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CONCENTRIC SIX-MONTH REPORTJANUARY – JUNE 2011

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First half 2011

  • Sales increased by 21% to SEK 1,113 m (920) during the first half 2011 compared to the same period 2010. In constant currencies, sales increased by 35% compared with the corresponding period in the preceding year.
  • Earnings before interest and taxation (“EBIT” or “Operating Income”) and EBIT margin amounted to SEK 118 m (7) and 10.6% (0.8%) respectively. One-time costs totalling SEK 24 m associated with the de-merger were included in the first half result and will not be incurred going forward. Adjusting for these costs, the EBIT and EBIT margin was SEK 142 m and 12.7%.
  • Earnings after tax amounted to SEK 64 m (loss: 28). Earnings per share amounted to SEK 1.44 (minus: 0.64). After adjusting for the post-tax impact of one-time de-merger costs, the earnings per share was SEK 1.83.
  • Cash flow from operating activities remained strong and amounted to SEK 67 m (96).
  • The Group’s net debt was SEK 269 m (404), a year-on-year reduction of SEK 135 m derived primarily from operating cash flows after investing activities.
  • The Group’s gearing (debt/equity ratio) was 36% (53%) at June 30th.
  • As previously announced by Haldex AB, the proposal for the demerger of the Concentric Group (Hydraulics Systems Division) was approved by the shareholders of Haldex AB at their Annual General Meeting and Concentric AB was subsequently listed on June 16th.

Second quarter 2011

  • Sales increased by 13% to SEK 559 m (493) during the second quarter 2011 compared to the same quarter 2010. In constant currencies, sales increased by 30% compared with the corresponding period in the preceding year.
  • During the second quarter, increases were noted in all end sectors and regions and sales in constant currencies rose 3% compared with the first quarter 2011.
  • EBIT and EBIT margin amounted to SEK 60 m (17) and 10.8% (3.5%) respectively. One-time costs totalling SEK 16 m associated with the de-merger were included in the second quarter result and will not be incurred going forward. Adjusting for these costs, the EBIT and EBIT margin was SEK 76 m and 13.6%.
  • Earnings after tax amounted to SEK 33 m (3). Earnings per share amounted to SEK 0.74 (0.06). After adjusting for the post-tax impact of one-time de-merger costs, the earnings per share was SEK 1.00.
  • Cash flow from operating activities remained strong and amounted to SEK 36 m (38).

As of August 1, 2011, David Woolley, currently the regional head of Europe and ROW, will succeed Ian Dugan as President and CEO of Concentric AB.


President and Chief Executive Officer Ian Dugan comments on the second quarter of 2011:

“Concentric delivered strong results during the second quarter of 2011. The robust market demand from the first quarter was sustained in the second quarter with sales in constant currencies increasing by 3% from the first quarter 2011.

The strong operating performance was reflected in a continued improvement of the EBIT margin to 10.8%, up from 10.4% in the first quarter of 2011. After adjusting for SEK 16 million of separation and duplicate corporate charges in the period and recognising that similar charges of SEK 8 million were incurred in the first quarter of 2011 , the comparable EBIT margin for the second quarter of 2011 was 13.5% versus the first quarter of 2011 which was 11.9%.   This confirms that Concentric maintains tight cost control even as sales rise.

The Group continues to maintain robust working capital disciplines and generated an operating cash flow of SEK 36 million despite the pressures of strong sales growth.

Latest 2011 market indices suggest a full year-on-year increase in sales across our market blend of 15% in constant currencies. Orders received during the second quarter 2011 indicate that sales activity levels during the second quarter will be sustained in the third quarter of 2011. Therefore we believe we will exceed the market projection for the full year 2011.”


For further information, please contact
Ian Dugan, President and CEO,
David Bessant, CFO, or
Lena Olofsdotter, SVP Corporate Communications,
at Tel: +44 121 445 6545
E-mail: info@concentricab.com

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