AN N UAL R E PORT 2008
Highlights 1
President and CEO Peter Aru 2
How Cardo is managed
Vision with the customer at the center 4 Business model that meets the global challenges 6
Sales and cost agenda 10
Risk management 12
The Cardo share 16
The Group in brief 2008 18
Divisions
Door & Logistics Solutions 20
Wastewater Technology Solutions 24
Pulp & Paper Solutions 28
Residential Garage Doors 32
Employees
Business-driven HR generates results 36 Cardo’s responsibility
Cardo’s sustainability strategy 40
ANNUAL REPORT 2008
Report of the Board of Directors 44
Group
Income statement 48
Balance sheet 49
Cash fl ow statement 50
Change in equity 51
Parent company
Income statement 51
Balance sheet 52
Cash fl ow statement 53
Change in equity 53
Notes 54
Audit report 68
Corporate governance report 70
Glossary and Defi nitions 73
Board of Directors and auditors 74
Group management 76
Financial information 78
Contact Cardo 79
Annual General Meeting 2009 80
Group fi nancial summary – multi-year review 81
Up-to-date information at Cardo’s website, www.cardo.com
CONTENTS
CONTENTS
D
Division: Wastewater Technology Solutions
Cardo Annual Report 2008
CARDO IN BRIEF
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. Operations are pursued in the Group’s divisions Door & Logistics Solutions, Wastewater Technology Solutions, Pulp & Paper Solutions and Residential Garage Doors. With sales of almost SEK 10 billion and more than 6,000 employees worldwide, Cardo delivers solutions that help to solve some the toughest challenges of our time in the fields of water, transportation and energy.
Cardo has been listed on NASDAQ OMX Stockholm since 1995 and its shares are traded under the designation CARD.
The number of shareholders is slightly more than 11,000. Institu- tional owners account for approximately 91 percent of the total number of shares and votes and non-Swedish investors hold approximately 17 percent.
Cardo is a Latin word with a number of different meanings. As a name, Cardo primarily expresses “being at the center” or “the core”. Cardo’s logotype, with a red dot in the middle of the “o”, symbolizes exactly that – being at the center
Production
Cardo Communications & Investor Relations.
Concept and design: Stefan Tempte Communication.
Text production: Sund Kommunikation.
Artwork production: ID kommunikation.
Photographers: Lars Strandberg, Gunnar Nydrén.
Reproduction and printing: Holmbergs i Malmö AB.
CARDO IN BRIEF
Division: Wastewater Technology Solutions
DOOR & LOGISTICS SOLUTIONS
Complete door, docking and service solutions for strategically selected service-intensive customers in transportation, logistics and retail.
The corporate brand is Crawford.
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 corporate 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 corporate brands are Scanpump and Lorentzen
& Wettre.
RESIDENTIAL GARAGE DOORS
Standardized and customized garage doors for the consumer market.
The corporate brands are Crawford, Normstahl and Henderson.
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.
NET SALES
SEK 9,810 million
OPERATING EARNINGS
SEK 941 million
NUMBER OF EMPLOYEES AT YEAR-END
6,014
49%
SEK 4,816 million
49%
SEK 490 million
51%
3,045
31%
SEK 3,040 million
35%
SEK 358 million
32%
1,911
8%
SEK 827 million
11%
SEK 111 million
7%
406
12%
SEK 1,160 million
5%
SEK 47 million
10%
594
Division: Wastewater Technology Solutions
1 Cardo Annual Report 2008
R E S U LTS
■
Inflow of orders:* SEK 9,530 million (9,267), unchanged compared with the previous year adjusted for the effects of exchange rate movements
■
Net sales:* SEK 9,810 million (9,116), up 5 percent adjusted for the effects of exchange rate movements
■
Operating earnings:* SEK 941 million (743 excluding items affecting comparability)
■
Cash flow from operating activities after tax:*
SEK 1,004 million (412)
■
Net earnings for the year:* SEK 592 million (457 excluding items affecting comparability)
■
Earnings per share: SEK 18.10 (5.67)
■
Proposed dividend for the financial year:
SEK 9.00 (SEK 9.00) per share
HIGHLIGHTS
Inflow of orders* Net sales*
S U M MARY
■
All financial targets reached
■
Improved operating earnings in all divisions for continuing operations
■
Increased or unchanged inflow of orders in three of four divisions
■
Strategic direction of “the new Cardo” has given results – focus on service, clear selection of customers, more efficient processes
S IG N I FICANT EVE NTS
■
Continued expansion of service operations
■
Continued success with new international key account agreements
■
Major orders for Door & Logistics Solutions in the Airports & Shipyards customer segment
■
Breakthrough for Wastewater Technology Solutions in desalination applications
■
Pulp & Paper Solutions acquires Finnish company Kajaani Process Measurements Ltd
■
Resolution to keep the Residential Garage Doors division
■
Residential Garage Doors disposes of garage door operation in the UK
■
Repurchase of 3,000,000 shares in the Company, 10 percent of all shares and votes in the Company, under the authorization of the General Meeting of Shareholders and as resolved by the Board of Directors
* The garage door operation in the UK was disposed of in December 2008. Inflow of orders, earnings and cash flow from this operation are excluded in the above figures.
See also note 1 Accounting Principles.
1) Excluding items affecting comparability.
Returns
1)0 5 10 15 20 25
%
2005 2006 2007 2008
Return on capital employed*
Return on equity (including discontinued operation) 0
2,000 4,000 6,000 8,000 10,000 SEK million
2005 2006 2007 2008
Rate of growth of net sales*
0 2 4 6 8 10
%
2005 2006 2007 2008
Organic Acquisitions 0
2,000 4,000 6,000 8,000 10,000 SEK million
2005 2006 2007 2008
Operating earnings and operating margin*
1)0 200 400 600 800 1,000 SEK million
2005 2006 2007 2008
0 2 4 6 8 10
%
Operating earnings Operating margin
Earnings & cash flow per share*
0 10 20 30 40 SEK
2005 2006 2007 2008
Earnings after tax
Cash flow from operating activities after tax
WE REACHED OUR TARGETS
When I accepted the challenge of becoming President and CEO of Cardo in 2005, we set up tough financial targets together. It was important to increase growth and improve earnings. I am pleased to be able to say that we reached all our financial targets during 2008 and we did it in the allotted time.
In 2008, Cardo delivered one of its best results ever with earnings of SEK 825 million before tax, and we increased sales to SEK 9,810 million for continuing operations. We did this at a time when the market was very much marked by historically high prices of raw materials and financial crisis. This is a sign of strength.
Cardo has lived up to its promises and delivered results that meet the targets that were set up. It was not an easy journey. Doubts were raised both externally and internally as to whether we would succeed, but we worked on step by step and have now reached our goals. A lot of hard work, many difficult decisions and an enormous transformation within the whole of Cardo lie behind the results.
What we have achieved makes me tremendously proud of our skilled managers and employees within the Group. I wish to convey my thanks for the fantastic efforts made during the year. Together we showed that goals are there to be achieved!
CUSTOM E R VALU E
The fact that our managers and employees are focusing on generating value for the customer is the key to the results that Cardo has achieved. If we are to achieve results in the future too, this must continue to be the case. When I took over in 2005, I realized that Cardo was a company in need of change and we launched the journey towards “the new Cardo”.
Our goal was a business focused on solutions that bring customer value to serviceintensive customers.
This concept is formulated best of all in our vision:
“Cardo will be a customer-oriented solution provider and a strongly growing industrial group”.
FORWAR D
Have we, then, already created “the new Cardo”
now that we have reached our financial targets? We definitely have not. We still have a long way to go, and the question is whether we will ever really reach journey’s end. Constant change, development and improvement in efficiency are guiding principles for those companies that wish to be at the top – and we do.
We have made a big stride forward. Our spirit of enterprise has expressed itself to a high degree in an extensive process involving our managers and other employees. Efforts have been concentrated on skills development and training, and since 2005 we have implemented a comprehensive develop- ment program for a long series of our managers. In the long term, this program will include managers at all levels throughout the Group.
S UCCE SS
We have also continued to work on our strategy, driven by a sales and cost agenda. This work has been very successful and has generated both growth and increased profitability. We are continuing to maintain our focus on both sales and costs.
2008 was a success in virtually all areas. During
the year, the Door & Logistics Solutions division was
turned around after a tough process of change that
has now produced results. We have broadened our
service base, learned to choose the right customers
Cardo Annual Report 2008 3
President and CEO Peter Aru
Malmö, Sweden, in March 2009
Peter Aru, President and CEO
and to manage our prices in a better way. This led to one of the best results in the division’s history, which gives me hope going forward.
Wastewater Technology Solutions is continuing to develop in a positive manner. It is a stable division that continues to work to implement the more service-oriented and solution-oriented set-up that we require. Ahead of 2009, the division is strong and prepared to take on a market in which extensive infrastructural investments may be expected.
Through yet another year with earnings in excess of SEK 100 million, Pulp & Paper Solutions showed that it can deliver at entirely different levels.
During 2006, it showed only half of these earnings.
Its customers have undergone an extremely testing time and the division continues to support its customers in creating even more efficient processes.
During the year, the trend in Residential Garage Doors’ field was characterized to a high degree by lower consumption. Nevertheless, earnings for continuing operations improved during the year.
During 2008, we took the decision that the division would be part of Cardo in the long term. However, we disposed of the garage door operation in the UK in December 2008. The decision meant that we left the British market for garage doors in order to instead focus on the premium segment in the rest of Europe, where we enjoy a strong position in the market.
WE LL PR E PAR E D
We live in a period marked by uncertainty as to the future. There is no doubt that the full force of the recession is upon us and that we must prepare ourselves for a more difficult time financially. It is a well known fact that the business cycle goes through both highs and lows. Those who have set their house in order in the boom times are better prepared when the bad times eventually arrive. We are today considerably stronger than we have been in a long time.
The time is right for Cardo. Several of the global challenges that concern virtually the entire world are in focus for us. These are the need for clean water, efficient transportation and reduced energy
consumption – all of them important and very big issues that must be solved in the long run. Cardo is involved in all these areas, and our ability to find long-term sustainable solutions will benefit everyone in due course.
FOCUS
2009 will be difficult, and we are faced by many
new challenges. So it will be important to keep to
our established strategy. To change a company
totally is not a rapid process. It requires stamina and
persistence. But our successes so far show that we
are on the right track, and I am convinced that we
are creating a strong Cardo in the long term.
VISION WITH THE CUSTOMER AT THE CENTER
Cardo is an international company that meets global challenges in the fields of water, transportation and energy. The Company’s vision – “Cardo will be a customer-oriented solution provider and a strongly growing industrial group” - is the guiding star for the Company and its development. This vision is further developed in a business idea and values that are concretized in the financial targets.
VI S ION
Cardo will be a customer-oriented solution provider and a strongly growing industrial group.
VALU E S
Cardo’s value base rests on three core values:
BUSINESS DEVELOPMENT
Cardo will constantly develop its business and its 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 are interdependent and cooperate together 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. Only then will people feel that they are part of a greater context. Encouragement is the basis of creating curiosity and courage to dare try new ways. This develops the business in a positive direction.
CHALLENGER
Cardo wants to develop 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 deliver- ing customer benefit.
B US I N E SS I DEA
Cardo is an international group with leading brands, offering solutions with quality products, a high level of service and great applications know-how to selected customers.
STRATEGY FOR G ROWTH
Cardo strategy for growth includes both a sales agenda and a cost agenda. The sales agenda comprises the following seven 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
Did you know that: More than 2,200 qualitymeasurements aremade worldwi
de every minute usinginstruments from Lore
ntzen&W
ettre .
Cardo Annual Report 2008 5
How Cardo is managed
G ROU P FI NANCIAL TARG ETS
Targets
1)Performance %
MARGIN TARGET
At the end of 2008, the Group will have an operating margin of at least 10 percent.
GROWTH TARGET
Annual organic growth of at least 5 percent over a business cycle.
RETURN ON CAPITAL EMPLOYED Return on capital employed of 20 percent.
1)
Relate to B2B operations.
0 5 10 15
0 5 10 15
0 10 20 30
2005 2006 2007 2008
G LOBAL DIVI S ION S
Operations are pursued in four divisions: Door &
Logistics Solutions, Wastewater Technology Solutions, Pulp & Paper Solutions and Residential Garage Doors, which all enjoy strong positions in their respective markets. The divisions are international and the bulk of sales, 90 percent, occur outside Sweden. Sales are principally to large national and international returning customers. The products are specified by architects or construction companies and are procured by the customers in competitive processes. Three of the four divisions operate in a considerable aftermarket where the extensive service needs of the customers are paramount.
The divisions focus on the following customer groups:
■
Door & Logistics Solutions – offers total door and docking solutions as well as service to customers in service-intensive segments such as the transportation and logistics sector and retail
■
Wastewater Technology Solutions – for customers that need wastewater treatment and handling applications, and also dewatering pump solutions for the construction industry, mining industry, etc.
■
Pulp & Paper Solutions – offers solutions for customers in the pulp and paper industry
■
Residential Garage Doors - sells garage doors to the premium segment, primarily through distributors
With its solutions and skills, Cardo has a central role to play in meeting a number of major global challenges relating to water, transportation and energy. More than one billion people lack access to clean water and even more lack access to basic sanitary facilities. As the Earth’s population grows and mobility increases and the demand for access to global goods and services becomes ever greater, the need for efficient transportation and logistics solutions also rises. A major issue that affects Cardo’s customers and the entire globe is the challenge of reducing energy consumption.
Solving these issues locally and globally presents great challenges and is necessary in order to ensure increased quality of life, health and continued economic development.
Cardo is meeting these global challenges in a number of ways.
The basis of the management of Cardo’s operations is the Company’s vision, values, business model, objectives and strategies. At Group level, Cardo guarantees that the solutions that are developed for its customers maintain a high quality. It does so by means of joint methodologies in respect of business development, leadership and processes. This work is driven by the groupwide functions HR, Communi- cations, IT, Purchasing, Finance & Treasury and Business Development. These functions also act in support of the divisions. By tying the functions together and working on the basis of common processes throughout the Group, Cardo generates synergies in the form of higher efficiency, lower costs and high overall quality. The Group’s employees are encouraged to constantly think along new lines and in so doing create new solutions that provide How Cardo is managed
BUSINESS MODEL THAT MEETS
THE GLOBAL CHALLENGES
Cardo Annual Report 2008 7
BUSINESS IDEA VISION VALUES TARGETS STRATEGIES
SYNERGIES
Busines development Leadership Training Methodology Processes Tools
MARKETS AND DIVISIONS
Door & Logistics Solutions Wastewater Technology Solutions Pulp & Paper Solutions Residential Garage Doors
CUSTOMERS
End customers Contractors Specifi ers
GROUPWIDE FUNCTIONS
HR Communications & Investor Relations IT Finance & Treasury Purchasing
WATER R
TR ANS SPORTA ATIO ON ENERG GY
MEETING GLOBAL CHALLENGES
How Cardo is managed
CLEAR B RAN D STRATEGY
The brands that the Group manages and markets generate value for its customers, and these brands are important assets for the Group. By means of acquisitions, Cardo has had an extensive brand portfolio. In recent years, a determined effort has been made in respect of brand strategy, with the focus on further developing a smaller number of globally strong brands. This means that a number of strategic brands have been selected based on the ambition that these should be the leaders in the selected customer segments and in those markets that Cardo has chosen to target. Cardo is developing these strategic brands as follows:
DOOR & LOGISTICS SOLUTIONS
■
Crawford is the corporate brand within Door &
Logistics Solutions
■
Hafa is used in parallel with Crawford principally in the Germany market as a brand for docking solutions
■
Combursa is used in parallel with Crawford principally in the Spanish market as a brand for docking solutions
■
Megadoor is used for advanced door solutions in the Airports & Shipyards customer segment
WASTEWATER TECHNOLOGY SOLUTIONS
■
ABS is the corporate brand for wastewater treatment and handling solutions and for dewatering pumps for the construction industry
■
Pumpex is used as a brand for dewatering pumps for the construction industry
PULP & PAPER SOLUTIONS
■
Scanpump is the brand for process pumps and agitators for the pulp and paper industry
■
Lorentzen & Wettre is the brand for solutions in the field of measuring instruments and process optimization for the same industry
RESIDENTIAL GARAGE DOORS
■
Crawford is used for garage doors in the Nordic area and the Benelux countries in particular
■
Normstahl is the brand in central Europe
■
Henderson is the brand in Ireland and for products within the Sliding Door Gear segment
Did you know that: Cardohas de
liveredmore than 3 m illion do
ors to
industries worldwide. Laid
out ina line,these doors would stretch more than twice around the world.
How Cardo is managed
MAR KETS AN D CUSTOM E RS
Cardo focuses on volume-intensive customers with a great need for service. Operations target large international or national returning customers with great development potential. The extensive service needs of these customers are central and create a significant aftermarket for the Group. The business methodology and sales process are based on there being a specifier, a contractor and an end customer.
Residential Garage Door’s activities differ from those of the other divisions in that the division has private individuals as end customers. Sales occur primarily via retailers and large building materials stores. In recent years, a network of exclusive retailers has been built up.
G ROU PWI DE FU NCTION S HUMAN RESOURCES
The point of departure for Cardo’s human resources (HR) efforts is to create a structure and processes that develop HR at both a strategic and an operative level in order to achieve Cardo’s overall business aims. HR work is controlled centrally from
Cardo through four different HR processes:
Learning & Development, Performance Manage- ment, Management Development and Recruiting &
Resourcing.
In order to increase its impact on activities and to strengthen a common pattern of behavior within the Group, the HR function developed a new organization during the year. All divisional and regional HR functions report directly to the Group’s central HR function. In addition, management development continued. Cardo now also runs management training programs at the level of middle management. Work on planning replace- ments and identifying management material was carried out for the third year in a row, which will in the long run enhance prospects for internal
development and mobility within the Group. In its day-to-day operational activities, the HR function continues to support, challenge and encourage Cardo’s managers in their work of developing the organization and its people. HR is a speaking partner with necessary specialist skills.
COMMUNICATIONS AND INVESTOR RELATIONS Cardo’s communications and investor relations department is responsible for the Group’s brand strategy, external communications in the form of investor relations (IR), public relations (PR) and market communications, and internal information.
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 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.
The year saw, among other things, the further development of processes for market communica- tions and press, the introduction of a new website and the strengthening of in-house communications.
IT
Cardo has a centralized IT function in order to coordinate the IT administration and project management of the four divisions. Cardo has a clear customer focus combined with a high degree of cost-awareness. Investments in new IT and business systems generate new business
opportunities, improve internal working processes and in the long term lead to reduced costs.
During the year, work continued on replacing old business systems by a new common system.
Among other things, the systems have been expanded in order to support service operations. In addition, the work of modernizing the Group’s IT structure continued.
PURCHASING
Poor materials management and defective materials planning can result in wrong deliveries that contribute to disturbances in production and consequently in disturbances in deliveries to customers. This can also be a factor in bringing distrust into the customer relationship and increased costs for intermediate storage and wastage. Cardo’s materials planning is carried out using continually updated sales forecasts from each sales company in combination with data on historical consumption. Each production unit provides subcontractors with rolling consumption forecasts. Cardo and its respective suppliers have
agreed on permitted levels with a view to minimizing delivery times and the total purchasing cost. In order to ensure ongoing improvement, regular follow-ups are carried out with the Group’s leading suppliers as regards volume trend, delivery accuracy and actual product quality. During the year, an initiative was launched to define and establish goals for the ongoing improvement process together with each supplier. Cardo’s suppliers are assessed from a total cost perspective, embracing the cost trend, capital trend, cash flow, quality, and delivery accuracy in accordance with common follow-up templates.
Purchasing of direct material such as products and
input goods occurs in each division. On an annual
basis, this is a matter of purchases for approximately
SEK 2,000-2,500 million. The purchasing process is
Cardo Annual Report 2008 9
The year saw, among other things, the introduc- tion of netting systems for intra-Group payments and tools for forecasting currency flows.
The financial information that is provided each month by the operative businesses is analyzed by Cardo’s central finance and treasury function.
Finance & Treasury is an important strategic function that acts as a link between strategy and follow-up of the business.
The year saw, among other things, the introduc- tion of netting systems for intra-Group payments and tools for forecasting currency flows.
The financial information that is provided each month by the operative businesses is analyzed by Cardo’s central finance and treasury function.
Finance & Treasury is an important strategic function that acts as a link between strategy and
How Cardo is managed
QUALIT Y
In a world characterized by stiff competition, customers are increasingly demanding that products and solutions must meet or even exceed expectations. As a result, the demand and need for a structured quality process are increasing.
In order to be competitive and to be the customer’s natural partner in each field of business, the quality process is integrated into the entire production and sales process. In order to guarantee that this is the case, quality managers are appointed to lead work involving improvement measures, control, measurability and follow-up.
The quality process in each division is run in accordance with the quality policy that controls the business. This provides quality targets for factors such as reliability of supply and complaints. In addition, methods are specified for follow-up and regulation of how and when internal quality audits are to be carried out. In order to ensure levels and processes that meet international standards, certification is also an essential part of the quality process.
Apart from the overall quality control systems, quality is a guiding star for every employee. It is the duty of every employee to take responsibility for his or her tasks or area of operation and to deliver quality in day-to-day work. To help employees do this, there are means that include systems for reporting non-compliance and for leaving sugges- tions for possible improvements or new solutions.
carried out directly vis-à-vis the Group’s suppliers.
A great deal of the purchases have been made from suppliers in Asia and other low-cost countries for many years and to an increasing degree. Raw material prices have fluctuated greatly in recent years. For Cardo, it is crucial to negotiate prices and terms for agreements directly with steel mills and suchlike to the greatest possible extent. Deliveries can then be ensured and prices balanced in order to counteract price trends to a certain extent.
The purchasing of overheads such as travel, vehicles, IT, telephony, consultants, tools, stationery, training, etc.
is done by a groupwide function.
The Group’s total purchasing volume relating to overheads amounts to approximately SEK 1,500 million.
The aim of the groupwide function is to reduce Group costs. This work includes procurement in various categories, support to other Group functions and work on policies so as to be able to influence the total cost. A major effort has been carried out to impact the Group’s total travel costs and to offer environmental alternatives to traveling. By reducing the overhead costs, the function can help to achieve significant cost savings, which are an important part of Cardo’s strategy.
FINANCE & TREASURY
Cardo’s groupwide function Finance & Treasury is responsible for consolidation, Group accounting, tax coordination, financing and support for the operative business in the form of financial risk management.
The Group’s finance activities are controlled by the finance policy that is established by the Board.
This policy regulates responsibility and authoriza- tions within the finance function and how risks are to be limited.
Did youknow that: More than 1 billion people today lackaccessto clean water.
SALES AND COST AGENDA
During 2008, Cardo continued its strategic initiative focusing on increased growth and profitability. The initiative, which was introduced in 2005, has been successful and is one of the cornerstones of the creation of the new Cardo. The Group has followed two agendas in parallel in order to achieve its financial targets: a sales agenda and a cost agenda.
This process has led to an organization that has developed its mode of operation so as to focus on the customer, identify savings and create efficiency measures to an even greater degree.
The sales agenda comprises seven points that will generate growth, while the cost agenda focuses
on a continuous process of rationalization and efficiency measures in order to increase profitability.
During 2005, a cost-saving program was initiated, which achieved full effect during 2008. In 2006, the effects amounted to SEK 125 million and during 2007 approximately SEK 45 million. In 2008, savings of a further SEK 10 million were made and the annual savings are therefore SEK 180 million in all, which is in line with the level that was communi- cated in the financial statements for 2007. In parallel with this, the day-to-day process of generating even greater efficiency is continuing.
SEK million
Restructuring costs incurred fourth quarter 2005 201
Estimated savings effect from 2008 200
Full-year effect 2006 125
Full-year effect 2007 45
Full-year effect 2008 10
Total savings effect 180
Sales agenda
Cost agenda
Increased growth and profi tability
SALES AND COST AGENDA
During 2008, Cardo continued its strategic initiative focusing on increased growth and profitability. The initiative, which was introduced in 2005, has been successful and is one of the cornerstones of the creation of the new Cardo. The Group has followed two agendas in parallel in order to achieve its
on a continuous process of rationalization and efficiency measures in order to increase profitability.
During 2005, a cost-saving program was initiated, which achieved full effect during 2008. In 2006, the effects amounted to SEK 125 million and during 2007 approximately SEK 45 million. In 2008,
f f th SEK 10 illi e made and
How Cardo is managed
How Cardo is managed
11 Cardo Annual Report 2008
STRATEGIES FOR GROWTH EXAMPLES OF ACTIVITIES IN 2008
Moving from product focus to customer benefit Continued development of system for delivery control and monitoring at logistics centers, Crawford
Monitoring System.
Aftermarket concept, including energy optimization program within Pulp & Paper Solutions.
Focusing on selected customer segments Continued prioritization and focus on the customer segments strategically selected on the basis of volume,
and applications service share and returning frequency
Door & Logistics Solutions – transportation, logistics and retail.
Wastewater Technology Solutions - public infrastructure, construction and mining industries.
Pulp & Paper Solutions - pulp and paper industry.
Residential Garage Doors - garage door specialists, building materials retailers and building contractors.
New solutions that provide enhanced control and monitoring of energy consumption in logistics centers.
New energy-efficient compressors and new dry-pit pump developed within Wastewater Technology Solutions.
Further development of service concept so as to ensure problem-free operation of doors at logistics centers – Change Before it Breaks
New L&W Consistency Meter developed within Pulp & Paper Solutions.
Continued success for the key account organization through several new global agreements.
Residential Garage Doors – further expanded number of exclusive distributors through new Crawford and Normstahl centers.
Using our international service organization in Continued expansion of service solutions for automatic door systems for pedestrian traffic.
a broader and more efficient way
More efficient service organization through, among other things, introduction of new portable planning and reporting tools.
Investing in emerging markets Door & Logistics Solutions - under the Megadoor brand, expanded in –Asia and Australia in the market for doors for airports and shipyards.
Wastewater Technology Solutions – establishment of subsidiary and sales organization in Russia and continued development in Mexico.
Pulp & Paper Solutions – expansion and positive development in China.
Added products and new skills in the segment for online measurement of pulp through the acquisition of Kajaani Process Measurements Ltd.
Continued integration of solutions for horizontal sliding doors under the Megadoor brand.
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
Making strategic acquisitions that either strengthen
the Group’s market presence or add products and
solutions to selected customer segments
RISK MANAGEMENT
In order to achieve set goals, all businesses must manage risks successfully. This involves preventing the negative consequences with which risks may be associated while taking into consideration the cost of managing these risks.
As an international group, Cardo is constantly exposed to various risks. Within Cardo, the management of operational risks occurs principally at the subsidiary and divisional level. The groupwide functions HR, Communications & Investor Relations, IT, Purchasing and Finance & Treasury manage and coordinate risks within their respective areas. The financial and insurable risks are managed and coordinated mainly by the Finance & Treasury function.
Besides operational and financial risks, there may also be risks associated with management, the Board or shareholders not receiving the information they require or at the right time in order to be able to make correct decisions in different situations. Cardo is therefore working on ensuring the quality of both its internal and external financial reporting. This work is described in more detail in the section Corporate Governance Report under the heading Internal Control on page 72.
How Cardo is managed
RISK MANAGEMENT
Policies and manuals Spreading of risks Insurances Agreements Financial instruments Preventive measures Contingency plans Corporate culture Internal controlOPERATIONAL RISKS
Raw material prices Competitive situation Dependence on state of the economy
Human resources Product liability
Interruptions due to property damage
FINANCIAL RISKS
Currency risk Interest rate risk Financing risk Credit riskCARDO’S AIMS RISKS ASSOCIATED
WITH INFORMATION FOR DECISION-MAKERS
Internal financial reporting External financial reportingCORPORATE
MANAGEMENT/
BOARD SHARE-
HOLDERS
OPERA ATIONAL L RISKS
Raw mateerial pricees Competittive situatiion Dependeence on staate of theFINANC CIAL RISKS
Currencyy risk Interest rrate risk Financingg risk Credit risskOPERATIONAL RISKS
Risk Exposure Management
Raw material prices The Group’s purchases of raw materials consist of relatively low-processed products. The prices of the raw materials that make up Cardo’s products have fluctuated strongly in recent years and remained at a high level during the year.
- Cardo is continually entering into agreements with its suppliers. In this way, delivery of important and planned input goods can be secured at the same time as the effects of sharp rises in prices are reduced.
Examples of activities 2008
■
New agreement templates with strengthened regulation of division of responsibilityg
■ New procedures for evaluation of suppliers
■
Increased number of suppliers with formalized requirements for continual improvement process
In the markets for industrial doors, docking systems and garage doors, there are a few major global competitors and a large number of smaller local competitors. The market is characterized by excess capacity and strong price competition. Competition is also fierce in the Wastewater Technology Solutions and Pulp & Paper solutions divisions, but not as fragmented as in Door &
Logistics Solutions and Residential Garage Doors.
– In order to be able to manufacture and supply as cost-effectively as possible, Cardo is continually evaluating its production and logistics structure.
– Similarly, the product portfolio and the offerings are also being continually evaluated in order to maintain an attractive offering to the customers.
– In order to gain a better understanding of the customers’
specific needs and in so doing be able to generate added value, the Group is working to create more long-term customer relations by means such as framework agreements with strategically selected key accounts.
Examples of activities 2008
■ Continued development of key account organization
■ Selection of customers and consistent price rises Competitive situation
Cardo Annual Report 2008 13
How Cardo is managed
Product liability Costs as a result of personal injury or damage to property caused by faults in the product.
– Great importance is attached to quality assurance reviews of the Group’s production plants (see more on page 9).
– Groupwide product liability insurance policies to cover the costs that may arise despite this precaution.
Risk Exposure Management
Dependence on state of the economy
Europe is Cardo’s largest market and its customers are to be found in several sectors, including transportation, logistics and retail, the public sector, the pulp and paper industry and the construction industry. A fairly stable development of infrastructural and environmental investments is required for Cardo’s development.
– In order to reduce its dependence on the European market and to take advantage of growth potential, Cardo is expanding its operations in emerging markets such as Asia and Latin America.
– Increased share of the aftermarket and service, creates stability in sales trend. 32 percent of Cardo’s total sales come from the aftermarket and service.
Examples of activities 2008
■
Expanded service offering in Door & Logistics Solutions
■ Expansive efforts were made in emerging markets
Human resources In order to be able to achieve the set goals, it is crucial that employees are motivated and have common values and attitudes.
– Cardo runs various goal-oriented activities to ensure that employees have a common value base and that the Group’s people maintain a high level of motivation.
In the section headed Employees on page 36, there is a description of the work that is being done today.
Examples of activities 2008
■ Cardo Executive Management Program
■ Cardo Core Leadership Program
■
Group training programs gathered in common learning portal
Property and interruptions
For reasons of efficiency, Cardo’s various production plants are specialized, increasing their sensitivity to disturbances.
– In order to minimize the risk of stoppages, regular risk inspections and damage-prevention follow-ups are carried out.
– Continual evaluation of alternative suppliers in order to ensure a secure supply of raw materials and components.
– Cardo also takes out groupwide insurance policies to cover the increases in costs and loss of income that would result from a major interruptions.
How Cardo is managed
Currency risk Currency risk can be divided into transaction exposure and translation exposure. Transaction exposure is the net value of operational and financial inflows and outflows of currencies. The single greatest exposure in a pair of currencies is in SEK/EUR.
Translation exposure is the net assets and earnings in foreign currencies of foreign subsidiaries. The effect of translation exposure is the difference that arises on translation of the income statements and balance sheets of foreign subsidiaries to Swedish kronor. Read more about financial instruments and financial risk management on page 56.
Group net exposure in various currencies during 2008
– With a view to reducing the effects of transaction exposure on the Group’s earnings, Cardo’s policy is to hedge major contracts, and financial flows and some of the remaining projected currency flows during the time when prices and costs are adapted to the changed conditions.
– Translation exposure is not hedged.
Examples of activities 2008
■
Improved efficiency of internal payments through central netting system
■
Groupwide tools for more efficient planning of cash flow
FINANCIAL RISKS
Risk Exposure Management
Interest rate risk As a result of the current borrowing requirements, an interest rate change of 1 percent annually affects Group earnings before tax by approximately SEK 11 million.
– With a view to reducing the effect of interest rate changes on Group earnings, the average fixed interest term of loans raised should be between three and twelve months, depending on the borrowing requirement and the cash flow expected. The current average fixed interest term is approximately eight months.
0 50 100 150 200 250 300 SEK million
EUR USD NOK DKK GBP Other currencies
Cardo Annual Report 2008 15
How Cardo is managed
Financing risk The risk of lacking access to borrowed capital or of it being expensive to gain access to borrowed capital.
– Cardo’s borrowing occurs principally via bank financing.
– With a view to reducing the financing risk, the Group strives for a distribution of borrowing opportunities among several counterparties, and a spread of due-dates for loans over different points in time.
– At December 31 2008, credit facilities of SEK 1,700 million were available to Cardo.
Examples of activities 2008
■ Renegotiation of syndicated loan of EUR 200 million. Term runs until 2013
■ Raising of new credit facilities of SEK 500 million.
Term runs until 2010
Credit risk Risk that outstanding accounts receivable and/or financial receivables fail to be paid, resulting in credit losses.
– In order to minimize the risk of bad debt losses, credit limits are applied and credit information is normally acquired before credit is given.
– Some aspects of sales are covered by credit insurance.
– Regarding financial counterparty risk, Cardo’s only enters into derivative transactions with credit-worthy counterparties only. The objective is also that these counterparties enter into agreements in accordance with International Swaps and Derivatives Inc. (ISDA).
Risks associated with management, the Board or shareholders not receiving the information they require to make correct decisions in different situations or that they do not receive information at the right time.
– Cardo is working continually on ensuring the quality of both its internal and external financial reporting.
This work is described in more detail in the section Corporate Governance Report under the heading Internal Control on page 72.
Examples of activities 2008
■ Audit committee constituted in the Board
■ New finance and reporting manual
■ New framework for internal control in the financial reporting
Risk Exposure Management
Erroneous information
RISKS ASSOCIATED WITH ERRORS IN INFORMATION FOR DECISION-MAKERS
Risk Exposure Management
CARDO IN THE STOCK MARKET 2008
Cardo has been listed on NASDAQ OMX Stockholm since 1995 and its shares are traded under the designation CARD. Cardo belongs to the Mid Cap segment, which covers medium- sized companies with a market value of between EUR 150 million and 1 billion. In addition, Cardo is categorized as belonging to the Industrial Machinery sector, which is often called
“Industrials” or “Industrial Goods and Services” in stock exchange listings.
A round lot in Cardo amounts to 100 shares.
On December 31 2008, the number of share- holders amounted to 11,351 (11,646).
S HAR E CAPITAL
On December 31 2008, Cardo’s share capital amounted to SEK 300 million, divided into 30 million shares, whereof 10 percent or 3 million shares are treasury shares. The share capital remained unchanged during the year. Each share entitles the holder to one vote and carries the right to a corresponding share in the Company’s assets and earnings.
OWN E RS H I P
At December 31 2008, the number of registered shareholders was 11,351 as compared with 11,646 at December 31 2007. Institutional owners account for approximately 91 percent (91) of the total number of shares and votes. Non-Swedish investors hold roughly 17 percent (20). The largest portion of shares held by non-Swedish investors is in the USA, equivalent to 6.2 percent (5.3)
DIVI DE N D POLICY
The Board of Directors’ objective is to propose dividend payments that correspond to at least 40 percent of the Group’s net earnings for the year after tax after taking into account the Group’s earnings trend, financial position and future development potential.
DIVI DE N D
The Board of Directors proposes to distribute a cash dividend of SEK 9.00 (SEK 9.00) per share to the shareholders. The proposed dividend, which amounts to SEK 243 million, is equivalent to approximately 47 percent of earnings after tax for the financial year 2008.
S HAR E PR ICE TR E N D
Cardo’s share fell during 2008 by 43 percent and at the end of 2008 was quoted at SEK 114.50 (201.00). The SIX general index fell by 41.8 percent during the year. The SIX industrial index fell by 48 percent. The highest price paid during the year was noted on January 2 at SEK 204.00 and the lowest price paid was noted on November 21 at SEK 99.00. At December 31 2008, Cardo’s total market value amounted to SEK 3,435 million (6,030).
During 2008, 12,559,897 (13,260,637) Cardo shares changed hands on the Stockholm exchange, which is 42 percent of the total number of shares.
On average 49,841 (53,042) shares changed hands per trading day. In the course of the year, 23,665 (10,332) transactions were completed.
The rate of turnover, that is to say liquidity, was 39 percent (44).
During the past five years, the price of the Cardo share has fallen by an average of 10.5 percent per year and the average dividend yield has been 6.2 percent.
R E PU RCHAS E OF S HAR E S
At the 2008 Annual General Meeting of Cardo AB, a resolution was passed authorizing the Board of Directors to acquire up to so many own shares before the next Annual General Meeting that the Company’s holding at no time exceeds 10% of all shares in the Company. The purpose of the repurchase is to give the Board the opportunity to adjust the capital structure of the Company during the period until the 2009 Annual General Meeting.
During 2008, the authorization of the General Meeting of Shareholders to repurchase was fully
utilized. Cardo has therewith repurchased 3 million shares equivalent to 10 percent of the number of outstanding shares. Equity in the parent company and the Group was therewith reduced by SEK 459 million.
OPTION PROG RAM
There is currently an option program for senior management. This was issued by Cardo’s principal shareholder L E Lundbergföretagen AB on March 1 2006 and totals 295,000 call options for 13 members of senior management within the Group.
The call options were issued on market terms and are equivalent to approximately 1.0 percent of the shares and votes in Cardo. Each call option carries the right to buy one share in Cardo during the period May 1 – October 1 2010 at an exercise price of SEK 259. Cardo is not taking part in the option program, nor will it be charged with any costs attributable to the program.
I NVE STOR R E LATION S
The process of providing financial information has a high priority, since the overall aim of Cardo’s activities is to generate growth in value for Cardo’s sharehold- ers. Cardo is constantly working to improve its financial information to shareholders, investors, employees and other interested parties. The aim of investor relations work is to increase confidence in Cardo and improve knowledge of the Group’s activities, strategy and goals with a view to providing the prerequisites for an objective valuation of Cardo. This work includes continually holding meetings with analysts, institutions, share investors and media.
During 2008, almost 50 presentations and meetings were held with investors and analysts.
Conference calls were arranged in connection with the report on operations and the interim reports for January–March, January–June and January–
September. Road shows were also arranged in, for example, London during the year. In addition, Cardo took part in five presentations for the Swedish Shareholders’ Association.
ANALYSTS WHO CONTINUALLY MONITOR CARDO:
■ Carnegie, Oscar Sjergren, +46 8 676 87 69 ■ Danske Market Equities, Carl Gustafsson, +46 8 568 805 23 ■ Goldman Sachs International, Rufolf Dreyer, +44 20 7 051 0662, Elsa Rocha, +44 20 7 552 0158 ■ Handelsbanken Capital Markets, John Hyltner, +46 8 701 12 75, ■ Kaupthing, Carl-Johan Blomqvist, +46 8 791 48 55
Cardo Annual Report 2008 17 Sweden 75.5
UK 6.3
USA 6.0
Other Nordic countries 3.3
Other countries 8.9
Total 100.0
SWEDISH AND NON-SWEDISH OWNERSHIP
(number of shares %)The share
SHARE PRICE TREND AND TURNOVER
PRESS RELEASES 2008
■ February 29, Ahead of Cardo’s annual general meeting ■ March 13, Cardo’s annual report 2007 and new website ■ April 07, Cardo’s annual general meeting ■ April 10, Cardo supplies complete door and docking solutions for DHL’s new terminal in Gothenburg ■ May 05, Invitation to conference call on May 9 2008 ■ May 09, Interim report January – March 2008 ■ May 15, Cardo wins order for water treatment products in Australia ■ June 18, Repurchase of shares in Cardo ■ June 26, Cardo takes order for pumping stations in Norway ■ June 27, Repurchase of shares in Cardo – flagging ■ July 21, Cardo acquires manufacturer of measuring instruments for pulp and paper industry ■ August 11, Invitation to conference on August 13 2008, 10.00 am ■ August 13, Interim report January - June 2008 ■ November 05, Invitation to conference call on November 12 2008, 10.00 am ■ November 12, Interim report January – September 2008 ■ November 25, Cardo gets order for hangar doors in Poland ■ December 03, Repurchase of shares in Cardo – flagging ■ December 10, Executive Vice President and audit committee appointed at Cardo ■ December 15, Cardo goes into consultation affecting up to 150 people in Residential Garage Doors division in UK.
IN CHARGE OF CARDO’S INVESTOR RELATIONS
Maria Bergving, Senior Vice President Communications & Investor Relations, +46 40 35 04 25,
Thomas Niklasson, IR/PR Manager, +46 40 35 04 68.
Financial information on Cardo is available on Cardo’s website at www.
cardo.com under Investors. Here it is also possible to put questions directly via info@cardo.com and to subscribe to financial information.
3,000 2,500 2,000 1,500 1,000 500
2004 2005 2006 2007 2008
700 600 500
400
300
200
100
© NASDAQ OMX OMX Stockholm SIX20 Industrials Number of traded shares, thousands The share
CORPORATE AND INDIVIDUAL OWNERS
(number of shares %)Corporate owners 91
Individual owners 9
Total 100.0
2008 2007 2006 2005 2004
Number of shares, thousands 30,000 30,000 30,000 30,000 30,000
wherof treasury shares 3,000 - - - -
Market value Dec. 31, SEK million 3,091 6,030 7,800 5,835 5,715
P/E, times3) 8.0 35.4 20.9 39.6 17.5
Dividend yield, %4) 6.25) 4.4 3.5 4.1 4.2
Dividend payout ratio, %6) 475) 159 67 163 7
Number of shareholders 11,349 11,656 12,762 13,363 14,957
Data per share
Market value Dec. 31, SEK million 114.50 201.00 260.00 194.50 190.50
Year high, SEK 204.00 318.00 274.00 197.50 213.00
Year low, SEK 99.00 189.00 189.00 160.00 170.50
Change in share price during year, % -43.03 -22.68 +33.68 +2.10 -4.51
Equity, SEK 112.67 97.75 98.58 97.83 96.00
Net earnings, SEK 18.10 5.671) 12.43 4.912) 10.86
Dividend, SEK 9.005) 9.00 9.00 8.00 8.00
1) Excluding items affecting comparability, earnings were SEK 14.83.
2) Excluding non-recurring items, earnings were SEK 9.60.
3) Price/Earnings, market value at December 31 in relation to earnings per share.
4) Regular dividend for the financial year as percentage of market value at December 31.
5) Board of Directors’ proposal.
6) Regular dividend for the financial year as percentage of earnings.
SHARE DATA
Name % of all shares and votes Number of shares
L E Lundbergföretagen AB 41.3 11,150,000
If Skadeförsäkring AB 11.1 2,999,000
HQ funds 3.7 1,010,801
Lannebo funds 3.7 996,000
Odin funds 2.0 534,737
Orkla ASA 1.9 507,600
Eikos fund 1.8 484,474
BBH funds 1.2 330,300
Second National Pension Insurance Fund 1.2 320,932
Swedish Foundation for Strategic Research 1.1 300,000
Total ten biggest owners 69.0 18,633,844
Other (11,341) 31.0 8,366,156
Total 100.0 27,000,000
* Excluding Cardo’s 3,000,000 treasury shares.
TEN LARGEST SHAREHOLDERS AT DECEMBER 31 2008*
Holding, Number of Percentage of Number of
number of shares shareholders shareholders shares % of shares
1-1,000 10,840 95.5 4,899,866 18.1
1,001-10,000 458 4.0 1,271,442 4.7
10,001-100,000 37 0.3 1,201,955 4.5
100,001-1,000,000 13 0.1 4,466,936 16.5
1,000,001- 3 <0.1 15,159,801 56.1
Totalt 11,351 100.0 27,000,000 100.0
* Excluding Cardo’s 3,000,000 treasury shares.
DISTRIBUTION OF SHARES AT DECEMBER 31 2008*
GROUP 2008
GREATLY IMPROVED EARNINGS
During 2008, Cardo reached the financial targets that were set in 2005. The Group shows good growth for the third year in succession and one of the best results in the history of the Group.
Behind the change, lies a clear strategy and hard work to implement that strategy. The strategy was introduced in 2005 and an extensive process of change that aims to create the new Cardo has been under way since then.
SALE S AN D R E S U LTS
The inflow of orders during the year amounted to SEK 9,530 million (9,267), which is unchanged compared with the previous year after adjustment for the effects of exchange rate movements. All markets except western Europe show positive growth in comparison with the previous year.
Price rises were implemented during the year to compensate for rises in the prices of raw materials.
Service operations continued to enjoy a positive trend.
Net sales amounted to SEK 9,810 million (9,116), up 5 percent after adjustment for the effects of exchange rate movements. All divisions report increased net sales during the year.
For continuing operations, operating earnings improved to SEK 941 million (743, excluding items affecting comparability).
Net earnings amounted to SEK 592 million (182), which is equivalent to SEK 20.63 (6.07) per share.
Cash flow from operating activities was SEK 1,004 million (412) after tax, which is equivalent to SEK 34.98 (13.73) per share.
R E STR UCTU R I NG AN D ACQU I S ITION S The restructuring program for which SEK 201 million was charged to the fourth quarter of 2005 was initially expected to give a savings effect of SEK 20 million for 2008. The outcome was SEK 10 million, which is in line with what was communicated in the report on operations for 2007.
In July, Pulp & Paper Solutions acquired the Finnish company Kajaani Process Measurements Ltd (KPM), which develops, manufactures and sells
advanced measuring instruments for paper pulp.
Through this acquisition, Cardo’s Pulp & Paper Solutions division is strengthening its position in this field.
In December 2008, a decision was taken to discontinue the garage door operation in the UK.
In January 2009, it was announced that the operation was being disposed of to the British company Bowburn Ltd. The costs in connection with the disposal amount SEK 53 million and have been charged to Cardo’s earnings for 2008, whereof approximately SEK 36 million in impair- ment losses. The disposal is expected to have a positive effect of approximately SEK 15 million on Cardo’s earnings for 2009.
FOCUS ON KEY ACCOU NTS AN D SOLUTION S
Cardo is an industrial group whose products and solutions are principally targeted at companies. The exception is the Residential Garage Doors division, which targets the consumer market. Cardo consists of the following four divisions:
■
Door & Logistics Solutions
■
Wastewater Technology Solutions
■
Pulp & Paper Solutions
■
Residential Garage Doors
The industrial divisions are all characterized by the fact that they operate in relatively mature sectors where there is tough competition and a tight price squeeze. This results in a continuous need to reduce production costs. In order to be able to generate greater margins and improved profitability, the industrial divisions to a greater degree target global customers that need complex solutions and extensive service. Today, all the industrial divisions target prioritized key accounts and have built up key account organizations. The aim is to strengthen the relation to the customer and take greater responsi- bility for the needs of the customer over a prolonged period of time
KEY FACTORS
The goal is for Cardo to be a profitable and growing industrial group. During 2008, the continued operation of the strategy led to new successes in a number of areas, but a lot of work remains to be done.
Cardo’s long-term development is based on a number of key factors:
■
doing business with key accounts
■
increasing the service share of sales
■
developing business in new markets
■
constantly working to achieve cost savings
■
strengthening a common value base for increased cooperation and synergies
Financial targets, %
1)Performance, % Status
■
Operating margin 10 10.3
■
Organic growth 5 5.7
■
Return on capital employed 20 22.8
1)Relate to B2B operations.
Division: Wastewater Technology Solutions
Cardo Annual Report 2008 19
The Group in brief
2008 2007 2006 2005
Inflow of orders, SEK million 1) 9,530 9,267 8,647 7,788
Net sales, SEK million 1) 9,810 9,116 8,363 7,684
Operating earnings, SEK million 1, 2) 941 743 613 451
Operating margin, %1, 2) 9.6 8.1 7.3 5.9
Return on capital employed, % 1, 2) 21.0 17.3 15.6 13.7
Earnings per share, SEK 3) 20.6 6.1 12.9 5.3
Dividend for the financial year, SEK 9.004) 9.00 9.00 8.00
Average number of employees 3) 6,125 6,044 5,931 5,845
1) Continuing operations.
2) Excluding items affecting comparability.
3) Including discontinued operation.
4) Board of Directors’ proposal.
Inflow of orders, SEK million
0 500 1,000 1,500 2,000 2,500 3,000 Quarter
2005 2006 2007 2008
7,000 7,500 8,000 8,500 9,000 9,500 10,000 Moving 12-month
Return on capital employed, %
2)0 5 10 15 20 25
Moving 12-month
2005 2006 2007 2008
Net sales, SEK million
0 500 1,000 1,500 2,000 2,500 3,000 3,500 Quarter
2005 2006 2007 2008
7,000 7,500 8,000 8,500 9,000 9,500 10,000 10,500 Moving 12-month
Operating earnings, SEK million
2)-100 0 100 200 300 400 500 Quarter
2005 2006 2007 2008
0 200 400 600 800 1.000 1.200 Moving 12-month
Net sales,
new sales & aftermarket, %
2008 2007
New sales 68 69
Aftermarket 32 31
100 100
Share of Group net sales by division, %
2008 2007
Door & Logistics Solutions 49 49 Wastewater Technology Solutions 31 30
Pulp & Paper Solutions 8 9
Residential Garage Doors 12 12
100 100
Net sales by
geographical market, %
2008 2007
Western Europe* 75 76
Eastern Europe 7 6
North America 6 6
Latin America 2 2
Asia-Pacific 6 6
Middle East 3 2
Africa 1 1
100 100
* whereof Sweden 10 9
