Trelleborg entering ‘normalised growth phase’ after strong 2022

Trelleborg, Sweden – Trelleborg Group has had a “good start to the year” with double-digit gains in sales and earnings, but expects growth to slow down compared to a strong 2022.

Earnings (EBITDA) rose 20% year-on-year to SEK1.85 billion (€158 million) during the first quarter, on 23% higher sales of SEK 8.7 billion, Trelleborg announced 27 April.

According to the Swedish group, sales were the highest to date for a quarter, reflecting a 7% increase in organic growth.

During the period, Trelleborg’s president and CEO Peter Nilsson noted a ‘balanced’ cost inflation, although operating margin fell to 16.2%, from 17.3% reported the year before.

Nilsson linked the lowered profitability to the acquisition and ongoing integration of the US-based Minnesota Rubber & Plastic, which was not part of the group last year.

Once integrated, Trelleborg expects Minnesota Rubber & Plastics to achieve synergies and yield “gradually higher profitability over the next few years.”

Over the first quarter, Trelleborg Industrial Solutions (TIS) reported healthy organic sales growth of 16% to SEK3.8 billion, while segment EBIT rose 20% to SEK529 million.

Here, LNG-related and marine solutions “grew considerably” while deliveries to the automotive and aerospace industries saw strong growth, said Nilsson.

Compared to last year, demand in the rail industry also increased, though the construction sector was weaker due to a declining market in Europe.

Trelleborg Sealing Solutions (TSS) reported a significant 29% increase in sales to SEK4.7 billion, while EBIT rose 9% to SEK953 million.

The unit saw organic sales improving in Europe and in North and South America, although sales in Asia were lower, due to “temporary weaker demand in China”.

During the period, TSS saw a ‘considerable increase’ in deliveries to healthcare & medical and the aerospace industry.

Likewise, sales to the automotive industry increased, with “healthy growth particularly in Europe”, according to Nilsson.

Trelleborg Wheel Systems (TWS) – now reported under 'discontinued operations' – saw an 8% increase in sales to SEK3.6 billion, with a positive trend in North America and weaker sales in Europe.

The parent group expects to complete the sale of TWS to Yokohama Rubber in the second half of the year, with only “few formalities remaining”.

Summarising Trelleborg's first quarter, leader Nilsson said: “Compared with the preceding year’s strong growth, it is clear that we are now entering a more normalised growth phase.” 

The group, he explained, has “already seen more subdued demand from the construction industry and some industrial market segments.”

As a result, Trelleborg said it has started “proactive adaptation” of parts of its business affected by lower demand.

Meanwhile, the Trelleborg-headquartered group will aim to increase its exposure to ‘strong growth’ market segments.

These, it said, include the aerospace industry, healthcare & medical and electrification, as well as in specific regional markets in Asia.