Trelleborg posts 16% earnings growth in record third quarter

Trelleborg, Sweden – Trelleborg Group has reported a 16% year-on-year increase in third-quarter earnings, with strong growth at its Sealing Solutions business driving another record quarter.

Group sales for the three months ended 30 Sept rose 8% year-on-year to SEK9.2 billion (€821 million), the highest quarterly sales reported to date, the Swedish group announced 23 Oct.

Organic sales increased 6% compared with the preceding year, while ‘structural changes’ and currency translation each contributed 1 percentage point to growth.

Earnings (EBITA, excluding items affecting comparability) rose 16% to SEK1.78 billion, including a SEK21 million positive impact from exchange rates.

The quarterly margin improved to 19.3% from 18.1% a year earlier, with both earnings and the margin reaching their ‘highest levels to date’ for a single quarter.

For the first nine months, group sales grew 4% year-on-year to SEK27 billion, while earnings increased 8% to SEK5.1 billion. The nine-month margin improved to 19.0% from 18.3% a year earlier.

“Our performance in the third quarter was in line with our expectations and marked another record-breaking quarter for the group,” said president and CEO Peter Nilsson.

Trelleborg, he added, recorded “the highest sales, the highest operating profit and the highest margin to date for a single quarter.”

“The results reflect the strength of our decentralised business model,” Nilsson said, citing strong market positions, a local footprint and systematic improvements.

Breaking down segment performances, Trelleborg Industrial Solutions reported a 7% year-on-year increase in third-quarter sales to SEK3.9 billion, while earnings rose 4% to SEK574 million.

For the first nine months, sales increased 2% to SEK11.7 billion, while earnings declined 1% to SEK1.8 billion.

According to Nilsson, the business reported “solid organic growth” during the quarter, although performance varied across market segments.

Deliveries to infrastructure and marine projects increased compared with the first half, as anticipated, and were expected to continue growing in the final quarter.

However, construction industry demand remained below year-earlier levels, while organic sales to automotive and rail customers declined slightly.

Sales to the aerospace industry continued to show a positive trend.

Trelleborg Medical Solutions reported a 6% year-on-year decline in third-quarter earnings to SEK171 million, despite 2% higher sales of SEK901 million.

For the first nine months, earnings fell 3% to SEK505 million, while sales remained broadly unchanged at SEK2.5 billion.

Organic sales declined 1% in the quarter, reflecting strong comparative figures and weaker demand in Asia.

Demand from medtech customers in North America and Europe remained “favourable,” according to Nilsson.

The business also completed its first commercial deliveries from a newly established facility in Costa Rica during the quarter.

Trelleborg Sealing Solutions recorded the strongest performance, with third-quarter sales rising 11% year-on-year to SEK4.7 billion and earnings increasing 26% to SEK1.1 billion.

The segment’s quarterly margin improved sharply to 23.6% from 20.7% a year earlier.

Over the first nine months, segment sales increased 6% to SEK13.4 billion, while earnings grew 18% to SEK3 billion.

The industrials segment performed positively, supported by a “sharp increase” in sales of advanced polymer solutions to the semiconductor industry, particularly in Asia.

The automotive segment also reported growth, with positive trends in Asia and North America, although European demand was “somewhat softer.”

Sales to the aerospace industry continued to perform “very strongly across the globe,” Nilsson added.

Commenting on market conditions, the CEO said geopolitical uncertainty continued to affect several regions, although the group had demonstrated “good resilience.”

“Higher costs have been largely offset by efficiency measures and selective price adjustments,” he said.

On the short-term outlook, Nilsson said demand in the fourth quarter was expected to be “on par with or slightly higher than the third quarter.”

The company cautioned, however, that the outlook remained subject to geopolitical uncertainty.