Trelleborg, Sweden – Trelleborg AB is cutting the number of its business areas to three from the current five as part of a reorganisation scheme, unveiled 4 Dec.
The restructuring programme will target further strengthening of “already well-performing and well-positioned business areas” while highlighting areas where profitability is weak, according to Trelleborg.
The new structure will see Trelleborg Coated Systems and Trelleborg Offshore & Construction discontinued as business areas.
Trelleborg Industrial Solutions, specialised in polymer-based niche applications and infrastructure projects; Trelleborg Sealing Solutions, specialised in polymer-based sealing solutions and Trelleborg Wheel Systems, specialised in tires for off-highway vehicles, will continue their operations as business units.
In addition, a reporting segment “businesses under development” is being created, to which the operations with low profitability will be transferred.
As of January 2020, Trelleborg Industrial Solutions will consist of its current operations, the engineered coated fabrics operations of Trelleborg Coated Systems and the operations of marine solutions and infrastructure projects of Trelleborg Offshore & Construction.
Certain operations from the business unit will be transferred to businesses under development.
Following the reorganisation and based on the most recent 12-month period, Trelleborg Industrial Solutions will post annual sales of SEK10.8 billion (€1 billion) and an EBIT margin of about 11%.
Trelleborg Sealing Solutions will be unaffected by the organisational changes.
Trelleborg Wheel Systems is only marginally affected by the transfer of its bicycle tire operations to businesses under development.
The new reporting segment businesses under development will consist of the printing blankets operations of Trelleborg Coated Systems; the oil & gas operations of Trelleborg Offshore & Construction; the Swedish and Estonian operations for speciality moulded components of Trelleborg Industrial Solutions and the Czech operations for speciality moulded components and technical rubber products of Trelleborg Industrial Solutions as well as the bicycle tire operations of Trelleborg Wheel Systems.
Dario Porta, business area president of Trelleborg Coated Systems, will leave Trelleborg’s Group management at the end of the year to head the company’s printing blankets operations.
Over the past 12 months, business under development had annual sales of SEK3.9 billion and weak profitability, according to Trelleborg.
The operations will be operated independently and report to Trelleborg’s chief financial officer, Ulf Berghult, who will have the overall responsibility for businesses under development.
An impairment of capital employed in the amount of SEK 3,200 M will be recognised in Trelleborg’s fourth quarter report.
As a result of the new organisational rejig, the company said its restructuring costs will increase by SEK50 million, distributed between 2019 and 2020.
Trelleborg, according to CEO and president Peter Nilsson, will be conducting “an intensive strategic review” of the operations that will are included in businesses under development.
“I want to be clear that we are demanding that profitability should be significantly improved within a 12–24 month period in order for these operations to be included in group,” said Nilsoon, adding that the company would “continuously evaluate various structural alternatives.”