Strong growth platform and focus on profitability targets
"Concerted strategic development has resulted in a well-positioned
global industrial group with favorable opportunities for growth.
Following vigorous concentration and expansion, we are now entering a
third phase that is more clearly focused on profitability targets," said
Group CEO Fredrik Arp, during Trelleborg's Capital Market Day in
Stuttgart, where he had the opportunity to provide in-depth information
about the Group while also presenting more details about the new
Trelleborg Sealing Solutions business area.
"With the acquisition of PSS, the repositioning of Trelleborg has
largely been completed," Fredrik Arp affirmed. "The concentration phase
begun in 1999 with the divestment of non-core operations and
simultaneous strong expansion through strategic acquisitions has
resulted in a first-class industrial platform. For 90 percent of our
sales, we have established leading positions in attractive market
segments and have achieved a number of economies of scale. We have well-
developed research and development, a well-structured production
organization and global coverage. These provide competitive advantages
and a solid foundation. Our focus now is on organic growth and
complementary acquisitions in profitable market segments. We are now
entering a third phase more clearly focused on profitability targets
with potential margin improvements in all business areas."
CFO Bo Jacobsson described the profitability targets, which at EBITA
levels are set individually for each business area. For the Group, the
targets for return on capital employed and return on shareholders'
equity are set at 15 percent, calculated before goodwill amortization.
At EBITA level, the cash-flow target is adjusted to 80-90 percent.
Following the current year's considerable expansion, the growth target
is now being revised to 8-10 percent annually, for which both financial
and organizational capacity exists, as Bo Jacobsson indicated.
The new business area, Trelleborg Sealing Solutions, was presented by
Business Area President Claus Barsøe, who also affirmed that the
integration process is progressing beyond expectations. The business
area is a leading supplier of precision seals for industrial, automotive
and aerospace applications. Through customer-tailored solutions, cost-
efficient production and global market coverage, Trelleborg Sealing
Solutions has also become the world leader in terms of earnings.
Trelleborg Automotive, which in recent years has integrated two major
acquisitions, is preparing for further growth in sales and earnings,
according to Business Area President George Caplea. Order bookings are
favorable and operations are well positioned following a solid
restructuring process. In addition to organic growth based on aspects
such as innovations and the transfer of technology between Europe and
North America, Caplea expects further complementary strategic
acquisitions like that of KunHwa during the spring of 2003.
Trelleborg Engineered Systems shows a positive profitability trend.
According to Business Area President Peter Nilsson, this is due to
measures that include rationalization of the product range. Such
measures will continue and will be complemented by production in areas
with cost advantages. Increased focus on product and application
development in profitable segments and increased market presence are
intended to result in a gradual improvement in margins.
The President of Trelleborg Wheel Systems, Maurizio Vischi, explained
that the business area is currently experiencing a difficult market
situation, with reduced demand for tractor tires due to weaker
conditions in the agricultural sector. However, it has been possible to
maintain earnings through the restructuring program now implemented and
a number of market activities.
Peter Suter, President of the Trelleborg Building Systems business area
explained that return ratio had been maintained at a high level through
a number of rationalization measures, successful innovations and
increased market presence, and were strengthened during the past year
with two complementary acquisitions in Germany and the UK.
Further information can be obtained from Trelleborg's Senior Vice
president, Corporate Communications, Mikael Byström, +46 (0) 410-670 37,
0708-552169 or from Viktoria Bergman, Vice President, Corporate
Communications, +46 410-670 94 or +46 708-47 57 33.
Trelleborg is a global industrial group. Operations are based on
spearhead competence within polymer materials and a high level of
industrial know-how, combined with functional solutions and systems
designed to meet the needs of our customers. The Trelleborg Group has
annual sales of approximately SEK 22.5 billion, with about 21,000
employees in 40 countries. Trelleborg consists of five business areas:
Trelleborg Automotive, Trelleborg Wheel Systems, Trelleborg Engineered
Systems, Trelleborg Building Systems and Trelleborg Sealing Solutions.
The Trelleborg share has been quoted on the A list of Stockholmsbörsen
since 1964. www.trelleborg.com
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