Concentric — Interim / Quarterly Report 2024

May 8, 2024

First quarter 2024

Net sales

MSEK 1,003 (1,127) – down –11% year-on-year with no major foreign exchange movements. Compared to Q4 2023 sales are up +9% in constant currency.

Operating income

Operating income was MSEK 137 (181) generating an Operating margin of 13.7% (16.1), up +1.6% from Operating margin before items affecting comparability of 12.1% reported in Q4 2023.

Net income for the period MSEK 100 (121); basic EPS of SEK 2.69 (3.18).

Cash flow from operating activities

Cash flow from operating activities was MSEK 43 (89) with a profit to cash conversion ratio of 29% (61).

Group's net debt

MSEK 698 (865); gearing ratio of 30% (39). Loan repayments of MSEK 187 in the quarter.

Key figures – Group1)

	Jan–Mar
MSEK	2024	2023	Change
Net sales	1,003	1,127	–11%
Operating income	137	181	–24%
Earnings before tax	128	159	–19%
Net income for the period	100	121	–17%
Cash flow from operating activities	43	89	–52%
Net debt 2)	698	865	–19%
Operating margin, %	13.7	16.1	–2.4
Basic EPS, SEK	2.69	3.18	–0.49
Diluted EPS, SEK	2.68	3.18	–0.50
Return on equity, %	17.5	24.2	–6.7
Gearing ratio , %	30	39	–9

1) For additional information see pages 19–20 and 23. 2) For additional information see page 23.

Review of the first quarter

Reduced operational costs and stabilised customer orders improved the Q1 Operating margin compared to the fourth quarter of 2023. Additionally, strong e-product sales contributed positively to the financial performance in this quarter.

Financial Performance

Our Group's reported net sales for the quarter were MSEK 1,003 (1,127), down by 11% year-on-year and our Operating income was MSEK 137 (181), resulting in an Operating margin of 13.7% (16.1).

Our customer's de-stocking activities diminished as we progressed through the first quarter of 2024, whilst the underlying market remained weak across most of our end-markets. All of our geographical regions, most notably our European and North American markets are weaker year-on-year by –15% and –9% respectively. However, sales of e-products were particularly strong this quarter, MSEK 244 (193) equating to 24% (17%) of Group sales and there were minimal year-on-year foreign exchange movements.

The cost-saving measures implemented during the third and fourth quarters of 2023, which are largely completed, combined with higher sales in the quarter, particularly in our Hydraulics division, have enabled us to improve our underlying Group Operating margin by 1.6% compared to the previous quarter. Quarteron-quarter sales and Operating margins in our engines division remained relatively flat, whilst our Hydraulics division reported a sales increase of 14% and Operating margins improved significantly to 14.8%, up 5.2% from the fourth quarter of 2023. Alfdex, our joint venture with Alfa Laval, experienced headwinds this quarter, particularly in China where the truck market remains weak. Our share of income from Alfdex this quarter was MSEK 13 (17).

As is typical with our annual business cycle the cash flow in the first quarter of the year is generally the weakest, both in absolute terms and the cash conversion ratio, this quarter was no exception with our cash flow from operating activities being MSEK 43 (89), which represents a profit to cash conversion ratio of 29% (61). The cash flow from operating activities was impacted by a working capital increase MSEK 98, caused mainly by increases in our inventory levels and our customers delaying payments into the second quarter.

We have continued to repurchase our own shares during the quarter totalling MSEK 44, bringing the total own shares purchased under this announced scheme to MSEK 144. We also repaid some of our outstanding debt in the quarter totalling MSEK 155, reducing our cash and cash equivalents balance to MSEK 515 (636) as at 31 March 2024.

Executing our Strategy

This quarter has once again seen us make significant strides in the execution of our strategic plan. While our investment plan to enhance our Pune plant for future growth is underway, our Indian team has success fully launched the production of coolant pumps for our first domestic on-highway customer. Additionally, investment in the new manufacturing line in Escanaba, North America, has been largely completed and we have started serial production of our new and innovative high-voltage fans for our North American customers.

Outlook

The Book-to-bill ratio for the Group this quarter is 92% and broadly similar in each of our reporting divisions. Based on this and other available information, we continue to estimate that our end-markets will be weaker during 2024. As a result, we expect net sales in the second quarter of 2024 to be broadly similar to the net sales achieved in the first quarter of 2024.

We continue to monitor the sales order intake levels, particularly for the second half of 2024 and will continue to take the necessary cost action in a timely manner to ensure we deliver strong Operating margins during this challenging economic cycle.

Concentric Group, first quarter figures

Key figures 1)

	Jan–Mar
Amounts in MSEK	2024	2023	Change
Net sales	1,003	1,127	–11%
Operating income	137	181	–24%
Earnings before tax	128	159	–19%
Net income for the period	100	121	–17%
Operating margin, %	13.7	16.1	–2.4
ROCE, %	15.5	20.1	–4.6
Return on equity, %	17.5	24.2	–6.7
Basic EPS, SEK	2.69	3.18	–0.49
Diluted EPS, SEK	2.68	3.18	–0.50

1) For additional information see pages 19–20 and 23.

Sales

Net sales for the first quarter were down year-on-year by –11%, there is no major foreign exchange impact in the quarter. The Book-to-bill ratio at the end of the first quarter was 92% (92), as demand stabilises in a generally weaker market.

Sales of electric products were MSEK 244 (193) in the first quarter representing 24% (17) of the Group's Net sales for the period.

Operating income

Operating income in the first quarter was MSEK 137 (181) resulting in an Operating margin of 13.7% (16.1). This is an improvement compared to Q4 2023 as a result of higher sales volumes and cost reduction activities largely completed during Q3 and Q4 of 2023.

Net financial items

Net financial income and expense for the first quarter was MSEK –9 (–22), this comprised of pension financial expense of MSEK –1 (–1), interest expenses for right of use assets MSEK –1 (–1), interest on the loan of –12 (–14) and net other financial income MSEK 5 (–3).

Taxes

The reported effective tax rate for the first quarter was 22% (24). This rate largely reflected the mix of taxable earnings and tax rates applicable across the various tax jurisdictions.

Earnings per share

The basic earnings per share for the first quarter was SEK 2.69 (3.18), down SEK 0.49 per share. The diluted earnings per share for the first quarter was SEK 2.68 (3.18), down SEK 0.50.

Cash flow from operating activities

The reported cash inflow from operating activities for the first quarter amounted to MSEK 43 (89), which represents SEK 1.15 (2.33) per share. This has resulted in an Operating cash conversion ratio of 29% (61) which has been impacted by a working capital increase in the first quarter.

Working capital

Total working capital as at 31 March 2024 was MSEK 442 (480), this represented 10.8% (11.3) of annual sales. In constant currency the drop in working capital was MSEK 54, of which MSEK 62 is due to lower inventory levels year-on-year.

Net debt and gearing

Overall, the Group's net debt at the end of the first quarter was MSEK 698 (865), comprising interest bearing liabilities MSEK 873 (1,132), liabilities for right of use assets MSEK 99 (116) and net pension liabilities of MSEK 241 (253), net of cash amounting to MSEK 515 (636). Shareholders' equity amounted to MSEK 2,362 (2,195), resulting in a gearing ratio of 30% (39) at the end of the first quarter.

CONCENTRIC INTERIM REPORT Q1 2024 FINANCIAL SUMMARY – GROUP

Graphs – Concentric Group

Sales and book-to-bill

Underlying operating income and margin

Earnings per share and return on equity

Engines

Financial Performance	Jan–Mar
Amounts in MSEK	2024	2023	Change
External net sales	678	752	–10%
Operating income	89	125	–29%
Operating margin, %	13.2	16.6	–3.4
ROCE, %	11.2	12.9	–1.7

Sales

Net sales for the first quarter were down year-on-year by –10% and foreign exchange movements did not have an impact this quarter.

Sales in both of our core sales regions of Europe and North America saw similar levels of decline down year-on-year by –9% and –11% respectively. The North American truck & bus market was the only sector to experience modest growth, however a sharp fall in Europe left sales into the truck & bus market down overall. The Book-to-bill ratio at the end of the quarter was 94% (96), up from the previous quarter, 85%.

Operating income

Operating income in the first quarter was MSEK 89 (125) resulting in an Operating margin of 13.2% (16.6). Sales and Operating margins remained broadly flat compared to Q4 2023. The share of income from Alfdex, our joint venture with Alfa Laval, was MSEK 13 (17).

Working capital

Working capital in the Engines division was MSEK 335 (382) as at 31 March 2024, or 12.0% (13.4) as a percentage of sales. In constant currency the drop in working capital was MSEK 58, of which MSEK 17 is due to lower inventory levels year-on-year.

Hydraulics

Financial Performance
	Jan–Mar
Amounts in MSEK	2024	2023	Change
External net sales	325	375	–13%
Operating income	48	56	–14%
Operating margin, %	14.8	15.0	–0.2
ROCE, %	22.8	30.2	–7.4

Sales

Net sales for the first quarter were down year-on-year by –13%, and foreign exchange movements did not have an impact this quarter.

Sales in both our core sales regions of North America and Europe exprienced year-on-year declines. However, while sales in North America decreased by 4%, sales in Europe saw a more substantial decline of 26%. Sales to the construction sector were notably impacted, experiencing double-digit percentage declines across both regions. The Book-to-bill ratio of at the end of the first quarter was 91% (85), down from 99% in the previous quarter.

Operating income

Operating income in the first quarter was MSEK 48 (56), down MSEK 8 year-on-year, generating an Operating margin of 14.8% (15.0). The Operating margin is broadly flat year-on-year but has improved quarter-on-quarter, up 5.2% from Q4 2023, this is in part due to increased sales volumes and cost reduction activities.

Working capital

Working capital in the Hydraulics division was MSEK 152 (164) as at 31 March 2024, or 11.6% (11.6) as a percentage of sales. In constant currency the drop in working capital is MSEK 16, entirely due to a large reduction in inventory levels of MSEK 45 year-on-year.

CONCENTRIC INTERIM REPORT Q1 2024 FINANCIAL SUMMARY – GROUP

Graphs – Engines

Sales and book-to-bill

Underlying operating income and margin

Working capital and working capital as a % of sales

CONCENTRIC INTERIM REPORT Q1 2024 FINANCIAL SUMMARY – GROUP

Graphs – Hydraulics

Sales and book-to-bill

Underlying operating income and margin

Working capital and working capital as a % of sales

Financial statements – Group

General information

Unless otherwise stated, all amounts have been stated in SEK million ("MSEK"). Certain financial data has been rounded in this interim report. Where the sign "—" has been used, this either means that no number exists or the number has been rounded to zero.

Consolidated income statement

	Jan–Mar
	2024	2023
Net sales	1,003	1,127
Cost of goods sold	–749	–824
Gross income	254	303
Selling expenses	–24	–34
Administrative expenses	–71	–76
Product development expenses	–25	–21
Share of net income in joint venture	13	17
Other operating income and expenses	–10	–8
Operating income	137	181
Financial income and expenses	–9	–22
Earnings before tax	128	159
Taxes	–28	–38
Net income for the period	100	121
Parent Company shareholders	100	121
Basic earnings per share, SEK	2.69	3.18
Diluted earnings per share, SEK	2.68	3.18
Basic average number of shares (000)	37,248	37,980
Diluted average number of shares (000)	37,272	38,069

Consolidated statement of comprehensive income

	Jan–Mar
	2024	2023
Net income for the period	100	121
Other comprehensive income
Items that may be reclassified subsequently to the income statement
Exchange rate differences related to liabilities to foreign operations	–32	–2
Tax arising from exchange rate differences related to liabilities to foreign operations	7	1
Cash-flow hedging	2	–4
Tax arising from cash-flow hedging	—	1
Share of OCI related to joint venture	4	—
Foreign currency translation differences	143	7
Total other comprehensive income	124	3
Total comprehensive income	224	124

Consolidated balance sheet

	31 Mar 2024	31 Mar 2023
Goodwill	1,506	1,455
Other intangible fixed assets	352	414
Right of use fixed assets	82	100
Tangible fixed assets	470	452
Share of net assets in joint venture	165	156
Deferred tax assets	106	100
Other long-term receivables	25	30
Total fixed assets	2,706	2,707
Inventories	490	538
Current receivables	691	687
Cash and cash equivalents	515	636
Total current assets	1,696	1,861
Total assets	4,402	4,568
Total Shareholders' equity	2,362	2,195
Pensions and similar obligations	241	253
Deferred tax liabilities	87	128
Long-term liabilities for right of use fixed assets	80	99
Other long-term interest-bearing liabilities	641	744
Other long-term liabilities	3	2
Total long-term liabilities	1,052	1,226
Short-term liabilities for right of use fixed assets	19	17
Other short-term interest-bearing liabilities	232	388
Other current liabilities	737	742
Total current liabilities	988	1,147
Total equity and liabilities	4,402	4,568

Financial derivatives

The carrying amount of financial assets and financial liabilities are considered to be reasonable approximations of their fair values. Financial instruments carried at fair value on the balance sheet consist of derivative instruments. As of 31 March 2024 the fair

value of derivative instruments that were assets was MSEK 21 (25), and the fair value of derivative instruments that were liabilities was MSEK 0 (0). These measurements belong in level 2 in the fair value hierarchy.

Consolidated changes in shareholders' equity

	31 Mar 2024	31 Mar 2023
Opening balance	2,181	2,070
Net income for the period	100	121
Other comprehensive income	123	3
Total comprehensive income	223	124
Own share buy-backs	–44	—
Long-term incentive plan	2	1
Closing balance	2,362	2,195

Consolidated cash flow statement, in summary

		Jan–Mar
	2024	2023
Earnings before tax	128	159
Reversal of depreciation and amortisation of fixed assets	46	48
Reversal of net income from joint venture	–13	–17
Reversal of other non-cash items	1	—
Taxes paid	–21	–21
Cash flow from operating activities before changes in working capital	141	169
Change in working capital	–98	–80
Cash flow from operating activities	43	89
Net investments in property, plant and equipment	–29	–28
Cash flow from investing activities	–29	–28
Buy-back of own shares	–44	—
Repayment of loans	–193	–40
Pension payments and other cash flows from financing activities	–1	–9
Cash flow from financing activities	–238	–49
Cash flow for the period	–224	12
Cash and bank assets, opening balance	724	624
Exchange-rate difference in cash and bank assets	15	—
Cash and bank assets, closing balance	515	636

Group notes

Data per share
	Jan–Mar
	2024	2023
Basic earnings per share, SEK	2.69	3.18
Diluted earnings per share, SEK	2.68	3.18
Equity per share, SEK	63.62	57.79
Cash-flow from current operations per share, SEK	1.15	2.33
Basic weighted average no. of shares (000's)	37,248	37,980
Diluted weighted average no. of shares (000's)	37,272	38,069
Number of shares at period-end (000's)	37,122	37,980

Key figures1)

	Jan–Mar
	2024	2023
Sales growth, %	–11	21
Sales growth, constant currency, %2)	–11	11
Sales of e-Products, %	24	17
EBITDA margin, %	18.2	20.3
Operating margin, %	13.7	16.1
Capital employed, MSEK	3,573	3,694
ROCE before items affecting comparability, %	16.1	19.8
ROCE, %	15.5	20.1
ROE, %	17.5	24.2
Working capital, MSEK	442	482
Working capital as a % of annual sales	10.8	11.3
Net debt, MSEK3)	698	865
Net debt/EBITDA	0.94	0.98
Gearing ratio, %	30	39
Net investments in PPE	29	28
R&D, %	2.5	1.8
Number of employees, average	1,210	1,258

1) For additional information see pages 19–20 and 23.

2) Sales growth excludes the impact of any acquisitions or divestments. For additional information see page 23.

3) For additional information see page 20.

Consolidated income statement in summary – by type of cost Jan–Mar

	2024	2023
Net sales	1,003	1,127
Direct material costs	–501	–550
Personnel costs	–233	–251
Depreciation and amortisation of fixed assets	–46	–48
Share of net income in joint venture	13	17
Other operating income and expenses	–99	–114
Operating income	137	181
Financial income and expense	–9	–22
Earnings before tax	128	159
Taxes	–28	–38
Net income for the period	100	121

Other operating income and expenses (refers to Income Statement on page 8) Jan–Mar

	2024	2023
Tooling income	1	1
Royalty income from joint venture	6	7
Amortisation of acquisition related surplus values	–18	–18
Other	1	2
Other operating income and expenses	–10	–8

Segment reporting

The Engines segment comprises all Concentric, Licos and EMP branded engine products, including royalties and net income from our joint venture, Alfdex. The Hydraulics division includes all Concentric and Allied branded hydraulic products. The evaluation of an operating segment's earnings is based upon its operating income or EBIT. Financial assets and liabilities are not allocated to segments.

Equity accounting is used for the consolidation of our joint venture, Alfdex, within the Engines segment reporting, in line with IFRS 11.

	Engines		Hydraulics		Elims/Adjs		Group
First quarter	2024	2023	2024	2023	2024	2023	2024	2023
Total net sales	683	758	325	376	–5	–7	1,003	1,127
External net sales	678	752	325	375	—	—	1,003	1,127
Operating income	89	125	48	56	—	—	137	181
Operating margin, %	13.2	16.6	14.8	15.0	n/a	n/a	13.7	16.1
Financial income and expense	—	—	—	—	–9	–22	–9	–22
Earnings before tax	89	125	48	56	–9	–22	128	159
Assets	3,303	3,321	568	636	531	611	4,402	4,568
Liabilities	749	776	325	377	966	1,220	2,040	2,373
Capital employed	3,499	3,586	748	773	–674	–665	3,573	3,694
ROCE before items affecting comparability, %	11.3	12.9	23.3	30.2	n/a	n/a	16.1	19.8
ROCE, %	11.2	12.9	22.8	30.2	n/a	n/a	15.5	20.1
Net investments in PPE	28	18	1	10	—	—	29	28
Depreciation and amortisation of fixed assets	42	43	4	5	—	—	46	48
Number of employees, average	842	850	368	412	—	—	1,210	1,262

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 first quarter was 63 (66) for the Group, with an average of 64 (67) working days for the Engines segment and 62 (64) working days for the Hydraulics segment.

Segment External Sales reporting by geographic location of customer

	Engines		Hydraulics		Group
First quarter	2024	2023	2024	2023	2024	2023
USA	462	482	170	183	632	665
Rest of North America	11	20	2	5	13	25
South America	—	—	—	—	—	—
Germany	44	66	39	54	83	120
UK	37	44	11	19	48	63
Sweden	14	17	21	24	35	41
Rest of Europe	81	77	37	48	118	125
Asia	22	32	41	39	63	71
Other	7	14	4	3	11	17
Total Group	678	752	325	375	1,003	1,127

Total sales by product groups

		Engines Hydraulics				Group
First quarter	2024	2023	2024	2023	2024	2023
Concentric branded products	159	231	297	353	456	584
EMP branded products	460	451	—	—	460	451
LICOS branded products	59	70	—	—	59	70
Allied branded products	—	—	28	22	28	22
Total Group	678	752	325	375	1,003	1,127

Total sales by end-markets

		Engines		Hydraulics		Group
First quarter	2024	2023	2024	2023	2024	2023
Trucks	294	301	53	64	347	365
Construction	192	254	114	146	306	400
Industrial	70	44	111	114	181	158
Agriculture	122	153	47	51	169	204
Total Group	678	752	325	375	1,003	1,127

Business risks, accounting principles and other information

Business overview

Descriptions of Concentric's business and its objectives, its products, the driving forces it faces, market position and the endmarkets it serves are all presented in the 2023 Annual Report on pages 10–17 and pages 22–31.

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 economic instability following the conflict in Ukraine, coupled with the escalating situation in the Middle East, holds the potential to impact future demand, as heightened tensions may have consequences for the global economy. We continue to monitor the macro economic environment and the demand from our end-markets.

Otherwise the risks to which Concentric may be exposed are 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;
• 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;
• Legal risks such as the protection and maintenance of intellectual property rights and potential disputes arising from third parties; 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 2023 Annual Report and confirm that there have been no changes other than those comments made above in respect of market developments during 2023. Please refer to the Risk and Risk Management section on pages 71–76 of the 2023 Annual Report for further details.

Events after the balance sheet date

There have been no material post balance sheet events which would require disclosure or adjustment to these financial statements.

Related-party transactions

The Parent Company is a related party to its subsidiaries and joint venture. Transactions with subsidiaries and joint venture occur on commercial market terms. No transactions have been carried out between Concentric AB and its subsidiary undertakings and any other related parties that had a material impact on either the Company's or the Group's financial position and results.

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 2023 Annual Report.

New standards, amendments and interpretations to existing standards have been endorsed by the EU and adopted by the Group. None of the IFRS and IFRIC interpretations endorsed by the EU are considered to have a material impact on the Group.

Financial Statements – Parent Company

Net sales and operating income

Net sales for the first quarter reflected mostly the royalty income received from the joint venture, Alfdex AB. Operating result for the first quarter was a loss of MSEK –1 (nil).

Net financial items and earnings before tax

Exchange rate losses on foreign liabilities to subsidiaries was MSEK –32 (–2) in the quarter, and the remaining financial items netted to MSEK –20 (–21), MSEK –12 (–14) of which relates to the interest cost on the term loan and multi-currency revolving facility. Accordingly, earnings before tax was a loss of MSEK –53 (–23) for the first quarter.

Buy-back and holdings of own shares

The total number of holdings of own shares at 1 January 2024 was 710,016 (108,153) and shares transferred to an Employee Share Ownership Trust ("ESOT") was 204,435 (209,947).

Including these shares the Company's holdings was 914,451 (318,100) and the total number of shares in issue was 38,297,600 (38,297,600). The company repurchased 260,699 (nil) of own shares during the first quarter, for a total consideration of MSEK 44 (nil), taking the total purchased own shares to 970,715. No transfer to or from the ESOT in this quarter. Consequently, the Company's holdings of own shares represent 2.5% (0.3) of the total number of shares. Including the own shares transferred to the ESOT, the total own holdings represent 3.1% (0.8) of the total number of shares.

Dividends

On April 18 2024, the AGM resolved on the proposed dividend for the financial year 2023 of SEK 4.25 per share, totaling MSEK 159.

Parent Company's income statement

	Jan–Mar
	2024	2023
Net sales	10	9
Operating costs	–11	–9
Operating income	–1	—
Net foreign exchange rate differences	–32	–2
Other financial income and expense	–20	–21
Earnings before tax	–53	–23
Taxes	7	–1
Net income for the period1)	–46	–24

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

Parent Company's balance sheet

	31 Mar 2024	31 Mar 2023
Shares in subsidiaries	4,289	4,329
Shares in joint venture	10	10
Long-term loans receivable from subsidiaries	908	1,004
Deferred tax assets	40	27
Total financial fixed assets	5,247	5,370
Other current receivables	6	7
Short-term receivables from subsidiaries	136	133
Cash and cash equivalents	423	531
Total current assets	565	671
Total assets	5,812	6,041
Total shareholders' equity	2,634	2,267
Pensions and similar obligations	21	20
Long-term interest-bearing liabilities	641	744
Long-term loans payable to subsidiaries	2,172	2,470
Total long-term liabilities	2,834	3,234
Short-term loans payable to subsidiaries	108	145
Short-term interest-bearing liabilities	232	388
Other current liabilities	4	7
Total current liabilities	344	540
Total equity and liabilities	5,812	6,041

Parent Company's changes in shareholders' equity

	31 Mar 2024	31 Mar 2023
Opening balance	2,724	2,291
Net income for the period	–46	–24
Buy-back of own shares	–44	—
Closing balance	2,634	2,267

Other information

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 AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 8.00 CET on 8 May, 2024.

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 forwardlooking, due to such considerations as changed conditions concerning the economy, market and competition.

Concentric's web site for investors

www.concentricab.com contains information about the Company, the share and insider information as well as archives for reports and press releases.

Reporting calendar

Interim Report January–June 2024 30 July, 2024 Interim Report January–September 2024 5 November, 2024

Further information:

Martin Kunz (President and CEO) or Marcus Whitehouse (CFO) at Tel: +44 (0) 121 445 6545 or E-mail: info@concentricab.com

Corporate Registration Number 556828-4995

Stockholm 8 May, 2024

Martin Kunz President and CEO

This report has not been reviewed by the company's auditors.

Alternative Performance Measures reconciliation

	Jan–Mar
Underlying EBIT or operating income	2024	2023
EBIT or operating income	137	181
Underlying operating income	137	181
Net sales	1,003	1,127
Operating margin (%)	13.7	16.1
Underlying operating margin (%)	13.7	16.1

		Jan–Mar
Underlying EBITDA or operating income before amortisation and depreciation	2024	2023
EBIT or operating income	137	181
Operating amortisation/depreciation	28	30
Amortisation of purchase price allocation	18	18
EBITDA or operating income before amortisation and depreciation	183	229
Underlying EBITDA or underlying operating income before amortisation and depreciation	183	229
Net sales	1,003	1,127
EBITDA margin (%)	18.2	20.3
Underlying EBITDA margin (%)	18.2	20.3

	Jan–Mar
Net income	2024	2023
Net income	100	121
Net income before items affecting comparability	100	121
Basic average number of shares (000)	37,248	37,980
Basic earnings per share	2.69	3.18
Basic earnings per share before items affecting comparability, SEK	2.69	3.18

CONCENTRIC INTERIM REPORT Q1 2024 ALTERNATIVE PERFORMANCE MEASURES

		Jan–Mar
Cash Conversion	2024	2023
Cash flow from operating activities	43	89
Payments for financial transactions	7	21
Tax payments	21	21
Net investments in property, plant and equipment	–29	–28
Adjustment for royalty from joint-venture (Alfdex)	–6	–7
Operating Cash	36	96
Operating income	137	181
Adjustment for royalty from joint-venture (Alfdex)	–6	–7
Adjustments for share in profit in joint-venture (Alfdex)	–13	–17
Adjusted Operating income	118	157
Cash conversion (%)	29	61

Net debt	31 Mar 2024	31 Mar 2023
Pensions and similar obligations	241	253
Liabilities for right of use fixed assets	99	116
Other long term interest bearing liabilities	641	744
Other short term interest bearing liabilities	232	388
Total interest bearing liabilities	1,213	1,501
Cash and cash equivalents	–515	–636
Total net debt	698	865
Net debt, excluding pension obligations	457	612

Capital employed	31 Mar 2024	31 Mar 2023
Total assets	4,402	4,568
Interest bearing financial assets	–5	–2
Non interest bearing assets	4,397	4,566
Non interest bearing liabilities	–824	–872
Non interest bearing liabilities (excl taxes)	–824	–872
Total capital employed	3,573	3,694

Working capital	31 Mar 2024	31 Mar 2023
Accounts receivable	585	601
Other current receivables	105	85
Inventory	490	538
Working capital assets	1,179	1,224
Accounts payable	–403	–391
Other current payables	–334	–351
Working capital liabilities	–737	–742
Total working capital	442	482

Graph data summary

	Q1/2024	Q4/2023	Q3/2023	Q2/2023	Q1/2023	Q4/2022	Q3/2022	Q2/2022	Q1/2022
Group
Sales, MSEK	1,003	945	1,035	1,098	1,127	1,033	1,068	1,021	934
Book-to-bill, %	92	89	92	99	92	94	107	108	105
Operating income before items affecting comparability, MSEK	137	115	146	175	181	172	165	164	166
Operating margin before items affecting comparability, %	13.7	12.1	14.1	16.0	16.1	16.7	15.5	16.1	17.8
Basic earnings per share, SEK	2.69	2.31	2.35	3.15	3.18	2.92	3.32	3.53	3.42
Return on equity, %	17.5	18.9	19.9	22.3	24.2	26.6	27.6	28.8	27.9
Cash flow from operating activities per share, SEK	1.15	6.04	4.2	3.67	2.33	5.33	4.26	1.99	2.37
Working capital as % of annualised sales	10.8	7.7	11.2	11.9	11.3	10.0	14.2	15.1	12.9
Net debt, MSEK	698	617	799	950	865	925	1,005	1,081	1,016
Gearing ratio, %	30	28	35	42	39	45	45	56	59
Gearing ratio (excl Pensions), %	19	17	24	30	28	32	43	51	49

	Q1/2024	Q4/2023	Q3/2023	Q2/2023	Q1/2023	Q4/2022	Q3/2022	Q2/2022	Q1/2022
Engines
Sales, MSEK	678	659	709	735	752	695	712	676	608
Book-to-bill, %	94	85	93	107	96	94	109	109	105
Operating income before items affecting comparability, MSEK	89	87	108	118	125	118	101	99	108
Operating margin before items affecting comparability, %	13.2	13.2	15.3	16.0	16.6	17.0	14.2	14.6	17.9
Working capital as % of annualised sales	12.0	9.6	13.1	13.8	13.4	12.6	15.9	18.4	20
Working capital, MSEK	335	275	379	403	382	339	388	364	306
Hydraulics
Sales, MSEK	325	286	326	363	375	338	356	345	326
Book-to-bill, %	91	99	91	85	85	94	102	107	105
Operating income before items affecting comparability, MSEK	48	28	38	58	56	54	65	65	58
Operating margin before items affecting comparability, %	14.8	9.6	11.5	15.8	15.0	16.1	18.1	18.8	17.7
Working capital as % of annualised sales	11.6	8.2	12.0	12.8	11.6	9.7	12.8	12.0	8.4
Working capital, MSEK	152	111	168	184	164	133	165	144	92

CONCENTRIC INTERIM REPORT Q1 2024 GLOSSARY & DEFINITIONS

Glossary

APM

An alternative performance measure is a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework.

EHS

Electro Hydraulic Steering.

EMP

Engineered Machined Products, Inc and subsidiaries.

ESOT

Employee Share Ownership Trust.

JSOP

Long-term incentive program to participants' resident in the United Kingdom to take part in a Joint Share Ownership Plan.

LTI

Long term incentive.

Net investments in fixed assets

Fixed asset additions net of fixed asset disposals and retirements.

OEMs

Original Equipment Manufacturers.

Off-highway

Collective term for industrial applications, agricultural machinery and construction equipment end-markets.

Order backlog

Customer sales orders received which will be fulfilled over the next three months.

R&D expenditure

Research and development expenditure.

Tier 1, Tier 2-supplier

Different levels of sub suppliers, typical within the automotive industry.

Definitions

Book-to-bill

Total sales orders received and booked into the order backlog during a three month period, expressed as a percentage of the total sales invoiced during that same three month period.

Book-to-bill is used as an indicator of the next quarter's net sales in comparison to the sales in the current quarter.

Capital employed

Total assets less interest bearing financial assets and non-interest bearing liabilities.

Capital employed measures the amount of capital used and serves as input for return on capital employed.

Drop-through/drop-out rate

Year-on-year movement in operating income as a percentage of the year-on-year movement in net sales.

This measure shows operating leverage of the business, based on the marginal contribution from the year-on-year movement in net sales.

EBITDA

Earnings before interest, taxes, depreciation and amortisation.

EBITDA is used to measure the cash flow generated from operating activities, eliminating the impact of financing and accounting decisions.

EBITDA margin

EBITDA as a percentage of net sales.

EBITDA margin is used for measuring the cash flow from operating activities.

EBIT or Operating income

Earnings before interest and tax.

This measure enables the profitability to be compared across locations where corporate taxes differ and irrespective the financing structure of the Company.

EBIT or Operating margin

Operating income as a percentage of net sales. Operating profit margin is used for measuring the operational profitability.

EPS

Earnings per share, net income divided by the average number of shares.

The earnings per share measure the amount of net profit that is available for payment to its shareholders per share.

Equity per share

Equity at the end of the period divided by number of shares at the end of the period.

Equity per share measures the net-asset value backing up each share of the Company's equity and determines if a Company is increasing shareholder value over time.

Gearing ratio

Ratio of net debt to shareholders' equity. The net gearing ratio measures the

extent to which the Company is funded by debt. Because cash and overdraft facilities can be used to pay off debt at short notice, this is calculated based on net debt rather than gross debt.

Gross margin

Net sales less cost of goods sold, as a percentage of net sales. Gross margin measures production profitability.

Net debt

Total interest-bearing liabilities, including pension obligations and liabilities for leases, less liquid funds. Net debt is used as an indication of the ability to pay off all debts if these were to fall due simultaneously on the day of calculation, using only available cash and cash equivalents.

ROCE

Return on capital employed; EBIT or Operating income as a percentage of the average capital employed over rolling 12 months.

Return on capital employed is used to analyse profitability, based on the amount of capital used. The leverage of the Company is the reason that this metric is used next to return on equity, because it not only includes equity, but taken into account other liabilities as well.

ROE

Return on equity; net income as a percentage of the average shareholders' equity over rolling 12 months.

Return on equity is used to measure profit generation, given the resources attributable to the Parent Company owners.

Sales growth, constant currency

Growth rate based on sales restated at prior year foreign exchange rates.

This measurement excludes the impact of changes in exchange rates, enabling a comparison on net sales growth over time.

Structural growth

Sales growth derived from new business contracts, i.e. not from changes in market demand or replacement business contracts.

Structural changes measure the contribution of changes in Group structure to net sales growth.

"Underlying" or "before items affecting comparability"

Adjusted for restructuring costs, impairment, pension curtailment gains/losses and other specific items (including the taxation effects thereon, as appropriate).

Enabling a comparison of operational business.

Working capital

Current assets excluding cash and cash equivalents, less non-interest-bearing current liabilities.

Working capital is used to measure the Company's ability, besides cash and cash equivalents, to meet current operational obligations.

24

CONCENTRIC INTERIM REPORT Q1 2024 FINANCIAL STATEMENTS – PARENT COMPANY