INTERIM REPORT JANUARY – MARCH 2012
First quarter 2012: Concentric continues to grow faster than the market with sustained margins and strong cash flow
- Year on year sales growth of 10% to MSEK 610 (554) during Q1 2012 (8% in constant currencies).
- Average sales per working day sustained - increases in the Americas have offset slightly lower activity experienced in Europe and the Rest of the World.
- EBIT and EBIT margin for Q1 2012 was MSEK 82 (58) and 13.4% (10.4) respectively. Adjusting for pension charges and one-time de-merger costs, underlying EBIT and EBIT margin was MSEK 88 (66) and 14.4% (11.9) respectively.
- Earnings after tax were MSEK 51 (31) - EPS of SEK 1.16 (0.70). Adjusting for post-tax impact of pension charges and one-time de-merger costs, EPS was SEK 1.25 (0.83).
- Cash flow from operating activities was strong in Q1 2012, amounting to MSEK 76 (30).
- The Group’s net debt was MSEK 57 (248) at 31 March 2012 - reduction of MSEK 57 derived primarily from operating cash flows.
President and CEO David Woolley comments on the first quarter 2012:
“Concentric’s strong performance in 2011 was sustained in the first quarter of 2012, and I am particularly pleased that Concentric continues to grow faster than the market. We achieved sales growth of 8% in constant currencies for the first quarter 2012 compared with the same period last year, well above the 1% blended market growth rate. This is the fifth consequtive quarter we have achieved above market growth.
This growth was also achieved without compromising our working capital and cost disciplines, resulting in strong cash flow and margins. Adjusting for pension costs, Concentric recorded an underlying EBIT margin of 14.4% for the quarter and cash flow from operating activities increased to 76 million.
Looking forward, orders received during the quarter indicate that the activity levels will also be sustained into the second quarter of 2012, with a continuing trend of stronger demand in North America compared to Europe. The blended market growth rate for full year 2012 based on the latest available data is forecast to be 5%, applying our mix of sales by end-market and customer location. Our ambition remains to grow faster than the market.
We 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 any challenges in 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 quarter 2012
- The emerging trend from the fourth quarter of 2011 of higher demand in the US compared to Europe has continued into the first quarter of 2012. Market indices highlight year on year growth across most North American end-markets. Conversely, with the exception of the hydraulic lift trucks market, most European end-markets are down slightly year on year for the first quarter 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 value for the joint venture of at least SEK 500 million.
- During the first quarter, 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.
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
Corporate Registration Number 556828-4995