Financial Overview

(in million SEK)

	FY2011	FY2010	Rate of change (%)	Factors
Overall
Sales	4,030	3,710	8.6	-
Operating income	235	100	135.0	-
Sales by divisions
Air Controls	1,619	1,611	0.5	-
Foundation Brake	2,411	2,099	14.9	-

Contracts

-In 2011, the Company started to deliver the new design of air disk brakes, ModulT, to SAF-Holland. The brakes are manufactured at the Company's plant in Landskrona, Sweden, and the order is worth around SEK 1 billion.

 
-Leading Chinese bus manufacturers Suzhou Kinglong and Golden Dragon have chosen the Company as the supplier of ABS (Anti-lock Braking System), TK+. Serial supply to both customers started in late 2011.

Business Partnership

-The Company and Master Sistemas Automotivos Limitada of Brazil, have signed a long term collaboration agreement in which the companies undertake to cooperate in the manufacturing, sales and technical support of Trailer ABS for the Brazilian market. In Brazil a new legislation will be introduced starting 2013 requiring all new trailers to be 100% equipped with ABS systems by 2014. Master Sistemas, a manufacturer of brakes for trucks, buses and trailers, is a joint venture between Randon S.A. Implementos e Participacoes and Meritor Inc. (From a press release on December 13, 2011)

Restructuring

-In 2008, the Company's operations comprised four divisions: Commercial Vehicle Systems, Hydraulic Systems, Traction Systems and Garphytan Wire.

• On June 1, 2009, the Garphyttan Wire division was divested.
• On January 31, 2011, the Company sold Traction Systems division to BorgWarner.
• On June 16, 2011, Concentric AB, former Hydraulic Systems division of the Haldex Group, was listed as an independent entity on the Stockholm Stock Exchange.

-Effective June 2011, the Company's operations are conducted in two business units, focusing on commercial vehicles.

• Air Controls
• Foundation Brake

R&D Expenditures

(in million SEK)

	FY2011	FY2010
Product development costs	153	134

Product Developments

World's first UN-ECE approved rollover simulator for trailers
-The Company launched the world's first UN-ECE approved rollover control simulator for trailers. The simulator will enable trailer manufacturers to obtain type approval for vehicles equipped with Haldex's EB+electronic braking system so that the vehicles meet the UN-ECE regulations (which include new rules for braking systems) without manufacturers having to carry out their own resource-intensive road testing.

New generation of disc brakes
-In 2010, the Company developed a new generation of disc brakes, "ModulT". This product is around 15% lighter than existing modules, which enables higher freight weights.

Capital Expenditures

(in million SEK)

	FY2011	FY2010
Total	100	146

Investment Outside Sweden

<Brazil>
-Haldex do Brazil will open a new facility in Sao Jose dos Campos, Brazil. The activities in Sao Paulo and Flores da Cunha are going to be moved starting in December 2011 and the activities at the present Rio de Janeiro site starting January 2012. The project is planned to be finalized by February 2012. (From a press release on August 29, 2011)

<Mexico>
-The Company completed the development of a new manufacturing site in Monterrey, Mexico, consolidating production from former site in Monterrey, Iola, Kanzas and Gran Haven, Michigan. This consolidation has resulted in an improved base to serve the North American market, while supporting improvements in the cost structure.

<China>
-In order to cope with the demand, which is driven by economic growth and adaptation of high quality technology, the Company is now expanding its facilities in Suzhou, China, with a new laboratory and increased production space.