Concentric — Interim / Quarterly Report 2012

Jul 19, 2012

First six months of 2012: Concentric continues to grow ahead of the market

• Year on year sales growth of 8% to MSEK 1,206 (1,113) during the first six months of 2012 (4% in constant currency). The Group's average sales per working day in the first six months of 2012 was MSEK 9.5 (8.9).
• EBIT for the first six months of 2012 was MSEK 161 (118), up 37% year on year, increasing the operating margin to 13.4% (10.6). Adjusting for pension charges and one-time de-merger costs, the underlying EBIT and EBIT margin was MSEK 173 (142) and 14.4% (12.7) respectively.
• Earnings after tax were MSEK 98 (64) - EPS of SEK 2.23 (1.44). Adjusting for post-tax impact of pension charges and one-time de-merger costs, the underlying EPS was SEK 2.41 (1.83).
• Cash flow from operating activities was strong in the first six months of 2012, amounting to MSEK 129 (67), which represents SEK 2.92 (1.52) per share.
• The Group's net debt was MSEK 119 (269) at 30 June 2012, representing a reduction of MSEK 83 for the six months, derived primarily from operating cash flows, before taking account of the dividend payout of MSEK 88 (nil). Accordingly, the gearing ratio (debt/equity) was 13% (36).

	Apr-Jun		Jan-Jun
Amounts in MSEK	2012	2011	Change	2012	2011	Change
Net sales	596	559	7%	1,206	1,113	8%
Operating income	79	60	31%	161	118	37%
Earnings before tax	70	49	44%	144	95	53%
Net income for the period	47	33	45%	98	64	55%
Operating margin, %	13.3	10.8	2.5	13.4	10.6	2.8
Return on capital employed, % 1)	26.0	19.2	6.8	26.0	19.2	6.8
Return on equity, % 2)	23.5	17.7	5.8	23.5	17.7	5.8
Earnings per share, SEK 3)	1.07	0.74	0.33	2.23	1.44	0.79

Concentric

1) The ROCE has been calculated on a rolling 12 month basis.

2) The ROE is calculated as Net income divided by the average Equity on a rolling 12 month basis.

3) Earnings per share is based on the current number of shares in the company of 44,215,970.

Second quarter of 2012: Largely sustained demand from Q1 2012

• Year on year sales growth of 7% to MSEK 596 (559) during the second quarter of 2012 (sales were flat in constant currency). The Group's average sales per working day in the second quarter of 2012 was MSEK 9.6 (9.1) – sustained from the first quarter of 2012, with the higher volumes in the US offset by lower activity experienced in Europe and the Rest of the World.
• EBIT for the second quarter of 2012 was MSEK 79 (60), up 31% year on year, taking the EBIT margin to 13.3% (10.8). Adjusting for pension charges and one-time de-merger costs, the underlying EBIT and EBIT margin was MSEK 85 (76) and 14.3% (13.5) respectively.
• Earnings after tax were MSEK 47 (33) - EPS of SEK 1.07 (0.74). Adjusting for post-tax impact of pension charges and one-time de-merger costs, the underlying EPS was SEK 1.16 (1.00).
• Cash flow from operating activities was also strong in the second quarter of 2012, amounting to MSEK 53 (37), which represents SEK 1.20 (0.84) per share.

President and CEO, David Woolley, comments on the interim report for the first six months of 2012:

"Concentric"s strong performance in the first quarter of 2012 was sustained in the second quarter of 2012, despite there being, on average, three less working days for the Group"s production facilities. Looking at the first six months of 2012, we have achieved year on year sales growth of 4% in constant currency, which remains above the 2% blended market growth rate.

Group sales for the second quarter were flat year on year, in constant currency, with growth in our North American regional operations offset by the decline in our European operations, driven by a softening in the construction equipment and medium/heavy truck markets.

This strong performance continues to be achieved without compromising our working capital and cost disciplines, resulting in both strong cash flow and margins. Adjusting for pension costs, Concentric recorded an underlying EBIT margin of 14.3% for the second quarter of 2012 and a cash flow from operating activities increased to 53 million.

Looking forward, orders received during the second quarter of 2012 indicate that the activity levels will be slightly lower in the third quarter of 2012. Despite the slight weakening in demand and economic confidence experienced in North America during the second quarter of 2012, we anticipate that the trend of stronger demand in the US compared to Europe will continue. The latest market indices indicate a market growth rate for the full year 2012 of 3%, applying our mix of sales by end-market and customer location. However, we also note this looks optimistic given that movements in the market indices tend to lag our order intake experience by 3-6 months. Our ambition remains for Concentric to grow faster than the market. We continue to 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 the challenges of the second half of 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 six months 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 sales during the contract period for the joint venture of at least SEK 500 million.
• During the first quarter of 2012, 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.
• Alfdex AB celebrated the production of its 1,000,000th separator on 3 July, 2012. Sales of Alfdex product for the first six months of 2012 were up 36% year on year.

Concentric

	Apr-Jun		Jan-Jun
Amounts in MSEK	2012	2011	Change	2012	2011	Change
Net sales	596	559	7%	1,206	1,113	8%
Operating income	79	60	31%	161	118	37%
Earnings before tax	70	49	44%	144	95	53%
Net income for the period	47	33	45%	98	64	55%
Operating margin, %	13.3	10.8	2.5	13.4	10.6	2.8
Return on capital employed, % 1)	26.0	19.2	6.8	26.0	19.2	6.8

1) The ROCE has been calculated on a rolling 12 month basis.

Net sales and operating income - Group

Sales increased by 8% to MSEK 1,206 (1,113) during the first six months of 2012 compared to the same period in 2011. Sales growth in constant currency was 4% compared with the corresponding period in the preceding year. The Group"s average sales per working day in the first six months of 2012 was MSEK 9.5 (8.9), slightly above the activity levels experienced in the second half of 2011.

Sales increased by 7% to MSEK 596 (559) during the second quarter of 2012 compared to the same quarter in 2011. Sales in constant currency were flat year on year. The Group"s average sales per working day in the second quarter of 2012 was MSEK 9.6 (9.1).

Operating income for the first six months of 2012 amounted to MSEK 161 (118), up 37% year on year, increasing the operating margin to 13.4% (10.6). This year on year improvement in operating income reflects a strong contribution from the higher sales as well as effective cost management through the Concentric Business Excellence program. Reported operating income for the first six months of 2012 included the following items affecting comparability:

• Under the current "corridor approach" for pension accounting, a charge of MSEK -12 (nil) in respect of previously unrecognised actuarial losses were recorded in the result for the first six months of 2012; and
• One-time costs totalling MSEK -24 associated with the de-merger were included in the comparative result for the first six months of 2011.

Adjusting for these items, the underlying operating income and operating margin were MSEK 173 (142) and 14.4% (12.7) respectively.

Operating income for the second quarter of 2012 amounted to MSEK 79 (60), up 31% year on year, increasing the operating margin to 13.3% (10.8). Reported operating income for the second quarter of 2012 included the following items affecting comparability:

• Under the current "corridor approach" for pension accounting, a charge of MSEK -6 (nil) in respect of previously unrecognised actuarial losses were recorded in the second quarter of 2012; and
• One-time costs totalling MSEK -16 associated with the de-merger were included in the comparative result for the second quarter of 2011.

Adjusting for these items, the underlying operating income and operating margin were MSEK 85 (76) and 14.3% (13.5) respectively.

Net financial items

Net financial expenses for the first six months of 2012 amounted to MSEK 17 (23), comprising interest on loans and commission relating to commitments of unutilized credit facilities and other interest payable of MSEK 7 (23) and net financial expenses in respect of net pension liabilities of MSEK 10 (0).

Net financial expenses incurred for the second quarter of 2012 amounted to MSEK 9 (11), comprising interest on loans and commission relating to commitments of unutilized credit facilities and other interest payable of MSEK 4 (11) and net financial expenses in respect of net pension liabilities of MSEK 5 (0).

Accordingly, consolidated income before taxation amounted to MSEK 144 (95) for the first six months of 2012 and MSEK 70 (49) for the second quarter of 2012.

Taxes

Tax expenses for the second quarter of 2012 amounted to MSEK 23 (16), equal to an effective annual tax rate of 33% (33%) for the period, bringing the effective annual tax rate for the first six months of 2012 to 32% (33%)

The increased tax expenses correspond to the higher income before taxation for the periods. Any movements in the group"s effective rate largely reflect changes in the mix of taxable earnings across the various tax jurisdictions in which the group operates.

Net income and Earnings per share

Earnings after taxation for the first six months of 2012 amounted to MSEK 98 (64).Earnings per share amounted to SEK 2.23 (1.44).After adjusting for the post-tax impact of items affecting comparability noted above, the earnings per share was SEK 2.41 (1.83).

Earnings after taxation for the second quarter of 2012 amounted to MSEK 47 (33).Earnings per share amounted to SEK 1.07 (0.74).After adjusting for the post-tax impact of items affecting comparability noted above, the earnings per share was SEK 1.16 (1.00).

Segment reporting

The Americas segment comprises the Group's operations in the USA. As our operations in India and China remain relatively small in comparison to our Western facilities, Europe & RoW continues to be reported as a single combined segment, in line with our management structure, comprising the Group's operations in Europe, India and China.

The evaluation of an operating segment's earnings is based on operating income or EBIT. Assets and liabilities not allocated to segments are financial assets and liabilities.

Americas	Apr-Jun			Jan-Jun
Amounts in MSEK	2012	2011	Change	2012	2011	Change
Net sales – external	344	305	13%	686	595	15%
Net sales – total	346	308	13%	691	601	15%
Operating income	42	32	31%	85	62	37%
Operating margin on external sales, %	12.2	10.6	1.6	12.4	10.4	2.0
Operating margin on total sales, %	12.2	10.5	1.7	12.3	10.3	2.0
Return on capital employed, % 1)	36.1	24.4	11.7	36.1	24.4	11.7

1) The ROCE has been calculated on a rolling 12 month basis.

Net sales and operating income - Americas

Total sales growth in constant currency was 7% in the first six months of 2012 and 2% in the second quarter of 2012, when compared with the corresponding periods in the preceding year, with the agricultural machinery, construction equipment, light and medium/heavy truck markets all performing strongly. Average total sales per working day was MSEK 5.4 (4.8) for the six months of 2012 and MSEK 5.5 (4.9) for the second quarter of 2012.

Operating income for the first six months of 2012 amounted to MSEK 85 (62), up 37% year on year, increasing the operating margin based on total sales to 12.3% (10.3). The year on year earnings improvement can be attributed to both the increase in sales volumes as well as effective cost management through the Concentric Business Excellence program.

Operating income for the second quarter of 2012 amounted to MSEK 42 (32), up 31% year on year, increasing the operating margin based on total sales to 12.2% (10.5) respectively.

Europe & RoW	Apr-Jun			Jan-Jun
Amounts in MSEK	2012	2011	Change	2012	2011	Change
Net sales - external	252	253	-1%	520	517	1%
Net sales - total	286	291	-2%	586	584	0%
Operating income	37	40	-7%	76	73	4%
Operating margin on external sales, %	14.7	15.7	-1.0	14.6	14.1	0.5
Operating margin on total sales, %	12.9	13.7	-0.8	13.0	12.5	0.5
Return on capital employed, % 1)	23.8	20.1	3.7	23.8	20.1	3.7

1) The ROCE has been calculated on a rolling 12 month basis.

Net sales and operating income – Europe & RoW

Total sales in constant currency were -1% down in the first six months of 2012 and -3% down in the second quarter of 2012, when compared with the corresponding periods in the preceding year, primarily due to the market softening experienced in construction equipment and medium/heavy trucks. Average total sales per working day was MSEK 4.6 (4.7) during the first six months of 2012 and MSEK 4.7 (4.8) for the second quarter of 2012.

Operating income for the first six months of 2012 amounted to MSEK 76 (73), up 4% year on year, increasing the operating margin based on total sales to 13.0% (12.5). Adjusting for those previously unrecognised actuarial losses charged in the first six months of 2012, the operating income was MSEK 88 (15.0%). The year on year earnings improvement can be attributed to both the increase in sales volumes as well as effective cost management through the Concentric Business Excellence program.

Operating income for the second quarter of 2012 amounted to MSEK 37 (40), down 7% year on year, decreasing the operating margin based on total sales to 12.9% (13.7). Adjusting for those previously unrecognised actuarial losses charged in the second quarter of 2012, the underlying operating income actually increased to MSEK 43 (15.0%).

Market

The market information pertaining to diesel engines detailed below is based on statistics from Power Systems Research. The market information pertaining to hydraulics products detailed below is based on statistics from Off-Highway Research for construction equipment and the International Truck Association for lift trucks.

End-markets & Regions

		Q2-12 vs. Q2-11			H2-12 vs. H2-11			FY-12 vs. FY-11
	North America	Europe	China/ India	North America	Europe	China/ India	North America	Europe	China/ India
Agricultural machinery
Diesel engines	4%	2%	18%	2%	0%	5%	4%	3%	10%
Construction equipment
Diesel engines	9%	-1%	23%	7%	-3%	6%	9%	-1%	9%
Hydraulic equipment	8%	-5%	n/a	9%	-4%	n/a	7%	-1%	n/a
Trucks
Light vehicles	10%	n/a	n/a	8%	n/a	n/a	10%	n/a	n/a
Medium/Heavy vehicles	7%	-7%	1%	5%	-8%	-13%	7%	-6%	-11%
Industrial Applications
Other Off-highway	4%	2%	18%	2%	0%	4%	4%	3%	9%
Hydraulic lift trucks	-4%	0%	n/a	4%	2%	n/a	3%	0%	n/a

The emerging trend of stronger demand in North America compared to Europe has largely been sustained in the second quarter of 2012. Market indices highlight year on year growth across all North American end-markets for the first six months of 2012. Conversely, with the exception of the hydraulic lift trucks market, all European end-markets are flat or down slightly year on year for the first six months of 2012.

North American end-markets continue to grow

• Growth in Construction equipment remains strong for both engine and hydraulic products, although this market has been the slowest to recover from the financial crisis in 2008/9, i.e. the construction market started the year from a pretty low base.
• Growth in both the Light and Medium/Heavy truck markets also remains strong, building upon the recovery experienced in 2011.
• The diesel engine market for Agricultural machinery and Industrial applications for other Offhighway vehicles shows steady improvement, up 4% year on year for the second quarter of 2012

European end-markets generally remain weak

The European Construction equipment and Medium/Heavy truck markets remain depressed, with no obvious signs of any improvement in the second half of 2012.

Slow start for emerging end-markets expected to improve in second half of 2012

• Market indices suggest that the second quarter of 2012 was stronger than the first quarter, although looking at the first six months of 2012 the Truck market remains very weak.
• Based on the market indices, strong growth is still anticipated in China and India for all offhighway end-markets during 2012.

Seasonality

Each end-market will have its own seasonality profile based on the end-users, e.g. sales of Agricultural machinery will be linked to harvest periods in the Northern and Southern hemispheres. However, there is no significant seasonality in the demand profile of Concentric"s customers and, therefore, the most significant driver is actually the number of working days in the quarter.

The weighted average number of working days for group in the second quarter of 2012 was 62 days (first quarter of 2012: 65 days). The weighted average number of working days for the operating regions in the second quarter of 2012 was 63 days for the Americas (first quarter of 2012: 64 days) and 61 days for Europe and RoW (first quarter of 2012: 66 days).

Consolidated sales development

	Q2-12 vs. Q2-11				H2-12 vs. H2-11			FY-12 vs. FY-11
	Americas	Europe & ROW	Group	Americas	Europe & ROW	Group	Americas	Europe & ROW	Group
Blended market rates 1)	5%	2%	3%	5%	-2%	2%	6%	0%	3%
Concentric actual rates 2)	2%	-3%	0%	7%	-1%	4%

1) Based on latest market indices blended to Concentric's mix of end-markets and locations 2) Based on actual sales in constant currency

Overall, market indices suggest a year-on-year increase of production rates for the first six months of 2012, blended to the Group"s end-market and regions, of approximately 2%. This compares with an actual year on year increase in Concentric"s sales for the first six months of 2012 of 4% in constant currency. However, looking at just the second quarter of 2012, actual sales were flat against a blended market rate of 3%. As previously noted, movements in the market indices tend to lag our order intake experience by three to six months.

Market indices suggest a full year-on-year increase of production rates for 2012, blended to the Group"s end-markets and regions, of 3%, down from 5%, as per those indices published three months ago.

Cash flow

Cash flow from operating activities for the first six months of 2012 was strong and amounting to MSEK 129 (67), which represents SEK 2.92 (1.52) per share. There were no unusual or one-off items in the group"s cash flow from operating activities for the first six months of 2012, i.e. this cash conversion rate reflects the group"s underlying robust working capital management disciplines.

The net cash inflow of MSEK 89 before dividend payments represents a cash generation of SEK 2.02 per share for the first six months of 2012.

Cash flow from operating activities was strong in the second quarter, amounting to MSEK 53 (37), which represents SEK 1.20 (0.84) per share.

Net investments in fixed assets

The Group"s net investments in fixed assets for the second quarter and the first six months of 2012 were MSEK 13 (13) and MSEK 22 (26) respectively. Capitalized development costs of MSEK 1 (1) were included in the net investments made for the first six months of 2012.

The group completed the sale of the freehold property it vacated in Statesville, North Carolina, USA for a net consideration which was in line with its carrying book value of MSEK 5, during July, 2012.

Financial position

As at 30 June, the Group"s net debt was MSEK 119 (269), comprising loans and corporate bonds of MSEK 189 (285) and pension liabilities of MSEK 113 (112), net of cash amounting to MSEK 183 (128). The net cash flow before financing items generated over the last twelve months have been used to repay MSEK 98 of loans and pay out a shareholder dividend of MSEK 88, with the balance increasing cash.

Shareholders" equity amounted to MSEK 952 (756), resulting in a gearing ratio of 12% (36).

Employees

The average number of full-time equivalents employed by the group during the second quarter of 2012 was 1,180 (1,183).

Related-party transactions

Other than those transactions with the wider Haldex AB group in the first half of 2011, no transactions have been carried out between Concentric AB and its subsidiary undertakings and any related parties that had a material impact on either the company"s or the group"s financial position and results.

Dividends

The Board of Directors proposal for an ordinary dividend of SEK 2.00 per share for the 2011 fiscal year was approved by the shareholders at the Annual General Meeting on 19 April, 2012. The dividend of MSEK 88 was distributed to the shareholders by Euroclear Sweden AB on 27 April, 2012.

Acquisitions and divestments

There were no acquisitions or divestments in either the current or preceding period.

Events after the balance-sheet date

There were no significant post balance sheet events to report.

Parent Company

The parent company, Concentric AB, was formed in December, 2010. As part of the restructuring of the Haldex Group, Concentric AB has acquired Hydraulics operations in Europe, India and Hong Kong from Haldex in December, 2010 and the Hydraulics operations in the USA in March, 2011.

Net sales and operating profit for the first six months of 2012 amounted to MSEK 10 (nil) and a profit of MSEK 3 (loss -21) respectively. The improvement in the result reflects the sales made to subsidiaries in the current period for services rendered and that the prior year result included one-time costs totaling MSEK 17 associated with the de-merger.

In the second quarter of 2012, the company received a dividend of MSEK 10 from their 50% ownership in the joint-venture company, Alfdex AB. Exchange rate losses of MSEK -10 (-2) were charged to profit and loss account in the second quarter of 2012, taking the cumulative net exchange rate losses for the first six months of 2012 to MSEK -4 (-2).

Business overview

A description of the business concept, key strategic objectives, value chain, business model and driving forces for the Concentric AB group is presented on pages 8-17 of the 2011 Annual Report (http://www.concentricab.com/\_downloads/AGM-2012/Concentric%20AR%202011.pdf).

Significant risks and uncertainties

There are no changes in the significant risks and uncertainties for Concentric AB and its subsidiary undertakings compared with those as presented on pages 31-34 of the 2011 Annual Report (http://www.concentricab.com/\_downloads/AGM-2012/Concentric%20AR%202011.pdf).

Forward-looking information

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.

Basis of Preparation and Accounting policies

This interim report for the Concentric AB group is prepared in accordance with IAS 34 Interim Financial Reporting and applicable rules in the Annual Accounts Act. The report for the Parent Company is prepared in accordance with the Annual Accounts Act, Chapter 9 and applicable rules in RFR2 Accounting for legal entities.

The basis of accounting and the accounting policies adopted in preparing this interim report are consistent for all periods presented and comply with those policies stated in the 2011 Annual Report. The combined financial statements of Concentric AB Group that are included in this interim report are based on the predecessor values of the consolidated accounts of the Haldex AB Group.

As noted above, the Concentric AB Group was established during 2011. The acquisitions of the subsidiaries are common control transactions; therefore an accounting policy has been established for these business combinations as IFRS is currently silent on the treatment of those transactions.

The financial statements are combined for all periods up to 31 March 2011 and thereafter consolidated. All financial statements included in this interim report are based on the uniting of interests model (predecessor accounting).

This method requires that the assets and liabilities of the combining entities are presented using the book values for the highest level of common control (i.e. Haldex AB) for which financial statements are prepared and the transaction is presented as if it had taken place at the beginning of the earliest period presented (i.e. comparatives are restated).

All transactions and balances between entities included in the combined financial statements within this interim report are eliminated.

New accounting principles

The new or amended IFRS standards and IFRIC Interpretations, which became effective 1 January, 2012 have had no material effect on the consolidated financial statements. As of 1 January, 2013, the amendments to IAS 19, Employee benefits will become effective.

Concentric currently uses the "corridor method" of accounting, whereby unrecognised losses over the corridor of 10% are amortised in the income statement. Under this corridor method, the Group had unrecognised pension liabilities of MSEK 419 (79), as at 31 December, 2011.

The amended standard removes the option to use the corridor method and, as such, actuarial gains and losses will be recognised in full through the comprehensive income statement. Accordingly, the previously unrecognised pension liabilities will be recorded on the Group"s balance sheet, together with a corresponding deferred tax asset. In addition, the service cost and net interest recognised in the profit and loss account will also be affected by the proposed changes.

Further information on the impact of the proposed amendments to IAS 19 is available in the 2011 Annual Report.

Other new accounting principles applicable from 2013 are considered to have less impact for Concentric and are therefore only reported in the 2011 Annual Report.

Future reporting dates

Interim Report January-September 2012	18 October, 2012
Interim Report January-December 2012	19 February, 2013
Annual Report January-December 2012	3 April, 2013
AGM & Interim Report January-March 2013	24 April, 2013

Stockholm, 19 July, 2012 Concentric AB (publ)

Stefan Charette Chairman

Claes Magnus Åkesson Marianne Brismar Kenth Eriksson

Board member Board member Board member

Martin Lundstedt Martin Sköld David Woolley

Board member Board member President and CEO

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

E-mail: info@concentricab.com Corporate Registration Number 556828-4995

Report on Review of Interim Financial Information

Introduction

We have reviewed the interim report of Concentric AB (publ), corporate identity number 556828-4995, as of 30 June, 2012 and for the six-month period then ended. The Board of Directors and the President are responsible for the preparation and fair presentation of this interim financial information in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim annual report based on our review.

Scope of Review

We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that we would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Annual Accounts Act for the Group and in accordance with the Annual Accounts Act for the Parent Company.

Stockholm, 19 July, 2012 KPMG AB

Anders Malmeby Authorised Public Accountant

Consolidated Income Statement, in summary 1)

		Apr-Jun	Jan-Jun		Jul 2011 -	Full year
Amounts in MSEK	2012	2011	2012	2011	Jun 2012	2011
Net sales	596	559	1,206	1,113	2,376	2,283
Cost of goods sold	-432	-405	-875	-815	-1,713	-1,653
Gross income	164	154	331	298	663	630
Selling expenses	-21	-24	-41	-43	-89	-91
Administrative expenses	-41	-42	-81	-84	-148	-151
Product development expenses	-19	-13	-39	-28	-88	-77
Other operating income and expenses	-4	-15	-9	-25	-14	-30
Operating income	79	60	161	118	324	281
Net financial income and expense	-9	-11	-17	-23	-24	-30
Earnings before tax	70	49	144	95	300	251
Taxes	-23	-16	-46	-31	-90	-75
Net income for the period	47	33	98	64	210	176
Earnings per share before and after dilution, SEK 2)	1.07	0.74	2.23	1.44	4.77	3.98
Average number of shares (000's) 2)	44,216	44,216	44,216	44,216	44,216	44,216

1) All figures from 1 April 2011 are consolidated. Figures for earlier periods are combined. See"Basis of preparation and Accounting Policies" section. 2) Concentric AB's average number of shares assumes the current number of shares in the company.

Consolidated statement of comprehensive income 1)

	Apr-Jun		Jan-Jun		Jul 2011 -	Full year
Amounts in MSEK	2012	2011	2012	2011	Jun 2012	2011
Net income for the period	47	33	98	64	210	176
Other comprehensive income Foreign currency translation difference	28	-4	6	-62	74	6
Total other comprehensive income	28	-4	6	-62	74	6
Total comprehensive income	75	29	104	2	284	182

1) All figures from 1 April 2011 are consolidated. Figures for earlier periods are combined. See "Basis of preparation and Accounting Policies" section.

Consolidated Balance Sheet, in summary 1)

	30 Jun	30 Jun	31 Dec
Amounts in MSEK	2012	2011	2011
Goodwill	505	470	501
Other intangible fixed assets	376	394	389
Tangible fixed assets	182	185	185
Deferred tax assets	26	15	24
Long-term receivables	5	6	6
Total fixed assets	1,094	1,070	1,105
Inventories	185	197	190
Current receivables	313	321	303
Cash and cash equivalents	183	128	183
Total current assets	681	646	676
Assets held for sale	5	-	5
Total assets	1,780	1,716	1,786
Total Shareholders' equity	952	756	936
Pensions and similar obligations	113	112	103
Deferred tax liabilities	90	78	96
Long-term interest-bearing liabilities	175	175	175
Other long-term liabilities	8	7	8
Total long-term liabilities	386	372	382
Short-term interest-bearing liabilities	14	110	18
Other current liabilities	428	478	450
Total current liabilities	442	588	468
Total liabilities and shareholders' equity	1,780	1,716	1,786

1) All figures from 1 April 2011 are consolidated. Figures for earlier periods are combined. See "Basis of preparation and Accounting Policies" section.

Consolidated changes in shareholders' equity, in summary 1)

	30 Jun	30 Jun	31 Dec
Amounts in MSEK	2012	2011	2011
Opening balance	936	699	699
Net income for the period	98	64	176
Other comprehensive income	6	-62	6
Total comprehensive income	104	2	182
Shareholder´s contribution	-	55	55
Dividend	-88	-	-
Closing balance	952	756	936

1) All figures from 1 April 2011 are consolidated. Figures for earlier periods are combined. See "Basis of preparation and Accounting Policies" section.

Consolidated cash flow statement, in summary 1)

	Apr-Jun		Jan-Jun		Jul 2011 -	Full year
Amounts in MSEK	2012	2011	2012	2011	Jun 2012	2011
Operating income	79	60	161	118	324	281
Reversal of depreciation and amortization	24	17	47	35	102	90
Reversal of pension charge for unrecognized actuarial losses	6	-	12	-	12	-
Net interest paid	-4	-5	-7	-12	-13	-18
Taxes paid	-41	-22	-55	-42	-106	-93
Cash flow from operating activities before changes in working capital	64	50	158	99	319	260
Change in working capital	-11	-13	-29	-32	-30	-33
Cash flow from operating activities	53	37	129	67	289	227
Net investments in fixed assets	-13	-13	-22	-26	-46	-50
Cash flow from investing activities	-13	-13	-22	-26	-46	-50
Capital contribution (from Haldex AB)	-	-	-	50	-	50
Dividend	-88	-	-88	-	-88	-
New loans	-	275	-	275	-	275
Repayment of loans	-	-394	-4	-431	-98	-525
Other financing activities	-4	-60	-14	-60	-2	-48
Cash flow from financing activities	-92	-179	-106	-166	-188	-248
Cash flow for the period	-52	-155	1	-125	55	-71
Cash and bank assets, opening balance	235	273	183	257	128	257
Exchange-rate difference in cash and bank assets	-	10	-1	-4	-	-3
Cash and bank assets, closing balance	183	128	183	128	183	183

1) All figures from 1 April 2011 are consolidated. Figures for earlier periods are combined. See "Basis of preparation and Accounting Policies" section.

Share data

	Apr-Jun		Jan-Jun		Jul 2011 -	Full year
	2012	2011	2012	2011	Jun 2012	2011
Earnings per share, SEK	1.07	0.74	2.23	1.44	4.77	3.98
Equity per share, SEK	21.54	17.09	21.54	17.09	21.54	21.16
Cash-flow from current operations per share, SEK	1.20	0.84	2.92	1.52	6.54	5.13
Average No. Of shares (000's)	44,216	44,216	44,216	44,216	44,216	44,216
Number of shares at period-end (000's)	44,216	44,216	44,216	44,216	44,216	44,216

Key figures

	Apr-Jun		Jan-Jun		Jul 2011 -	Full year
	2012	2011	2012	2011	Jun 2012	2011
Sales growth, constant currency, %	0	30	4	35	n/a	25
Sales growth, %	7	13	8	21	10	16
EBITDA margin before items affecting comparability, %	18.2	16.6	18.2	15.9	18.4	17.3
EBITDA margin, %	17.2	13.9	17.2	13.8	17.9	16.3
Operating margin before items affecting comparability, %	14.3	13.5	14.4	12.7	14.2	13.4
Operating margin, %	13.3	10.8	13.4	10.6	13.7	12.3
Capital Employed, MSEK	1,254	1,153	1,254	1,153	1,254	1,232
ROCE before items affecting comparability, %1)	27.0	21.1	27.0	21.1	27.0	25.0
ROCE, %1)	26.0	19.2	26.0	19.2	26.0	23.1
ROE, %	23.5	17.7	23.5	17.7	23.5	22.1
Working Capital, MSEK	70	41	70	41	70	42
Working capital as a % of annual sales 2)	2.9	1.9	2.9	1.9	2.9	1.9
Net Debt, MSEK	119	269	119	269	119	114
Net debt/Equity ratio, %	13	36	13	36	13	12
Net investments in fixed assets, MSEK	13	12	22	25	47	50
R&D, %	3.2	2.5	3.3	2.6	3.7	3.4
Number of employees, average	1,180	1,183	1,180	1,167	1,190	1,179

1) The ROCE has been calculated on a rolling 12 month basis

2) Annual sales calculated on a rolling 12 month basis

3) Average number of employees has been calculated as full time equivalent. The method used to calculate the average number of employees has changed as of quarter 2, 2011 and therefore the comparable figures have also been changed.

Consolidated income statement in summary, by type of cost 1)

		Apr-Jun		Jan-Jun	Jul 2011 -	Full year
Amounts in MSEK	2012	2011	2012	2011	Jun 2012	2011
Net sales	596	559	1,206	1,113	2,376	2,283
Direct material costs	-310	-286	-625	-576	-1,218	-1,169
Personnel costs	-132	-118	-262	-235	-508	-481
Depreciation, amortization and impairment losses	-24	-18	-47	-36	-101	-90
Other operating income and expenses	-51	-77	-111	-148	-225	-262
Operating income	79	60	161	118	324	281
Net financial income and expense	-9	-11	-17	-23	-24	-30
Earnings before tax	70	49	144	95	300	251
Taxes	-23	-16	-46	-31	-90	-75
Net income for the period	47	33	98	64	210	176

1) All figures from 1 April 2011 are consolidated. Figures for earlier periods are combined. See "Basis of preparation and Accounting Policies" section.

Consolidated Income Statement in summary, per quarter 1)

	2012	2012	2011	2011	2011	2011	2010	2010
Amounts in MSEK	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3
Net sales	596	610	577	593	559	554	520	537
Cost of goods sold	-432	-443	-410	-428	-405	-410	-401	-396
Gross income	164	167	167	165	154	144	119	141
Selling expenses	-21	-20	-25	-23	-24	-19	-14	-30
Administrative expenses	-41	-40	-34	-33	-42	-42	-34	-28
Product development expenses	-19	-20	-26	-23	-13	-14	-16	-32
Other operating income and expenses	-4	-5	-2	-3	-15	-10	-2	-3
Operating income	79	82	80	83	60	58	53	48
Net financial income and expense	-9	-8	-3	-4	-11	-12	-13	-13
Earnings before tax	70	74	77	79	49	46	40	35
Taxes	-23	-23	-17	-27	-16	-15	8	-20
Net income for the period	47	51	60	52	33	31	48	15

1) All figures from 1 April 2011 are consolidated. Figures for earlier periods are combined. See "Basis of preparation and Accounting Policies" section.

Key figures by quarter

	2012	2012	2011	2011	2011	2011	2010	2010
	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3
Earnings per share, SEK	1.07	1.16	1.35	1.19	0.74	0.70	1.09	0.34
Operating margin, %	13.3	13.4	13.9	14.1	10.8	10.4	10.2	9.0
ROCE, % 1)	26.0	24.6	23.1	21.0	19.2	14.4	8.8	2.9
ROE, %	23.5	23.1	22.1	22.2	17.7	14.0	5.2	n/a
Equity per share, SEK	21.54	21.83	21.16	19.80	17.09	16.32	15.80	13.17
Cash-flow from current operations per	1.20	1.72	2.37	1.24	0.84	0.68	1.47	0.97
share, SEK
Net investments in fixed assets, MSEK	13	9	15	10	12	13	11	-2
R&D, %	3.2	3.3	4.5	3.8	2.5	2.6	3.1	6.0
Number of employees, average	1,180	1,184	1,189	1,202	1,183	1,152	1,168	1,131

1) The ROCE has been calculated on a rolling 12 month basis

Segment reporting

	2012	2012	2011	2011	2011	2011	2010	2010
Amounts in MSEK	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3
Americas
Net sales – external	344	342	314	329	305	290	265	302
Net sales – total 1)	346	345	317	331	308	293	n/a	n/a
Operating income	42	43	33	36	32	30	27	8
Operating margin on external sales, %	12.2	12.5	10.6	11.1	10.6	10.2	10.3	2.8
Operating margin on total sales, %	12.2	12.4	10.5	11.1	10.5	10.1	n/a	n/a
Assets	621	599	631	681	636	687	723	813
Liabilities	245	258	266	281	280	270	295	408
Capital employed	425	385	418	446	401	459	472	521
ROCE, % 2)	36.1	37.3	31.2	28.2	24.4	19.1	13.1	7.5
Net investments in fixed assets	4	-	3	3	4	2	-3	-
Depreciation, amortization and impairment losses	12	11	17	15	7	7	9	22
Number of employees, average 3)	402	416	417	426	419	404	425	430
Europe & RoW
Net sales – external	252	268	263	264	254	264	256	235
Net sales – total 1)	286	300	293	299	290	293	n/a	n/a
Operating income	37	39	47	47	40	33	26	40
Operating margin on external sales, %	14.7	14.6	17.8	17.8	15.7	12.5	10.0	17.0
Operating margin on total sales, %	12.9	13.1	16.0	15.7	13.7	11.2	n/a	n/a
Assets	1,034	1,044	1,039	1,058	999	1,126	1,156	1,085
Liabilities	392	401	438	451	421	438	523	803
Capital employed	721	716	718	725	688	800	813	746
ROCE, % 2)	23.8	24.3	23.4	20.0	20.1	11.5	5.7	-1.0
Net investments in fixed assets	9	9	12	7	8	11	14	-1
Depreciation, amortization and impairment losses	11	12	11	11	11	11	11	13
Number of employees, average 3)	778	768	772	776	764	747	743	702
Not broken down by segments
Elimination of inter-segmental sales	-36	-35	-33	-37	-39	-32	n/a	n/a
Operating loss	-	-	-	-	-12	-5	-	-
Assets	124	172	116	73	81	3	5	11
Liabilities	191	191	146	204	260	387	368	43
Group
Net sales	596	610	577	593	559	554	520	537
Operating income	79	82	80	83	60	58	53	48
Operating margin, %	13.3	13.4	13.9	14.1	10.8	10.4	10.2	9.0
Assets	1,780	1,815	1,786	1,812	1,716	1,817	1,885	1,909
Liabilities	828	850	850	936	960	1,095	1,186	1,254
Capital employed	1,254	1,257	1,232	1,223	1,153	1,234	1,264	1,272
ROCE, % 2)	26.0	24.6	23.1	21.0	19.2	14.4	8.8	2.9
Net investments in fixed assets	13	9	15	10	12	13	11	-2
Depreciation, amortization and impairment losses	23	23	28	26	18	18	20	35
Number of employees, average 3)	1,180	1,184	1,189	1,202	1,183	1,152	1,168	1,131

1) Total Net sales, includes both external and internal net sales. No figures available for the quarters 2010.

2) The ROCE has been calculated on a rolling 12 month basis

3) Average number of employees has been calculated as full time equivalent. The method used to calculate the average number of employees has changed as of quarter 2, 2011 and therefore the comparable figures have also been changed.

Operating income per operating segment

	2012	2012	2011	2011	2011	2011	2010	2010
Amounts in MSEK	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3
Americas	42	43	33	36	32	30	27	8
Europe & RoW	37	39	47	47	40	33	26	40
Unallocated 1)	-	-	-	-	-12	-5	-	-
Total operating income	79	82	80	83	60	58	53	48
Net financial income and expense	-9	-8	-3	-4	-11	-12	-13	-13
Earnings before tax	70	74	77	79	49	46	40	35

1) The unallocated costs incurred during 2011 of MSEK 17 m relate to one-off advisor costs associated with the de-merger from Haldex AB.

Sales by customer location - geographic area

	2012	2012	2011	2011	2011	2011	2010	2010
Amounts in MSEK	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3
USA	327	330	308	323	291	288	267	295
Germany	82	83	86	80	77	85	75	80
UK	49	53	55	53	47	52	49	40
Sweden	34	37	28	28	38	37	39	31
Other	104	107	100	109	106	92	90	91
Total Group	596	610	577	593	559	554	520	537

Tangible assets by operating location

	2012	2012	2011	2011	2011	2011	2010	2010
Amounts in MSEK	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3
USA	69	66	73	83	78	78	91	92
Germany	36	35	36	36	43	38	41	43
UK	33	32	31	32	31	31	31	28
Sweden	15	16	16	15	14	14	17	17
Other	29	30	29	27	19	23	20	22
Total Group	182	179	185	193	185	184	200	202

Parent Company's income statement, in summary

	Apr-Jun		Jan-Jun		Jul 2011 -	Full year
Amounts in MSEK	2012	2011	2012	2011	Jun 2012	2011
Net sales	5	-	10	-	27	17
Administrative expenses	-3	-	-7	-	-25	-18
Other operating expenses	-	-13	-	-21	4	-17
Operating income/loss	2	-13	3	-21	6	-18
Income from shares in subsidiaries	-	-	-	-	8	8
Income from shares in associated companies	10	-	10	-	10	-
Other net financial income and expense	-11	-6	-8	-11	-12	-15
Earnings/loss before tax	1	-19	5	-32	12	-25
Taxes	0	5	-1	9	-3	7
Net income/loss for the period 1)	1	-14	4	-23	9	-18

1) Total Comprehensive income for the Parent Company is the same as Net income/loss for the period.

Parent Company's balance sheet, in summary

	30 Jun	30 Jun	31 Dec
Amounts in MSEK	2012	2011	2011
Shares in subsidiaries	937	937	937
Shares in associated companies	10	10	10
Long-term loans from subsidiaries	104	121	103
Deferred tax assets	5	9	7
Total fixed assets	1,056	1,077	1,057
Current receivables	2	8	3
Short-term receivables from subsidiaries	17	11	1
Cash and cash equivalents	116	58	126
Total current assets	135	77	130
Total assets	1,191	1,154	1,187
Total Shareholders' equity	578	657	662
Long-term loans	175	175	175
Total long-term liabilities	175	175	175
Short-term loans	-	100	-
Short-term loans to subsidiaries	433	221	340
Other current liabilities	5	1	10
Total current liabilities	438	322	350
Total liabilities and shareholders' equity	1,191	1,154	1,187

Parent Company's changes in shareholders' equity, in summary

	30 Jun	30 Jun	31 Dec
Amounts in MSEK	2012	2011	2011
Opening balance	662	343	343
Total comprehensive income 1)	4	-23	-18
Dividend	-88	-	-
Shareholder's Contribution (from Haldex AB)	-	337	337
Closing balance	578	657	662

1) Total Comprehensive income for the Parent Company is the same as Net income/loss for the period.

Definitions

Americas	Americas operating segment comprising the Group"s USA operations
Dividend yield	Dividend divided by market price at year end
Capital employed	Total assets less non-interest bearing liabilities
EBIT or Operating income	Earnings before interest and taxes
EBIT multiple	Market value at year end plus net debt divided by EBIT
EBIT or Operating margin	Operating income as a percentage of net sales
EPS	Earnings per share, net income divided by the number of shares
Europe & RoW	Europe and the rest of the world operating segment comprising the Group"s operations in Europe, India and China
Gearing	Ratio of net debt to equity
Gross margin	Net sales less cost of goods sold, as a percentage of net sales
Net debt	Total interest-bearing liabilities less liquid finds
Net investments in fixed assets	Fixed asset additions net of fixed asset disposals and retirements
Operating income before items affecting comparability	Operating income adjusted for restructuring and other specified one-off items
ROCE	Return on capital employed; operating income plus interest income as a percentage of the average capital employed over a rolling 12 months
P/E ratio	Market value at year-end divided by net earnings
Payout ratio	Dividend divided by EPS
Sales growth, constant currency	Growth rate based on sales restated at prior year foreign exchange rates
Working capital	Current assets excluding cash, less non-interest-bearing current liabilities