CONCENTRIC INTERIM REPORT JANUARY – JUNE 2013

First six months of 2013: Strong results despite lower activity levels year-on
-year

  · Sales for H1 MSEK 951 (1,206), down 17% year-on-year in constant currency -
fall in demand across most end-markets and regions from last year
  · EBIT and EBIT margin for H1 MSEK 133 (175) and 13.9% (14.6) respectively 1)
  · Earnings after tax for H1 MSEK 81 (106) – EPS before & after dilution SEK
1.85 (2.41) 1)
  · Net cash flow for H1 of MSEK -135 (1) includes a dividend payout of MSEK 110
(88) and a negative cash flow for the acquisition of LICOS Trucktec GmbH
(“Licos”) of MSEK 105
  · Group’s net debt and gearing ratio for H1 MSEK 622 (532) and 107% (81)
respectively – restated for IAS 19 unrecognised pension liabilities & associated
deferred tax asset 1)

Second quarter of 2013: Sequential improvement in sales and operating margin

  · Sales for Q2 up 11% sequentially on Q1 in constant currency – an increase of
13% after adjusting for lower average working days in Q2 compared to Q1
  · Sales for Q2 MSEK 502 (596), down 11% year-on-year in constant currency -
fall in demand across most end-markets and regions from last year
  · EBIT and EBIT margin for Q2 MSEK 74 (86) and 14.8% (14.5) respectively 1)
  · Earnings after tax for Q2 MSEK 44 (51) – EPS before & after dilution SEK
1.01 (1.16) 1)
  · Strong cash flow for Q2 from operating activities MSEK 66 (53)

1) The 2012 comparative figures for EBIT, Earnings before tax, Net income for
the period have 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 Q2 2013:

“Demand across most of our end-markets and regions has continued to stabilise
during the second quarter of 2013 compared to the falling sales levels
experienced during the second half of last year. As a result, both sales and
EBIT were up on a sequential basis for the second consecutive quarter.

Even with all the efforts we have put into the ongoing consolidation of our
European hydraulics business, I am pleased to report that we have achieved a
strong drop through from the sequential improvement in sales for the second
quarter, underpinned by the Concentric Business Excellence programme. As a
result, our EBIT margins for the second quarter increased to 14.8%, with a
strong conversion rate into cash derived from operating activities.

Looking forward, the orders received were slightly above sales for the third
consecutive quarter, indicating that end-customer confidence continues to
improve. However, current customer schedules still do not suggest that there
will be sufficient underlying growth in the second half of this year to meet the
latest external market indices which, blended to the Group’s end-markets and
regions, project a 2% increase year on year. That said, our ambition remains 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.

We are very optimistic about the future benefits that will be derived from our
new hydraulics facility in Hof, Germany and the acquisition of Licos. We believe
the ramp up of existing contracts with global truck manufacturers will grow the
sales of Licos electromagnetic clutches on water pumps by 50% over the coming
three-year period, enabling them to reach the Group’s existing margin levels. In
addition, we believe there are further growth opportunities using Concentric’s
existing geographical and end-market spread, as well as applying the clutch
technology to a wider range of the Group’s products and applications .”


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)