CONCENTRIC INTERIM REPORT JANUARY – SEPTEMBER 2016

THIRD QUARTER

  · Net sales: MSEK 491 (559) – down 7% y-o-y, after adjusting for currency
(–5%)
  · Operating income: MSEK 81 (93), generating an operating margin of 16.5%
(16.6)
  · Earnings after tax: MSEK 59 (66); basic EPS of SEK 1.45 (1.57)
  · Strong cash flow generated from operating activities: MSEK 113 (70) driven
by reduction in working capital, which represented 2.0% (4.7) of annual sales

FIRST NINE MONTHS

  · Net sales: MSEK 1,531 (1,802) – down 11% y-o-y, after adjusting for currency
(–4%)
  · Operating income: MSEK 255 (298), generating an operating margin of 16.6%
(16.5) – comparative for 2015 includes negative goodwill of MSEK 15 and one-off
expenses of MSEK 14, both associated with the acquisition of GKN Pumps
  · Earnings after tax: MSEK 182 (217); basic EPS of SEK 4.46 (5.13)
  · Strong cash flow generated from operating activities: MSEK 309 (239)
  · Group’s net debt: MSEK 559 (451); gearing ratio of 81% (53) following the
recognition of pension remeasurement losses of MSEK 214 (gains 100) and own
share buy-backs of MSEK 60 (92) during the first nine months
Overall, Concentric's sales for the third quarter and the first nine months were
broadly in line with published market indices. The group’s sales for the third
quarter and the first nine months were down year-on-year by 7% and 11%
respectively in constant currency. The primary reason for the decline in sales
continues to be the lower US volumes in the Class 8 heavy duty truck market,
down by over 30% in the first nine months, following a peak in the replacement
cycle during 2015 and a subsequent correction of inventory levels. As
expected, the European truck market has also softened in the third quarter with
the normalisation of demand in Southern Europe. Commodity prices continue to
suppress global demand for agricultural machinery and industrial applications,
especially within the oil and gas industry. Construction equipment markets in
North America and Europe have also remained soft with the macro economic
uncertainty. Continued de-stocking of dealers and OEM’s inventories has also
contributed to the soft demand during the quarter.

All parts of the business participate in the Concentric Business Excellence
(“CBE”) and this has underpinned our ability to adapt operations to the lower
demand and thereby protect our margins.

The successful implementation of this programme has continued to support the
consolidated results, ensuring that the underlying EBIT margin for both the
third quarter and the first nine months remained stable at 16.5% and 16.6%
respectively, in spite of the market headwinds. In addition, we have continued
to protect and enhance our sales and engineering resources to support the
organic growth objectives. We were recently present at the IAA 2016 where we
exhibited Concentric's extensive range of pumps, including new products
developments such as the Mid-range 2-speed controllable cooling pump, and we
gained a lot of positive feedback.

We also continue to explore acquisition opportunities for enabling technologies
that will enhance our solutions for variable displacement pumps and provide us
with an even greater presence alongside our global customers.

Outlook
Looking forward, the orders received, and expected to be fulfilled during the
fourth quarter of 2016, were slightly behind the sales levels of the third
quarter of 2016. Our continued focus on business excellence will help us respond
to these challenging market conditions for both on- and off-highway sectors in
North America and Europe. Market indices have been revised during the third
quarter and now suggest that production volumes blended to Concentric’s end
-markets and regions will soften a little further during the last quarter of
2016, down 8% year-on-year for the full year 2016. Concentric remains well
positioned both financially and operationally, to fully leverage our market
opportunities.

For further information, please contact:

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

This information is information that Concentric AB is obliged to make public
pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The
information was submitted for publication, through the agency of the contact
person set out above, at 08.00 CET on 1 November 2016.