CONCENTRIC INTERIM REPORT JANUARY – JUNE 2012

First six months of 2012: Concentric continues to grow ahead of the market

  · Year on year sales growth of 8% to MSEK 1,206 (1,113) during the first six
months of 2012 (4% in constant currency). The Group’s average sales per working
day in the first six months of 2012 was MSEK 9.5 (8.9).
  · EBIT for the first six months of 2012 was MSEK 161 (118), up 37% year on
year, increasing the operating margin to 13.4% (10.6). Adjusting for pension
charges and one-time de-merger costs, the underlying EBIT and EBIT margin was
MSEK 173 (142) and 14.4% (12.7) respectively.
  · Earnings after tax were MSEK 98 (64) - EPS of SEK 2.23 (1.44). Adjusting for
post-tax impact of pension charges and one-time de-merger costs, the underlying
EPS was SEK 2.41 (1.83).
  · Cash flow from operating activities was strong in the first six months of
2012, amounting to MSEK 129 (67), which represents SEK 2.92 (1.52) per share.
  · The Group’s net debt was MSEK 119 (269) at 30 June 2012, representing a
reduction of MSEK 83 for the six months, derived primarily from operating cash
flows, before taking account of the dividend payout of MSEK 88 (nil).
Accordingly, the gearing ratio (debt/equity) was 13% (36).

President and CEO, David Woolley, comments on the interim report for the first
six months of 2012:
“Concentric’s strong performance in the first quarter of 2012 was sustained in
the second quarter of 2012, despite there being, on average, three less working
days for the Group’s production facilities. Looking at the first six months of
2012, we have achieved year on year sales growth of 4% in constant currency,
which remains above the 2% blended market growth rate.

Group sales for the second quarter were flat year on year, in constant currency,
with growth in our North American regional operations offset by the decline in
our European operations, driven by a softening in the construction equipment and
medium/heavy truck markets.

This strong performance continues to be achieved without compromising our
working capital and cost disciplines, resulting in both strong cash flow and
margins. Adjusting for pension costs, Concentric recorded an underlying EBIT
margin of 14.3% for the second quarter of 2012 and a cash flow from operating
activities increased to 53 million.

Looking forward, orders received during the second quarter of 2012 indicate that
the activity levels will be slightly lower in the third quarter of 2012. Despite
the slight weakening in demand and economic confidence experienced in North
America during the second quarter of 2012, we anticipate that the trend of
stronger demand in the US compared to Europe will continue. The latest market
indices indicate a market growth rate for the full year 2012 of 3%, applying our
mix of sales by end-market and customer location. However, we also note this
looks optimistic given that movements in the market indices tend to lag our
order intake experience by 3-6 months. Our ambition remains for Concentric to
grow faster than the market. We continue to firmly believe that our geographical
spread and four distinct end-customer segments, together with the flexibility we
have in our operations through our Business Excellence program, make Concentric
very well positioned to tackle the challenges of the second half of 2012.

We continue to see great opportunities for long-term growth by providing value
to our customers through our leading technology addressing the key drivers in
our market niches, such as the forthcoming changes in emissions legislation and
increased focus on reducing fuel consumption.”

Key business events – first six months of 2012:

  · Alfdex, a 50/50 joint venture between Alfa Laval and Concentric, signed an
exclusive supplier agreement with one of the world’s largest producer of heavy
trucks. The agreement to supply Alfdex Oil Mist Separators is valid until 2017,
with a total estimated sales during the contract period for the joint venture of
at least SEK 500 million.
  · During the first quarter of 2012, the group has invested in four new test
stations for coolant pumps at its research and development facility based in
Birmingham, UK to support the ongoing development of the next generation of
engine products. The new test stations will enable accurate performance
evaluation of engine coolant pumps, by measuring their flow, pressure, power
consumption and cavitation performance.
  · In addition, as part of its ongoing investment program, Concentric also
unveiled a new automated facility at its production facility based in
Birmingham, UK to assemble and test oil pumps for the new Perkins Tier 4 engine.
  · Alfdex AB celebrated the production of its 1,000,000th separator on 3 July,
2012. Sales of Alfdex product for the first six months of 2012 were up 36% year
on year.

For further information, please contact:
David Woolley (President and CEO), David Bessant (CFO), or Lena Olofsdotter (SVP
Corporate Communications),
at Tel: +44 121 445 6545

E-mail: info@concentricab.com
Corporate Registration Number 556828-4995