Interim report April-June 2013

"Continued improvements"   "Trelleborg has once again reported a strong quarter. The operating profit and operating margin for the quarter was the highest to date for the Group. There was a positive trend in organic sales, with growth of 2 percent compared with the preceding year, driven by a slightly positive trend in Europe, particularly in general industry, and continued good growth in Asia. We are continuing to strengthen the Group’s positions within attractive and profitable market segments, primarily through organic initiatives. During the quarter, a small acquisition was made in offshore oil/gas, which has already made a positive contribution and further strengthened our position within this interesting segment. At the same time, work is progressing within our excellence and restructuring programs that continue to have a positive impact on earnings. We are pleased with the continued improvements, but remain far from satisfied. Our ambition is to continuously raise the bar and improve performance. The European Commission’s judgment for participation in a cartel relating to marine hoses was affirmed by the General Court of the European Union during the quarter. The case has been in progress since 2007 and although we do not share the Court’s view of the prevailing legal status, the judgment means that we have come to the end of the processing of an issue that has been under way for many years and we can now look forward instead. Market outlooks remain uncertain. However, our overall assessment is that demand is deemed to be on a par with the second quarter of 2013. As before, we are following economic developments closely and have a continued high level of preparedness to address fluctuating market conditions," says Peter Nilsson, President and CEO.

Continuing operations

Net sales for the second quarter of 2013 totaled SEK 5,628 M (5,612). Organic sales increased by 2 percent.
Operating profit for the quarter, excluding items affecting comparability and the participation in TrelleborgVibracoustic, rose by 3 percent to SEK 723 M (702), equivalent to an operating margin of 12.8 percent (12.5), which is the highest to date for the Group.

Items affecting comparability amounted to negative SEK 204 M (pos: 171), of which restructuring costs amounted to an expense of SEK 49 M (expense: 32). Refer to page 3 for more information.
Operating cash flow for the quarter amounted to SEK 531 M (590).

Operating profit for the quarter for the associated company TrelleborgVibracoustic, excluding items affecting comparability, amounted to EUR 31 M (pro forma EUR 27 M), corresponding to an operating margin of 6.9 percent
(pro forma 6.5).
Trelleborg’s participation in TrelleborgVibracoustic amounted to SEK 97 M before tax for the quarter (-). This participation was charged with SEK 11 M in expenses affecting comparability (-).

Group in total

Consolidated net sales amounted to SEK 5,628 M (7,533) for the quarter.
Operating profit declined for the quarter to SEK 616 M (1,115), mainly due to nonrecurring costs of SEK 155 M being charged to the second quarter, and in the preceding year by nonrecurring revenues of SEK 337 M.
The second quarter of 2012 included now discontinued operations in Group’s accounting.
Earnings per share for the quarter were SEK 1.40 (3.35).

Market outlook for the third quarter of 2013

Demand is expected to be on a par with the second quarter of 2013, adjusted for seasonal variations.

Invitation to a telephone conference
A telephone conference will be held on July 23 at 09:30 a.m. To participate in the telephone conference, call +46 (8) 519 993 68 or +44 207 660 2081 or +1 855 753 2237. Code: “Trelleborg”. The conference will also be broadcast on the Internet in real time. Visit our website at: for the Internet link and presentation materials.