CONCENTRIC INTERIM REPORT JANUARY – SEPTEMBER 2013

First nine months of 2013: Underlying margins maintained on lower sales y-o-y

  · Sales for first nine months MSEK 1,477 (1,698), down 11% year-on-year in
constant currency, after adjusting for the acquisition of LICOS Trucktec GmbH
(“Licos”)
  · EBIT and EBIT margins for first nine months MSEK 209 (249) and 14.1% (14.7)
respectively 1)
  · Earnings after tax for first nine months MSEK 130 (155) – EPS before & after
dilution: SEK 2.95 (3.52) 1)
  · Net cash outflow for first nine months MSEK 152 (inflow 31), including the
dividend payout of MSEK 110 (88) and the acquisition of Licos of MSEK 105
  · Group’s net debt and gearing ratio for Q3 MSEK 590 (471) and 96% (71)
respectively – restated for IAS 19 unrecognised pension liabilities and
associated deferred tax asset 1)

Third quarter of 2013: Sales and operating income increases y-o-y

  · Sales for Q3 MSEK 526 (492), up 3% year-on-year in constant currency, after
adjusting for the acquisition of Licos
  · EBIT and EBIT margins for Q3 MSEK 76 (74) and 14.5% (14.9) respectively 1)
  · Earnings after tax for Q3 MSEK 49 (49) – EPS before & after dilution SEK
1.10 (1.10) 1)
  · Cash flow for Q3 from operating activities of MSEK 55 (61)

1) The 2012 comparative figures for EBIT, Earnings before tax and Net income for
the period have all been adjusted for the amendments to IAS 19, Employee
benefits (see Appendix 1 for restated income statements). In addition, the 2012
comparative figures for net debt and equity have also been adjusted for the
amendments to IAS 19, Employee benefits (see Appendix 3 for restated balance
sheets).
2) As Return on equity is calculated on a rolling 12 months basis and 2011 has
not been restated, no comparable figure has been provided.

President and CEO, David Woolley, comments on interim report for Q3 2013:

“Concentric delivered a solid performance with sales for the third quarter ahead
year-on-year for the first time during 2013, up 3% on the same quarter as last
year after adjusting for the acquisition of Licos (6%) and the impact of
currency (-2%).

However, looking at the sequential development during 2013, there now seems to
be a clear polarisation between our two main geographical markets. Europe has
continued to show steady signs of improvement with this being the third
consequtive quarter of sequential growth. On the other hand, weakening US
demand, primarily in the medium/heavy trucks and heavy construction and mining
equipment, has resulted in a sequential sales drop of 6% and a year-on-year
sales drop of 10% for the third quarter. Whilst our sales experience appears
contrary to the latest market indices, we are confident that we have maintained
our relative competitive position in all our North American end-markets.

We continue to flex our operations in response to the prevailing uncertain
market conditions, underpinned by the Concentric Business Excellence programme.
As a result, I am pleased to say that our EBIT margin for the third quarter was
maintained at 14.5%.

Looking forward, the orders received this quarter were slightly below sales,
even after making seasonal adjustments for the fewer working days planned in the
fourth quarter. This reversal of the recent order trend seems to be driven by a
weakening of confidence within our hydraulic customer mix for North America,
most noticeably at Caterpillar.

We have made good progress in the quarter on the ongoing projects to consolidate
our European hydraulics business and integrate the Licos acquisition into the
wider Concentric group and, as such, we remain optimistic about the future long
-term benefits that will be derived from these initiatives.

We continue to strive to outperform the market through our leading technology
addressed at the key market drivers, such as tougher emissions legislation and
increased demand for fuel efficient solutions.”


For further information, please contact:

David Woolley (President and CEO), David Bessant (CFO), or Lena Olofsdotter
(Corporate Communications), at Tel: +44 121 445 6545 (E-mail:
info@concentricab.com)