CONCENTRIC INTERIM REPORT JANUARY – JUNE 2014

First six months of 2014: Strong margin and cash conversion from y-o-y growth

• Net sales for H1, excluding revenues attributable to Alfdex: MSEK 1,023 (894) [1] – up 5% year-on-year, after adjusting for currency (+3%) and LICOS (+6%)
• Operating income for H1, including net income (after interest and tax) attributable to Alfdex: MSEK 161 (131) – operating margin of 15.8% (14.6) [1]
• Earnings after tax for H1: MSEK 113 (81) – basic EPS of SEK 2.59 (1.86)
• Strong cash flow from operating activities for H1: MSEK 159 (65)
• Group’s net debt for H1: MSEK 440 (638) [1] – gearing ratio of 56% (110), following dividend payout of MSEK 121 (110) and own share buy-backs of MSEK 50 (nil) in Q2

Second quarter of 2014: Positive sales and margin development continued

• Net sales for Q2, excluding revenues attributable to Alfdex: MSEK 527 (472) [1] – up 2% year-on-year, after adjusting for currency (+4%) and LICOS (+6%)
• Operating income for Q2, including net income (after interest and tax) attributable to Alfdex: MSEK 84 (73) – operating margin of 16.0% (15.5) [1]
• Earnings after tax for Q2: MSEK 60 (44) – basic EPS of SEK 1.39 (1.01)
• Strong cash flow from operating activities for Q2: MSEK 94 (64)

[1] The 2013 comparative figures for Net sales, Operating income, Earnings before tax and Net debt for the period have been adjusted for the amendments to IFRS 11, “Joint arrangements” (see Appendices 1 to 3 for the restated consolidated income statements, balance sheets and cash flow statements).

President and CEO, David Woolley, comments on interim report for Q2 2014:

“The strong sales, operating margin and cash flow delivered in the first quarter have continued into the second quarter of 2014. As a result, sales for the first half of 2014 were up 5% y-o-y, after adjusting for LICOS (+6%) and currency (+3%), whilst the EBIT margin increased to 15.8% for the same period. In spite of some Euro VI pre-buy effects affecting the first quarter, demand across our European end-markets for both engine and hydraulic products has been relatively strong and continues to be an important source of growth. Engine products sales in North American end-markets have also improved, particularly for medium and heavy trucks, although demand for our hydraulics products remains fairly flat in the US.

Looking forward, the orders received in the second quarter were in line with sales for the quarter, indicating that end-customer confidence is stable.

The increasing pressure to reduce fuel consumption in all forms of machinery and trucks just reinforces the importance of our ongoing customer development programmes for our variable flow pump technology. Furthermore, our longstanding expertise in hydraulic products, will allow us to continue to occupy strong positions in niche areas where customers require more advanced, custom-made solutions. Concentric remains well positioned both financially and operationally, to fully leverage our market opportunities.”

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)

Concentric AB (publ) is listed on NASDAQ OMX Stockholm, Mid Cap. The information in this report is of the type that Concentric is required to disclose under the Swedish Securities Market Act. The information was submitted for publication at 8.00am on 24 July, 2014. This report contains forward-looking information in the form of statements concerning the outlook for Concentric’s operations. This information is based on the current expectations of Concentric’s management, as well as estimates and forecasts. The actual future outcome could vary significantly compared with the information provided in this report, which is forward-looking, due to such considerations as changed conditions concerning the economy, market and competition.

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