REDITCH, England, November 3, 2022 /PRNewswire/ — THIRD QUARTER 2022

  • Net sales: MSEK 1,068 (515) – reported sales increased by +107% year-on-year. Adjusting for the impact of currencies +14% and EMP +84%, year-over-year constant currency sales were up +9%.
  • Operating result: 175 MSEK (114), generating an operating margin of 16.3% (22.2). Third quarter operating profit includes the profit from the sale of our Argentinian business of MSEK 9, resulting in operating profit before items affecting comparability of MSEK 166 (114).
  • Net income for the period: MSEK 126 (91); Basic EPS SEK3.32 (2.39).
  • Cash flow from operating activities: MSEK 163 (69); cash conversion increases to 108% in the third quarter.


  • Net sales: MSEK 3,023 (1,420) – reported sales increased by +113% year-on-year. After adjusting for +13% currency effects and +79% EMP, sales at constant currency increased by +21%.
  • Operating result: Operating income was MSEK 505 (316), generating an operating margin of 16.7% (22.3).
  • Net income for the period: MSEK 390 (248); Basic EPS SEK10.28 (6.54).
  • Cash flow from operating activities: MSEK 329 (217); cash generation was impacted by increased working capital to support increased sales.
  • Group net debt: 1005 MSEK (-136); debt ratio of 45% (-10). Pension liabilities continue to decline as discount rates rise, resulting in a net revaluation gain of MSEK 26 (-5) in the third quarter and a total gain of MSEK 217 (80) year-to-date .

President and CEO, Martin Künzcomments on the interim report for the third quarter of 2022.

Concentric continues to perform well in a challenging environment.

Financial performance

The Concentric Group continued to perform well in the third quarter of 2022 with year-over-year sales growth and strong operating margins despite supply chain inflationary pressures. Net sales increased 107% to MSEK 1,068, with Machined Machinery Products (EMP) accounting for +84% of year-over-year sales growth, while underlying sales growth and exchange rates increased sales by +9% and +14% respectively. . Third quarter operating profit was MSEK 175 (114), achieving an operating margin of 16.3% (22.2), which included a better than expected profit of MSEK 9 following the sale of our activity in Argentina. The Group’s cash performance improved this quarter, cash flow from operating activities was MSEK 163 (69) with a profit to cash conversion ratio of 108% for the quarter and a ratio since start of the year by 85%. Inventory remains the drag on cash generation and we will continue to focus on reducing our current inventory levels as the supply chain stabilizes.

Sales and Market Development

Our global end markets offer a mixed picture, particularly the important North American and European markets. Most of our end markets in North America offered opportunities for growth, while in Europe, these same markets are stable or in decline. We have a strong presence in the Indian construction equipment market and it’s good to see that this market remains dynamic. China however, the economy is slowing as it adapts to a punitive zero-Covid strategy and weakening global demand, impacting our Alfdex business in particular. Overall, published quarterly market indices suggest the market was down -2% year-over-year, while our sales were up +9% in constant currency, indicating the continued lag between our sales and market indices.

Sales of electrical products this quarter were MSEK 200, equivalent to 19% of group sales. While electrical products are of strategic importance, we also want to develop sales opportunities for our existing mechanical products, particularly in emerging markets such as India, where Concentric has been present for more than 30 years. It is for this reason that we are delighted to announce two new commercial designations in the on-road truck sector for water pumps required on new engine platforms designed to meet the stringent Bharat VI emission standard. . These are the first commercial appointments with a national OEM in the road sector and are an important step in developing our position in this important emerging market.

The stability of the global supply chain continues to improve, except for the electrical components needed for our e-products, which remain hard to find to meet end-market demand. While the global supply chain has improved over the past three quarters, critical bottlenecks remain, which continue to limit sales and increase the order bank.

Our global engine market was comparable to last year and in line with our underlying sales performance for the quarter. Sales by geographic region were mixed as we recorded strong sales in North America, in particular to the agricultural machinery sector, while sales to our European customers in the truck sector were down. Our Engines division’s net sales for the quarter were MSEK 712 (252) with an operating margin of 14.2% (31.1). EMP increased engine sales by +171% and exchange rates increased sales by a further +11%, meaning underlying sales were flat year-over-year. Decline in sales of Alfdex products to China continues to impact engine operating margin.

Demand for our hydraulic products remains strong in our core geographic markets and across all end-market applications. Our Hydraulics division’s net sales for the quarter were MSEK 356 (263) with an operating margin of 18.1% (13.7). Underlying sales increased by +17% and exchange rates further increased sales by +18%.


Looking to the fourth quarter of 2022, we currently estimate that net sales will remain consistent with the sales performance achieved during the third quarter. We expect the high level of market volatility to continue with the ongoing war in Europehigh inflation, risk of new restrictions related to Covid-19 in China and supply chain bottlenecks. Our Concentric Business Excellence program will continue to support our strong business margins in the current climate and improve our cash performance by reducing inventory in the next quarter.

For more information, please contact:
Martin Künz (President and CEO) or Marcus White House (CFO)
at tel: +44 121 445 6545
or email: [email protected]

The information contained in this report is of the type that Concentric AB is required to make public under EU Market Abuse Regulation and Securities Markets Law. The information was submitted for publication, through the contact persons listed above, at 08:00 CET on November 3, 2022.

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SOURCE Concentric AB

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