CONCENTRIC INTERIM REPORT JANUARY – MARCH 2013

First quarter of 2013: Modest sequential sales growth

• Sales for Q1 up 7% sequentially on Q4 last year in constant currency – 3% increase after adjusting for more working days
• Sales for Q1 MSEK 449 (610), down 23% year-on-year in constant currency - fall in demand across most end-markets and regions from last year
• EBIT and EBIT margin for Q1 MSEK 59 (89) and 13.0% (14.6) respectively 1)
• Earnings after tax for Q1 MSEK 37 (55) – EPS before & after dilution SEK 0.84 (1.25) 1)
• Group’s net debt and gearing ratio for Q1 MSEK 438 (466) and 69% (69) respectively – includes previously unrecognised pension liabilities & associated deferred tax asset 1)

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 2 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 Q1 2013:

“Demand across most of our end-markets and regions appeared to stabilise during the first quarter of 2013 compared to what we experienced at the end of last year, with a reduction in both the level of customer shutdowns and the amount of de-stocking from the major OEMs. As a result, both sales and EBIT were up on a sequential quarter basis.

During the first quarter Concentric implemented new production lines for contracts secured in 2012 and continued to consolidate the Group’s hydraulics business in Europe. Despite this, Concentric has maintained operating margins versus the fourth quarter 2012 at 13.0%. This continued strong performance has been achieved through effective cost management supported by the Concentric Business Excellence programme.

Cash flow from operating activities was adversely affected in the quarter by higher tax payments, restructuring expenditure and a negative working capital impact arising from the stronger than usual cash flow achieved in the fourth quarter 2012, combined with the timing of this year’s Easter vacation.

Looking forward, the orders received during the quarter were again slightly above sales for the second consecutive quarter, indicating that end-customer confidence is improving.

Latest market indices suggest 2% growth in 2013 year-on-year, blended across our end-markets, based on much stronger demand in the second half of 2013. However, current customer schedules do not indicate any significant improvement in order levels yet. 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.”         

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)