"Robust earnings in a challenging market"
Trelleborg started the year by posting strong earnings, despite the prevailing market situation in agriculture and oil/gas. Our margin discipline negatively impacted volumes, and thus also organic sales.
Despite the organic sales trend, the Group achieved the highest operating profit to date for a single quarter, partly positively impacted by currency effects. Our largest business area, Trelleborg Sealing Solutions, is developing satisfactory and reported its highest result to date for a single quarter. Acquired operations had a positive impact on earnings.
The TrelleborgVibracoustic joint venture performed well and according to plan, continuing to outperform the underlying market in terms of growth. The company reported its highest operating margin to date for a single quarter. Activities aimed at preparing TrelleborgVibracoustic for a potential initial public offering are progressing.
At the end of the quarter, some signs of improvement were noted in the European market in individual segments, while a slowdown was observed in a few segments in the North American market.
The significantly lower world market price of oil impacts parts of the Group, and has a negative effect on demand and increases the uncertainty for our deliveries to the oil/gas industry. At the same time the lower price of oil is expected to stimulate the economy in general. Our agricultural tire operation will continue to be impacted by the challenging market situation within its segment.
Our overall assessment is that the market is moving sideways. We are continuously monitoring developments and are maintaining preparedness to adjust our various businesses to fluctuating demand”, says Peter Nilsson, President and CEO.
Net sales for the first quarter of 2015 increased by 14 percent (4) to SEK 6,370 M (5,597). Organic sales declined by 4 percent (increase: 3). Effects of structural changes made a positive contribution of 4 percent (0), while the effects of exchange rate movements were a positive 14 percent (pos: 1).
Operating profit, excluding the participation in TrelleborgVibracoustic and items affecting comparability, rose 7 percent to SEK 833 M (779), equivalent to an operating margin of 13.1 percent (13.9). The operating profit was the Group’s highest to date for a single quarter.
Items affecting comparability for the quarter amounted to an expense of SEK 35 M (expense: 18), which was fully attributable to previously announced restructuring programs.
Operating profit in the quarter for TrelleborgVibracoustic, excluding items affecting comparability, increased 20 percent and amounted to EUR 46.2 M (38.6). This corresponded to an operating margin of 9.5 percent (8.6), the highest to date for the company for a single quarter.
Trelleborg’s participation in TrelleborgVibracoustic’s profit amounted to SEK 137 M after tax (87). Items affecting comparability amounted to an expense of SEK 27 M (expense: 27) and is in line with communicated full-year levels.
Earnings per share rose 11 percent to SEK 2.54 (2.29).
The operating cash flow was SEK 59 M (367).
Market outlook for the second quarter of 2015
Demand is expected to be on a par with the first quarter of 2015, adjusted for seasonal variations.
For further information, please contact:
Media: Vice President Media Relations Karin Larsson, +46 (0)410 67015, +46 (0)733 747015, firstname.lastname@example.org
Investors/analysts: Vice President IR Christofer Sjögren, +46 (0)410 67068, +46 (0)708 665140, email@example.com
This is information of the type that Trelleborg AB (publ) is obligated to disclose in accordance with the Swedish Securities Exchange and Clearing Operations Act and/or the Financial Instruments Trading Act. The information was issued for publication on Thursday, April 23, 2015, at 13:00 CET.