Trelleborg targets 5% organic growth

ERJ staff report (TP)

Stockholm – Trelleborg outlined its long-term strategy during its Capital Markets Day and showed how the last decade has seen it grow in China, Brazil and India.

At last week’s Capital Markets Day in Stockholm, Ulf Berghult, CFO, explained the firm’s financial targets for 2014.

In terms of organic sales development he said there is “still some way to go” but the company is aiming for an average organic growth of 5%.

In comparison, Q2 and Q4 2013, and Q1 2014 were all 2%. Q3 2013 was 5% and Trelleborg seeks to replicate that figure.

Since 2010, its EBIT margin has been steadily rising. Q1 2014 was 12.7% and Berghult said they are looking for a margin target of around 12%.

Peter Nilsson, president & CEO, explained how the firm had expanded globally since 2005.

For example, seven years ago it had two “major group locations” in China – one JV plant in Wuxi and one sales office in Shanghai.

By 2014 this has expanded to six manufacturing plants and seven sales offices – stretching from Chengdu to Beijing.

Looking at the bigger picture, Nilsson said the firm expects global growth to bottom out.

World real GDP per quarter is projected to be 3.2%, 3.3% and 3.5% year-on-year for Q2, Q3 and Q4 respectively. In comparison, Q3 2013 was 3%, while Q4 2013 was 3.3%.

In terms of the company’s future, Nilsson said it will further strengthen its market leading position in industrial hoses.

Back in April, ERJ reported it had acquired the Turkish firm Superlas. This development will help it expand – particularly in North America and Asia.

Nilsson said there will also be an increasing focus on revenue & growth, moving away from organisation & structure.