Concentric AB: Concentric Interim Report January – June 2013

Regulatory News:

Concentric AB (STO:COIC):

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 .”

This information was brought to you by Cision http://news.cision.com