Concentric — Interim / Quarterly Report 2013

Jul 25, 2013

First six months of 2013: Strong results despite lower activity levels year-on-year

• Sales for H1 MSEK 951 (1,206), down 17% year-on-year in constant currency - fall in demand across most end-markets and regions from last year
• EBIT and EBIT margin for H1 MSEK 133 (175) and 13.9% (14.6) respectively 1)
• Earnings after tax for H1 MSEK 81 (106) – EPS before & after dilution SEK 1.85 (2.41) 1)
• Net cash flow for H1 of MSEK -135 (1) includes a dividend payout of MSEK 110 (88) and a negative cash flow for the acquisition of LICOS Trucktec GmbH ("Licos") of MSEK 105
• Group's net debt and gearing ratio for H1 MSEK 622 (532) and 107% (81) respectively – restated for IAS 19 unrecognised pension liabilities & associated deferred tax asset 1)

Key Figures – Group, 1)		Apr-Jun			Jan-Jun		Jul-Jun	Jan-Dec
Amounts in MSEK	2013	2012	Change	2013	2012	Change	2012/13	2012
Net sales	502	596	-16%	951	1,206	-21%	1,874	2,129
Operating income before items affecting comparability	74	86	-14%	133	175	-24%	254	297
Operating income	74	86	-14%	133	175	-24%	239	281
Earnings before tax	67	76	-12%	118	155	-24%	206	243
Net income for the period	44	51	-13%	81	106	-24%	146	171
Operating margin before items affecting comparability, %	14.8	14.5	0.3	13.9	14.6	-0.7	13.5	13.9
Operating margin, %	14.8	14.5	0.3	13.9	14.6	-0.7	12.7	13.2
Return on Equity, % 2)	23.2	n/a	n/a	23.2	n/a	n/a	23.2	26.5
EPS before items affecting comparability, SEK	1.01	1.16	-0.15	1.85	2.41	-0.56	3.57	4.13
EPS before and after dilution, SEK	1.01	1.16	-0.15	1.85	2.41	-0.56	3.32	3.88

Second quarter of 2013: Sequential improvement in sales and operating margin

• Sales for Q2 up 11% sequentially on Q1 in constant currency – an increase of 13% after adjusting for lower average working days in Q2 compared to Q1
• Sales for Q2 MSEK 502 (596), down 11% year-on-year in constant currency - fall in demand across most end-markets and regions from last year
• EBIT and EBIT margin for Q2 MSEK 74 (86) and 14.8% (14.5) respectively 1)
• Earnings after tax for Q2 MSEK 44 (51) – EPS before & after dilution SEK 1.01 (1.16) 1)
• Strong cash flow for Q2 from operating activities MSEK 66 (53)

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 3 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 Q2 2013:

"Demand across most of our end-markets and regions has continued to stabilise during the second quarter of 2013 compared to the falling sales levels experienced during the second half of last year. As a result, both sales and EBIT were up on a sequential basis for the second consecutive quarter.

Even with all the efforts we have put into the ongoing consolidation of our European hydraulics business, I am pleased to report that we have achieved a strong drop through from the sequential improvement in sales for the second quarter, underpinned by the Concentric Business Excellence programme. As a result, our EBIT margins for the second quarter increased to 14.8%, with a strong conversion rate into cash derived from operating activities.

Looking forward, the orders received were slightly above sales for the third consecutive quarter, indicating that end-customer confidence continues to improve. However, current customer schedules still do not suggest that there will be sufficient underlying growth in the second half of this year to meet the latest external market indices which, blended to the Group"s end-markets and regions, project a 2% increase year on year. That said, 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.

We are very optimistic about the future benefits that will be derived from our new hydraulics facility in Hof, Germany and the acquisition of Licos. We believe the ramp up of existing contracts with global truck manufacturers will grow the sales of Licos electromagnetic clutches on water pumps by 50% over the coming three-year period, enabling them to reach the Group"s existing margin levels. In addition, we believe there are further growth opportunities using Concentric"s existing geographical and end-market spread, as well as applying the clutch technology to a wider range of the Group"s products and applications ."

Key business events announced during 2013:

• 29-Jan-13 Martin Bradford was promoted to Senior Vice President of Americas at Concentric AB, with responsibility for the group"s operations at the Rockford and Itasca facilities in Illinois, USA.
• 21-Feb-13 Concentric AB's Birmingham factory awarded certification to Investors in Excellence (IiE) standard, designed to enable organisations to excel through effective and efficient leadership, resourcing and delivery. The award forms part of Concentric's Business Excellence programme to deliver continuous improvement.
• 17-Apr-13 Variable flow oil and water pumps developed by Concentric AB have made a significant contribution to the US-funded "Supertruck" program to develop a new generation of fuelefficient heavy-duty trucks.
• 28-Jun-13 Concentric AB announces the completion of the acquisition of LICOS Trucktec GmbH, a leading producer of water pumps and electromagnetic fan clutches for the truck industry, which broadens Concentric"s product portfolio in a growing niche, the semi-variable water pump, and presents an opportunity to leverage Concentric"s position in the USA for Licos electromagnetic fan clutches.
• 15-Jul-13 Concentric AB has opened a new plant in Hof, Bavaria, consolidating all its European hydraulics manufacturing operations into a single site. The inauguration of the new 9,000 m² Hof facility is the culmination of the restructuring programme previously announced in October last year to create one centre of excellence for Concentric's hydraulics technology and manufacturing in Europe. It involves the closure of the existing older plants in Hof and Skånes Fagerhult, Sweden and the gradual transfer of all production lines into the new facility during 2013.

Concentric – Group, 1)		Apr-Jun			Jan-Jun		Jul-Jun	Jan-Dec
Amounts in MSEK	2013	2012	Change	2013	2012	Change	2012/13	2012
Net sales	502	596	-16%	951	1,206	-21%	1,874	2,129
Operating income before items affecting comparability	74	86	-14%	133	175	-24%	254	297
Operating income	74	86	-14%	133	175	-24%	239	281
Earnings before tax	67	76	-12%	118	155	-24%	206	243
Net income for the period	44	51	-13%	81	106	-24%	146	171
Operating margin before items affecting comparability, %	14.8	14.5	0.3	13.9	14.6	-0.7	13.5	13.9
Operating margin, %	14.8	14.5	0.3	13.9	14.6	-0.7	12.7	13.2
ROCE before items affecting comparability, % 2)	23.3	n/a	n/a	23.3	n/a	n/a	23.3	26.7
ROCE, % 2)	21.9	n/a	n/a	21.9	n/a	n/a	21.9	25.3

Net sales and operating income - Group

1) The 2012 comparative figures for EBIT, Earnings before tax, Net income for the period and EPS have been adjusted for the amendments to IAS 19, Employee benefits (see Appendix 1 for restated income statements).

2) As Return on capital employed is calculated on a rolling 12 months basis and 2011 has not been restated no comparable figures have been provided.

Sales for the first six months were MSEK 951 (1,206), down 17% year-on-year in constant currency, as demand across most end-markets and regions dropped from last year. As a result, the Group"s average sales per working day in the first six months fell year-on-year to MSEK 7.6 (9.6).

Operating income and margin for the first six months amounted to MSEK 133 (175) and 13.9% (14.6) respectively. The comparative period in 2012 has been restated for the amendments to IAS 19, Employee benefits, thereby removing the amortisation of previously unrecognised actuarial losses and increasing the reported operating income by MSEK 14. The reduction in operating income for the first six months of 2013 equates to a drop through rate of 17%.

Sales for the second quarter were up 11% sequentially on the first quarter of 2013 in constant currency, representing an increase of 13%, after adjusting for lower working days in the second quarter.

Sales for the second quarter were MSEK 502 (596), down 11% year-on-year in constant currency, as demand across most end-markets and regions dropped from last year. As a result, the Group"s average sales per working day in the second quarter fell year-on-year to MSEK 8.1 (9.6).

Operating income and margin for the second quarter amounted to MSEK 74 (86) and 14.8% (14.5) respectively. The comparative quarter in 2012 has been restated for the amendments to IAS 19, Employee benefits, thereby removing the amortisation of previously unrecognised actuarial losses and increasing the reported operating income by MSEK 7. The reduction in operating income for the second quarter of 2013 equates to a drop through rate of 13%.

Net financial items

Net financial expenses incurred for the first six months amounted to MSEK 15 (20), comprising interest on loans and commission relating to commitments of unutilized credit facilities and other interest payable of MSEK 4 (7) and net financial expenses in respect of net pension liabilities of MSEK 11 (13). The comparative period in 2012 has been restated for the amendments to IAS 19, Employee benefits, thereby lowering the expected reurn on plan assets and increasing the reported net financial expenses in respect of net pension liabilities by MSEK 3.

Accordingly, consolidated income before taxation amounted to MSEK 118 (155) for the first six months.

Net financial expenses incurred for the second quarter amounted to MSEK 7 (10), comprising interest on loans and commission relating to commitments of unutilized credit facilities and other interest payable of MSEK 1 (3) and net financial expenses in respect of net pension liabilities of MSEK 6 (7). The comparative quarter in 2012 has been restated for the amendments to IAS 19, Employee benefits, thereby lowering the expected reurn on plan assets and increasing the reported net financial expenses in respect of net pension liabilities by MSEK 1.

Accordingly, consolidated income before taxation amounted to MSEK 67 (76) for the second quarter.

Taxes

Tax expenses for the first six months amounted to MSEK 37 (49), which is an effective annual tax rate of 31% (32%). The comparative period in 2012 has been restated for the amendments to IAS 19, Employee benefits, thereby increasing the reported net tax expenses by MSEK 3.

Tax expenses for the second quarter amounted to MSEK 23 (25), which is an effective annual tax rate of 34% (33%). The comparative quarter in 2012 has been restated for the amendments to IAS 19, Employee benefits, thereby increasing the reported net tax expenses by MSEK 2.

Any movement in the group"s effective rate largely reflects the change in 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 amounted to MSEK 81 (106).Earnings per share before and after dilution amounted to SEK 1.85 (2.41).The comparative period in 2012 has been restated for the amendments to IAS 19, Employee benefits, thereby increasing the reported net income by MSEK 8.

Earnings after taxation for the second quarter amounted to MSEK 44 (51).Earnings per share before and after dilution amounted to SEK 1.01 (1.16).The comparative period in 2012 has been restated for the amendments to IAS 19, Employee benefits, thereby increasing the reported net income by MSEK 4.

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, 1)		Apr-Jun			Jan-Jun		Jul-Jun	Jan-Dec
Amounts in MSEK	2013	2012	Change	2013	2012	Change	2012/13	2012
Net sales - external	266	344	-23%	492	686	-28%	1,018	1,212
Net sales - total	270	346	-22%	498	691	-28%	1,028	1,221
Operating income before items affecting comparability	39	44	-12%	64	88	-28%	129	153
Operating income	39	44	-12%	64	88	-28%	130	154
Operating margin before items affecting comparability, % 2)	14.3	12.6	1.7	12.8	12.7	0.1	12.5	12.5
Operating margin, % 2)	14.3	12.6	1.7	12.8	12.7	0.1	12.6	12.6
ROCE before items affecting comparability, % 3)	35.9	n/a	n/a	35.9	n/a	n/a	35.9	40.3
ROCE, % 3)	36.2	n/a	n/a	36.2	n/a	n/a	36.2	40.5

Net sales and operating income - Americas

1) The 2012 comparative figures for EBIT have been adjusted for the amendments to IAS 19, Employee benefits. For the first six months of 2012 this adjustment amounted to an increase in operating income of MSEK 2.

• 2) Operating margins are based on total sales.
• 3) As Return on capital employed is calculated on a rolling 12 months basis and 2011 has not been restated no comparable figure have been provided.

Total sales in constant currency were 24% lower in the first six months of 2013 when compared with the same period last year. Demand was down across the board with the sharpest declines experienced in medium/heavy trucks and heavy construction and mining equipment. As a result, average total sales per working day fell year-on-year to MSEK 3.9 (5.4) for the first six months.

Operating income for the first six months amounted to MSEK 64 (88), increasing the operating margin based on total sales to 12.8% (12.7). The reduction in operating income for the first six months of 2013 equates to a drop through rate of 13%.

Total sales for the second quarter were up 16% sequentially on the first quarter of 2013 in constant currency, representing an increase of 12%, after adjusting for higher average working days in the region for the second quarter.

Total sales in constant currency were 18% lower in the second quarter of 2013 when compared with the peak volumes experienced in the same quarter last year. Second quarter volumes continued to be down across the board with the sharpest declines experienced in medium/heavy trucks and heavy construction and mining equipment. As a result, average total sales per working day fell year-on-year to MSEK 4.2 (5.5) for the second quarter.

Operating income for the second quarter amounted to MSEK 39 (44), increasing the operating margin based on total sales to 14.3% (12.6). The reduction in operating income for the second quarter of 2013 equates to a drop through rate of 7%.

Europe & RoW, 1)		Apr-Jun			Jan-Jun		Jul-Jun	Jan-Dec
Amounts in MSEK	2013	2012	Change	2013	2012	Change	2012/13	2012
Net sales - external	236	252	-6%	459	520	-12%	856	917
Net sales - total	264	286	-8%	511	586	-13%	952	1,027
Operating income before items affecting comparability	35	43	-19%	69	88	-23%	125	144
Operating income	35	43	-19%	69	88	-23%	108	127
Operating margin before items affecting comparability, % 2)	13.3	14.9	-1.6	13.4	14.9	-1.5	13.1	14.0
Operating margin, % 2)	13.3	14.9	-1.6	13.4	14.9	-1.5	11.3	12.4
ROCE before items affecting comparability, % 3)	16.9	n/a	n/a	16.9	n/a	n/a	16.9	19.6
ROCE, % 3)	14.7	n/a	n/a	14.7	n/a	n/a	14.7	17.3

Net sales and operating income – Europe & RoW

1) The 2012 comparative figures for EBIT have been adjusted for the amendments to IAS 19, Employee benefits. For the first six months of 2012 this adjustment amounted to an increase in operating income of MSEK 12.

• 2) Operating margins are based on total sales.
• 3) As Return on capital employed is calculated on a rolling 12 months basis and 2011 has not been restated no comparable figure have been provided.

Total sales in constant currency were down 9% in the first six months when compared with the same period last year. During the first six months all end-markets remained relatively weak, with the sharpest declines experienced in hydraulic products for construction equipment and lift truck markets. As a result, average total sales per working day fell year-on-year to MSEK 4.1 (4.7) for the first six months.

Operating income for the first six months amounted to MSEK 69 (88), including acquisition-related legal and advisory costs of MSEK 1, decreasing the operating margin based on total sales to 13.4% (14.9). The reduction in operating income in the first six months of 2013 equates to an underlying drop through rate of 23%.

Total sales for the second quarter were up 7% sequentially on the first quarter of 2013 in constant currency, representing an increase of 12%, after adjusting for lower average working days across the region for the second quarter.

Total sales in constant currency were down 3% in the second quarter when compared with the same quarter last year. During the second quarter all end-markets remained relatively weak, with the sharpest declines experienced in hydraulic products for construction equipment and lift truck markets. As a result, average total sales per working day fell year-on-year to MSEK 4.4 (4.8) for the second quarter.

Operating income for the second quarter amounted to MSEK 35 (43), including acquisition-related legal and advisory costs of MSEK 1, decreasing the operating margin based on total sales to 13.3% (14.9). The reduction in operating income in the second quarter of 2013 equates to an underlying drop through rate of 27%.

Market development

End-markets &		Q2-13 vs. Q2-12		H1-13 vs. H1-12				FY-13 vs. FY-12
Regions	North America	Europe	China/ India	North America	Europe	China/ India	North America	Europe	China/ India
Agricultural machinery Diesel engines	-6%	-22%	-5%	-3%	-21%	-3%	3%	2%	11%
Construction equipment Diesel engines Hydraulic equipment	-3% 11%	-18% -12%	-35% n/a	-3% 8%	-18% -15%	-30% n/a	5% 11%	3% -12%	27% n/a
Trucks Light vehicles Medium/Heavy vehicles	8% -9%	n/a -11%	n/a -23%	6% -11%	n/a -9%	n/a -17%	12% -4%	n/a -5%	n/a 1%
Industrial Applications
Other Off-highway	-5%	-21%	-4%	-2%	-23%	-2%	5%	4%	9%
Hydraulic lift trucks	-9%	3%	n/a	-15%	-13%	n/a	6%	-5%	n/a

Based on Q2 2013 updates received from Power Systems Research, Off-Highway Research and the International Truck Association for lift trucks

The market information pertaining to diesel engines detailed above 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.

The latest external market indices are now more in line with Concentric"s recent sales orders of the last three quarters, namely that most end-markets are down significantly year-on-year. However, the market indices still anticipate activity levels to pick up in the second half of 2013, such that modest year-on-year growth for the full year 2013 is predicted in both North America and China.

North American end-markets

• The latest external market indices now report diesel engines down across the board in all four endmarkets year-on-year for the second quarter, which is more in line with the actual demand experienced by Concentric in the first six months of 2013. The one exception to this trend was the market indice for light trucks which continued to report growth, up 8% year-on-year for the second quarter.
• Hydraulic products that are used later in the production cycle for Construction equipment continued to grow,up 11% year-on-year for the second quarter.
• Conversely, hydraulic products used in Lift trucks were down 9% year-on-year in the second quarter.

European end-markets

• Demand in all European sectors end-markets remains comparatively weak, with no significant change in customer demand levels.
• With the exception of hydraulic lift trucks, all European end-markets were down year-on year in the second quarter, with diesel engines for Agricultural and Off-highway Industrial applications the worst affected.

Emerging end-markets

Market indices for the second quarter were down across the board in all four end-markets year-onyear, similar to the first quarter, although the Agricultural machinery and Construction equipment markets in China continue to show some signs of recovery.

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 period.

The weighted average number of working days in the second quarter was 62 (62) for the Group, with an average of 64 (63) working days for the Americas region and 61 (61) working days for the Europe & RoW region.

Consolidated sales		Q2-13 vs. Q2-12		H1-13 vs. H1-12			FY-13 vs. FY-12
development	America	Europe & RoW	Group	America	Europe & RoW	Group	America	Europe & RoW	Group
Blended market rates 1)	-3%	-14%	-8%	-4%	-15%	-9%	4%	0%	2%
Concentric actual rates 2)	-18%	-3%	-11%	-24%	-9%	-17%

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 decrease in production rates for the first six months, blended to the Group"s end-market and regions, of approximately 9%. This continues to be less than the reduction in actual sales experienced by Concentric, down 17% for the first six months in constant currency.

For the second quarter, market indices suggest a year-on-year decrease in production rates, blended to the Group"s end-market and regions, of approximately 8%. This also continues to be less than the reduction in actual sales experienced by Concentric, down 11% for the second quarter in constant currency.

Market indices suggest that sales for full year 2013, blended to the Group"s end-markets and regions, will be up 2% year on year, based on much stronger demand in the second half of 2013. However, current schedules of Concentric"s customers do not indicate of any significant improvement in order levels yet.

Cash flow

The cash flow from operating activities for the first six months was MSEK 71 (129), which represents SEK 1.62 (2.91) per share. The year-on-year reduction in cash flow for the first six months may be attributed the following factors:

• lower operating income for the first six months amounting to MSEK 133 (175);
• cash payments in the first six months of MSEK 13 (nil) in respect of the closure reserves booked for the Skånes Fagerhult facility during the fourth quarter of 2012; and
• a negative working capital impact arising from the stronger than usual cash flow achieved in the fourth quarter of 2012.

The cash flow from operating activities for the second quarter was MSEK 66 (53), which represents SEK 1.51 (1.20) per share.

Net investments in fixed assets

The Group"s net investments in tangible fixed assets for the first six months and the second quarter were MSEK 10 (22) and MSEK 7 (13) respectively.

On 28 June 2013, Concentric AB completed the acquisition of LICOS Trucktec GmbH, further details of which are provided below.

Financial position

The carrying amount of financial assets and financial liabilities are considered reasonable approximations of fair value. Financial instruments carried at fair value on the balance sheet consists of derivative instruments. As of 30 June, 2013 the fair value of derivative instruments that were assets was MSEK 0 (1), and the fair value of derivative instruments that were liabilities was MSEK 3 (0). These fair value measurements belong in level 2 in the fair value hierarchy.

As of 1 January, 2013, amendments to IAS 19, Employee benefits, became effective. As a result, the Group"s balance sheet was restated as of 1 January 2012 onwards to reflect previously unrecognised pension liabilities, together with a corresponding deferred tax asset. Accordingly, as at 30 June, the Group"s net debt was restated to MSEK 622 (532), comprising loans and corporate bonds of MSEK 235 (189) and full recognition of the Group"s net pension liabilities of MSEK 539 (526), net of cash amounting to MSEK 152 (183).

Shareholders" equity was also restated to MSEK 582 (654), resulting in a gearing ratio of 107% (81).

Employees

The average number of full-time equivalents employed by the group during the first six months and the second quarter was 1,051 (1,180) and 1,089 (1,180) respectively.

Related-party transactions

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.

Acquisitions

On 28 June 2013, Concentric AB completed the acquisition of the entire share capital of LICOS Trucktec GmbH ("Licos"), a leading producer of water pumps and electromagnetic fan clutches for the truck industry based in Markdorf, Germany. The primary purpose of the acquisition was to broaden Concentric"s current product portfolio in the growing niche market of variable flow pumps,

As the acquisition of Licos was only completed at the end of the second quarter there was insufficient time available to properly establish the fair values of the identifiable assets acquired and the liabilities assumed. Accordingly, the following provisional fair values have been determined using the book values recorded in Licos as at 30 June 2013:

Provisional fair values - Licos acquisition 1)	30 Jun
Amounts in MSEK	2013
Cash	77
Shares in Concentric AB	4
Total purchase consideration for Licos shares	81
Other intangible fixed assets	0
Tangible fixed assets	12
Total fixed assets acquired	12
Inventories	12
Current receivables	32
Cash and cash equivalents	3
Total current assets acquired	47
Short-term interest-bearing liabilities	30
Other current liabilities	20
Total current liabilities assumed	50
Net assets acquired	9
Goodwill arising on acquisition 2)	72

1) The provisional fair values of the identifiable assets acquired and liabilities assumed have been determined using the book values recorded in Licos as at 30 June 2013.

2) The provisional goodwill arising on acquisition will be partly replaced by other items, like identifiable intangible assets and other fair value adjustments including deferred tax.

The fair value exercise is expected to be completed before the end of the financial year and the above provisional amounts will be adjusted retrospectively, as appropriate.

In addition to the total purchase consideration for Licos shares shown above, acquisition-related legal and advisory costs of MSEK 1 were incurred and expensed in the income statement for the second quarter.

The net sales, EBIT margin and net income of Licos for the first six months of 2013 (which have not included in the consolidated results for Concentric AB) were MSEK 59, 9.3% and MSEK 5 respectively.

Events after the balance-sheet date

There were no significant post balance sheet events to report.

Business overview

Descriptions of Concentric"s Vision, Mission and Values, Business targets and strategies, Driving forces, Products, Value chain and Business model are all presented on pages 6-23 of the 2012 Annual Report (http://www.concentricab.com/_downloads/AGM-2013/Concentric%20AR%202012.pdf).

Significant risks and uncertainties

All business operations involve risk – managed risk-taking is a condition of maintaining a sustainable profitable business. Risks may arise due to events in the world and can affect a given industry or market or can be specific to a single company or group. Concentric works continuously to identify, measure and manage risk, and in some cases Concentric is able to influence the likelihood that a risk-related event will occur. In cases in which such events are beyond Concentric"s control, the aim is to minimise the consequences. The risks to which Concentric are exposed may be classified into four main categories:

• Industry and market risks external related risks such as the cyclical nature of our end-markets, intense competition, customer relationships and the availability and prices of raw materials;
• Legal risks such as changes in legislation and regulations including environmental matters, the protection and maintenance of intellectual property rights, prevailing tax laws where Concentric operations are based and potential disputes arising from third parties;
• Operational risks such as constraints on the capacity and flexibility of our production facilities and human capital, product development and new product introductions, customer complaints, product recalls and product liability; and
• Financial risks such as liquidity risk, interest rate fluctuations, currency fluctuations, credit risk, management of pension obligations and the group"s capital structure.

Concentric"s Board of Directors and Senior management team have reviewed the development of these significant risks and uncertainties since the publication of the 2012 Annual Report and confirm that there have been no changes other than those comments made above in respect of the improving market development.

For further details, please refer to the Risk and Risk Management section on pages 30-33 of the 2012 Annual Report (http://www.concentricab.com/_downloads/AGM-2013/Concentric%20AR%202012.pdf).

Parent Company

Net sales and operating income for the first six months amounted to MSEK 11 (10) and a profit of MSEK 5 (3) respectively. The slight improvement reflects the remuneration from subsidiaries in the current period for services rendered.

The company received dividends during the first six months from its wholly owned US subsidiary undertaking, Concentric Americas, Inc. and its 50% ownership in the joint-venture company, Alfdex AB, of MSEK 817 (nil) and MSEK 12 (10) respectively.

The cumulative net exchange rate losses for the first six months were MSEK 9 (4). Interest expenses have been slightly reduced during the first six months to MSEK 3 (4).

Net sales and operating income for the second quarter amounted to MSEK 5 (5) and a profit of MSEK 3 (2) respectively.

The company received a dividend of MSEK 817 (nil) during the second quarter from its wholly owned US subsidiary undertaking, Concentric Americas, Inc. as part of a group refinancing exercise.

The cumulative net exchange rate losses for the second quarter were MSEK 9 (9). Interest expenses for the second quarter amounted to MSEK 2 (2).

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 2012 Annual Report, except as described below.

Impact of new accounting principles

As of 1 January, 2013, amendments to IAS 19, Employee benefits became effective thereby removing the option to use the corridor method. As such, actuarial gains and losses are recognised in full in other comprehensive income. Accordingly, the Group"s balance sheet has been restated as of 1 January 2012 onwards to reflect previously unrecognised pension liabilities, together with a corresponding deferred tax asset. In addition, the service cost and net interest recognized in respect of pensions in the income statement have also been restated for the changes.

As at 30 June 2012, the restatements in the balance sheet amounted to an increase in net debt of MSEK 413 and a net reduction in equity of MSEK 298. For the first six months of 2012 the restatements in the income statement amounted to an increase in operating income of MSEK 14, an increase in earnings before tax of MSEK 11 and an increase in net income for the period of MSEK 8, resulting in an increase to the reported EPS of SEK 0.18.

See Appendices 1, 2 and 3 to this interim report for full details of the restated consolidated income statements, other comprehensive income and balance sheets for 2012 by quarter, in summary.

Purpose of report and forward-looking information

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 25 July, 2013. This report contains forwardlooking 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.

Future reporting dates

Interim Report January-September 2013	24 October, 2013
Interim Report January-December 2013	13 February, 2014
Annual Report January-December 2013	9 April, 2014
AGM & Interim Report January-March 2014	30 April, 2014

The Board of Directors and CEO give their assurance that the six-month report presents a true and fair view of the Group's and Parent Company's operations, financial position and profits and describes the significant risks and uncertainties facing the Parent Company and companies included in the Group.

Stockholm, 25 July, 2013 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 (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, 2013 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, 25 July, 2013 KPMG AB

Anders Malmeby Authorised Public Accountant

Consolidated Income Statement, in summary 1)

		Apr-Jun		Jan-Jun	Jul 2012 -	Full year
Amounts in MSEK	2013	2012	2013	2012	Jun 2013	2012
Net sales	502	596	951	1,206	1,874	2,129
Cost of goods sold	-359	-431	-689	-873	-1,381	-1,565
Gross income	143	165	262	333	493	564
Selling expenses	-18	-20	-34	-40	-63	-69
Administrative expenses	-28	-36	-56	-70	-111	-125
Product development expenses	-17	-19	-33	-39	-70	-76
Other operating income and expenses	-6	-4	-6	-9	-10	-13
Operating income	74	86	133	175	239	281
Financial income and expense	-7	-10	-15	-20	-33	-38
Earnings before tax	67	76	118	155	206	243
Taxes	-23	-25	-37	-49	-60	-72
Net income for the period	44	51	81	106	146	171
Earnings per share before and after dilution, SEK	1.01	1.16	1.85	2.41	3.32	3.88
Average number of shares (000)	43,892	44,216	43,892	44,216	43,932	44,094

1) Figures for 2012 have been restated. See "Basis of preparation and Accounting Policies" section.

Consolidated statement of comprehensive income 1)

		Apr-Jun		Jan-Jun	Jul 2012 -	Full year
Amounts in MSEK	2013	2012	2013	2012	Jun 2013	2012
Net income for the period	44	51	81	106	146	171
Other comprehensive income
Items that will not be reclassified to profit or loss:
Actuarial Gains/Losses	-	1	-	3	-61	-58
Tax on actuarial losses	-	0	-	-1	9	8
Items that may be reclassified subsequently to profit or loss:
Net investment hedging	-10	-9	-10	-3	1	8
Cash-flow hedging	-	-	-2	-	-2	-
Other foreign currency translation difference	28	27	8	4	-39	-43
Total other comprehensive income	18	19	-4	3	-92	-85
Total comprehensive income	62	70	77	109	54	86

1) Figures for 2012 have been restated. See "Basis of preparation and Accounting Policies" section.

Consolidated Balance Sheet, in summary 1,2)

	30 Jun	30 Jun	31 Dec
Amounts in MSEK	2013	2012	2012
Goodwill	551	505	481
Other intangible fixed assets	318	376	336
Tangible fixed assets	180	182	181
Deferred tax assets	178	141	156
Long-term receivables	5	5	5
Total fixed assets	1,232	1,209	1,159
Inventories	211	185	167
Current receivables	319	318	204
Cash and cash equivalents	152	183	288
Total current assets	682	686	659
Total assets	1,914	1,895	1,818
Total Shareholders' equity	582	654	615
Pensions and similar obligations	539	526	547
Deferred tax liabilities
	81	90	71
Long-term interest-bearing liabilities	175	175	175
Other long-term liabilities	6	8	4
Total long-term liabilities	801	799	797
Short-term interest-bearing liabilities	60	14	13
Other current liabilities	471	428	393
Total current liabilities	531	442	406

1) Figures for 2012 have been restated. See "Basis of preparation and Accounting Policies" section.

2) The carrying amount of financial assets and financial liabilities are considered reasonable approximations of fair value. Financial instruments carried at fair value on the balance sheet consists of derivative instruments. As of 30 June, 2013 the fair value of derivative instruments that were assets was MSEK 0 (1), and the fair value of derivative instruments that were liabilities was MSEK 3 (0). These fair value measurements belong in level 2 in the fair value hierarchy.

Consolidated changes in shareholders' equity, in summary 1)

	30 Jun	30 Jun	31 Dec
Amounts in MSEK	2013	2012	2012
Opening balance	943	936	936
Effect due to changes in accounting principles:
Actuarial gains/losses	-444	-419	-419
Special payroll tax in Sweden on pensions	-2	-2	-2
Changes in deferred taxes	118	118	118
Total effect due to changes in accounting principles	-328	-303	-303
Restated opening balance	615	633	633
Net income for the period	81	106	171
Other comprehensive income	-4	3	-85
Total comprehensive income	77	109	86
Dividend	-110	-88	-88
Buy-back own shares	-	-	-16
Closing balance	582	654	615

1) Figures for 2012 have been restated. See "Basis of preparation and Accounting Policies" section.

Consolidated cash flow statement, in summary 1)

	Apr-Jun		Jan-Jun		Jul 2012 -	Full year
Amounts in MSEK	2013	2012	2013	2012	Jun 2013	2012
Operating income Reversal of depreciation, amortization and write-down	74	86	133	175	239	281
of fixed assets	21	24	42	47	95	100
Reversal of other non-cash items	-7	-1	-12	-2	-37	-27
Interest paid	1	-4	-	-7	-6	-13
Taxes paid	-23	-41	-51	-55	-83	-87
Cash flow from operating activities before changes in working capital	66	64	112	158	208	254
Change in working capital	-	-11	-41	-29	32	44
Cash flow from operating activities	66	53	71	129	240	298
Investments in subsidiaries 2)	-105	-	-105	-	-105	-
Other net investments in fixed assets	-7	-13	-10	-22	-39	-51
Cash flow from investing activities	-112	-13	-115	-22	-144	-51
Dividend	-110	-88	-110	-88	-110	-88
Buy-Back Own Shares	-	-	-	-	-16	-16
New loans	47	-	47	-	47	-
Repayment of loans	-	-	-4	-4	-5	-5
Other financing activities	-9	-4	-24	-14	-39	-29
Cash flow from financing activities	-72	-92	-91	-106	-123	-138
Cash flow for the period	-118	-52	-135	1	-27	109
Cash and bank assets, opening balance	268	235	288	183	183	183
Exchange-rate difference in cash and bank assets	2	-	-1	-1	-4	-4
Cash and bank assets, closing balance	152	183	152	183	152	288

1) Figures for 2012 have been restated. See "Basis of preparation and Accounting Policies" section. -

2) Total cash flow relating to the investment in Licos, comprising cash consideration MSEK -77, short-term loans repaid on acquisition MSEK -30, cash balances acquired MSEK 3 and acquisition-related expenses MSEK -1

Data per Share

	Apr-Jun		Jan-Jun		Jul 2012 -	Full year
	2013	2012	2013	2012	Jun 2013	2012
Earnings per share before items affecting comparability, SEK	1.01	1.16	1.85	2.41	3.57	4.13
Earnings per share before and after dilution, SEK	1.01	1.16	1.85	2.41	3.32	3.88
Equity per share, SEK	13.27	14.82	13.27	14.82	13.27	14.00
Cash-flow from current operations per share, SEK	1.51	1.20	1.62	2.91	5.48	6.76
Average No. of shares (000's)	43,892	44,216	43,892	44,216	43,932	44,094
Number of shares at period-end (000's)	43,892	44,216	43,892	44,216	43,892	43,892

Key figures

		Apr-Jun		Jan-Jun	Jul 2012 -	Full year
	2013	2012	2013	2012	Jun 2013	2012
Sales growth, constant currency, %	-11	0	-17	4	n/a	-9
Sales growth, %	-16	7	-21	8	-21	-7
EBITDA margin before items affecting comparability, %	19.0	18.4	18.3	18.4	18.2	18.3
EBITDA margin, %	19.0	18.4	18.3	18.4	17.8	17.9
Operating margin before items affecting comparability, %	14.8	14.5	13.9	14.6	13.5	13.9
Operating margin, %	14.8	14.5	13.9	14.6	12.7	13.2
Capital Employed, SEK m	1,150	1,165	1,150	1,165	1,150	1,019
ROCE before items affecting comparability, % 2)	23.3	n/a	23.3	n/a	23.3	26.7
ROCE, % 2)	21.9	n/a	21.9	n/a	21.9	25.3
ROE, % 2)	23.2	n/a	23.2	n/a	23.2	26.5
Working Capital, SEK m	59	43	59	43	59	-23
Working capital as a % of annual sales 1)	3.2	2.2	3.2	2.2	3.2	-1.1
Net Debt, SEK m	622	532	622	532	622	446
Gearing ratio, %	107	81	107	81	107	73
Investments	7	13	10	22	39	51
R&D, %	3.4	3.2	3.5	3.2	3.6	3.5
Number of employees, average	1,089	1,180	1,051	1,180	1,072	1,131

1) Annual sales calculated on a rolling 12 months basis.

2) As Return on capital employed and Return on equity are calculated on a rolling 12 months basis and 2011 has not been restated, no comparable figure have been provided.

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

	Apr-Jun		Jan-Jun		Jul 2012 -	Full year
Amounts in MSEK	2013	2012	2013	2012	Jun 2013	2012
Net sales	502	596	951	1,206	1,874	2,129
Direct material costs	-255	-310	-484	-625	-970	-1,111
Personnel costs	-103	-125	-200	-248	-395	-443
Depreciation, amortization and impairment losses	-21	-23	-42	-46	-96	-100
Other operating income and expenses	-49	-52	-92	-112	-174	-194
Operating income	74	86	133	175	239	281
Financial income and expence	-7	-10	-15	-20	-33	-38
Earnings before tax	67	76	118	155	206	243
Taxes	-23	-25	-37	-49	-60	-72
Net income for the period	44	51	81	106	146	171

1) Figures for 2012 have been restated. See "Basis of preparation and Accounting Policies" section.

	2013	2013	2012	2012	2012	2012	2011	2011	2011	2011
Amounts in MSEK	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Net sales	502	449	431	492	596	610	577	593	559	554
Cost of goods sold	-359	-330	-332	-360	-431	-442	-410	-428	-405	-410
Gross income	143	119	99	132	165	168	167	165	154	144
Selling expenses	-18	-16	-13	-16	-20	-20	-25	-23	-24	-19
Administrative expenses	-28	-28	-232	-32	-36	-34	-34	-33	-42	-42
Product development expenses	-17	-16	-21	-16	-19	-20	-26	-23	-13	-14
Other operating income and expenses	-6	-	-10	6	-4	-5	-2	-3	-15	-10
Operating income	74	59	32	74	86	89	80	83	60	58
Financial income and expense	-7	-8	-11	-7	-10	-10	-3	-4	-11	-12
Earnings before tax	67	51	21	67	76	79	77	79	49	46
Taxes	-23	-14	-5	-18	-25	-24	-17	-27	-16	-15
Net income for the period	44	37	16	49	51	55	60	52	33	31
of which minority interests	-	-	-	-	-	-	-	-	-	-

Consolidated Income Statement in summary, per quarter 1)

1) Figures for 2012 have been restated. No quarters for 2011 have been restated. See "Basis of preparation and Accounting Policies" section.

Key figures by quarter 1)

	2013	2013	2012	2012	2012	2012	2011	2011	2011	2011
	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Earnings per share before and after dilution, SEK	1.01	0.84	0.37	1.10	1.16	1.25	1.35	1.19	0.74	0.70
Operating margin, %	14.8	13.0	7.5	14.9	14.5	14.6	13.9	14.1	10.8	10.4
ROCE, %	21.9	23.1	25.3	26.7	28.1	26.9	24.9	22.9	19.7	15.7
ROE, %	23.2	23.6	26.5	21.7	23.5	23.1	22.1	22.2	17.7	14.0
Equity per share, SEK Cash-flow from current operations per	13.27	14.37	14.00	15.04	14.82	15.18	21.16	19.80	17.09	16.32
share, SEK	1.51	0.11	2.46	1.39	1.20	1.72	2.37	1.24	0.84	0.68
Investments	7	3	20	9	13	9	15	10	12	13
R&D, %	3.4	3.6	4.7	3.3	3.2	3.3	4.5	3.8	2.5	2.6
Number of employees, average	1,089	1,018	1,054	1,117	1,180	1,184	1,189	1,202	1,183	1,152

1) Figures for 2012 have been restated. See "Basis of preparation and Accounting Policies" section.

Segment reporting 1)

	2013	2013	2012	2012	2012	2012	2011	2011	2011	2011
Amounts in MSEK	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Americas
Net sales - external	266	226	239	287	344	342	314	329	305	290
Net sales - total 2)	270	228	241	289	346	345	317	331	308	293
Operating income	39	25	31	36	43	44	33	36	32	30
Operating margin on total sales, %	14.3	10.9	12.8	12.1	12.6	12.8	10.5	11.1	10.5	10.1
Assets 4)	563	524	514	575	649	627	660	681	636	687
Liabilities 4)	320	271	265	287	312	324	337	281	280	270
Capital employed	338	349	332	364	405	389	408	451	430	392
ROCE, % 3)	36.2	36.5	40.5	37.3	36.8	34.7	31.0	29.7	23.8	22.5
Net investments	-	-	-	-4	4	-	3	3	4	2
Depreciation, amortization and impairment losses	6	6	13	12	12	11	17	15	7	7
Number of employees, average	338	300	340	380	402	416	417	426	419	404
Europe & RoW
Net sales - external	236	223	192	205	252	268	263	264	254	264
Net sales - total 2)	264	247	213	228	286	300	293	299	290	293
Operating income	35	34	1	38	43	45	47	47	40	33
Operating margin on total sales, %	13.3	13.6	0.7	16.8	14.9	14.9	16.0	15.7	13.7	11.2
Assets 4)	1,248	1,053	1,069	1,080	1,123	1,131	1,130	1,058	999	1,126
Liabilities 4)	720	685	718	675	735	743	744	451	421	438
Capital employed	826	679	707	742	752	733	737	747	689	689
ROCE, % 3)	14.9	16.0	17.3	21.1	23.4	24.2	23.5	20.5	20.1	13.5
Net investments	7	3	20	13	9	9	12	7	8	11
Depreciation, amortization and impairment losses	15	15	18	11	11	12	11	11	11	11
Number of employees, average	751	718	715	737	778	768	772	776	764	747
Not broken down by segments
Elimination of inter-segmental sales	-32	-26	-23	-25	-36	-35	-33	-37	-39	-32
Operating loss	0	0	0	0	0	0	0	0	-12	-5
Assets 4)	104	226	235	165	123	172	114	73	81	4
Liabilities 4)	291	217	220	196	194	191	190	204	259	387
Group
Net sales	502	449	431	492	596	610	577	593	559	554
Operating income	74	59	32	74	86	89	80	83	60	58
Operating margin, %	14.8	13.0	7.5	14.9	14.5	14.6	13.9	14.1	10.8	10.4
Assets 4)	1,914	1,803	1,818	1,820	1,895	1,930	1,904	1,812	1,716	1,817
Liabilities 4)	1,332	1,173	1,203	1,158	1,241	1,258	1,271	936	960	1,095
Capital employed	1,150	1,016	1,019	1,098	1,165	1,130	1,151	1,204	1,135	1,064
ROCE, % 3)	21.9	23.1	25.3	26.7	28.1	26.9	24.9	22.9	19.7	15.7
Net investments in fixed assets	7	3	20	9	13	9	15	10	12	13
Depreciation, amortization and impairment losses	21	21	31	23	23	23	28	26	18	18
Number of employees, average	1,089	1,018	1,054	1,117	1,180	1,184	1,189	1,202	1,183	1,152

1) Figures for 2012 have been restated. See "Basis of preparation and Accounting Policies" section.

2) Total Net sales, includes both external and internal net sales.

3) As 2011 is not restated the comparable figures for previous quarters are calculated on operating income and capital employed before restatement.

4) Assets and Liabilities for Q1-Q3 2011 have not been restated.

	2013	2013	2012	2012	2012	2012	2011	2011	2011	2011
Amounts in MSEK	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Americas	39	25	31	35	44	44	33	36	32	30
Europe & RoW	35	34	1	39	42	45	47	47	40	33
Unallocated 2)	0	0	0	0	0	0	-	0	-12	-5
Total operating income	74	59	32	74	86	89	80	83	60	58
Financial net	-7	-8	-11	-7	-10	-10	-3	-4	-11	-12
Earnings before tax	67	51	21	67	76	79	77	79	49	46

Operating income per operating segment 1)

1) Figures for 2012 have been restated. See "Basis of preparation and Accounting Policies" section.

2) Unallocated costs incurred during 2011 in the amount of MSEK 17 relate to one-off advisor costs associated with the de-merger from Haldex AB.

Sales by customer location - geographic area

	2013	2013	2012	2012	2012	2012	2011	2011	2011	2011
Amounts in MSEK	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
USA	268	222	234	272	327	330	308	323	291	288
Germany	70	74	63	70	82	83	86	80	77	85
UK	38	34	29	38	49	53	55	53	47	52
Sweden	34	33	25	25	34	37	28	28	38	37
Other	92	86	80	87	104	107	100	109	106	92
Total Group	502	449	431	492	596	610	577	593	559	554

Tangible assets by operating location

	2013	2013	2012	2012	2012	2012	2011	2011	2011	2011
Amounts in MSEK	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
USA	54	56	59	62	69	66	73	83	78	78
Germany	41	31	34	33	36	35	36	36	43	38
UK	45	43	46	38	33	32	31	32	31	31
Sweden	13	12	12	15	15	16	16	15	14	14
Other	27	28	30	30	29	30	29	27	19	23
Total Group	180	170	181	178	182	179	185	193	185	184

Parent Company's income statement, in summary

		Apr-Jun	Jan-June		Jul 2012 -	Full year
Amounts in MSEK	2013	2012	2013	2012	Jun 2013	2012
Net sales	5	5	11	10	22	21
Operating costs	-2	-3	-6	-7	-14	-15
Operating income/loss	3	2	5	3	8	6
Income from shares in subsidiaries	817	-	817	-	822	5
Income from shares in associated companies	0	10	12	10	12	10
Net foreign exchange rate differences	-9	-9	-9	-4	3	8
Other financial income and expense	-2	-2	-3	-4	-6	-7
Earnings/loss before tax	809	1	822	5	839	22
Taxes	2	0	2	-1	-1	-4
Net income/loss for the period 1)	811	1	824	4	838	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

	31 Jun	31 Jun	31 Dec
Amounts in MSEK	2013	2012	2012
Shares in subsidiaries	1,753	937	937
Shares in associated companies	10	10	10
Long-term loans receivable from subsidiaries	191	104	80
Deferred tax assets	5	5	2
Total fixed assets	1,959	1,056	1,029
Current receivables	1	2	2
Short-term receivables from subsidiaries	30	17	36
Cash and cash equivalents	96	116	230
Total current assets	127	135	268
Total assets	2,086	1,191	1,297
Total Shareholders' equity	1,290	578	576
Long-term loans	175	175	175
Total long-term liabilities	175	175	175
Short-term loans	48	-	-
Short-term loans payable to associated companies	5	-	10
Short-term loans payable to subsidiaries	561	433	530
Other current liabilities	7	5	6
Total current liabilities	621	438	546
Total liabilities and shareholders' equity	2,086	1,191	1,297

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

	30 Jun	30 Jun	31 Dec
Amounts in MSEK	2013	2012	2012
Opening balance	576	662	662
Total comprehensive income 1)	824	4	18
Dividend	-110	-88	-88
Buy-back own shares	-	-	-16
Closing balance	1,290	578	576

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
Capital employed	Total assets less interest bearing financial assets and cash and cash equivalents and non-interest bearing liabilities, excluding any tax assets and tax liabilities
Dividend yield	Dividend divided by market price at year end
Drop through rate	Change in operating income as a percentage of any change in net sales between two comparable periods
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 average number of shares
EPS before items affecting comparability	EPS adjusted for post tax impact of restructuring costs and other "one-off" items
Europe & RoW	Europe and the rest of the world operating segment comprising the Group"s operations in Europe, India and China
Gearing ratio	Ratio of net debt to shareholders" 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
OEMs	Original Equipment Manufacturers
P/E ratio	Market value at year-end divided by net earnings
Payout ratio	Dividend divided by EPS
R&D	Research and development expenditure
ROCE	Return on capital employed; EBIT or Operating income as a percentage of the average capital employed over a rolling 12 months
ROE	Return on equity; net income as a percentage of the average shareholders" equity over a rolling 12 months
Sales growth, constant currency	Growth rate based on sales restated at prior year foreign exchange rates
"Underlying" or "before items affecting comparability"	Adjusted for restructuring costs and other "one-off" items
Working capital	Current assets excluding cash, less non-interest-bearing current liabilities

Appendix 1 - Restated Consolidated Income Statement for 2012 by quarter, in summary

			Reported Income Statement Adjustments							Restated Income Statement
Year-to-date	2012 Jan	2012 Jan	2012 Jan	2012 Jan	2012 Jan	2012 Jan	2012 Jan	2012 Jan	2012 Jan	2012 Jan	2012 Jan
Amounts in MSEK	Mar	Jun	Sep	Dec	Mar	Jun	Sep	Dec	Mar	Jun	Sep
Net sales	610	1,206	1,698	2,129	-	-	-	-	610	1,206	1,698
Cost of goods sold	-443	-875	-1,237	-1,570	1	2	4	5	-442	-873	-1,233
Gross income	167	331	461	559	1	2	4	5	168	333	465
Selling expenses	-20	-41	-57	-70	-	1	1	1	-20	-40	-56
Administrative expenses	-40	-81	-119	-147	6	11	17	22	-34	-70	-102
Product development expenses	-20	-39	-55	-76	-	-	-	-	-20	-39	-55
Other operating income and expenses	-5	-9	-3	-13	-	-	-	-	-5	-9	-3
Operating income	82	161	227	253	7	14	22	28	89	175	249
Financial income and expense	-8	-17	-22	-32	-2	-3	-5	-6	-10	-20	-27
Earnings before tax	74	144	205	221	5	11	17	22	79	155	222
Taxes	-23	-46	-62	-66	-1	-3	-5	-6	-24	-49	-67
Net income for the period	51	98	143	155	4	8	12	16	55	106	155
Quarterly	2012	2012	2012	2012	2012	2012	2012	2012	2012	2012	2012
MSEK Amounts in	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Net sales	610	596	492	431	-	-	-	-	610	596	492
Cost of goods sold	-443	-432	-362	-333	1	1	2	1	-442	-431	-360
Gross income	167	164	130	98	1	1	2	1	168	165	132
Selling expenses	-20	-21	-16	-13	-	1	-	-	-20	-20	-16
Administrative expenses	-40	-41	-38	-28	6	5	6	5	-34	-36	-32
Product development expenses	-20	-19	-16	-21	-	-	-	-	-20	-19	-16
Other operating income and expenses	-5	-4	6	-10	-	-	-	-	-5	-4	6
Operating income	82	79	66	26	7	7	8	6	89	86	74
Financial income and expense	-8	-9	-5	-10	-2	-1	-2	-1	-10	-10	-7
Earnings before tax	74	70	61	16	5	6	6	5	79	76	67
Taxes	-23	-23	-16	-4	-1	-2	-2	-1	-24	-25	-18

Net income for the period 51 47 45 12 4 4 4 4 55 51 49 16

Appendix 2 - Restated Other Comprehensive Income for 2012 by quarter, in summary

		Reported OCI			Adjustments					Restated OCI
Year-to-date Amounts in MSEK	2012 Jan Mar	2012 Jan Jun	2012 Jan Sep	2012 Jan Dec	2012 Jan Mar	2012 Jan Jun	2012 Jan Sep	2012 Jan Dec	2012 Jan Mar	2012 Jan Jun	2012 Jan Sep	2012 Jan Dec
Net income for the period Other comprehensive income Items not be reclassified to P&L:	51	98	143	155	4	8	12	16	55	106	155	171
Actuarial Gains/Losses	-	-	-	-	2	3	5	-58	2	3	5	-58
Tax on actuarial losses Items that may be reclassified subsequently to P&L:	-	-	-	-	-1	-1	-1	8	-1	-1	-1	8
Net investment hedging	6	-3	8	8	-	-	-	-	6	-3	8	8
Cash-flow hedging Other foreign currency translation	-	-	-	-	-	-	-	-	-	-	-	-
difference	-28	9	-43	-52	5	-5	5	9	-23	4	-38	-43
Total other comprehensive income	-22	6	-35	-44	6	-3	9	-41	-16	3	-26	-85
Total comprehensive income	29	104	108	111	10	5	21	-25	39	109	129	86

	Reported OCI					Restated OCI
Quarterly	2012	2012	2012	2012	2012	2012	2012	2012	2012	2012	2012	2012
Amounts in MSEK	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Net income for the period	51	47	45	12	4	4	4	4	55	51	49	16
Other comprehensive income
Items not be reclassified to P&L:
Actuarial Gains/Losses	-	-	-	-	2	1	2	-63	2	1	2	-63
Tax on actuarial losses Items that may be reclassified subsequently to P&L:	-	-	-	-	-1	0	0	9	-1	0	0	9
Net investment hedging	6	-9	11	0	-	-	-	-	6	-9	11	0
Cash-flow hedging Other foreign currency translation	-	-	-	-	-	-	-	-	-	-	-	-
difference	-28	37	-52	-9	5	-10	10	4	-23	27	-42	-5
Total other comprehensive income	-22	28	-41	-9	6	-9	12	-50	-16	19	-29	-59
Total comprehensive income	29	75	4	3	10	-5	16	-46	39	70	20	-43

Appendix 3 - Restated Consolidated Balance Sheet for 2012 by quarter, in summary

		Reported Balance Sheet				Adjustments				Restated Balance Sheet
	31 Mar	30 Jun	30 Sep	31 Dec	31 Mar	30 Jun	30 Sep	31 Dec	31 Mar	30 Jun	30 Sep	31 Dec
Amounts in MSEK	2012	2012	2012	2012	2012	2012	2012	2012	2012	2012	2012	2012
Goodwill	491	505	485	481	-	-	-	-	491	505	485	481
Other intangible fixed assets	370	376	351	336	-	-	-	-	370	376	351	336
Tangible fixed assets	179	182	178	181	-	-	-	-	179	182	178	181
Deferred tax assets	23	26	24	38	115	115	110	118	138	141	134	156
Long-term receivables	6	5	5	5	-	-	-	-	6	5	5	5
Total fixed assets	1,069	1,094	1,043	1,041	115	115	110	118	1,184	1,209	1,153	1,159
Inventories	193	185	176	167	-	-	-	-	193	185	176	167
Current receivables	318	318	279	204	-	-	-	-	318	318	279	204
Cash and cash equivalents	235	183	212	288	-	-	-	-	235	183	212	288
Total current assets	746	686	667	659	-	-	-	-	746	686	667	659
Total assets	1,815	1,780	1,710	1,700	115	115	110	118	1,930	1,895	1,820	1,818
Total Shareholders' equity	965	952	944	943	-293	-298	-282	-328	672	654	662	615
Pensions and similar obligations	103	113	103	101	408	413	392	446	511	526	495	547
Deferred tax liabilities	90	90	85	71	-	-	-	-	90	90	85	71
Long-term interest-bearing liabilities	175	175	175	175	-	-	-	-	175	175	175	175
Other long-term liabilities	8	8	7	4	-	-	-	-	8	8	7	4
Total long-term liabilities	376	386	370	351	408	413	392	446	784	799	762	797
Short-term interest-bearing liabilities	14	14	12	13	-	-	-	-	14	14	12	13
Other current liabilities	460	428	384	393	-	-	-	-	460	428	384	393
Total current liabilities	474	442	396	406	-	-	-	-	474	442	396	406
Total liabilities and shareholders' equity	1,815	1,780	1,710	1,700	115	115	110	118	1,930	1,895	1,820	1,818