AnnuAl RepoRt 2009

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AnnuAl RepoRt 2009

cARDo AnnuAl RepoRt 2009

Cardo in brief

cardo AB (publ) Roskildevägen 1 Box 486 Se-201 24 Malmö Sweden

tel: +46 10 4747 000 Fax +46 40 97 64 40 info@cardo.com www.cardo.com

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Cardo in brief

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Cardo Annual Report 2009 Cardo Annual Report 2009 Cardo Annual Report 2009

Cardo Annual Report 2009

Highlights

Results

n Inflow of orders: SEK 8,424 million (9,455), down 18 percent adjusted for the effects of exchange rate movements

n Net sales: SEK 8,825 million (9,742), down 16 percent adjusted for the effects of exchange rate movements

n Operating earnings: SEK 529 million (941) n Cash flow from operating activities after tax:

SEK 1,356 million (1,004)

n Net earnings for the year: SEK 345 million (592)

n Earnings per share: SEK 12.78 (18.10)²⁾ n Proposed dividend for the financial year:

SEK 9.00 (SEK 9.00) per share

Inflow of orders

Operating earnings and operating margin¹⁾

Net sales

Returns¹⁾

Rate of growth of net sales

Earnings & cash flow per share Summary

n Continued growth in Asia-Pacific n Service successful in tough market n High price competition, but price level

maintained at expense of some volume n Improved operating margin in Residential

Garage Doors

n Operations adapted on an ongoing basis n Strong cash flow and low net interest bearing debt

Significant events per quarter n First quarter

– Efficiency improvement project begins in Door & Logistics Solutions division – Major order for desalination plant in

Australia

n Second quarter

– Improved operating margin in garage door division despite general downturn – Significant orders signed with treatment

plants in China and Switzerland

– Efficiency improvement project begins in Wastewater Technology Solutions division n Third quarter

– Asia-Pacific sees positive trend – Cash flow further strengthened – Order for measuring instruments for two

of the world’s leading papermakers in Asia and North America

– Signing of largest door order so far. In addition, unique dock management system gives significant order for logistics company in Sweden

n Fourth quarter

– Launch of world’s most energy-efficient submersible wastewater pump

0 2,000 4,000 6,000 8,000 10,000 SEK million

2005 2006 2007 2008 2009

0 200 400 600 800 1,000 SEK million

2005 2006 2007 2008 2009

Operating earnings Operating margin

0 2 4 6 8 10

% 0 2,000 4,000 6,000 8,000 10,000 SEK million

2005 2006 2007 2008 2009

0 5 10 15 20 25

%

2005 2006 2007 2008 2009

Return on capital employed Return on equity

-18 -15 -12 -9 -6 -3 0 3 6 9

%

2005 2006 2007 2008 2009

Organic Acquisitions

0 10 20 30 40 50 SEK

2005 2006 2007 2008 2009

Earnings after tax²⁾

Cash flow from operating activities after tax

1) Excluding items affecting comparability, see page 87.

2) Including discontinued operation.

Financial information

Up-to-date information at www.cardo.com

Report dates 2010 May 4

Interim Report January – March August 13

Interim Report January – June November 12

Interim Report January – September February 2011

Report on operations 2010

Up-to-date information at www.cardo.com Annual reports, interim reports and press releases can be read on and printed out from the website at www.cardo.com as soon as they have been made public. Here it is possible to request printed annual reports as well. On the website, there are also archives of press releases and reports, up-to-date information on the market value of the Cardo share and a description of the Group’s operations. Cardo’s financial information is published in Swedish and English.

Subscription service

Via the website, e-mail subscriptions to reports can be registered via the subscription service.

Printed annual reports are sent to shareholders and others who specially indicate that they wish to receive these by ordinary mail. Letters of welcome containing information about the subscription service and login details are sent to new shareholders on a routine basis.

Shareholders and others using Cardo’s subscription service on the website can register

and change their personal details and subscriptions themselves.

Changes of address in the register of shareholders, which is kept by Euroclear Sweden AB, should be made via a bank or institute conducting accounts. For persons entered in an official population register in Sweden, a regular notifica- tion of change of address to the company Svensk Adressändring AB results in the updating of Euroclear’s register, provided that automatic address updating has not been declined. Shareholders using Cardo’s subscription service on the website can themselves specify a mailing address for information from Cardo other than that registered at Euroclear.

Contact and information Cardo AB

Investor Relations

Box 486, SE-201 24 Malmö, Sweden Tel: +46 10 4747 000

Fax: +46 40 97 64 40 e-mail: info@cardo.com Website: www.cardo.com Maria Bergving

Senior Vice President Communications &

Investor Relations

Tel: +46 10 4747 405, mobile: +46 70 602 61 81 e-mail: maria.bergving@cardo.com

Thomas Niklasson

Head of Investor & Public Relations

Tel. +46 10 4747 459, mobile: +46 70 277 99 50 e-mail: thomas.niklasson@cardo.com

Contact Cardo

DIVISIONS

Cardo Entrance Solutions Box 171

SE-201 24 Malmö, Sweden Visitors:

Roskildevägen 1 Tel +46 10 4747 100 Fax +46 40 12 81 84 info@crawfordsolutions.com www. crawfordsolutions.com info@megadoor.com www.megadoor.com

info@crawfordgarageportar.se www.crawfordgarageportar.se info@normstahl.de

www.normstahl.com

Cardo Flow Solutions Box 394

SE-201 23 Malmö, Sweden Visitors:

Roskildevägen 1 Tel +46 10 4747 200 Fax +46 40 30 50 45 info@absgroup.com www.absgroup.com info@pumpex.com www.pumpex.com info@scanpump.com www.scanpump.com

AB Lorentzen & Wettre Box 4

SE-164 93 Kista, Sweden Visitors:

Viderögatan 2 Tel +46 8 477 90 00 Fax +46 8 477 91 99 info@lorentzen-wettre.com www.lorentzen-wettre.com

CORPORATE HEADQUARTERS Cardo AB

Box 486

SE-201 24 Malmö Sweden

Visitors:

Roskildevägen 1 Tel +46 10 4747 000 Fax +46 40 97 64 40 info@cardo.com www.cardo.com

Divisions in brief

In addition to the sum of the divisions, the totals for the Cardo group are also made up of the elimination of intra-Group sales, central costs and employees in the parent company. The percentage of Group operating earnings is exclusive of central costs.

Net sales SEK 8,825 million

Operating earnings SEK 529 million

Number of employees at year-end

5,430

45 % SEK 4,030 million

47 % SEK 281 million

50 % 2,656

34 % SEK 3,039 million

36 % SEK 212 million

32 % 1,735

8 % SEK 670 million

9 % SEK 51 million

7 % 379 13 %

SEK 1,105 million

8 % SEK 49 million

11 % 590 Door & Logistics Solutions

Complete door, docking and service solutions for service-intensive customers in transportation, logistics and retail.

The main brand is Crawford.

Residential Garage Doors

Standardized and customized garage doors for the consumer market.

The brands are Crawford, Normstahl and Henderson.

Wastewater Technology Solutions Pumps, mixers, aerators and control and monitoring systems for wastewater treatment and handling applications, and dewatering pump solutions for the construction industry etc.

The main brand is ABS.

Pulp & Paper Solutions

Pumps, agitators and sophisticated measuring instruments for process optimization and quality control in the pulp and paper industry.

The brands are Scanpump and Lorentzen & Wettre.

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cardo Annual Report 2009 cardo Annual Report 2009 cardo Annual Report 2009

cardo Annual Report 2009

Highlights

Results

n Inflow of orders: SeK 8,424 million (9,455), down 18 percent adjusted for the effects of exchange rate movements

n net sales: SeK 8,825 million (9,742), down 16 percent adjusted for the effects of exchange rate movements

n operating earnings: SeK 529 million (941) n cash flow from operating activities after tax:

SeK 1,356 million (1,004)

n net earnings for the year: SeK 345 million (592)

n earnings per share: SeK 12.78 (18.10)²⁾ n proposed dividend for the financial year:

SeK 9.00 (SeK 9.00) per share

Inflow of orders

Operating earnings and operating margin¹⁾

Net sales

Returns¹⁾

Rate of growth of net sales

Earnings & cash flow per share Summary

n continued growth in Asia-pacific n Service successful in tough market n High price competition, but price level

maintained at expense of some volume n Improved operating margin in Residential

Garage Doors

n operations adapted on an ongoing basis n Strong cash flow and low net interest bearing debt

Significant events per quarter n First quarter

– efficiency improvement project begins in Door & logistics Solutions division – Major order for desalination plant in

Australia

n Second quarter

– Improved operating margin in garage door division despite general downturn – Significant orders signed with treatment

plants in china and Switzerland

– efficiency improvement project begins in Wastewater technology Solutions division n third quarter

– Asia-pacific sees positive trend – cash flow further strengthened – order for measuring instruments for two

of the world’s leading papermakers in Asia and north America

– Signing of largest door order so far. In addition, unique dock management system gives significant order for logistics company in Sweden

n Fourth quarter

– launch of world’s most energy-efficient submersible wastewater pump

0 2,000 4,000 6,000 8,000 10,000 SEK million

2005 2006 2007 2008 2009

0 200 400 600 800 1,000 SEK million

2005 2006 2007 2008 2009

Operating earnings Operating margin

0 2 4 6 8 10

% 0 2,000 4,000 6,000 8,000 10,000 SEK million

2005 2006 2007 2008 2009

0 5 10 15 20 25

%

2005 2006 2007 2008 2009

Return on capital employed Return on equity

-18 -15 -12 -9 -6 -3 0 3 6 9

%

2005 2006 2007 2008 2009

Organic Acquisitions

0 10 20 30 40 50 SEK

2005 2006 2007 2008 2009

Earnings after tax²⁾

Cash flow from operating activities after tax

1) excluding items affecting comparability, see page 87.

2) Including discontinued operation.

Financial information

up-to-date information at www.cardo.com

Report dates 2010 May 4

Interim Report January – March August 13

Interim Report January – June november 12

Interim Report January – September February 2011

Report on operations 2010

Up-to-date information at www.cardo.com Annual reports, interim reports and press releases can be read on and printed out from the website at www.cardo.com as soon as they have been made public. Here it is possible to request printed annual reports as well. on the website, there are also archives of press releases and reports, up-to-date information on the market value of the cardo share and a description of the Group’s operations. cardo’s financial information is published in Swedish and english.

Subscription service

Via the website, e-mail subscriptions to reports can be registered via the subscription service.

printed annual reports are sent to shareholders and others who specially indicate that they wish to receive these by ordinary mail. letters of welcome containing information about the subscription service and login details are sent to new shareholders on a routine basis.

Shareholders and others using cardo’s subscription service on the website can register

and change their personal details and subscriptions themselves.

changes of address in the register of shareholders, which is kept by euroclear Sweden AB, should be made via a bank or institute conducting accounts. For persons entered in an official population register in Sweden, a regular notifica- tion of change of address to the company Svensk Adressändring AB results in the updating of euroclear’s register, provided that automatic address updating has not been declined. Shareholders using cardo’s subscription service on the website can themselves specify a mailing address for information from cardo other than that registered at euroclear.

Contact and information cardo AB

Investor Relations

Box 486, Se-201 24 Malmö, Sweden tel: +46 10 4747 000

Fax: +46 40 97 64 40 e-mail: info@cardo.com Website: www.cardo.com Maria Bergving

Senior Vice president communications &

Investor Relations

tel: +46 10 4747 405, mobile: +46 70 602 61 81 e-mail: maria.bergving@cardo.com

thomas niklasson

Head of Investor & public Relations

tel. +46 10 4747 459, mobile: +46 70 277 99 50 e-mail: thomas.niklasson@cardo.com

Contact Cardo

DIVISIonS

cardo entrance Solutions Box 171

Se-201 24 Malmö, Sweden Visitors:

Roskildevägen 1 tel +46 10 4747 100 Fax +46 40 12 81 84 info@crawfordsolutions.com www. crawfordsolutions.com info@megadoor.com www.megadoor.com

info@crawfordgarageportar.se www.crawfordgarageportar.se info@normstahl.de

www.normstahl.com

cardo Flow Solutions Box 394

Se-201 23 Malmö, Sweden Visitors:

Roskildevägen 1 tel +46 10 4747 200 Fax +46 40 30 50 45 info@absgroup.com www.absgroup.com info@pumpex.com www.pumpex.com info@scanpump.com www.scanpump.com

AB lorentzen & Wettre Box 4

Se-164 93 Kista, Sweden Visitors:

Viderögatan 2 tel +46 8 477 90 00 Fax +46 8 477 91 99 info@lorentzen-wettre.com www.lorentzen-wettre.com

coRpoRAte HeADQuARteRS cardo AB

Box 486

Se-201 24 Malmö Sweden

Visitors:

Roskildevägen 1 tel +46 10 4747 000 Fax +46 40 97 64 40 info@cardo.com www.cardo.com

Divisions in brief

In addition to the sum of the divisions, the totals for the cardo group are also made up of the elimination of intra-Group sales, central costs and employees in the parent company. the percentage of Group operating earnings is exclusive of central costs.

Net sales SeK 8,825 million

Operating earnings SeK 529 million

Number of employees at year-end

5,430

45 % SeK 4,030 million

47 % SeK 281 million

50 % 2,656

34 % SeK 3,039 million

36 % SeK 212 million

32 % 1,735

8 % SeK 670 million

9 % SeK 51 million

7 % 379 13 %

SeK 1,105 million

8 % SeK 49 million

11 % 590 Door & Logistics Solutions

complete door, docking and service solutions for service-intensive customers in transportation, logistics and retail.

the main brand is crawford.

Standardized and customized garage doors for the consumer market.

the brands are crawford, normstahl and Henderson.

Wastewater Technology Solutions pumps, mixers, aerators and control and monitoring systems for wastewater treatment and handling applications, and dewatering pump solutions for the construction industry etc.

the main brand is ABS.

pumps, agitators and sophisticated measuring instruments for process optimization and quality control in the pulp and paper industry.

the brands are Scanpump and lorentzen & Wettre.

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1 Cardo Annual Report 2009

Cardo is a world-leading supplier of industrial doors and logistics systems, wastewater treatment systems, process equipment for the pulp and paper industry and garage doors.

Cardo solutions help to solve some the toughest challenges of our time: shortage of water and a growing demand for efficient transportation and energy solutions.

The Group has approximately 5,400 employees and annual sales of almost SEK 9 billion. The number of shareholders is slightly more than 11,000. Institutional owners account for approximately 90 percent of the total number of shares and votes and non-Swedish investors hold approximately 21 percent. The share has been listed on NASDAQ OMX Stockholm since 1995 and is traded under the designation CARD.

Cardo’s headquarters are located in Malmö, Sweden.

Cardo is a Latin word. As a name, Cardo primarily expresses “being at the center” or “the core”. Cardo’s logotype, with the red dot, symbolizes exactly that, being at the center – at the center of some of the greatest challenges of our time.

Production

Cardo Communications & Investor Relations Text and artwork: ID kommunikation Design: Stefan Tempte Communication Photographer: Lars Strandberg

Reproduction and printing: Holmbergs i Malmö AB

President and CEO Peter Aru

Right course at difficult time 2 The world around us

Global challenges in the fields of water,

transportation and energy 6

The world’s most energy-efficient

submersible wastewater pump 8 Door solutions that improve efficiency

and save energy 9

How Cardo is managed

Cardo meeting global challenges 13 Complete solutions for critical applications 14 The Group 2009

Handled a difficult market situation 21 Division

Door & Logistics Solutions division 24 Service successful in tough market 26 Residential Garage Doors division 28

Success in tough market 30

Wastewater Technology Solutions division 32 Low demand and stiff price competition 34 Pulp & Paper Solutions division 36 Strong second half-year 38 Sustainable development

A natural part of the sustainable society 42

Risk management 46

The share

Positive growth in value for the Cardo share 52 Annual Report 2009

Report of the Board of Directors 54 Group

Income statement 58

Balance sheet 59

Cash flow statement 60

Change in equity 61

Parent company

Income statement 61

Balance sheet 62

Cash flow statement 63

Change in equity 63

Notes 64

Audit report 78

Corporate governance report 80 Board of Directors, Auditors

and Group management 84

Annual General Meeting 2010 86 Group financial summary – multi-year review 87

Glossary and Definitions 88

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Right course at difficult time

Cardo is a greatly changing company. However, the past year put us to the test in our process of change.

The financial crisis affected our work, but in a very difficult market situation we succeeded in adapting to the reality faced by our customers.

However, the long-term process of change is continuing and the strategy for how we will develop Cardo into a company that sells solutions with a strong element of service to our end customers stands firm. We have known for a long time that focus on the end customer contributes significantly to improved earning ability.

The objective that was set up for the Group’s business- to-business division in 2005 was achieved in 2008.

During 2009, we were fully occupied with handling the recession that had emerged and which we met in virtually all markets. We succeeded in changing our product and market mix in a very difficult market situation.

Excellence in everything

How is this possible? The answer is by using our products and solutions to meet some of the greatest challenges of our time: shortage of clean water, and demand for efficient transportation and reduced energy consumption. But also by acting with a strong element of what we call commercial, operational and innovation excellence.

In practice, this involves the following:

Commercial excellence: that we are selective and strengthen our ability to understand the customers’ needs, offer solutions that meet those needs and communicate the value that our solutions offer.

Operational excellence: that we have efficient processes, strengthen collaboration between our various field of operation and ensure that we have the right quality in the entire supply chain.

Innovation excellence: that we continually meet the demands of the market, actively identify the challenges that our customer will meet in the future and offer solutions that meet their needs better than anyone else.

A challenging year

2009 was a challenging year for Cardo. Net sales decreased by 16 percent and earnings after financial items amounted to SEK 496 million (825).

However, cash flow from operating activities improved considerably and amounted to SEK 1,356 million after tax (1,004). We have used the strong cash flow primarily to reduce our net debt, which at year-end was SEK 164 million (1,098).

Tough for all divisions

The Door & Logistics Solutions division had a challenging year as far as new sales were concerned, but service coped better. We worked hard on pricing, selective measures and the product mix.

The challenges for the division are to expand service, improve efficiency in new sales and introduce new sales methods.

The Wastewater Technology Solutions division operates in a market that is growing slowly. But during 2009, this area also felt the full force of the recession, particularly in Europe.

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3 Cardo Annual Report 2009 Malmö, Sweden, in March 2010

Peter Aru, President and CEO

It is true that the inflow of orders did not drop as much as in Door & Logistics Solutions, but we saw a shift in our market mix in favor of China in particular. This illustrates the importance of continuing along the course we have entered upon and investing in emerging markets in Asia and Latin and North America.

During the year, we launched a new range of submersible pumps. In so doing, we are taking a big technological step forward and introducing a new industry standard in relation to our competitors. There will be a technology shift for other products in this division also during the next few years.

The Pulp & Paper Solutions division is mainly active vis-à-vis the pulp and paper industry. The division had a very difficult year. The structural crisis that has hit our customers did not affect the division during 2008, but did so with full force in 2009. We have adapted the business to the prevailing market situation as much as we have been able.

The Residential Garage Doors division is the business that has been least affected by the recession. After disposal of the garage door operation in the UK, the division did well during the year and is the only division to increase its operating margin during 2009.

A stronger company

To summarize: 2009 was a difficult year for Cardo, but we are positive ahead of 2010. Uncertainty remains concerning the economic situation, but our strategy is giving results and we are ready to further coordinate our business operationally by creating two divisions, Cardo Entrance Solutions and Cardo Flow Solutions. At the same time, the measuring instruments business within the present Pulp & Paper Solutions will constitute an independent unit.

I would like to thank our employees as well as our customers and collaborative partners. It is thanks to you that we managed so well in 2009.

President and CEO Peter Aru

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The world around us

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Solving global challenges such as the shortage of drinking water and energy and the need for efficient transportation solutions requires entirely new ways of thinking. This applies to nations and societies as well as to organizations and companies. Everyone must take part if we are to combine increased prosperity with minimal environmental impact.

Cardo plays an important role here.

The world’s population is growing; and mobility and the demand for access to goods and services from across the globe are increasing. Globalization and an increased pressure on the environment are bringing new dangers and concerns.

All this makes the issues of increased living standards and protection of the environment an ever greater challenge. At the UN millennium summit in 2000, the member states therefore set a target to halve the number of poor people in the world by 2015. During the same period, an interim target was to halve the percentage of people who lack access to clean water and basic sanitation.

Of all the water in the world, only slightly less than one percent can be used as drinking water. This water is also unevenly distributed. Today, more than one billion people lack access to clean water and 4,000 children die of diarrhea caused by dirty water every day.

Almost as important for the quality of life and health is access to sanitation: toilets, hand-washing facilities, wastewater systems and wastewater treatment. In the industrialized world, we take these for granted, but 40 percent of the Earth’s population lack such amenities.

At today’s rate of construction, the water target will not be achieved until 2035 and the sanitation target not until a hundred years’ from now.

Global challenges in the fields of water, transportation and energy

Energy and infrastructure are insufficient Energy is also in short supply, and demand continues to increase worldwide. At present, renewable sources of energy provide approximately 13 percent of all the energy used. Even according to the most optimistic assessments, known and estimated oil reserves will be exhausted before the end of this century.

This is worrying, not least because energy supply and transportation are essential to society in many ways. Conservative forecasts estimate a doubling of transportation during the next 30 years. Others predict a threefold increase. Present infrastructure will therefore soon be insufficient, particularly for the fast growing global trade.

An equally important problem is that a large percentage of carbon dioxide emissions comes from energy production and transportation. These are the same carbon dioxide emissions that society will try to halve during the course of a few decades in order to combat global warming.

Market forces

There are three factors that primarily influence the development of new solutions in the market, both generally and for Cardo:

■ the development of new global regulatory frameworks

■ business considerations

■ individual behaviors

The global regulatory frameworks in, for example, the fields of water and energy are made up of global or regional agreements, laws, directives, regulations and plans from bodies such as the UN, EU and other international organizations. In recent years, a number of laws have been enacted and international agreements made that exert an effect on such matters as energy consumption and the need for water treatment. And more are on the way.

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The world around us

The business considerations of the customers are increasingly influenced by changes in the demands of the market, public opinion and ethical standpoints as a result of the global challenges in the fields of water, transportation and energy.

The individual behaviors and the opinions to which these may give rise may seem unpredictable, but when problems reach a critical mass, opinions and politics often move in the same direction. This is beginning to be apparent in the environmental field in particular.

By 2050, the UN estimates that the world’s population will have increased from today’s approximately 6.7 billion people to 9.2 billion. Together with increased urbanization, this makes new demands on logistics and access to clean water. Reduced individual water consumption also has an effect on infrastructure; and pumps, for example, need to be replaced in order to adapt capacity to the reduced quantity of water.

Increased prosperity and minimal environmental impact

Cardo plays an important role in these contexts. The Company has extensive competence in the field of wastewater treatment, developed over more than 100 years. Cardo can today offer one of the world’s most complete programs in the field of wastewater technology and thereby helps to conserve available water resources and increase the potential for recycling wastewater in an efficient manner. Together with its customers, Cardo gives more and more people access to clean water and in so doing raises their quality of life.

Quality of life is also dependent on economical and reliable access to energy. If increasing demand is to be met, improved energy utilization is required, and Cardo offers innovative solutions for energy-optimized production and flows. The Company’s solutions for infrastructure and logistics also help to save large amounts of energy and to create efficient flows of goods and more efficient transportation in the long term.

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8 Cardo Årsredovisning 2009

During the year, Cardo launched the world’s most energy-efficient submersible wastewater pump, the ABS EffeX. This is a range of newly developed pumps, which with their low power consumption are adapted to market demand for reduced energy consumption and less environmental impact in connection with water treatment.

The ABS EffeX also boasts enhanced hydraulics and a high degree of reliability, thanks to features such as the market’s best sludge handling and passage for both large solid particles and long-fiber material. A number of ABS EffeX pumps were already operating in field trials at various pumping facilities in Europe prior to the launch

The world’s most energy-efficient submersible wastewater pump

and exceeded the customers’ requirements for both reliability and energy consumption, a combination that has been historically difficult to achieve.

The ABS EffeX boasts advantages as far as energy- saving and reduced emissions of carbon dioxide are concerned, both during the service life of the pump and during its manufacture. It is also more future-proof than any previous pump, since the development process took into account the EU’s expected requirements for reduced energy consumption and forthcoming legislation in other countries.

The world around us

And its greater energy saving

It is the fi rst premium-effi ciency pump in the world.

is another

good reason

to

The ABS EffeX range of submersible sewage pumps has built-in IE3

choose it

premium-effi ciency motors in accordance with IEC60034-30 to optimise motor effi ciency. The main benefi t of this is the highest effi ciency available without any impact on the risk of increased blockage often associated with hydraulic effi ciency.

Moreover, the ABS EffeX range boosts impeller design to the next level and achieves some of the highest hydraulic effi ciencies in the market, while still maintaining a minimum 75 mm free solid passage.

Our greater energy saving gives you:

Reduced energy costs ǩ

Smaller CO ǩ 2 footprint

Qualifi cation for capital allowance schemes ǩ

Everything considered, the ABS EffeX range of submersible sewage pumps offers you the highest performance for this product class.

Visit www.ABSEffeX.com for the full picture and to request a demonstration.

Now you can make the right choice if you want to be fi rst...

...or more importantly, the fi rst choice if you want to be right!

2009AP002en1 – www.pyramid.se

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The world around us

Door solutions that improve efficiency and save energy

The Crawford Monitoring System (CMS) is a system for the control and monitoring of doors and docking areas. It fulfills several purposes, of which saving energy is the most important – a crucial argument in view of the fact that 75 percent of energy losses in logistics centers occur through open doors.

With CMS, the customer can ensure that the door is open only during loading or unloading and is automatically closed when the truck leaves the facility. The system can also automatically close the door during a break in work. It goes without saying that CMS also increases security at

the facility, both by keeping the doors closed when they are not being used and by allowing the entire facility to be monitored in real time. The system can also help improve the efficiency of the facility by reserving selected doors for certain vehicles and by communicating with the drivers using, for example, text messages.

Finally, CMS can be used to manage preventive maintenance, automatic error messages and service planning and in so doing contribute to the efficiency and long-term profitability of the facility.

Would you leave this door open?

Doors left open for no reason can cause up to 80%

of avoidable energy loss. Reduce your energy loss at the loading bay with energy-saving solutions from Crawford. It’s better for your business, and better for the environment.

www.pyramid.se

Cardo Annual Report 2009 9

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How Cardo is managed

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Cardo Annual Report 2009 13

Cardo meeting global challenges

Cardo is an international company that meets the global challenges in the fields of water, transport and energy.

The Company’s vision – “Cardo is a customer-oriented solution provider that helps to solve the global needs for clean water, efficient transportation and reduced energy consumption” - is the guiding star for the Company and its development.

Mission

Cardo meets the global challenges of the future.

Vision

Cardo is a customer-oriented solution provider that helps to solve the global needs for clean water, efficient transportation and reduced energy consumption.

Business idea

By means of quality products, great applications know-how and a high level of service, we offer value-adding solutions to selected customers worldwide.

Financial targets

Cardo did not announce any new external financial targets during 2009. In 2010, the intention is to present new financial targets that are adapted to the changed divisional structure.

Strategies

Cardo’s strategic initiative is based on a seven-point agenda for growth and business development in the areas of commercial, operational and innovation excellence.

Frameworks and processes

In order to ensure that Group targets are met and that strategies are implemented in a coordinated and efficient manner, groupwide frameworks, functions and processes are defined.

Activities

Annually, short-term and long-term activities are designed and continually followed up. These activities are based on the Group’s targets and strategies and include commercial, operational and innovation excellence.

Results

Cardo’s results are an effect of a long-term and coordinated process in which customer benefit is central, synergies are continually created, and common attitudes and values are in focus.

Values, code of conduct and corporate governance Values, code of conduct and corporate governance generate behaviors and a regulatory framework that provide a sustainable, stable and responsible business, for the benefit of all stakeholders in the Cardo group.

Cardo’s value base rests on three core values:

■ Business development

– Cardo constantly develops its business and the Company’s own abilities and skills. Each employee bears a responsibility for the development of the Company and should be able to see and understand his or her role in the overall picture. All employees cooperate to find the best solutions for the customers and to constantly exceed the customers’ expectations.

■ Encouragement

– Every employee must feel that he or she is seen and appreciated. Encouragement is the basis of creating curiosity and courage to dare try new ways. This develops the business in a positive direction.

■ Challenger

– Cardo develops a culture in which its employees challenge themselves and each other to think in new ways and to be creative. It is about questioning the accepted, how the Group operates and uses its resources – with the focus on delivering customer benefit.

Mission and vision Business idea Targets and strategies Frameworks and processes

Activities Results

Values, code of conduct and corporate governance

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Complete solutions for critical applications

Cardo has the greater part of its sales in Europe, but focuses on expanding in new emerging markets.

Operations target large international or national returning customers with great development potential. Their extensive service needs are central and create a significant aftermarket for the Group.

Most of the operations rest on the same industrial logic, have the same focus on the end customer and are based on a similar business logic: critical applications, focus on complete solutions and service for selected segments with growth.

Cardo’s business methodology and sales process are based on there being specifiers in a firm of architects or construction company, a contractor and an end customer.

The products are constituents of critical applications.

Industrial doors and pumps are often part of major investments and must meet stringent reliability requirements. A breakdown affects or even stops the entire production in capital-intensive operations where

time is of the essence such as logistics centers, pulp and paper mills or networks for water treatment, with major financial consequences. Cardo therefore adopts a target-oriented approach to the quality assurance of its products. The service operations, not least those that include preventive maintenance, further strengthen the offering.

Offers complete solutions

The customer offering consists of complete solutions, where know-how, products, preventive maintenance and service form a whole that is increasingly aimed at ensuring function and improving the customer’s processes. Cardo’s strength is its ability to combine its own competence with knowledge of the customer’s processes, applications and needs.

Cardo is a partner from the design of solutions that help to make the processes more efficient and more reliable to service and aftermarket offerings that include running maintenance, repairs, upgrades, etc. of both the Group’s own products and of competing and related products. Together

Global needs

Clean water

More efficient transportation of goods and people Reduced energy consumption

Market forces

Global regulatory frameworks

Business considerations

Individual behaviors

Doors & Logistics Solutions

Wastewater Technology Solutions

Pulp & Paper Solutions Complete solutions for global customers with critical applications and a great need for service

Market and applications know-how

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Business logic

Critical applications

Complete solutions

Service

Customers in selected segments

End customer

Contractor

Specifier Selected segments

Transportation and logistics

Retail

Aircraft industry and shipyards

Industry

Public sector

Pulp and paper industry

with advanced systems for control and monitoring, Cardo’s offering is one of the strongest in the market.

The service offering contributes to reliability and profitability in the customer’s business and is the foundation for a relation that will live for many years.

Three areas of focus

In its efforts to develop its activities, Cardo particularly focuses on three areas that lead to improved internal efficiency and the development of products and services that solve the customers’ problems and make it easy to be and to develop as a customer of Cardo.

■ Commercial excellence

We select our customers and strengthen our ability to understand their needs, offer solutions that meet these needs and communicate the value that our solutions offer. In order to be a close partner for selected customers, Cardo focuses on and continually develops factors that include

– customer segmentation in sectors with growth – value-based sales methods and pricing – global service concept

– brand positioning and market communication – internal communication, understanding and

exchange of experience.

■ Operational excellence

We continually improve the efficiency of our processes, strengthen collaboration between our various fields of operation and make sure that we always have the right quality and precision throughout the supply chain.

■ Innovation excellence

We continually meet the increasing demands of the market, actively identify the challenges that our customer will meet and offer solutions that meet their needs better than anyone else. The foundation is a research and development plan based on the market’s present and future requirements. In order to achieve this, Cardo seeks and strives for

– input from leading end users and knowledge of macro trends and business trends

– product development based on platforms and standardization

– well defined cross-functional and efficient innovation processes.

Market and applications know-how

Commercial excellence

Operational

excellence Innovation

excellence

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Strategies for growth

The process of developing a uniform corporate culture, improving the efficiency of activities and enhancing profitability is constantly under way. The aim is to move the Group and all its parts from focusing on products and individual business transactions to solutions and long-term relations.

Cardo strategy for growth includes a sales agenda with seven strategic points:

■ moving from product focus to customer benefit

■ focusing on selected customer segments and applications

■ offering value-adding solutions with quality products, a high service content and great applications know-how

■ building up a key account organization for large returning national and international customers

■ using our international service organization in a broader and more efficient way

■ investing more in emerging markets

■ making strategic acquisitions that either strengthen the Group’s market presence or add products and solutions to selected customer segments

By means of acquisitions, Cardo has had an extensive brand portfolio. In recent years, a determined effort has been made concerning brand strategy, with the focus on further developing a smaller number of globally strong brands.

Joint methodologies and support functions Cardo is an integrated operational industrial group. A common strategy for the divisions is combined with joint methodologies, processes and functions in areas that include human resources, communications, IT, purchasing, finance and treasury, quality and intellectual property.

Coordinated business development, leadership, training, methodologies and processes generate synergies in the form of higher efficiency and lower costs. The organization utilizes cutting-edge competence in the Company and creates a natural foundation for cooperation and skills development – all crucial to a competitive group with the potential for profitability and growth.

Human Resources

The point of departure for Cardo’s human resources (HR) efforts is to create structures and processes that help to achieve Cardo’s overall business aims. HR work is controlled centrally from Cardo through four main processes (see also page 44).

All divisions and regional HR functions report directly to the Group’s central HR function. In its day-to-day operational activities, the HR function supports Cardo’s managers in their work of developing employees.

Communications and Investor Relations

Cardo’s communications and investor relations department is responsible for the Group’s brand strategy, intellectual property rights, external communications in the form of investor relations (IR), public relations (PR) and market communications, and internal communications. The department therefore plays a central role when it comes to conveying the Group’s values both externally and internally.

The principal purpose of IR work is to create a fair and correct picture of the Company in the stock market.

Financial communication is mainly done through Cardo’s website, press releases and meetings with investors, analysts and media.

As far as internal communications are concerned, the Group’s main channels are the groupwide intranet, Hands-OnLine, and the in-house publication Hands-On Magazine.

Value-adding solutions

Product sales

Profitability and relation focus Volume and

transaction focus

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Door & Logistics Solutions

Door and logistics systems Door and docking solutions for customers in service- intensive segments such as transportation, logistics and retail.

Crawford is the main brand.

Megadoor is used for advanced door solutions in the Airports &

Shipyards customer segment.

Wastewater Technology Solutions

Technology for the transportation and treatment of wastewater

Wastewater treatment and handling solutions and service for public and private customers. Dewatering pump solutions for the construction industry, mining industry, etc.

ABS is the main brand for wastewater treatment and handling applications and for dewatering pumps for the construction industry.

Pumpex is used as a brand for dewatering pumps for the construction industry.

Systems for the pulp and paper industry

Pumps and measuring instruments and service for the pulp and paper industry.

Scanpump is a brand for process pumps and agitators.

Lorentzen & Wettre is a brand for solutions in the field of measuring instruments and process optimization.

Garage doors Garage doors in the premium segment to end customers/

private individuals, primarily via distributors

Crawford is used primarily in the Nordic area and the Benelux countries.

Normstahl is the brand in central Europe.

Henderson is a brand for products within the Sliding Door Gear segment.

Division Business Offering Brands

During 2010, the division Residential Garage Doors is being integrated with the division Door & Logistics Solutions. Similarly, the pump business within Pulp & Paper Solutions is being integrated with the division Wastewater Technology Solutions. The new divisional names will be Cardo Entrance Solutions and Cardo Flow Solutions. The measuring instruments business within the present Pulp & Paper Solutions will constitute an independent unit within the Group.

Cardo’s divisions, businesses, offerings and brands