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Trelleborg — Audit Report / Information 2010
Feb 15, 2011
2985_10-k_2011-02-15_24cdd878-140d-4797-869a-b2ef80288875.pdf
Audit Report / Information
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Year-end Report 2010
President and CEO Peter Nilsson
"Demand increased significantly during 2010. Sales for continuing operations increased to slightly more than SEK 27 billion and organic growth was 17 percent. The EBITDA margin for the full year was 12.1 percent, which means that this financial target was achieved. The distinct increase compared with last year is a result of increased volumes and a more efficient structure.
During and after the fourth quarter 2010 three bolt-on acquisitions and two divestments were realized. This is part of the accelerating efforts of strategically focus the operations on selected and profitable segments. In line with this strategy Trelleborg in January 2011, signed a Letter of Intent with Freudenberg to form a joint venture for operations in antivibration for light and heavy vehicles. The ambition is to create a global leader and the new company is expected to generate sales of SEK 12 billion, with 8,100 employees in 17 countries.
Cash flow remained strong during the year. We improved the capital structure and propose an increased dividend for 2010."
- Net sales in the quarter, including discontinued operations, increased to SEK 7,045 M (6,755) and to SEK 28,778 M (27,059) for the full year.
- Operating profit for the quarter, including discontinued operations, increased to SEK 423 M (197) and to SEK 1,952 M (773) for the full year.
Continuing operations:
- Net sales in the quarter increased to SEK 6,852 M (6,185). Net sales for the full year increased to SEK 27,196 M (24,769).
- Operating profit in the quarter increased to SEK 400 M (166). Items affecting comparability amounted to an expense of SEK 118 M (expense: 218). Operating profit for the full year increased to SEK 2,036 M (734).
Items affecting comparability amounted to an expense of SEK 250 M (expense: 354).
Operating cash flow in the quarter increased to SEK 929 M (845). Operating cash flow for the full year was SEK 2,190 M (3,040).
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations | ||||
| Net sales | 6,852 | 6,185 | 27,196 | 24,769 |
| Operating profit | 400 | 166 | 2,036 | 734 |
| Profit for the period | 234 | 19 | 1,284 | 403 |
| Earnings per share, SEK | 0.85 | 0.05 | 4.65 | 1.65 |
| Operating profit, excl. items affecting comparability |
518 | 384 | 2,286 | 1,088 |
| Earnings per share, SEK, excl. items affecting comparability |
1.15 | 0.65 | 5.35 | 2.70 |
Market outlook for the first quarter of 2011
Market outlook for the first quarter of 2011. Overall, demand is expected to remain in line with or be slightly better than the fourth quarter of 2010, adjusted for seasonal variations.
Board proposes dividend of SEK 1.75
Proposed dividend. The Board of Directors and the President propose a cash dividend of SEK 1.75 per share (0.50).
| Key ratios | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations | ||||
| Net sales | 6,852 | 6,185 | 27,196 | 24,769 |
| Operating profit | 400 | 166 | 2,036 | 734 |
| Profit before tax | 357 | 96 | 1,818 | 344 |
| Profit for the period | 234 | 19 | 1,284 | 403 |
| - equity holders of the parent | 229 | 14 | 1,263 | 393 |
| - non-controlling interest | 5 | 5 | 21 | 10 |
| Earnings per share, SEK | 0.85 | 0.05 | 4.65 | 1.65 |
| Average number of employees within the Group, of whom | 20,042 | 20,073 | ||
| - women | 5,083 | 4,981 | ||
| - men | 14,959 | 15,092 | ||
| Operating key ratios | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||
| Operating profit | 518 | 384 | 2,286 | 1,088 |
| Earnings per share, SEK | 1.15 | 0.65 | 5.35 | 2.70 |
| Operating margin (ROS), % | 7.5 | 6.2 | 8.4 | 4.4 |
| EBITDA, % | 11.0 | 10.5 | 12.1 | 8.7 |
The Group's key figures*
October – December 2010
Organic sales rose 18 percent Net sales. The Trelleborg Group's net sales for the fourth quarter increased to SEK 6,852 M (6,185), up 11 percent compared with the year-earlier period. Organic sales rose 18 percent, exchange-rate effects were negative 7 percent and structural changes were 0 percent.
Trelleborg's sales to all of its market segments − light vehicles, general industry, agriculture, offshore oil/gas, transport, infrastructure and aerospace − were higher than in the fourth quarter of 2009.
Compared with the third quarter of 2010, sales were higher to the general industry, agriculture, transportation equipment and aerospace segments. Sales to the light vehicle segment and the project-related segments of offshore oil/gas and infrastructure construction were in line with the third quarter of 2010.
| Change in net sales, continuing operations | Oct - Dec | Oct - Dec |
|---|---|---|
| % | 2010 | 2009 |
| Organic sales | +18 | -7 |
| Structural changes | 0 | 0 |
| Currency impact | -7 | -2 |
| Total | +11 | -9 |
*Pertains to continuing operations. Continued operations does not include operations within hoses for light vehicles, formerly part of Trelleborg Automotive, which were divested during the second quarter of 2010, or roofing operations, formerly part of Trelleborg Engineered Systems, for which an agreement on divestment was signed during the fourth quarter of 2010.
Operating profit increased to SEK 400 M (166)
Earnings. Operating profit for the quarter increased to SEK 400 M (166). Items affecting comparability were an expense of SEK 118 M (expense: 218), see page 5.
Operating margin remained strong and improved compared with the yearearlier period as a result of volume growth and a more efficient structure.
Cost increases for raw materials have a delayed impact on earnings and had a negative effect on the earnings for the quarter, mainly affecting Trelleborg Automotive and Trelleborg Wheel Systems. Prices for raw materials continued to increase during the quarter and are expected to remain volatile.
Intensified acquisition and divestment activity, and increased variable salaries, resulted in higher central costs during the quarter.
Exchange-rate fluctuations arising in the translation of the earnings of foreign Group companies had a negative impact on operating profit of SEK 22 M compared with the corresponding period in 2009.
Financial net expense was SEK 43 M (expense: 70), corresponding to an average interest rate of 2.5 percent (3.2).
Profit before tax increased to SEK 357 M (96). Net profit increased to SEK 234 M (19).
The tax rate was 34 percent, negatively impacted by the country mix and the change in deferred taxes. Earnings per share increased to SEK 0.85 (0.05).
Fritt kassaflöde 683 MSEK (568) Free cash flow was SEK 683 M (568)
Cash flow. Operating cash flow for the period increased to SEK 929 M (845). Cash flow was favorably impacted by improved generation of earnings and reduced working capital with an the amount of SEK 531 M (378). A higher level of investment, SEK 377 M (196), had a negative effect on cash flow.
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations | ||||
| Operating cash flow | 929 | 845 | 2,190 | 3,040 |
| Utilization of restructuring provisions | -111 | -98 | -414 | -532 |
| Dividend - non-controlling interest | -2 | - | -3 | -2 |
| Financial items | -27 | -52 | -306 | -543 |
| Paid tax | -106 | -127 | -294 | -264 |
| Free cash flow | 683 | 568 | 1,173 | 1,699 |
Debt/equity ratio decreased to 53 percent (68)
Net debt. Net debt decreased SEK 1,960 M during the year to SEK 6,409 M as a result of a positive cash flow and exchange-rate effects. The debt/equity ratio declined to 53 percent (68).
Net debt in relation to EBITDA was 2.1 (4.3) in 2010.
| Change in net debt | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Net debt, opening balance | -7,097 | -8,833 | -8,369 | -12,706 |
| Net cash flow for the period excl. rights issue | 615 | 595 | 950 | 1,680 |
| Rights issue | - | - | - | 2,070 |
| Additional payment, disposals | - | - | 77 | - |
| Disposals | - | - | 57 | - |
| Exchange rate differences | 73 | -131 | 876 | 587 |
| Net debt, closing balance | -6,409 | -8,369 | -6,409 | -8,369 |
| Debt/equity ratio, % | 53 | 68 |
January – December 2010
Net sales. The Trelleborg Group's net sales for 2010 increased to SEK 27,196 M (24,769), up 10 percent compared with 2009. Organic sales increased 17 percent, exchange-rate effects were negative 7 percent and structural changes were 0 percent.
Earnings. Operating profit for the full year increased to SEK 2,036 M (734). Items affecting comparability amounted to an expense of SEK 250 M (expense: 354),see page 5. Profit before tax increased to SEK 1,818 M (344). Net profit increased to SEK 1,284 M (403). Earnings per share increased to SEK 4.65 (1.65).
Exchange-rate fluctuations arising in the translation of earnings of foreign Group companies had a negative impact on operating profit of SEK 122 M compared with the corresponding period in 2009.
Operating cash flow for 2010 was SEK 2,190 M (3,040)
Cash flow. Operating cash flow in 2010 totaled SEK 2,190 M (3,040), a result of a considerable improvement in the generation of earnings from operations, which was partly offset by increased working capital due to growth in sales. In 2009, working capital was released, which had a positive effect on cash flow. The investment level was relatively low in 2010, as there has not been any need for capacity investments. The investment level gradually increased during the latter half of the year with continued investments in growing markets.
Capital employed and shareholders' equity. Capital employed amounted to SEK 17,785 M at the end of the period, compared with SEK 19,170 M at yearend 2009. The decrease was mainly attributable to exchange-rate effects that were partly offset by increased working capital.
Shareholders' equity at year-end was SEK 12,079 M, excluding noncontrolling interests. The equity/assets ratio was 45 percent (42).
Return on equity. Return on shareholders' equity for the year, excluding items affecting comparability, amounted to 11.9 percent (5.8). The return on capital employed, excluding items affecting comparability, was 11.9 percent (5.1).
| Continuing operations |
Excl. items affecting comparability |
|||
|---|---|---|---|---|
| Jan - Dec | Jan - Dec | Jan - Dec | Jan - Dec | |
| % | 2010 | 2009 | 2010 | 2009 |
| Return on capital employed | 10.8 | 3.5 | 11.9 | 5.1 |
| Return on shareholders' equity | 10.4 | 3.5 | 11.9 | 5.8 |
Items affecting comparability
Items affecting comparability during the quarter: Expense of SEK 118 M before tax and SEK 92 M after tax
Items affecting comparability. Items affecting comparability in the fourth quarter of 2010 totaling an expense of SEK 118 M (expense: 218) before tax were excluded from the calculation of the Group's operating key figures. Items affecting comparability comprise restructuring costs for previously announced and ongoing measures in all of the Group's four business areas. Remaining costs relating to the ongoing measures totaling slightly more than SEK 100 M mainly pertain to Trelleborg Engineered Systems and Trelleborg Sealing Solutions.
| Items affecting comparability | ||||
|---|---|---|---|---|
| in operating profit 1) | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations | ||||
| Trelleborg Engineered Systems | -46 | -146 | -131 | -163 |
| Trelleborg Automotive | -55 | -13 | -77 | -23 |
| Trelleborg Sealing Solutions | -8 | -55 | -22 | -152 |
| Trelleborg Wheel Systems | -8 | -4 | -16 | -16 |
| Other | -1 | - | -4 | - |
| Total items affecting comparability | -118 | -218 | -250 | -354 |
1) Main part reported as other operating expenses
The Group's operating key figures
October – December 2010
Operating profit rose to SEK 518 M (384)
Earnings. Operating profit increased to SEK 518 M (384). The operating margin rose to 7.5 percent (6.2).
Operating profit before depreciation (EBITDA) increased to SEK 761 M (650). The EBITDA margin increased to 11.0 percent (10.5). Exchange-rate fluctuations arising in the translation of the earnings of foreign Group companies had a negative impact on operating profit of SEK 34 M compared with the corresponding period in 2009.
Consolidated profit before tax increased to SEK 475 M (314) and net profit increased to SEK 326 M (172). Earnings per share totaled SEK 1.15 (0.65).
January – December 2010
Earnings. Operating profit increased to SEK 2,286 M (1,088). The operating margin increased to 8.4 percent (4.4).
Operating profit before depreciation (EBITDA) increased to SEK 3,304 M (2,173). The EBITDA margin amounted to 12.1 percent (8.7). Exchange-rate fluctuations arising in the translation of the earnings of foreign Group companies had a negative impact on operating profit of SEK 143 M compared with the corresponding period in 2009
Consolidated profit before tax increased to SEK 2,068 M (698) and net profit increased to SEK 1,474 M (655). Earnings per share totaled SEK 5.35 (2.70).
The financial target for the EBITDA margin was reached
Structural changes, October – December 2010
| Acquisitions | Lutz Sales. To strengthen its presence in the North American market Trelleborg Sealing Solutions acquired US company Lutz Sales, with annual sales of approximately SEK 100 M and about 50 employees. Lutz Sales is a distributor of a broad range of precision seals and customer-specific rubber components, to the North American market. |
|---|---|
| PPL Polyurethane Products. By entering an agreement to acquire UK company PPL Polyurethane Products Trelleborg Engineered Systems reinforces its position in offshore oil/gas and infrastructure construction. PPL develops, manufactures and markets a broad portfolio of polyurethane-based solutions and products, with a focus on the offshore oil/gas and infrastructure segments. PPL Polyurethane Products has annual sales of approximately SEK 90 M and about 90 employees. |
|
| Watts Tyre Group. Trelleborg Wheel Systems has strengthened its world leading position, through a geographic broadening and increased presence in the aftermarket by entering an agreement to acquire Watts Tyre Group. Watts is one of the major global players in industrial tires and has annual sales of approximately SEK 300 M and about 230 employees. |
|
| Divestments | Roofing operations. As part of Trelleborg's strategy to focus on selected segments Trelleborg entered an agreement to divest its roofing operations, which earlier was included in the Trelleborg Engineered Systems business area. The operation is geographically limited and the main part of the sales is done in Sweden and Denmark. The business is ready to be taken to the next level and Trelleborg is prioritizing investments in other areas. The buyer is Axcel, a Nordic venture capital company. The divested operations have annual sales of approximately SEK 900 M and have about 230 employees. |
Events after the end of the period
Trelleborg and Freudenberg intend to form a global leader in antivibration solutions
Global leader in antivibration. On January 14, 2011, Trelleborg and Freudenberg signed a Letter of Intent to form a 50/50 joint venture company for antivibration solutions for light and heavy vehicles. The formation of the joint-venture company creates opportunities for an efficient structure in a fragmented market. It offers opportunities for the continued development of Trelleborg's antivibration operations, at the same time as Trelleborg can focus on the continued development of other areas of the Group.
Through this joint-venture company, a global leader and strong partner is formed for Trelleborg's customers and at the same time, a platform is created for aggressive development and future growth. The companies' customer portfolios complement each other in a positive manner, while Trelleborg's broad geographic presence is complemented by Freudenberg's product portfolio. Combined, this means that the company will be able to offer automotive manufacturers throughout the world the market's best geographic coverage and the broadest product portfolio in antivibration solutions.
The joint venture will consist of Trelleborg Automotive's operations in antivibration solutions and Freudenberg's corresponding activities, Vibracoustic. Total annual sales are estimated to approximately SEK 12 billion, with 8,100 employees in 17 countries
The part of Trelleborg Automotive that will be included in the new company pertains to antivibration operations for light and heavy vehicles. It represents about 75 percent of sales in Trelleborg Automotive and has annual
sales of about SEK 6,300 M, with approximately 5,200 employees. Trelleborg Automotive's operations outside the area of antivibration are not affected. Due diligence and the contract process are in progress. Implementation of the transaction requires the fulfillment of certain terms and conditions and the approval of the appropriate competition authorities. The formation of the new company is expected to occur in 2011. Operations in brake hoses. A further step of the Group's strategy to focus on selected segments was taken by entering an agreement to divest its operations in brake hoses for light vehicles, earlier part of the Trelleborg Automotive business area. This is the only operation in Trelleborg within this product area and it is a local operation in Brazil. The effort required to develop the business to the next level would require a major strategic shift and accordingly Trelleborg has chosen to divest the operations to make way for other investments. The buyer is French company Flexitech. The divested operation has sales of approximately SEK 140 M and slightly more than 200 employees. Acquisitions and divestments. The acquisition of PPL Polyurethane Products was completed on January 4, 2011 and the acquisition of Watts Tyre Group on February 4, 2011. These acquistions will be consolidated from the date of the finalization of the acquisition. The divestment of the roofing operations was completed on January 31, 2011 The operations will in this report be accounted for as Discontinued operations. Other Proposed dividend. The Board of Directors and the President propose that a cash dividend of SEK 1.75 (0.50) per share be paid to shareholders. The Group's dividend policy states that, in the long term, the dividend shall amount to 30-50 percent of net profit for the year. Proposals for the Annual General Meeting. The Nomination Committee comprising representatives of the major owners, representing approximately 66 percent of the votes in Trelleborg AB, and the Chairman of the Board, has resolved to propose to the Annual General Meeting a reelection of all Board members: Hans Biörck, Claes Lindqvist, Sören Mellstig, Peter Nilsson, Bo Risberg, Nina Udnes Tronstad, Heléne Vibbleus Bergquist and Anders Narvinger as chairman of the Board. The following serve as members of the Nomination Committee: Rolf Kjellman (Chairman of the Nomination Committee), Henry och Gerda Dunkers Stiftelse, Henrik Didner, Didner & Gerge Funds, Ramsay Brufer, Alecta, Lars Öhrstedt, AFA Insurance Companies, KG Lindvall, Swedbank Robur Funds, and the Chairman of the Board, Anders Narvinger. Dividend of SEK 1.75 proposed Nomination Committee's proposals to the 2011 AGM Finalization of acquisition and divestment Agreement to divest the operations in brake hoses
Trelleborg's Annual General Meeting will be held at 5 p.m. on April 20, 2011 in Trelleborg.
Agreement with European Investment Bank for long-term loan of EUR 80 M
Agreement with the European Investment Bank. Trelleborg signed an agreement with the European Investment Bank for a long-term loan totaling EUR 80 M. The objective of the loan is to finance some of Trelleborg's costs for selected research and development projects.
Risk management
Risks/risk management at Trelleborg. Trelleborg focuses continuously on identifying, evaluating and managing risks arising in systems and processes. Trelleborg applies an Enterprise Risk Management process (ERM) with the overall objective of ensuring that risks are managed systematically, that the right priorities are made and that risks are managed as efficiently as possible.
The principal risks and uncertainties currently faced by the Group relate to the economy's effect on demand, supply and price movements of raw materials and components, legal risks, structural programs and financial business environment risks.
For further information regarding the Group's risks, risk exposure and risk management, refer to the Trelleborg Annual Report and www.trelleborg.com.
The Group's market outlook
Market outlook for the first quarter of 2011. Overall, demand is expected to remain in line with or be slightly better than the fourth quarter of 2010, adjusted for seasonal variations.
Outlook from the interim report published on October 28, 2010: Market outlook for fourth quarter of 2010. Overall, demand is expected to remain in line with or slightly better than the third quarter of 2010, adjusted for seasonal variations.
Trelleborg, February 15, 2011 Board of Directors of Trelleborg AB (publ)
_____________________________________________________________
This report was prepared in accordance with IAS 34 Interim Financial Reporting and applicable rules in the Annual Accounts Act. The interim report for the Parent Company was prepared in accordance with chapter 9 of the Annual Accounts Act, Interim Reports. Unless otherwise stated, the accounting policies applied by the Group and Parent Company correspond to the accounting policies applied in the preparation of the most recent annual report.
The new and revised accounting policy for 2010 that may be expected to have a material impact on the consolidated financial statements is IFRS 3 Business Combinations. The revised standard continues to apply the acquisition method to business combinations, but with some significant changes. For example, all payments for purchases of a business are recognized at fair value on the date of acquisition, with subsequent contingent payments classified as debt later remeasured in profit and loss.
All acquisition-related transaction costs should be expensed. From January 1, 2010 the Group will apply IFRS 3 (Revised) to all business combinations.
Amendments to IFRS 5, Non-current Assets Held for Sale and Discontinued Operations affects the disclosure requirements for non-current assets classified as held for sale or as discontinued operations.
This report has not been subject to special review by the company's auditors.
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations excl. items affecting comparability | ||||
| Net sales | 2,618 | 2,495 | 10,053 | 10,249 |
| Operating profit | 214 | 178 | 850 | 636 |
| Operating margin (ROS), % | 8.2 | 7.1 | 8.5 | 6.2 |
| EBITDA margin, % | 11.2 | 10.6 | 11.8 | 9.7 |
| Operating cash flow | 438 | 394 | 724 | 1,518 |
| Including items affecting comparability | ||||
| Operating profit | 168 | 32 | 719 | 473 |
| ROS, % | 6.4 | 1.2 | 7.2 | 4.6 |
Trelleborg Engineered Systems
Additional key ratios on pages 16 - 19
Fourth quarter 2010
Market trend. In the general industry segment, demand was significantly higher than in the year-earlier period. Demand in the project-related segments of offshore oil/gas and infrastructure construction improved during the quarter and was generally higher than in the fourth quarter of 2009.
Net sales. Net sales during the quarter increased 5 percent compared with the year earlier period. Organic sales increased 12 percent, exchange-rate effects were negative 6 percent and structural changes negative 1 percent. During the quarter, sales increased in both the project-related and general industry segments.
Operating profit and cash flow. Operating profit for the quarter improved compared with the year-earlier period, primarily due to a generally enhanced cost structure.
Operating cash flow for the quarter increased, despite a higher level of investment, mainly as a consequence of more efficient management of working capital.
Other. The business area decided to establish new operations in Bangalore, in India, to capitalize in a better manner on the future growth in that country, particularly in infrastructure for the telecom sector and industrial antivibration. The business area is also investing approximately SEK 160 M over a twoyear period in a new plant for development and production in Brazil for the strongly expanding offshore oil and gas extraction industry.
After the end of the reporting period, the business area divested its roofing operations and acquired PPL Polyurethane Products (see page 6).
Net sales. Net sales during 2010 decreased 2 percent compared with 2009. Organic sales increased 5 percent during the year, exchange-rate effects were negative 7 percent and structural changes 0 percent. Demand in the infrastructure construction and offshore oil/gas project-related segments improved successively and was at the end of year level with 2009. Demand in general industry was favorable for most of the year. Full year 2010
Operating profit and cash flow. Operating profit improved compared with 2009, mainly as a result of positive effects from completed structural measures and other capacity and cost adaptations.
Operating cash flow was favorable during the year, but weaker than in the preceding year when significant releases occurred in working capital.
Trelleborg Automotive
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations excl. items affecting comparability | ||||
| Net sales | 2,111 | 1,957 | 8,560 | 7,031 |
| Operating profit | 122 | 101 | 529 | 34 |
| Operating margin (ROS), % | 5.6 | 5.0 | 6.0 | 0.4 |
| EBITDA margin, % | 9.9 | 10.1 | 10.4 | 6.1 |
| Operating cash flow | 237 | 193 | 640 | 450 |
| Including items affecting comparability | ||||
| Operating profit | 67 | 88 | 452 | 11 |
| ROS, % | 3.0 | 4.3 | 5.1 | 0.0 |
Additional key ratios on pages 16 - 19
Fourth quarter 2010
Market trend. During the quarter, global production of light vehicles increased 7 percent compared with the corresponding period in 2009. In Asia (excluding Japan), light vehicle production rose 18 percent, in North America 6 percent and in Europe, 3 percent. In Japan, light vehicle production declined 11 percent.
Net sales. Net sales during the quarter increased 8 percent compared with the year earlier period. Organic sales increased 14 percent, exchange-rate effects were negative 6 percent and structural changes 0 percent.
Operating profit and cash flow. Operating profit improved compared with the year-earlier period, primarily due to higher volumes and effective costcontrol.
Cost increases for raw materials, which impact earnings with a delay, had a negative effect on earnings for the quarter.
Operating cash flow remained strong during the quarter.
Other. Following the end of the reporting period, Trelleborg and Freudenberg signed a contract to form a global leader in antivibration for light vehicles and trucks (see page 6).
After the end of the reporting period, the business area entered an agreement to divest its brake hose operations (see page 6).
Jim Law was appointed new business area President. He assumed this position on January 1, 2011 and succeeds Roger Johansson, who leaves to take up a new post outside Trelleborg. Jim has extensive experience in the automotive industry and has held various management positions at Trelleborg since 1997.
Full year 2010
Net sales. Net sales during 2010 increased 22 percent compared with 2009. Organic sales increased 29 percent during the year, exchange-rate effects were negative 7 percent and structural changes 0 percent. Demand was strong for most of the year in all geographic markets. During the second half of the year, growth slowed in Western Europe due to diminished government support packages.
Operating profit and cash flow. Operating profit improved significantly compared with 2009, mainly due to considerably higher volumes and positive effects of capacity and cost adaptations.
Operating cash flow remained strong during the year.
| Trelleborg Sealing Solutions | ||
|---|---|---|
| ------------------------------ | -- | -- |
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations excl. items affecting comparability | ||||
| Net sales | 1,434 | 1,164 | 5,783 | 4,673 |
| Operating profit | 216 | 123 | 876 | 280 |
| Operating margin (ROS), % | 15.0 | 10.6 | 15.1 | 6.0 |
| EBITDA margin, % | 18.1 | 15.0 | 18.5 | 10.6 |
| Operating cash flow | 207 | 258 | 885 | 783 |
| Including items affecting comparability | ||||
| Operating profit | 208 | 68 | 854 | 128 |
| ROS, % | 14.5 | 5.8 | 14.8 | 2.8 |
Additional key ratios on pages 16 - 19
Fourth quarter 2010
Market trend. Demand in general industry and light vehicles rose sharply compared with the fourth quarter of 2009. Demand in the aerospace segment continued to successively improve.
Net sales. Net sales during the quarter increased 23 percent compared with the year-earlier period. Organic sales increased 31 percent, exchange-rate effects were negative 8 percent and the structural changes 0 percent.
Operating profit and cash flow. Operating profit improved compared with the corresponding period in 2009, as a result of increased volumes and an improved cost structure. Continued good capacity utilization in manufacturing units contributed positively to the result.
Operating cash flow remained strong, relative to increased sales, particularly due to good earnings generation and continued efficient management of working capital.
Other. The business area acquired Lutz Sales (see page 6).
Net sales. Net sales during 2010 increased 24 percent compared with 2009. Organic sales for the full year increased by 33 percent, exchange-rate effects were negative 9 percent and structural changes 0 percent. Demand was strong in the general industry and light vehicles segments. Demand in the aerospace industry improved successively. Full year 2010
Operating profit and cash flow. Operating profit was significantly higher than in 2009 as a result of higher sales and effects of cost-adaptations implemented.
Operating cash flow remained very strong, mainly due to the increase in operating profit and continued efficient management of working capital.
| SEK M | 2010 | 2009 | 2010 | 2009 | |||
|---|---|---|---|---|---|---|---|
| Continuing operations excl. items affecting comparability | |||||||
| Net sales | 738 | 629 | 2,990 | 2,991 | |||
| Operating profit | 51 | 46 | 263 | 283 | |||
| Operating margin (ROS), % | 7.0 | 7.4 | 8.8 | 9.5 | |||
| EBITDA margin, % | 10.4 | 11.3 | 12.0 | 12.8 | |||
| Operating cash flow | 168 | 71 | 251 | 520 | |||
| Including items affecting comparability | |||||||
| Operating profit | 43 | 42 | 247 | 267 | |||
| ROS, % | 6.0 | 6.9 | 8.3 | 8.9 | |||
| Additional key ratios on pages 16 - 19 | |||||||
| Fourth quarter 2010 |
Market trend. Demand in the agricultural sector improved generally and was higher than in the fourth quarter of 2009. Global demand in the transport segment (manufacturers of material-handling equipment) remained favorable and higher compared with the corresponding period in 2009. |
||||||
| Net sales. Net sales during the quarter increased 17 percent compared with the year-earlier period. Organic sales increased 26 percent, exchange-rate effects were negative 9 percent and structural changes 0 percent. |
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| Operating profit and cash flow. Operating profit increased compared with the year-earlier period. Cost increases for raw materials, which impact earnings with a delay, had a negative impact on the business area's result. The business area has offset these using price increases, which has slightly affected the volume development in a negative way. To further improve the position as a complete supplier, there is continued development and broadening of the range. The business area is focusing on geographical expansion and to increase presence on growing markets, primarily in Asia. Operating cash flow during the period was good, driven by more efficient management of working capital. Other. Following the end of the reporting period, the business area completed the acquisition of Watts Tyre Group (see page 6). |
|||||||
| Full year 2010 | Net sales. Net sales during 2010 were level with 2009. Organic sales increased 7 percent, exchange-rate effects were negative 7 percent and structural changes 0 percent. Demand in agriculture declined during the start of the year, but improved somewhat during the second half of the year. Demand in transport increased significantly during the year. |
||||||
| Operating profit and cash flow. Operating profit, excluding exchange variations, was slightly higher than in 2009. Weaker demand within agricultural tires at the beginning of the year impacted operating profit negatively. Operating cash flow during the year was lower than in 2009, but improved successively. |
Trelleborg Wheel Systems
Oct - Dec Oct - Dec Jan - Dec Jan - Dec
| Financial accounts Income Statements |
||||||
|---|---|---|---|---|---|---|
| Group | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | ||
| SEK M | 2010 | 2009 | 2010 | 2009 | ||
| Continuing operations | ||||||
| Net sales | 6,852 | 6,185 | 27,196 | 24,769 | ||
| Cost of goods sold | -5,045 | -4,599 | -19,897 | -18,663 | ||
| Gross profit | 1,807 | 1,586 | 7,299 | 6,106 | ||
| Selling expenses | -548 | -562 | -2,124 | -2,217 | ||
| Administrative expenses | -698 | -622 | -2,490 | -2,428 | ||
| Research and development costs | -143 | -140 | -577 | -566 | ||
| Other operating income/expense | -22 | -100 | -86 | -168 | ||
| Profit from part. in assoc. companies | 4 | 4 | 14 | 7 | ||
| Operating profit | 400 | 166 | 2,036 | 734 | ||
| Financial income and expenses | -43 | -70 | -218 | -390 | ||
| Profit before tax | 357 | 96 | 1,818 | 344 | ||
| Tax | -123 | -77 | -534 | 59 | ||
| Profit for the period | 234 | 19 | 1,284 | 403 | ||
| Discontinued operations | ||||||
| Net sales | 193 | 570 | 1,582 | 2,290 | ||
| Operating profit | 23 | 31 | -84 | 39 | ||
| Profit before tax | 23 | 32 | -86 | 25 | ||
| Profit for the period | 28 | 73 | -101 | 16 | ||
| Group, total | ||||||
| Net sales | 7,045 | 6,755 | 28,778 | 27,059 | ||
| Operating profit | 423 | 197 | 1,952 | 773 | ||
| Profit before tax | 380 | 128 | 1,732 | 369 | ||
| Profit for the period | 262 | 92 | 1,183 | 419 | ||
| of which attributable to: | ||||||
| - equity holders of the parent | 257 | 87 | 1,162 | 409 | ||
| - non-controlling interest | 5 | 5 | 21 | 10 | ||
| Earnings per share | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | ||
| SEK | 2010 | 2009 | 2010 | 2009 | ||
| Continuing operations | 0.85 | 0.05 | 4.65 | 1.65 | ||
| Discontinued operations | 0.10 | 0.30 | -0.35 | 0.05 | ||
| Group, total | 0.95 | 0.35 | 4.30 | 1.70 | ||
| Number of shares | ||||||
| End of period | 271,071,783 | 271,071,783 | 271,071,783 | 271,071,783 | ||
| Average number 1) | 271,071,783 | 271,071,783 | 271,071,783 | 240,699,594 |
1) In periods before June 2009, following the rights issue, the average number of shares was adjusted according to guidelines in IAS 33. This calculation method has been applied throughout this report in all key figures that include the number of shares.
Statements of comprehensive income
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Profit for the period | 262 | 92 | 1,183 | 419 |
| Other comprehensive income | ||||
| Cash flow hedges | 37 | 33 | 24 | 86 |
| Hedging of net investment | 87 | -128 | 892 | 446 |
| Translation difference | -97 | 371 | -1,890 | -762 |
| Income tax relating to components of other | ||||
| comprehensive income | -37 | -9 | -235 | -160 |
| Other comprehensive income, net of tax | -10 | 267 | -1,209 | -390 |
| Total comprehensive income | 252 | 359 | -26 | 29 |
| Total profit for the period | ||||
| - equity holders of the parent | 245 | 351 | -43 | 18 |
| - non-controlling interest | 7 | 8 | 17 | 11 |
Published on February 15, 2011 13 (23)
| Balance Sheets | ||
|---|---|---|
| Group | Dec 31 | Dec 31 |
| SEK M | 2010 | 2009 |
| Property, plant and equipment | 5,609 | 6,603 |
| Intangible assets | 9,980 | 11,282 |
| Financial assets | 1,297 | 1,620 |
| Total non-current assets | 16,886 | 19,505 |
| Inventories | 3,433 | 3,425 |
| Current operating receivables | 5,597 | 5,940 |
| Current interest-bearing receivables | 100 | 78 |
| Cash and cash equivalents | 832 | 591 |
| Total current assets | 9,962 | 10,034 |
| Assets for sale | 466 | - |
| Total assets | 27,314 | 29,539 |
| Equity holders of the parent | 12,079 | 12,267 |
| Non-controlling interest | 117 | 94 |
| Total equity | 12,196 | 12,361 |
| Non-current interest-bearing liabilities | 4,343 | 6,516 |
| Other non-current liabilities | 1,138 | 1,559 |
| Total non-current liabilities | 5,481 | 8,075 |
| Interest-bearing current liabilities | 3,162 | 2,529 |
| Other current liabilities | 6,345 | 6,574 |
| Total current liabilities | 9,507 | 9,103 |
| Liabilites for sale | 130 | - |
| Total equity and liabilities | 27,314 | 29,539 |
| Specification of changes in equity | Dec 31 | Dec 31 |
|---|---|---|
| SEK M | 2010 | 2009 |
| Attributable to equity holders of the parent | ||
| Opening balance, January 1 | 12,267 | 10,153 |
| Adjustment opening balance | -9 | - |
| Total comprehensive income | -43 | 18 |
| Dividend | -136 | - |
| Reduction of share capital | - | -2,078 |
| Bonus issue | - | 2,078 |
| Rights issue | - | 2,169 |
| Transaction costs | - | -73 |
| Closing balance | 12,079 | 12,267 |
| Attributable to non-controlling interest | ||
| Opening balance, January 1 | 94 | 85 |
| Adjustment opening balance | 9 | - |
| Total comprehensive income | 17 | 11 |
| Dividend | -3 | -2 |
| Closing balance | 117 | 94 |
| Sum total equity, closing balance | 12,196 | 12,361 |
Cash flow statements
| Group | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Operating activities | ||||
| Operating profit | 400 | 166 | 2,036 | 734 |
| Adjustments for items not included in cash flow: | ||||
| Depreciation, property, plant and equipment | 205 | 227 | 845 | 919 |
| Depreciation, intangible assets | 35 | 39 | 145 | 165 |
| Impairment losses, property, plant and equipment | 27 | 12 | 38 | 41 |
| Impairment losses, intangible assets | 5 | 3 | 20 | 5 |
| Provision for restructuring costs | 89 | 203 | 220 | 309 |
| Undistributed result from part. in assoc. companies | 7 | -4 | 6 | -9 |
| 768 | 646 | 3,310 | 2,164 | |
| Interest received and other financial items | 4 | 5 | 14 | 15 |
| Interest paid and other financial items | -31 | -57 | -320 | -558 |
| Taxes paid | -106 | -127 | -294 | -264 |
| Cash flow from operating activities before changes in working | ||||
| capital | 635 | 467 | 2,710 | 1,357 |
| Cash flow from changes in working capital: | ||||
| Change in inventories | -72 | 94 | -471 | 1,124 |
| Change in operating receivables | 233 | 299 | -718 | 1,096 |
| Change in operating liabilities | 369 | -14 | 838 | -647 |
| Utilization of restructuring provisions | -111 | -98 | -414 | -532 |
| Cash flow from operating activities | 1,054 | 748 | 1,945 | 2,398 |
| Investing activities | ||||
| Acquisitions | -138 | -13 | -165 | -63 |
| Disposals | 71 | 41 | 78 | 44 |
| Capital expenditure, property, plant and equipment | -360 | -175 | -776 | -661 |
| Capital expenditure in intangible assets | -17 | -21 | -46 | -72 |
| Sale of non-current assets | 7 | 15 | 53 | 36 |
| Cash flow from investing activities | -437 | -153 | -856 | -716 |
| Financing activities | ||||
| Rights issue | - | - | - | 2,070 |
| Change in interest-bearing investments | 210 | -133 | 712 | 685 |
| Change in interest-bearing liabilities | -571 | -583 | -1,387 | -4,591 |
| Dividend - equity holders of the parent | - | - | -136 | - |
| Dividend - non-controlling interest | -2 | - | -3 | -2 |
| Cash flow from financing activities | -363 | -716 | -814 | -1,838 |
| Cash flow for the period | 254 | -121 | 275 | -156 |
| Cash and cash equivalents: | ||||
| At beginning of the period | 578 | 691 | 591 | 749 |
| Reclassification to assets for sale | -6 | - | -6 | - |
| Exchange rate differences | 6 | 21 | -28 | -2 |
| Cash and cash equivalents at end of period | 832 | 591 | 832 | 591 |
Group review
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||
| Net sales | 6,852 | 6,185 | 27,196 | 24,769 |
| EBITDA | 761 | 650 | 3,304 | 2,173 |
| Operating profit | 518 | 384 | 2,286 | 1,088 |
| Profit for the period | 326 | 172 | 1,474 | 655 |
| Net sales | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations | ||||
| Trelleborg Engineered Systems | 2,618 | 2,495 | 10,053 | 10,249 |
| Trelleborg Automotive | 2,111 | 1,957 | 8,560 | 7,031 |
| Trelleborg Sealing Solutions | 1,434 | 1,164 | 5,783 | 4,673 |
| Trelleborg Wheel Systems | 738 | 629 | 2,990 | 2,991 |
| Eliminations | -49 | -60 | -190 | -175 |
| Total | 6,852 | 6,185 | 27,196 | 24,769 |
| EBITDA | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||
| Trelleborg Engineered Systems | 295 | 265 | 1,190 | 990 |
| Trelleborg Automotive | 213 | 201 | 906 | 438 |
| Trelleborg Sealing Solutions | 259 | 174 | 1,071 | 497 |
| Trelleborg Wheel Systems | 77 | 72 | 360 | 383 |
| Other companies | -1 | -1 | -9 | -6 |
| Group items | -82 | -61 | -214 | -129 |
| Total excl. items affecting comparability | 761 | 650 | 3,304 | 2,173 |
| Items affecting comparability | ||||
| Trelleborg Engineered Systems | -47 | -133 | -132 | -141 |
| Trelleborg Automotive | -32 | -9 | -55 | -19 |
| Trelleborg Sealing Solutions | -1 | -57 | -13 | -133 |
| Trelleborg Wheel Systems | -8 | -4 | -16 | -16 |
| Other | -1 | - | -4 | - |
| Total items affecting comparability | -89 | -203 | -220 | -309 |
| Total incl. items affecting comparability | 672 | 447 | 3,084 | 1,864 |
| EBITDA | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| % | 2010 | 2009 | 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||
| Trelleborg Engineered Systems | 11.2 | 10.6 | 11.8 | 9.7 |
| Trelleborg Automotive | 9.9 | 10.1 | 10.4 | 6.1 |
| Trelleborg Sealing Solutions | 18.1 | 15.0 | 18.5 | 10.6 |
| Trelleborg Wheel Systems | 10.4 | 11.3 | 12.0 | 12.8 |
| Total excluding items affecting comparability | 11.0 | 10.5 | 12.1 | 8.7 |
| Including items affecting comparability | ||||
| Trelleborg Engineered Systems | 9.5 | 5.3 | 10.5 | 8.3 |
| Trelleborg Automotive | 8.4 | 9.7 | 9.8 | 5.9 |
| Trelleborg Sealing Solutions | 18.0 | 10.0 | 18.3 | 7.8 |
| Trelleborg Wheel Systems | 9.3 | 10.8 | 11.5 | 12.3 |
| Total including items affecting comparability | 9.8 | 7.2 | 11.3 | 7.5 |
| Operating profit | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||
| Trelleborg Engineered Systems | 214 | 178 | 850 | 636 |
| Trelleborg Automotive | 122 | 101 | 529 | 34 |
| Trelleborg Sealing Solutions | 216 | 123 | 876 | 280 |
| Trelleborg Wheel Systems | 51 | 46 | 263 | 283 |
| Other companies | -2 | -1 | -11 | -8 |
| Group items | -83 | -63 | -221 | -137 |
| Total excl. items affecting comparability | 518 | 384 | 2,286 | 1,088 |
| Items affecting comparability | ||||
| Trelleborg Engineered Systems | -46 | -146 | -131 | -163 |
| Trelleborg Automotive | -55 | -13 | -77 | -23 |
| Trelleborg Sealing Solutions | -8 | -55 | -22 | -152 |
| Trelleborg Wheel Systems | -8 | -4 | -16 | -16 |
| Other | -1 | - | -4 | - |
| Total items affecting comparability | -118 | -218 | -250 | -354 |
| Total incl. items affecting comparability | 400 | 166 | 2,036 | 734 |
| Operating margin, (ROS) | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| % | 2010 | 2009 | 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||
| Trelleborg Engineered Systems | 8.2 | 7.1 | 8.5 | 6.2 |
| Trelleborg Automotive | 5.6 | 5.0 | 6.0 | 0.4 |
| Trelleborg Sealing Solutions | 15.0 | 10.6 | 15.1 | 6.0 |
| Trelleborg Wheel Systems | 7.0 | 7.4 | 8.8 | 9.5 |
| Total excl. items affecting comparability | 7.5 | 6.2 | 8.4 | 4.4 |
| Including items affecting comparability | ||||
| Trelleborg Engineered Systems | 6.4 | 1.2 | 7.2 | 4.6 |
| Trelleborg Automotive | 3.0 | 4.3 | 5.1 | 0.0 |
| Trelleborg Sealing Solutions | 14.5 | 5.8 | 14.8 | 2.8 |
| Trelleborg Wheel Systems | 6.0 | 6.9 | 8.3 | 8.9 |
| Total incl. items affecting comparability | 5.8 | 2.6 | 7.4 | 2.9 |
| Capital employed | Dec 31 | Dec 31 |
|---|---|---|
| SEK M | 2010 | 2009 |
| Continuing operations | ||
| Trelleborg Engineered Systems | 6,062 | 6,382 |
| Trelleborg Automotive | 3,713 | 4,162 |
| Trelleborg Sealing Solutions | 6,545 | 7,156 |
| Trelleborg Wheel Systems | 1,712 | 1,835 |
| Other companies | 26 | 48 |
| Group items | -58 | 3 |
| Provision for restructing costs and legal costs | -215 | -416 |
| Total | 17,785 | 19,170 |
| Return on capital employed, (ROCE) | Jan - Dec | Jan - Dec |
|---|---|---|
| % | 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||
| Trelleborg Engineered Systems | 13.2 | 9.1 |
| Trelleborg Automotive | 13.1 | 0.8 |
| Trelleborg Sealing Solutions | 12.9 | 3.7 |
| Trelleborg Wheel Systems | 14.1 | 13.9 |
| Total excluding items affecting comparability | 11.9 | 5.1 |
| Including items affecting comparability | ||
| Trelleborg Engineered Systems | 11.3 | 6.8 |
| Trelleborg Automotive | 11.4 | 0.2 |
| Trelleborg Sealing Solutions | 12.6 | 1.7 |
| Trelleborg Wheel Systems | 13.3 | 13.3 |
| Total including items affecting comparability | 10.8 | 3.5 |
| Cash flow report | Capital | Sold non | Change in | Total cash flow | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA 1) | expenditure | current assets | working capital | Jan - Dec | Jan - Dec | |||||
| SEK M | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| Trelleborg Engineered Systems | 1,228 | 1,040 | -254 | -252 | 14 | 20 | -264 | 710 | 724 | 1,518 |
| Trelleborg Automotive | 945 | 469 | -278 | -212 | 7 | 6 | -34 | 187 | 640 | 450 |
| Trelleborg Sealing Solutions | 1,087 | 521 | -180 | -91 | 14 | 7 | -36 | 346 | 885 | 783 |
| Trelleborg Wheel Systems | 371 | 399 | -104 | -176 | 2 | 3 | -18 | 294 | 251 | 520 |
| Other companies | -9 | -7 | - | - | 6 | - | 1 | -1 | -2 | -8 |
| Group items | -312 | -258 | -6 | -2 | 10 | - | - | 37 | -308 | -223 |
| Operating cash flow | 3,310 | 2,164 | -822 | -733 | 53 | 36 | -351 | 1,573 | 2,190 | 3,040 |
| Utilization of restructuring provisions | -414 | -532 | ||||||||
| Dividend - non-controlling interest | -3 | -2 | ||||||||
| Financial items | -306 | -543 | ||||||||
| Paid tax | -294 | -264 | ||||||||
| Free cash flow | 1,173 | 1,699 | ||||||||
| Acquisitions | -165 | -63 | ||||||||
| Disposals | 78 | 44 | ||||||||
| Dividend - equity holders of the parent | -136 | - | ||||||||
| Rights issue | - | 2,070 | ||||||||
| Sum net cash flow | 950 | 3,750 |
1) Excluding undistributed result from associated companies and allocated group expenses
Acquisitions
No acquisitions significant for the Group were made during the year.
Lutz Sales
A minor complementary acquisition was made in Trelleborg Sealing Solutions when the business area acquired the US company Lutz Sales, with annual sales of approximately SEK 100 M and about 50 employees. Lutz Sales is the distributor of a broad range of precision seals and customer-specific rubber components, mainly to the North American market.
Key ratios per quarter
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |
|---|---|---|---|---|---|---|---|---|---|
| SEK M | 2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 |
| Continuing operations | |||||||||
| Net sales | 6,852 | 6,601 | 7,187 | 6,556 | 6,185 | 5,967 | 6,232 | 6,385 | 6,791 |
| Operating profit | 400 | 505 | 643 | 488 | 166 | 338 | 153 | 77 | -521 |
| Profit for the period | 234 | 327 | 415 | 308 | 19 | 202 | 62 | 120 | -591 |
| Operating cash flow | 929 | 391 | 792 | 78 | 845 | 851 | 899 | 445 | 568 |
| Items aff. comparability in operating profit | -118 | -54 | -51 | -27 | -218 | -30 | -92 | -14 | -579 |
| Operating profit, excl. items aff. comp. | 518 | 559 | 694 | 515 | 384 | 368 | 245 | 91 | 58 |
| EBITDA, %, excl. items aff. comparability | 11.0 | 12.3 | 13.2 | 11.7 | 10.5 | 10.6 | 8.3 | 5.8 | 5.1 |
Net sales by business area
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |
|---|---|---|---|---|---|---|---|---|---|
| SEK M | 2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 |
| Continuing operations | |||||||||
| Trelleborg Engineered Systems | 2,618 | 2,376 | 2,629 | 2,430 | 2,495 | 2,477 | 2,597 | 2,680 | 2,989 |
| Trelleborg Automotive | 2,111 | 2,061 | 2,268 | 2,120 | 1,957 | 1,800 | 1,759 | 1,515 | 1,580 |
| Trelleborg Sealing Solutions | 1,434 | 1,477 | 1,522 | 1,350 | 1,164 | 1,104 | 1,129 | 1,276 | 1,361 |
| Trelleborg Wheel Systems | 738 | 732 | 795 | 725 | 629 | 630 | 782 | 950 | 903 |
| Eliminations | -49 | -45 | -27 | -69 | -60 | -44 | -35 | -36 | -42 |
| Total | 6,852 | 6,601 | 7,187 | 6,556 | 6,185 | 5,967 | 6,232 | 6,385 | 6,791 |
EBITDA % by business area
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |
|---|---|---|---|---|---|---|---|---|---|
| % | 2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 |
| Continuing operations excluding items affecting comparability | |||||||||
| Trelleborg Engineered Systems | 11.2 | 12.5 | 13.4 | 10.1 | 10.6 | 11.3 | 9.3 | 7.6 | 8.8 |
| Trelleborg Automotive | 9.9 | 9.1 | 11.7 | 10.8 | 10.1 | 8.9 | 6.5 | neg | neg |
| Trelleborg Sealing Solutions | 18.1 | 19.8 | 19.7 | 16.3 | 15.0 | 13.5 | 6.8 | 7.7 | 14.0 |
| Trelleborg Wheel Systems | 10.4 | 13.8 | 10.3 | 13.8 | 11.3 | 11.9 | 13.8 | 13.5 | 9.4 |
| Total | 11.0 | 12.3 | 13.2 | 11.7 | 10.5 | 10.6 | 8.3 | 5.8 | 5.1 |
Operating profit by business area
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |
|---|---|---|---|---|---|---|---|---|---|
| SEK M | 2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 |
| Continuing operations excluding items affecting comparability | |||||||||
| Trelleborg Engineered Systems | 214 | 215 | 263 | 158 | 178 | 192 | 153 | 113 | 165 |
| Trelleborg Automotive | 122 | 95 | 175 | 137 | 101 | 65 | 11 | -143 | -257 |
| Trelleborg Sealing Solutions | 216 | 238 | 251 | 171 | 123 | 94 | 22 | 41 | 138 |
| Trelleborg Wheel Systems | 51 | 77 | 59 | 76 | 46 | 52 | 83 | 102 | 60 |
| Other companies | -2 | -2 | -4 | -3 | -1 | -2 | -2 | -3 | -2 |
| Group items | -83 | -64 | -50 | -24 | -63 | -33 | -22 | -19 | -46 |
| Total | 518 | 559 | 694 | 515 | 384 | 368 | 245 | 91 | 58 |
Income Statements
| Group | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
|---|---|---|---|---|---|---|---|---|---|
| SEK M | 2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 |
| Continuing operations | |||||||||
| Net sales | 6,852 | 6,601 | 7,187 | 6,556 | 6,185 | 5,967 | 6,232 | 6,385 | 6,791 |
| Cost of goods sold | -5,045 | -4,848 | -5,195 | -4,809 | -4,599 | -4,425 | -4,734 | -4,905 | -5,194 |
| Gross profit | 1,807 | 1,753 | 1,992 | 1,747 | 1,586 | 1,542 | 1,498 | 1,480 | 1,597 |
| Selling expenses | -548 | -511 | -542 | -523 | -562 | -505 | -551 | -599 | -648 |
| Administrative expenses | -698 | -576 | -626 | -590 | -622 | -547 | -605 | -654 | -730 |
| Research and development costs | -143 | -140 | -149 | -145 | -140 | -137 | -137 | -152 | -141 |
| Other operating income/costs | -22 | -24 | -36 | -4 | -100 | -17 | -52 | 1 | -595 |
| Share of profit or loss in assoc. companies | 4 | 3 | 4 | 3 | 4 | 2 | 0 | 1 | -4 |
| Operating profit | 400 | 505 | 643 | 488 | 166 | 338 | 153 | 77 | -521 |
| Financial income and expenses | -43 | -56 | -50 | -69 | -70 | -85 | -104 | -131 | -144 |
| Profit before tax | 357 | 449 | 593 | 419 | 96 | 253 | 49 | -54 | -665 |
| Tax | -123 | -122 | -178 | -111 | -77 | -51 | 13 | 174 | 74 |
| Profit for the period | 234 | 327 | 415 | 308 | 19 | 202 | 62 | 120 | -591 |
| Discontinued operations | |||||||||
| Net sales | 193 | 264 | 627 | 498 | 570 | 592 | 636 | 492 | 552 |
| Operating profit | 23 | 40 | -160 | 13 | 31 | 33 | 6 | -31 | -279 |
| Profit before tax | 23 | 38 | -159 | 12 | 32 | 35 | -3 | -39 | -288 |
| Profit for the period | 28 | 28 | -141 | -16 | 73 | 14 | -16 | -55 | -251 |
| Group, total | |||||||||
| Net sales | 7,045 | 6,865 | 7,814 | 7,054 | 6,755 | 6,559 | 6,868 | 6,877 | 7,343 |
| Operating profit | 423 | 545 | 483 | 501 | 197 | 371 | 159 | 46 | -800 |
| Pofit before tax | 380 | 487 | 434 | 431 | 128 | 288 | 46 | -93 | -953 |
| Profit for the period | 262 | 355 | 274 | 292 | 92 | 216 | 46 | 65 | -842 |
| - equity holders of the parent | 257 | 351 | 269 | 285 | 87 | 213 | 44 | 65 | -845 |
| - non-controlling interest | 5 | 4 | 5 | 7 | 5 | 3 | 2 | 0 | 3 |
| Earnings per share | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
| SEK | 2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 |
| Continuing operations | 0.85 | 1.20 | 1.50 | 1.10 | 0.05 | 0.75 | 0.25 | 0.60 | -3.00 |
| Discontinued operations | 0.10 | 0.10 | -0.50 | -0.05 | 0.30 | 0.05 | -0.05 | -0.25 | -1.25 |
| Group, total | 0.95 | 1.30 | 1.00 | 1.05 | 0.35 | 0.80 | 0.20 | 0.35 | -4.25 |
Parent company
| Income Statements | ||||||||
|---|---|---|---|---|---|---|---|---|
| Parent company | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | ||||
| SEK M | 2010 | 2009 | 2010 | 2009 | ||||
| Administrative expenses | -100 | -170 | -338 | -389 | ||||
| Other operating income | 51 | 98 | 244 | 289 | ||||
| Operating profit | -49 | -72 | -94 | -100 | ||||
| Financial income and expenses | -153 | -388 | 827 | -516 | ||||
| Profit before tax | -202 | -460 | 733 | -616 | ||||
| Tax | 46 | 40 | 136 | 144 | ||||
| Profit for the period | -156 | -420 | 869 | -472 |
| Balance Sheets | ||
|---|---|---|
| Parent company | Dec 31 | Dec 31 |
| SEK M | 2010 | 2009 |
| Property, plant and equipment | 26 | 29 |
| Intangible assets | 9 | 9 |
| Financial assets | 34,362 | 34,244 |
| Total non-current assets | 34,397 | 34,282 |
| Current operating receivables | 52 | 52 |
| Current interest-bearing receivables | 1,078 | 1,665 |
| Cash and cash equivalents | 5 | - |
| Total current assets | 1,135 | 1,717 |
| Total assets | 35,532 | 35,999 |
| Shareholders' equity | 12,609 | 11,005 |
| Total equity | 12,609 | 11,005 |
| Non-current interest-bearing liabilities | 52 | 51 |
| Other non-current liabilities | 14 | 6 |
| Total non-current liabilities | 66 | 57 |
| Interest-bearing current liabilities | 22,768 | 24,845 |
| Other current liabilities | 89 | 92 |
| Total current liabilities | 22,857 | 24,937 |
| Total equity and liabilities | 35,532 | 35,999 |
Financial definitions
Return on shareholders' equity
Profit for the period, attributable to equity holders of the parent as a percentage of average shareholders' equity, excluding minority interests.
Return on capital employed (ROCE), %
EBIT divided by the average capital employed.
EBITDA
Operating profit excluding depreciation and amortization of PPE and intangible assets.
EBITDA margin
EBITDA excluding profit from participation in associated companies as a percentage of net sales.
Free cash flow
Operating cash flow and cash flow from financial items and tax and the effect of restructuring measures on cash flow.
Net debt
Interest-bearing liabilities less interest-bearing assets and cash and cash equivalents.
Operating cash flow
EBITDA excluding undistributed participation in the earnings of associated companies, investments and changes in working capital but excluding cash flow pertaining to restructuring.
Operating cash flow/operating profit, %
Operating cash flow as a percentage of operating profit.
Earnings per share
Profit for the period, attributable to equity holders of the parent divided by the average number of shares outstanding.
Operating margin (ROS), %
Operating profit excluding participation in the earnings of associated companies as a percentage of net sales.
Operating profit
Operating profit according to profit and loss.
Debt/equity ratio, %
Net debt divided by total equity.
Equity/assets ratio, %
Total equity in relation to total assets
Capital employed
Total assets less interest-bearing financial assets and noninterest-bearing operating liabilities (including pension liabilities) and excluding tax assets and tax liabilities.
Invitation to presentation and teleconference on February 15 at 9:30 a.m.
A presentation and telephone conference will be held on February 15 at 9:30 a.m. The presentation will be held at Operaterassen in Stockholm. To participate in the telephone conference, call +46 (0)8-5051 3793 or +44 (0)20 7806 1967 and state the code 6465135 or the password "Trelleborg". The conference will also be broadcast in real time on the Internet. Visit our website at www.trelleborg.com/en/Investors/Presentations for Internet link and presentation materials.
Calendar 2011
Publication of the 2010 Annual Report March 18 Interim Report January – March 2011 April 20 Annual General Meeting (Trelleborg) April 20 Interim Report April – June 2011 July 20 Interim Report July – September 2011 October 25 Capital Markets Day (Stockholm) November 30
For further information, please contact:
Investors/analysts
Conny Torstensson, VP Investor Relations Tel: +46 (0)410 – 670 70 Mobil: +46 (0)734 – 08 70 70 E-mail: [email protected]
Media
Mikael Sjöblom, VP Media Relations Tel: +46 (0)410 – 670 15 Mobil: +46 (0)733 – 74 70 15 E-mail: [email protected]
Annual Reports, the stakeholder magazine T-TIME and other information on the Trelleborg Group can be ordered from: Corporate Communications, by telephone on +46 (0)410 – 670 09, or can be downloaded from the Group's website: www.trelleborg.com
Trelleborg AB (publ) Corp. Reg. No. 556006-3421 PO Box 153, SE-231 22 Trelleborg Sweden Tel: +46 (0)410-670 00.
This report contains forward-looking statements that are based on the current expectations of the management of Trelleborg. Although management believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove correct. Accordingly, results could differ materially from those implied in the forward-looking statements as a result of, among other factors, changes in economic, market and competitive conditions, changes in the regulatory environment and other government actions, fluctuations in exchange rates and other factors.
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 Tuesday, February 15, 2011 at 7:45 a.m.