- Email: [email protected]
Cardo AB, Sweden
September 2005
Pump Industry Analyst
Cardo AB, Sweden
Ebara Corp, Japan Key Figures (¥ billion) First quarter ended 30.6
2005
2004
Net Sales Of Which: Cardo Pump
1953
1982
757
761
Cost of Goods Sold
1289
1297
Operating Earnings Of Which: Cardo Pump
78
119
83
66
Net Earnings
44
85
2005
2004
Net Sales Of Which: Fluid Machinery & Systems
68.1
66.5
39.6
35.5
Cost of Sales
61.1
58.8
R&D
2.8
2.0
Gross Profit
6.9
7.7
(14.6)
(14.4)
(9.2)
(10.3)
Orders Received Of Which: Fluid Machinery & Systems
133.8
121.1
62.0
47.4
Backlog of Orders Received Of Which: Fluid Machinery & Systems
365.5
329.0
137.5
123.1
Operating Income/(Loss) Net Income/(Loss)
January–June 2005
2004
Net Sales Of Which: Cardo Pump
3575
3691
1325
1374
Cost of Goods Sold
2390
2430
Operating Earnings Of Which: Cardo Pump
68
146
87
78
Net Earnings
28
89
5746
5935
Average Number of Employees
COMMENT COMMENT During the second quarter Cardo Pump was able to deliver a 2% rise in the inflow of orders. The business saw gains in both waste water and water treatment applications and in the construction industry, but orders were lower in the pulp and paper industry segment. Cardo Pump’s net sales in the quarter came in at SKr1325 million, down from SKr1374 million a year ago. Cardo has plans to reorganize the company, so that the operational and decision process will be simplified and the activities of the divisions will be aimed at increasing organic growth. The main objective of all of this is to reduce the
cost level in the new, streamlined group by at least SKr200 million, achieving full effect as of 2008. From 1 January 2006, the present business areas Cardo Door and Cardo Pump will be replaced by four divisions: Door & Logistics Solutions; Wastewater Technology Solutions; Pulp & Paper Solutions; and Residential Garage Doors. The targets of the next few years are to have an operating margin of at least 10% until 2008 and an organic growth of at least 5%, with a return on capital employed of at least 20% annually over the business cycle. ■
In Japan, the first quarter of fiscal 2006 was challenging for Ebara’s Fluid Machinery & Systems division, as the public sector make further reductions in budgets for public works. However, conditions for the standard pump and related businesses were strong because of improvements in their main markets, including private capital investment by the materials and other industries and building fixtures and equipment. Overseas, demand increased in the oil and gas and electric power sectors, principally for LNG and ethylene equipment in Asia and the Middle East. This led to firm performance in the pump, compressor and other areas. In June, the fluid
machinery and systems segment began operations at a new pump manufacturing plant in Zhejiang, China, that will mainly supply equipment to the petrochemical market. Completion of this new plant is one aspect of the fluid machinery and systems’s drive, under Ebara’s medium-term management plan, to expand overseas production and sales capabilities. As a result of these developments, the Fluid Machinery and Systems unit reported an 11.7% increase in sales over the same quarter of 2004, to ¥39 619 million. An operating loss of ¥4497 million was reported for the quarter, an improvement of ¥4079 million over last year’s first quarter. ■
7
COMPANY WATCH
Key Figures (SKr million) April–June
Pump Industry Analyst
Cardo AB, Sweden
Ebara Corp, Japan Key Figures (¥ billion) First quarter ended 30.6
2005
2004
Net Sales Of Which: Cardo Pump
1953
1982
757
761
Cost of Goods Sold
1289
1297
Operating Earnings Of Which: Cardo Pump
78
119
83
66
Net Earnings
44
85
2005
2004
Net Sales Of Which: Fluid Machinery & Systems
68.1
66.5
39.6
35.5
Cost of Sales
61.1
58.8
R&D
2.8
2.0
Gross Profit
6.9
7.7
(14.6)
(14.4)
(9.2)
(10.3)
Orders Received Of Which: Fluid Machinery & Systems
133.8
121.1
62.0
47.4
Backlog of Orders Received Of Which: Fluid Machinery & Systems
365.5
329.0
137.5
123.1
Operating Income/(Loss) Net Income/(Loss)
January–June 2005
2004
Net Sales Of Which: Cardo Pump
3575
3691
1325
1374
Cost of Goods Sold
2390
2430
Operating Earnings Of Which: Cardo Pump
68
146
87
78
Net Earnings
28
89
5746
5935
Average Number of Employees
COMMENT COMMENT During the second quarter Cardo Pump was able to deliver a 2% rise in the inflow of orders. The business saw gains in both waste water and water treatment applications and in the construction industry, but orders were lower in the pulp and paper industry segment. Cardo Pump’s net sales in the quarter came in at SKr1325 million, down from SKr1374 million a year ago. Cardo has plans to reorganize the company, so that the operational and decision process will be simplified and the activities of the divisions will be aimed at increasing organic growth. The main objective of all of this is to reduce the
cost level in the new, streamlined group by at least SKr200 million, achieving full effect as of 2008. From 1 January 2006, the present business areas Cardo Door and Cardo Pump will be replaced by four divisions: Door & Logistics Solutions; Wastewater Technology Solutions; Pulp & Paper Solutions; and Residential Garage Doors. The targets of the next few years are to have an operating margin of at least 10% until 2008 and an organic growth of at least 5%, with a return on capital employed of at least 20% annually over the business cycle. ■
In Japan, the first quarter of fiscal 2006 was challenging for Ebara’s Fluid Machinery & Systems division, as the public sector make further reductions in budgets for public works. However, conditions for the standard pump and related businesses were strong because of improvements in their main markets, including private capital investment by the materials and other industries and building fixtures and equipment. Overseas, demand increased in the oil and gas and electric power sectors, principally for LNG and ethylene equipment in Asia and the Middle East. This led to firm performance in the pump, compressor and other areas. In June, the fluid
machinery and systems segment began operations at a new pump manufacturing plant in Zhejiang, China, that will mainly supply equipment to the petrochemical market. Completion of this new plant is one aspect of the fluid machinery and systems’s drive, under Ebara’s medium-term management plan, to expand overseas production and sales capabilities. As a result of these developments, the Fluid Machinery and Systems unit reported an 11.7% increase in sales over the same quarter of 2004, to ¥39 619 million. An operating loss of ¥4497 million was reported for the quarter, an improvement of ¥4079 million over last year’s first quarter. ■
7
COMPANY WATCH
Key Figures (SKr million) April–June