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1 Technology+ Innovation= Sustainability David Second Woolley level (CEO) & David Bessant (CFO) Q Interim Report 26 April June 2011

2 Agenda Q Highlights DW Summary of financial results DB Innovation DW FY 2012 Third level Outlook DW Q&A DW & DB 22 June 26 April

3 Q Highlights Concentric continues to grow year on year and faster than the market Growth is achieved without compromising on working capital and cost discipline. Improved margins and strong cash flow Strong Q results as the demand from Q was largely sustained Emerging trend of US demand ahead of Europe continues in Q1 2012, reflected in average sales per working day Strong profitability and working capital management further reduces net debt Robust financial position debt/equity ratio <10% 33 June 26 April

4 Summary of financial results 4 June 2011

5 Q Results MSEK Net Sales Jan-Mar Change Sales growth, like for like 8% 53% Gross income Operating income / EBIT (1) Operating margin 14.4% 11.9% Click Net to financial edit Master expenses text styles Net income Second level Capital employed 1,257 1,243 ROCE (1) 26.3% 16.5% Net debt Gearing (Debt/Equity) 6% 34% Rolling 12mth EBIT multiple (1) 7.4 n/a EPS (1) (SEK) (1) Earnings adjusted for MSEK 6 pension charges in Q (MSEK 8 demerger costs in Q1 2011) MSEK 2,423 Enterprise value based on 31-Mar-12 share price SEK June 26 April

6 Sales & Operating margin development 2, % 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Sales & Operating income margins (rolling 12 months) Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 2,600 2,400 2,300 2,200 2,100 2,000 1,900 1,800 1,700 1,600 1,500 Profitable growth trend continues: Sales growth ahead of market for 5 th successive quarter H market growth rates restated upwards following revised production data received in Q report Strong drop through from increased sales volumes Realisation of benefits from Concentric Business Excellence program and ongoing cost management Operating margin (Actual) Market growth (Restated) Sales (Actual) Market growth (Reported) 66 June 26 April Sales (Constant currency)

7 Market Data for Q Industrial applications +6% 1% -10% +4% +4% +9% Applying our sales mix by endmarket and customer location, the blended market growth rate for Q1-12 was 1% versus an actual year on year growth of 8% in constant currencies. 77 June 26 April Q1-12 vs. Q1-11 FY-12 vs. FY-11 North Europe China/ North Europe China/ America India America India Agricultural machinery - -3% -8% +4% +3% +12% Construction equipment +8% -4% -3% +8% - +18% Truck +3% -4% -21% +8% +2% -5% Source: Based on statistics from Power Systems & Research, Off-Highway Research and International Truck Association Q update The blended market growth rate forecast for the full year 2012 is currently 5%. FY-11 Sales by end-market 25% Con Equip 17% Ag Mach 27% Trucks 31% Ind Apps FY-11 Sales by customer location 6% Sweden 9% UK 18% Other 14% Germany 53% USA

8 Regional Performance Americas Click Amounts in MSEK Master title style Net sales - total (including inter-regional sales) Q1-12 Q1-11 Change Operating income % Drop-through % Operating margin Return on capital employed (1) (1) The quarterly ROCE has been calculated on a rolling 12 month basis. Continued sales growth year on year Sales growth, like for like, was 13% for Q1-12 vs. Q1-11, driven primarily by off-highway equipment for construction and industrial applications Average sales per working day basis was MSEK 5.4 Improving operating margins Operating margins for the quarter were up to 12.4% with strong drop through from the increased sales volumes 88 June 26 April

9 Regional Performance Europe & RoW Click Amounts in MSEK Master title style Net sales - total (including inter-regional sales) Q1-12 Q1-11 Change Operating income % Operating margin Return on capital employed (1) (1) The quarterly ROCE has been calculated on a rolling 12 month basis. Sales levels continue to soften slightly vs. H2-11 In constant currencies, sales were up 2% in Q1-12 vs. Q1-11 On a sales per working day basis, activity levels were down -3% in Q1-12 vs. Q4-11 Strong operating margins Adjusting for the pension charges recorded in Q1-12 in respect of previously unrecognised actuarial losses, underlying operating margins remained strong at 14.8% (Q4-11: 16.0%) 99 June 26 April

10 Robust financial position Amounts in MSEK Q1-12 Q1-11 Comments Click Balance Sheet Master title style Working Capital Capital Employed 1,257 1,243 Net Debt Equity Gearing (Debt/Equity) ratio 6% 34% MSEK 57 of non-operating working capital with Haldex AB was settled in Q as part of refinancing Available facilities of c. MSEK 360 Very low gearing Cash Flow EBITDA CAPEX Cash in flow before financing Continued strong cash conversion June 26 April

11 Technology Click to edit Master + Innovation subhead text styles = Sustainability 11 June 2011

12 Technology Engine Products Best in class technologies. High reliability performance, focused on fuel economy, emissions reduction Oil mist separators New contracts announced Variable Flow Oil pumps First production order announced Variable Flow Water pumps Development contracts in place Alfdex Oil mist separator Variable Flow Oil Pump Variable Flow Coolant Pump June April

13 Technology Hydraulic Products Our gear pumps and motors (and the power packs they are in) are well established and respected around the world Latest developments include the Calma product Helps meet legislation for lower noise A Quiet Revolution Gear tooth profiles optimised to reduce noise June April

14 Innovation by Design Technology is key to our success (PRODUCT and MANUFACTURING) BUT also need right business environment and approach We need INNOVATION in ALL of our processes Click Customer edit Master management subhead text styles Purchase/ Supply Manufacturing Quality We are developing Fifth a level culture of continuous improvement Challenge everything we do to make it better Goals- Increased performance and customer satisfaction We have many examples- but wanted to talk about LEAN MANUFACTURE June 26 April

15 Innovation in LEAN manufacturing Tools to increase Speed of production Level of quality Employee skill and satisfaction Quality 50 PPM U Shaped Cells 1 piece flow Set-up Reduction Application The Second right tool level in the right place Balanced use to best effect People engagement Sustained improvement 5C / TPM OEE / DSA / Inventory Days Training & Understanding Visual Management Kanban / VSM Blitz Kaizen June 26 April Technology + Innovation = Sustainability

16 Innovation in LEAN manufacturing B E F O R E A F T E R June 26 April Technology + Innovation = Sustainability

17 Innovation in LEAN manufacturing Integrated into the business Click Joined up Master title style Global approach Customer focussed People focussed Builds on foundations Common language 50 PPM 5C Customer Satisfaction Quality 5C / TPM OEE / DSA / Inventory Days QUALITY COST DELIVERY U Shaped Cells 1 piece flow Training & Understanding Visual Management Set-up Reduction Kanban / VSM Blitz Kaizen Waste Elimination People Satisfaction Lean and 6 Sigma Principles EFQM / Baldrige Concentric Business Excellence TS16949 ISO14001 BS June 26 April Technology + Innovation = Sustainability

18 FY 2012 Outlook 18 June 2011

19 Outlook Orders received during Q indicate that the Group s underlying sales activity will be sustained during the Q2 2012, with a continuing trend of stronger demand in North America compared to Europe. The blended market growth rate for FY 2012 based on the latest available data is forecast to be 5%, applying our mix of sales by endmarket and customer location. Our ambition remains to grow faster than the market. We Second firmly level believe that our geographical spread and four distinct end- market segments, together with the flexibility we have in our operations through our Business Excellence program, make Concentric very well positioned to tackle any challenges in We continue to see great opportunities for long-term growth by providing value to our customers through our leading technology addressing the key drivers in our market niches, such as the forthcoming changes in emissions legislation and increased focus on reducing fuel consumption June 26 April

20 Any Questions? 20 June 2011

21 Appendices 21 June 2011

22 Company Overview Concentric AB is organized regionally Two regions Americas and Europe and ROW Manufacturing occurs in the UK, India, China, Sweden, Germany and the US close to customers The company employs 1,202 people Focus on four end markets Truck, Agricultural machinery, Construction equipment and Industrial applications We make pumps for diesel engines, used for pumping lubricating oil, coolants and diesel fuel Concentric AB is the global market leader in engine pumps in the litre per cylinder niche Largest customers are engine manufacturers and large truck manufacturers which produce diesel engines for their own trucks and construction machinery We make gear pumps for a broad range of hydraulic pump applications Concentric AB is a market leader in niches such as fan drives and supplementary power steering Largest customers are OEMs of a wide range of industrial vehicles, agricultural machinery and construction equipment April 2012

23 Global Infrastructure Footprint adjacent to our Customers Itasca, Click Illinois Master title style Manufacturing & Distribution 100 Employees Birmingham, UK Headquarters Manufacturing & Distribution 200 Employees Landskrona, Sweden Manufacturing, JV with Alfa Laval Skånes Fagerhult, Sweden Manufacturing 90 Employees Rockford, Illinois USA Manufacturing 350 Employees Suzhou, China Manufacturing 40 Employees Hof, Germany Manufacturing 175 Employees Pune, India Manufacturing 200 Employees June April

24 Engine Products We offer best in class pumps for diesel engines focused on fuel economy and emissions reduction, with the major products including: Oil pumps, fixed and variable displacement, mechanical or electronic control Water pumps, fixed and variable control with future stretch for electrification Fuel transfer pumps, mechanical with electrification options Variable Flow Pumps Alfdex oil mist separators Water Pumps Oil Fifth Pumps level Fuel Pumps Oil Mist Separator June April

25 Hydraulic Products Cab Tilt and Ladder Stow Auxiliary Pumps Fan Drive Supplemental Steering Transmission Axle Cooling Implement Pump Accumulator Charging June April

26 Blue Chip Customer Base Top 10 Customers Caterpillar, 19% Other, 35% Cummins, 17% John Deere, 8% Volvo, 6% JLG, 2% Kion Group, 2% Nacco, 2% Source: 2011 Group sales Daimler, 3% Navistar, 2% Deutz, 3% Top 10 customers account for 65% - reflects customer concentration for engines Customer development can take up to 3 yrs but platform life cycle usually +10 yrs Other customers account for 35% - reflects diverse base in hydraulic products (700+) April 2012

27 Emissions Legislation Europe/North America/Japan However large the engine, wherever it is made and wherever it is used, on or off highway, there will be tougher emissions standards and increased focus on reducing fuel consumption. This offers opportunities for our technology. Source: ACEA June 26 April

28 Emissions Legislation Emerging Markets Source: ACEA June 26 April