Interim report, January - June 1998: Streamlining completed.

STOCKHOLM, Sweden--(BUSINESS WIRE)--Aug. 5, 1998--

-- The Group completed the streamlining into medical technology and

changed name to Gambro on July 1.

-- Sales amounted to SEK 10,600 M (10,309). For business area

Medical Technology sales increased by 41% incl. acquisitions.

-- Earnings after financial items amounted to SEK 1,327 M (11,735),

including nonrecurring items of SEK 875 M (11,101).

-- Increased sales and expanded operations in medical technology but

a weaker trend of earnings, primarily due to production

disturbances.

-- Continued focusing of operations

- It is proposed that the holding of ABB shares be sold to

Gambro's shareholders.

- The holding of Electrolux shares was sold.

- Agreement was reached covering sale of the MacGREGOR

subsidiary.

Gambro is an international medical-technology group with revenues of approximately SEK 18 billion and about 17,000 employees in some 40 countries.

INTERIM REPORT a) - SIX MONTHS ENDED JUNE 30, 1998

Sales amounted to SEK 10,600 M (10,309). Sales of the Group as presently structured, including acquisitions, increased 33% compared with sales in the corresponding period in 1997.

Operating earnings amounted to SEK 1,462 M (11,750). Operating earnings of the Group as presently structured amounted to SEK 901 M (814).

Earnings after financial items amounted to SEK 1,327 M (11,375). This included nonrecurring earnings totaling SEK 875 M (11,101) from the sale of shareholdings and companies. Comparable earnings a year earlier also included participations totaling SEK 355 M in the earnings of associated companies. Earnings per share was SEK 2.32 (28.70). The overall effects of movements in foreign exchange rates during the period were minor.

Operations in the field of medical technology continued to expand through acquisitions of clinics, among other activities. Sales of dialysis products were higher, but the earnings were unsatisfactory, primarily due to production disturbances of dialyzers and continued weak development for cardiopulmonary care products. The marine cargo-handling business was strong, with favorable trends of sales and earnings.

The strategic focusing of the Group on medical technology continued. It is proposed that the shareholding in ABB AB be sold to Gambro's shareholders. The holding of Electrolux shares was sold. An agreement to sell the majority of shares in the MacGREGOR subsidiary has been reached. The remaining shareholding in Munters has been sold.

a) Pertains to the then Incentive, whose name was changed to Gambro on July 1, 1998. -0-

Group key ratios
                             January - June   July 97  Jan-Dec
SEK M                         1998    1997   - June 98  1997

Revenues                     10,600  10,309  19,781   19,490
Operating margin, %            13.8   114.0    19.4     72.5
Earnings after financial      1,327  11,735   3,482   13,890
items
Return on shareholders'         6.2   102.5     9.8     57.6
equity, %  1)
Return on total assets, %       8.0    56.6     9.8     35.3
Earnings per share, SEK  1)    2.32   28.70    7.32    33.70
Shareholders' equity per      74.58   69.37   74.58    74.25
share, SEK
Solidity (equity/assets          58      48      58       52
ratio), %

1)   After full tax

-0- MEDICAL TECHNOLOGY

Sales in the first half of 1998 for business area Medical Technology amounted to SEK 9,007 M (6,341) - an increase of 41%, adjusted for foreign exchange movements, compared with sales in the year-earlier period. Operating earnings before depreciation (EBITDA) amounted to SEK 1,681 M (1,226), 37% higher than in the first half of 1997. The operating margin before depreciation was 18.7% (19.3). Operating earnings after depreciation (EBIT) amounted to SEK 818 M (775) and the corresponding margin was 9.1% (12.2).

Dialysis Products

Sales increased to SEK 3,824 M (3,587), an increase of 7%, adjusted for foreign exchange effects. The growth in volume of business in Europe and the United States continued to be in line with growth of these markets.

Sales and deliveries of monitors continued to develop well and are following growth in the markets in Europe and the United States, among other regions. Sales of products used in the treatment of acute kidney failure - including the Prisma monitor - have been very strong. In May a company involved in the development and production of central water treatment systems for dialysis clinics was acquired.

For disposable products, the growth in volume of sales of the BiCart bicarbonate cartridge continues to be favorable, but with continuing pressure on prices in certain markets. Sales of blood-lines were firm but were affected by production problems and a consequent product recall in May of this year. This has caused some additional costs. Three lots of blood tubing sets were believed to be the cause of a few incidents of hemolysis, a destruction of the red blood cells. The company is working closely with the authorities to investigate these incidents.

The dialyzer filter operations have not developed satisfactorily. Sales increased but were lower than planned. The earnings were unfavorable, primarily due to production problems in one factory and underutilization of production capacity. The implementation of Gambro's own dialyzers in the US clinics has therefore proceeded more slowly than planned. Against this background and the foreseen continued pressure on margins, the Group is planning a review of the structure and efficiency of the operations within the business area Dialysis Products. The objective is to accelerate the ongoing rationalization and restructuring program that is being conducted within the area. In the new organisation established on July 1, 1998 a new position as Vice President Operations with global responsibility for the production of dialysis products is included.

The actions planned to cope with the problems indicated above will not improve operating (EBITDA) margin for business area Medical Technology before year-end.

Dialysis Care

Sales amounted to SEK 4,338 M (1,802), an increase of 120%, adjusted for foreign exchange effects. As of June 30, 1998 there were a total of approximately 450 Gambro clinics - responsible for the care of approximately 35,000 patients - in Europe, North and South America, and Asia.

Gambro Healthcare Patient Services, which operates the Group's clinics in the United States, continued to develop positively. In the laboratory service business an increased pressure on margins has been noted. The integration of clinic operations in the former Vivra company has proceeded according to plan. In April 17 clinics were acquired in California, Connecticut, Illinois, Massachusetts and Washington DC with a total of 1,100 patients. In June an agreement was reached covering the acquisition of dialysis operations in Alabama with 450 patients. The business in Argentina has developed very favorably. It was expanded during the period through the acquisition of clinics serving approximately 200 patients and now includes 1,500 patients in total.

Blood Component Technology

This business area continued to develop favorably, with strong growth in sales and earnings. Sales rose to SEK 559 M (503), an increase of 9%, adjusted for foreign exchange effects. The trend was especially favorable in the markets in Europe and the United States. Sales in Japan and China were weaker than the corresponding period 1997.

There is continuing good growth in sales of the Spectra blood component separation technology system and related disposable products. The TRIMA Automated Blood Collection System that was introduced during the second half of 1997 was launched successfully in a number of markets in Europe. It will be introduced in the American market following approval by the U.S. Food & Drug Administration (USFDA).

In April the CITEM-10 immunoadsorption system, which was developed and is being marketed by Gambro's Excorim subsidiary, was approved by the USFDA for marketing in the U.S. for the treatment of hemophilia with antibodies focused on coagulation factor VIII or IX. Slightly more than 3,000 patients are estimated to be suffering from this condition in the U.S. The product will be sold by COBE BCT.

Cardiopulmonary Care

Sales of the business area amounted to SEK 580 M (580), which - adjusted for foreign exchange effects - represented a decrease of 4%. Following weak sales in the beginning of the year, a recovery was noted toward the end of the period. The trend in the American market was favorable, with a weaker trend in the European market. In the latter there was also a slight increase in the pressure on prices. The ongoing rationalization of production of cardiopulmonary products is continuing according to plan.

MATERIALS HANDLING

This business area comprises the MacGREGOR company, which focuses on products and service in the field of marine cargo- handling, in which it is a world leader. MacGREGOR has between 35% and 45% of the world market in its three most important product areas: cranes, hatch covers and ro/ro equipment. MacGREGOR has a strong base in Asia, where it has a partly owned subsidiary in Japan and licenses the manufacture of cranes and hatch covers in China, among other operations.

Order bookings during the period, SEK 1,597 M (1,497), were 7% higher than a year earlier. Sales were on a level with those in the preceding year: SEK 1,593 M (1,613). For the period operating earnings before depreciation (EBITDA) amounted to SEK 99 M (61) and the corresponding margin was 6.2% (3.8). Operating earnings after depreciation (EBIT) improved to SEK 83 M (38), with an increase to 5.2% (2.4) in the corresponding margin.

The overall trend of business in MacGREGOR was favorable, with good growth in sales and earnings. The efficiency-improvement and rationalization program that was begun in 1997 is continuing to contribute to good growth in earnings. Trends in the markets for the company's various product groups differ, with somewhat weaker growth for products used in container ships and very strong growth for products used in ro/ro and passenger ships. The service business developed very favorably.

THE STRATEGIC FOCUSING IS COMPLETED

Important steps were taken during the period to finalize the strategic focusing of operations on medical technology and Gambro.

The Group's entire holding of five million AB Electrolux Series A shares was sold in June for SEK 825 M. The pre-tax capital gain amounted to SEK 535 M (capital gain after tax SEK 350 M).

The remaining holding of 1.1 million Munters shares was sold in April for SEK 90 M, resulting in a capital gain of SEK 66 M.

The Board of Directors decided on June 25, 1998 to propose that Gambro's shareholders be offered an opportunity to acquire approximately 114 million ABB AB shares, equal to 12.2% of the capital and 16.4% of the voting rights in ABB. The price per ABB share is SEK 55, representing a discount of approximately 50% relative to the last price paid for ABB shares on August 4, 1998. At a market price of SEK 111.50, the shares being offered are worth approximately SEK 12.7 billion. After giving effect to such a sale, Gambro's remaining holding in ABB will amount to approximately 3.8 million shares.

The sale of ABB shares represents an important step toward the objective of streamlining the Group. The opportunities for profitable growth in medical technology are being improved at the same time that it is becoming easier to value the company's stock.

In June an agreement was reached covering the sale of the MacGREGOR subsidiary at a price of SEK 900 M. MacGREGOR, which occupies a leading global position in the field of marine cargo-handling, has annual sales of approximately SEK 3.6 billion, with about 1,000 employees.

SPLIT

A 5-for-1 split of the Company's shares was effected on June 2.

INVESTMENTS

Group investments during the period amounted to SEK 881 M (556).

FINANCIAL POSITION

As of June 30, Gambro's net debt (loan and pension liabilities less cash and short-term investments including other financial investments) amounted to approximately SEK 10.4 billion. Effective with this interim report, net debt also includes pension liability (about SEK 550 M). Payment for the sale of the Electrolux shares was received after the close of the period. The equity/assets ratio was 58%. The liquid assets of the Group amounted to SEK 501 M (2,041) as of June 30, 1998. PERSONNEL The number of employees increased by 45 during the period. The total number of employees at the close of the period (June 30) was 18,221.

PARENT COMPANY

Parent Company earnings after financial items amounted to SEK -696 M (17,122). Liquid assets as of June 30, 1998 amounted to SEK 5,879 M (45).

SIGNIFICANT EVENTS FOLLOWING CLOSE OF THE PERIOD

On July 1, 1998 Gambro and Incentive merged into one group with the name of Gambro. A new group organisation was established including a more well-defined structure with four business areas and groupwide management functions. Business operations consist of two business areas in the renal care sector - Renal Care Products and Renal Care Services - in addition to the Cardiopulmonary Care and Blood Component Technology business areas.

As of July 1, 1998, goodwill in the amount of SEK 9,750 M was charged against shareholders' equity. This goodwill pertains to the acquisition of Gambro by the then Incentive. As a result, amortization of goodwill amounting to approximately SEK 560 M per year will be eliminated. This action has no effect on cash flow, nor does it have any tax consequences.

The proposed sale of ABB AB shares to Gambro's shareholders will be considered at a Special General Meeting today, August 5, 1998. If the Meeting adopts the proposal, Gambro plans to conduct the sale of approximately 114 million shares during the month of September and to complete the transaction by September 25.

In June, an agreement was reached covering the sale of the MacGREGOR subsidiary at a price of SEK 900 M. The transaction is being implemented through the sale of the majority interest - 60% of the voting rights and capital - in a new company that includes MacGREGOR. It is expected that the transaction can be completed during the third quarter of the current year. It will result in a capital gain of approximately SEK 400 M and will release about SEK 1,000 M in liquid funds.

Gambro's financial position following completion of the transactions noted above - amortization of goodwill, the sale of ABB AB shares and the sale of the MacGREGOR subsidiary - is shown in the pro forma balance sheet as of June 30, 1998, on page 10. Net debt amounts to approximately SEK 5.2 billion and the equity/assets ratio is 57%.

Stockholm, August 5, 1998

Mikael Lilius President

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

Future 1998 financial report date: October 27 (Nine-month interim report).

Gambro's financial information is also available on the Internet: http://www.gambro.com -0-

Sales by business area 1)
                           January - June      Change  Full yr
SEK M                      1998      1997       % 2)   1997 1)
Medical Technology,       9,007     6,341        41    15,033
of which
    Dialysis Products     3,824     3,587         7     7,435
    Dialysis Care         4,338     1,802       120     5,716
    Internal               -294      -131                -376
    Total Renal Care      7,868     5,258        49    12,775
    Blood Component         559       503         9     1,076
Technology
    Cardiopulmonary         580       580        -4     1,182
Care
Materials Handling        1,593     1,613         1     3,591
Total, present           10,600     7,954        33    18,624
structure
Divestments                         2,388                 773
Intra-Group                           -33                  93
Total                    10,600    10,309         3    19,490

1)  For present structure    2)  Corrected for exchange effects


Sales by market 1)

                            January - June

SEK M                  1998       %    1997       %
Nordic region           331       3     337       4
Rest of Europe        3,531      33   3,432      43
Americas              5,537      52   2,888      36
Asia, Australia       1,146      11   1,208      15
Rest of world            55       1      89       2
Total                10,600     100   7,954     100

1)  For present structure


Operating earnings 1) by business area
                                January-June     Full yr
SEK M                  1998    % 2)   1997  % 2) 1997    % 2)
                                       3)         3)
Medical Technology      818    9.1    776  12.2  1,721   11.4
Materials Handling       83    5.2     38   2.4     60    1.7
Total, present          901    8.5    814  10.2  1,781    9.6
structure
Divested companies                    153           31
Group items:
-   Items affecting
comparability           875        11,101       12,949
-   Depreciation and   -293          -293         -590
amortization
-   Other               -21           -25          -36
Total                 1,462   13.8 11,750 114.0 14,135  72.5

1)  After depreciation    2)  Operating margin    3)  For present
                                                      structure

GAMBRO GROUP INCOME STATEMENT

                             January - June  July 97  Full year
SEK M                        1998     1997  - June 98  1997

Revenues                    10,600   10,309  19,781   19,490

Operating expenses  1)      -9,138    1,441 -15,934   -5,355

Operating earnings           1,462   11,750   3,847   14,135
(EBITDA)

Financial items, net  2)      -135      -15    -365     -245

Earnings before taxes        1,327   11,735   3,482   13,890
(EBIT)
Taxes                         -505   -1,912    -935   -2,342
Minority interest              -29      -12     -45      -28

Net income                     793    9,811   2,502   11,520


1)     Of which,
nonrecurring items             875   11,101   2,723   12,949
amortization, goodwill        -675     -405  -1,331   -1,061
depreciation, other assets    -499     -438    -876     -815

2) Of which earnings in
 companies divested during
 the year.                       -       33     204      237

 Of which earnings in
 associated companies            -      355 a)    -     355 a)
 a) (Jan-March 1997)


QUARTERLY DATA PER BUSINESS AREA
(Present Group structure)

                      1998                    1997

SEK M              Q1     Q2     Q1      Q2     Q3        Q4    Total

Medical
Technology
Revenues         4,447  4,560  2,904   3,437   4,214    4,478   15,033
Operating
earnings -
before depr
(EBITDA)           858    823    532     694     837      881    2,944
Operating
margin %          19.3   18.0   18.3    20.2    19.9     19.7     19.6
Operating
earnings - after
depr. (EBIT)       431    387    345     431     453      492    1,721
Operating
margin %           9.7    8.5   11.9    12.5    10.7     11.0     11.4
Materials
Handling
Revenues           761    832    569   1,044     848    1,130    3,591
Operating
earnings -
before depr
(EBITDA)            37     62      0      61       5       37      103
Operating
margin %           4.9    7.5      0     5.8     0.6      3.3      2.9
Operating
earnings
- after depr
(EBIT)              27     56    -11      49      -6       28       60
Operating
margin %           3.5    6.7   -1.9     4.7    -0.7      2.5      1.7
Total business
areas
Revenues         5,208  5,392  3,473   4,481   5,062    5,608   18,624
Operating
earnings -
before depr
(EBITDA)           895    885    532     755     842      918    3,047
Operating
margin %          17.2   16.4   15.3    16.8    16.6     16.4     16.4
Operating
earnings
- after depr
(EBIT)             458    443    334     480     447      520    1,781
Operating
margin %           8.8    8.2    9.6    10.7     8.8      9.3      9.6


GAMBRO GROUP BALANCE SHEET


SEK M                             June 30,   June 30,   Dec 31,
                                      98        97        97
ASSETS
Fixed assets
Intangible assets                   25,281    24,468   25,570
Property, plant and equipment        4,790     4,796    4,439
Shares and participations            2,471     2,804    2,749
Long-term receivables                  372       426      334
Total fixed assets                  32,914    32,494   33,092

Current assets
Inventories                          2,928     3,380    2,757
Trade receivables, etc               8,442    13,258   13,151
Liquid assets                          501     2,041      881
Total current assets                11,871    18,679   16,789

TOTAL ASSETS                        44,785    51,173   49,881

SHAREHOLDERS' EQUITY AND
LIABILITIES
Shareholders' equity  1)            25,496    23,714   25,385
Minority interests                     115        44       98
Accruals                               987       906      698
Long-term liabilities                5,716    12,359   10,064
Advances from customers                517     1,222      408
Current liabilities                 11,954    12,928   13,228

TOTAL SHAREHOLDERS' EQUITY
AND LIABILITIES                     44,785    51,173   49,881

1) Total number of shares outstanding 341.869.335 (of which,
Series A: 250.574.090, Series B: 91.295.245)


STATEMENT OF CHANGES IN FINANCIAL POSITION

                                            January - June

SEK M                                      1998         1997

Earnings after financial items
(excl. associated companies)              1,327       11,380
Depreciation according to plan            1,174          843
Change in operating capital                -643         -959
Investments in fixed assets                -881         -556

Cash flow from operations                   977       10,708
Acquisitions                               -394      -11,588

Cash flow from operations after             583         -880
acquisitions


GAMBRO GROUP PRO FORMA BALANCE SHEET(a)


SEK billion                         June 30, 98     Pro forma
ASSETS
Fixed Assets                               32.9          20.7
Current assets                             11.9           9.3
TOTAL ASSETS                               44.8          30.0

SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders equity                        25.5          17.4
Minority interests                          0.1           0.1
Accruals                                    1.0           0.9
Long-term liabilities                       5.7           4.9
Advances from customers                     0.5             0
Current liabilities                        12.0           6.7
TOTAL SHAREHOLDERS EQUITY AND              44.8          30.0
LIABILITIES

a)   Following the adjustment of goodwill as of July 1, 1998, the
     receipt of payment for the Electrolux shares, the assumed
     completion of the sale of approx. 114 million ABB shares, and the
     assumed completion of the sale of the MacGREGOR subsidiary.

CONTACT: Gambro

Bengt Modeer

Senior Vice President

Corporate Communications

[phone],

[phone]

or

Citigate, New York

Ray McNulty, 212/508-3400