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2016-02-04

TRELLEBORG: Interim report and Year-end report 2015

"Stable end to the year"

"2015 turned out to be quite an eventful year, and despite the
challenging market conditions in several segments, we once again
succeeded in achieving record results for the full-year. Operating
profit was the highest ever recorded for a fourth quarter, giving a
stable end to a largely satisfactory year.

However, organic sales growth was below our target. Organic sales were
negative at two percent for the full-year, but remained unchanged in
the fourth quarter. With a relatively weak market situation in
several segments and raw material prices that continued to decline,
with a subsequent negative effect on our organic growth, the year
proved challenging in terms of growth. Several initiatives are
ongoing and others will be launched to address our sales growth going
forward.

Development of the Group continues, with a focus on selected segments
and improved positions, involving many targeted organic initiatives.
During the year, we invested heavily in both improved efficiency and
new geographic areas, with the establishment of a new manufacturing
unit for agricultural tires in North America being particularly
noteworthy. Investment in structural improvements will continue.

We completed eight acquisitions during the year, which will contribute
almost SEK 500 M to annual sales, strengthen our total offering and
market positions in selected segments, and complement our organic
initiatives. We will continue to actively seek bolt-on acquisitions.

In the fourth quarter, we signed an agreement to acquire CGS Holding
a.s. CGS has well-positioned and favorably performing operations
within agricultural and specialty tires, as well as engineered
polymer solutions. This marks Trelleborg's largest acquisition in
decades and will significantly alter the position and size of a
number of our business areas. The transaction is subject to
regulatory approval, and we expect to complete the acquisition in the
first half of 2016.

The jointly owned company TrelleborgVibracoustic developed according
to plan, with organic sales well in excess of underlying market
growth during the year. The company's operating profit was the
highest ever for the full-year as well as for a fourth quarter.
Efforts to prepare TrelleborgVibracoustic for a possible IPO are
progressing according to plan.

At present, there are some signs of a market improvement in certain
geographic areas and some segments, such as the aerospace and
automotive industries, which appear to be displaying satisfactory
development. However, the situation looks considerably more difficult
than it did last year in other parts of our business. Low oil prices,
generally low raw material prices and a continued weak trend in parts
of general industry and agriculture are continuing to hamper some
parts of the Group. The share of our order backlog related to oil &
gas has contracted significantly, which is why we expect tougher
times ahead with both fewer project deliveries and lower
profitability in the segment. Adjustment to a lower level of activity
has already been initiated and has been partly completed.

2016 will probably bring major structural changes for the Group.
Trelleborg will continue to strengthen its positions, and we are
maintaining preparedness to adjust our various businesses to
fluctuating demand. I therefore feel confident, and look forward to
the continued development of Trelleborg into an even better company",
says Peter Nilsson, President and CEO.

Continuing operations, fourth quarter
Net sales for the fourth quarter of 2015 increased by 6 percent (9) to
SEK 5,927 M (5,592). Sales were the Group's highest to date for a
fourth quarter. Organic sales were unchanged (neg: 2). Effects of
structural changes made a positive contribution of 2 percent (3),
while the effects of exchange rate movements were 4 percent (8).

Operating profit, excluding the participation in
TrelleborgVibracoustic and items affecting comparability, rose by 2
percent to SEK 705 M (690), equivalent to an operating margin of 11.9
percent (12.3). The operating profit was the Group's highest to date
for a fourth quarter.

Items affecting comparability for the quarter amounted to an expense
of SEK 90 M (expense: 68), which is in line with communicated
full-year levels.

Operating profit during the quarter for TrelleborgVibracoustic,
excluding items affecting comparability, increased by 26 percent and
amounted to EUR 43.5 M (34.4). This corresponded to an operating
margin of 8.8 percent (7.6). The operating profit and corresponding
margin were the highest to date for the company for a fourth quarter.

Trelleborg's participation in TrelleborgVibracoustic's profit amounted
to SEK 104 M after tax (72). Items affecting comparability amounted
to an expense of SEK 29 M (expense: 11), which is in line with
communicated full-year levels.

Earnings per share rose 9 percent to SEK 2.00 (1.84).
Operating cash flow amounted to SEK 854 M (1,031). During the fourth
quarter of 2015, a dividend of SEK 1,357 M (-) was received from
TrelleborgVibracoustic. The operating cash flow, including this
dividend, amounted to SEK 2,211 M (1,031).

The Board of Directors and President propose a cash dividend of SEK
4.00 per share (3.75).

Continuing operations, full year
Net sales for the full-year 2015 increased by 10 percent (5) and
totaled SEK 24,803 M (22,533). Organic sales declined by 2 percent
(neg: 1). Effects of structural changes made a positive contribution
of 2 percent (2), while the effects of exchange rate movements were
10 percent (4).

Operating profit, excluding the participation in
TrelleborgVibracoustic, and items affecting comparability, rose 7
percent to SEK 3,219 M (3,001), equivalent to an operating margin of
13.0 percent (13.3). Operating profit was the highest to date for the
Group for a full-year.

Operating profit for the full-year for TrelleborgVibracoustic,
excluding items affecting comparability, rose 21 percent to EUR 182.9
M (151.0), corresponding to an operating margin of 9.4 percent (8.5).
Both operating profit and operating margin were the highest to date
for the company for a full-year. Trelleborg's participation in
TrelleborgVibracoustic's profit amounted to SEK 509 M (298) after
tax.

Earnings per share rose 17 percent to SEK 9.60 (8.23).
Operating cash flow amounted to SEK 2,282 M (2,705). A dividend of SEK
1,357 M (131) was received from TrelleborgVibracoustic during 2015.
The operating cash flow, including this dividend, amounted to SEK
3,639 M (2,836). The cash conversion ratio was 71 percent (90),
excluding dividends from TrelleborgVibracoustic.

The total return on shareholders' equity for the Group was 14.3
percent (13.6).

Market outlook for the first quarter of 2016
Demand is expected to be on a par with, or slightly weaker, than the
fourth quarter of 2015, adjusted for seasonal variations.

Market outlook from the interim report published on October 22, 2015,
relating to the fourth quarter of 2015

Demand is expected to be on a par with, or slightly weaker, than the
third quarter of 2015, adjusted for seasonal variations.

Proposed dividend 2015
The Board of Directors and President propose a cash dividend of SEK
4.00 per share (3.75).

For further information, please contact:
Media: Vice President Media Relations Karin Larsson, +46 (0)410 67015,
+46 (0)733 747015, karin.larsson@trelleborg.com

Investors/analysts: Vice President IR Christofer Sjögren, +46 (0)410
67068, +46 (0)708 665140, christofer.sjogren@trelleborg.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, February 4,
2016, at 07:45 CET.

Trelleborg is a world leader in engineered polymer solutions that
seal, damp and protect critical applications in demanding
environments. Its innovative solutions accelerate performance for
customers in a sustainable way. The Trelleborg Group has annual sales
of SEK 25 billion in over 40 countries. The Group comprises five
business areas: Trelleborg Coated Systems, Trelleborg Industrial
Solutions, Trelleborg Offshore & Construction, Trelleborg Sealing
Solutions and Trelleborg Wheel Systems. In addition, Trelleborg owns
50 percent of TrelleborgVibracoustic, the global market leader within
antivibration solutions for light and heavy vehicles, with annual
sales of SEK 18 billion in about 20 countries. The Trelleborg share
has been listed on the Stock Exchange since 1964 and is listed on
Nasdaq Stockholm, Large Cap.www.trelleborg.com

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http://news.cision.com/trelleborg/r/interim-report-and-year-end-report-2...
http://mb.cision.com/Main/584/9907698/472611.pdf

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