CONCENTRIC INTERIM REPORT JANUARY – MARCH 2015

First quarter of 2015: Solid results strengthened by currency gains

• Net sales for Q1, excluding Alfdex: MSEK 623 (496) – up 1% year-on-year, after adjusting for currency (+21%) and acquisition of GKN Pumps (+4%)
• Operating income for Q1: MSEK 117 (77), including negative goodwill of MSEK 15 (nil) recognised on acquisition of GKN Pumps – operating margin of 18.8% (15.5)
• Earnings after tax for Q1: MSEK 89 (53) – basic and diluted EPS of SEK 2.10 (1.20)
• Group’s net debt for Q1: MSEK 630 (343) – gearing ratio of 84% (40)

 
President and CEO, David Woolley, comments on interim report for Q1 2015:

“The group’s solid performance in the first quarter of 2015 was strengthened by significant translational currency gains derived from the relative weakness of the Swedish Krona. Underlying sales for the first quarter of 2015, excluding the impact of currency and the GKN Pumps acquisition, were up 1% year-on-year, in line with the published indices for our end-markets. Across most of our end-markets, the outlook in North America remained positive and, although Europe was flat, Concentric enjoyed further structural growth from the ramp up of Euro VI platforms. However, the weak demand in the global agricultural machinery market has continued.

Linked to the strong currency impact, the group’s underlying EBIT margin for the first quarter improved to 16.3% (15.5). As the fair value of the net assets acquired with the GKN pumps business exceeded the purchase price, negative goodwill of MSEK 15 was also recognised in the first quarter, which increased the reported operating margin to 18.8%. In addition, we expect to book integration costs in respect of GKN pumps during the second quarter of 2015 which should not exceed the value of this negative goodwill.

Looking forward, the orders received, and expected to be fulfilled during the second quarter of 2015, were in line with the sales levels of the first quarter of 2015, indicating stable end-customer demand.

Concentric remains well positioned, both financially and operationally, to fully leverage our market opportunities.”

  
For further information, please contact:
David Woolley (President and CEO) or David Bessant (CFO) at Tel: +44 121 445 6545 or 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 28 April, 2015. 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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