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Trelleborg — Audit Report / Information 2012
Feb 13, 2013
2985_10-k_2013-02-13_4426a9a6-a08e-42c5-a2d1-260e4e88dc17.pdf
Audit Report / Information
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President and CEO Peter Nilsson
Year-end report 2012
"Full-year 2012 was a good 12 months for Trelleborg. In a turbulent economic climate, we improved our geographic balance and portfolio of operations and strengthened our positions. During the year, we formed the joint venture TrelleborgVibracoustic, which is of major strategic significance.
It is a demonstration of our strength that we are able to report satisfactory sales, operating profit and operating margin, despite the period that were underpinned by the considerable unrest prevailing in the global economy in the fourth quarter. In addition, cash flow developed positively as a result of efficient management of working capital.
We are seeing signs that the market trend is beginning to stabilize, albeit uncertainty remains. We are carefully monitoring economic developments and have a solid financial base and continued high readiness to manage a volatile market."
Continuing operations:
- Net sales during the fourth quarter 2012 declined by 3 percent to SEK 4,966 M (5,104). Organic sales were unchanged. The corresponding figure for the full year 2012 was SEK 21,262 M (21,043), up 1 percent.
- Operating profit, excluding items affecting comparability and the participation in the associated company TrelleborgVibracoustic, increased by 19 percent to SEK 446 M (376), resulting in an operating margin of 9.0 percent (7.4). The corresponding figure for full-year was SEK 2,342 M (2,231) with an operating margin of 11.0 percent (10.6).
- Operating cash flow for the quarter rose sharply to SEK 1,101 M (620). Operating cash flow was SEK 2,248 M (1,539) for full-year.
- The associated company TrelleborgVibracoustic reported an operating profit, excluding items affecting comparability, of SEK 204 M (pro forma SEK 269 M) for the quarter, corresponding to an operating margin of 5.8 percent (pro forma 7.7). Expenses affecting comparability negatively impacted the quarter by SEK 98 M.
- Trelleborg's participation in the associated company TrelleborgVibracoustic amounted to SEK 37 M before tax for the quarter. This participation was charged with SEK 49 M in expenses affecting comparability. Trelleborg's participation in the associated company TrelleborgVibracoustic amounted to SEK 109 M before tax for the full-year.
Group in total:
- Net sales for the Group amounted to SEK 4,966 M (7,106) for the quarter and SEK 25,237 M (29,150) for the full year. Operating profit declined for the quarter to SEK 365 M (459) and increased for the full year to SEK 2,815 M (2,689).
- Earnings per share for the quarter amounted to SEK 0.95 (0.95) and for full-year to SEK 7.55 (6.70), corresponding to an increase of approximately 13 percent.
Market outlook for the first quarter of 2013
Market outlook for the first quarter of 2013. Demand is expected to be on a par with the fourth quarter of 2012, adjusted for seasonal variations.
The Board proposes a dividend of SEK 3.00
Proposed dividend. The Board of Directors and President propose a cash dividend of SEK 3.00 per share (2.50).
| Key ratios, continuing operations | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Net sales | 4,966 | 5,104 | 21,262 | 21,043 |
| Change total, % | -2.7 | 2.2 | 1.0 | 6.6 |
| Organic, % | 0.0 | -1.1 | 0.6 | 9.2 |
| Structural, % | - | 4.1 | 0.5 | 3.7 |
| Exchange rate, % | -2.7 | -0.8 | -0.1 | -6.3 |
| Operating profit excl items affecting comparability excl part in | ||||
| TrelleborgVibracoustic | 446 | 376 | 2,342 | 2,231 |
| Operating margin, % | 9.0 | 7.4 | 11.0 | 10.6 |
| Items affecting comparability | -129 | -63 | 11 | -138 |
| Profit share in TrelleborgVibracoustic 1) | 37 | - | 109 | - |
| Operating profit | 354 | 313 | 2,462 | 2,093 |
| Operating margin, % | 7.1 | 6.1 | 11.6 | 9.9 |
| Operating cash flow | 1,101 | 620 | 2,248 | 1,539 |
| Return on capital employed excl items affecting comparability, % | 13.7 | 13.6 | ||
| Average number of employees within the Group, of whom: | 13,905 | 14,306 | ||
| - women | 3,598 | 3,700 | ||
| - men | 10,307 | 10,606 |
Continuing operations, fourth quarter 2012
1) TrelleborgVibracoustic is consolidated in Trelleborg according to equity method as from July 2012.
Organic sales were unchanged
Net sales. Net sales for the fourth quarter 2012 amounted to SEK 4,966 M (5,104), representing a decline of 3 percent (increase: 2), which was entirely related to exchange-rate effects.
Sales in the Group's project-related operations, represented by the Trelleborg Offshore & Construction and parts of the Trelleborg Industrial Solutions business areas, were higher compared with the corresponding period in 2011, attributable to favorable development in offshore oil/gas. Although reported sales for Trelleborg Sealing Solutions and Trelleborg Wheel Systems were lower year-on-year, they were in line with general markets trends.
Operating profit excl. items affecting comparability and participations in TrelleborgVibracoustic amounted to SEK 446 M (376), corresponding to an increase of 19 percent
Earnings. Operating profit excluding items affecting comparability and participations in the associated company TrelleborgVibracoustic amounted to SEK 446 M (376), representing a year-on-year increase of 19 percent. The higher operating profit was mainly attributable to the improved earnings of project-related operations and a generally lower cost level.
During the quarter, the Group continued to adapt production to the prevailing economic climate, which had a negative effect on earnings while inventory levels continued to decrease. Exchange-rate effects upon the translation of foreign subsidiaries had a negative impact on earnings of SEK 16 M compared with the corresponding period in 2011.
TrelleborgVibracoustic's operating profit, excluding items affecting comparability, totaled SEK 204 M, of which Trelleborg's share was SEK 102 M. For the comparable part of Trelleborg that is now part of TrelleborgVibracoustic, operating profit amounted to SEK 131 M in the corresponding period in 2011. The comparative figure was positively impacted by transactions of a non-recurring nature at the end of 2011. Trelleborg's participation in the TrelleborgVibracoustic associated company is included in operating profit and amounted to SEK 37 M before tax (-), according to the equity method. This participation was charged with
expenses of SEK 49 M, corresponding to half of the expenses affecting comparability in the joint venture.
The quarter was charged with expenses for items affecting comparability totaling SEK 129 M (expense: 63) for restructuring projects, which was in line with the information that has been provided earlier.
Operating profit for the quarter was SEK 354 M (313).
| Operating cash flow | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Operating profit before depreciation | 617 | 528 | 3,003 | 2,910 |
| Capital expenditures | -299 | -356 | -910 | -813 |
| Sale of fixed assets | 48 | 12 | 59 | 30 |
| Change in working capital | 735 | 436 | 96 | -588 |
| Operating cash flow | 1,101 | 620 | 2,248 | 1,539 |
Cash flow. Operating cash flow for the period amounted to SEK 1,101 M (620). The year-on-year improvement resulted from improved operating profit, lower capital expenditure and the continued positive change in working capital, principally due to efficient inventory management and lower invoicing in the second half of December. Capital expenditure during the quarter totaled SEK 299 M (356).
Continuing operations, full-year 2012
Net sales. The Trelleborg Group's net sales in 2012 amounted to SEK 21,262 M (21,043).
Earnings. Operating profit excluding items affecting comparability and participations in TrelleborgVibracoustic amounted to SEK 2,342 M (2,231), up 5 percent year-on-year. Exchange-rate effects upon the translation of foreign subsidiaries had a positive impact on operating profit in the first six months of the year, while the effect was negative in the second half of the year. The effects on full-year profit were neutral.
The Group's continued investments in the establishment of new operations in high-growth countries impacted profit for the year.
TrelleborgVibracoustic's operating profit, excluding items affecting comparability, was SEK 377 M, of which Trelleborg's share was SEK 188 M. For the comparable part of Trelleborg that is now part of TrelleborgVibracoustic, operating profit amounted to SEK 198 M in the corresponding period in the preceding year. Trelleborg's participation in the associated company TrelleborgVibracoustic for the full year is included in operating profit and amounted to SEK 109 M before tax (-), according to the equity method. This participation was charged with expenses of SEK 56 M, corresponding to half of the expenses affecting comparability in the joint venture.
Profit was affected by income from items affecting comparability totaling SEK 11 M (expense: 138), of which continued restructuring of the operation accounted for an expense of SEK 192 M and a capital gain from a property sale accounted for income of SEK 203 M.
Operating profit for the year totaled SEK 2,462 M (2,093).
Cash flow. Operating cash flow for 2012 amounted to SEK 2,248 M (1,539). A somewhat higher level of capital expenditure compared with the preceding year was amply offset by improved operating profit and a primarily of a positive working capital trend.
Capital employed. At the end of the year, capital employed amounted to SEK 19,464 M (16,562) including participations in TrelleborgVibracoustic totaling SEK 2,860 M and SEK 472 M attributable to the acquisition of Maine Industrial Tire, which was finalized at the end of the year (see page 6). Average capital employed, excluding TrelleborgVibracoustic and Maine Industrial Tire, amounted to SEK 17,081 M (16,443).
Return. The return on capital employed, excluding items affecting comparability and participations in TrelleborgVibracoustic, was 13.7 percent (13.6).
| Key ratios | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Net sales | 4,966 | 7,106 | 25,237 | 29,150 |
| Operating profit | 365 | 459 | 2,815 | 2,689 |
| Profit before tax | 329 | 396 | 2,626 | 2,480 |
| Net profit | 257 | 266 | 2,057 | 1,838 |
| Earnings per share: | ||||
| - Continuing operations, incl items affecting comparability, SEK | 1.20 | 0.65 | 6.30 | 5.25 |
| - Continuing operations, excl items affecting comparability, SEK | 0.90 | 0.50 | 6.55 | 4.90 |
| - Total Group, SEK | 0.95 | 0.95 | 7.55 | 6.70 |
| Return on equity: | ||||
| - Continuing operations, excl items affecting comparability, % | 12.5 | 11.2 | ||
| - Continuing operations, incl items affecting comparability, % | 12.9 | 10.4 | ||
| - Total Group, % | 14.9 | 14.3 |
Group in total, fourth quarter 2012
1) Continuing operations includes TrelleborgVibracoustic as from July 2012
Operating profit was SEK 365 M
(459)
Net sales. Consolidated net sales for the fourth quarter 2012 amounted to SEK 4,966 M (7,106). During the fourth quarter 2011, net sales from discontinued operations amounted to SEK 2,002 M.
Earnings. Operating profit for the fourth quarter 2012 was SEK 365 M (459), impacted by discontinued operations. Financial income and expenses were negative in the amount of SEK 36 M (neg: 63), corresponding to an average rate of interest of 2.7 percent (3.7). Profit before tax was SEK 329 M (396). Net profit was SEK 257 M (266). The tax rate was 22 percent (33). The reduction in the Swedish corporate tax rate from 26.3 percent to 22.0 percent as of 2013 had a positive impact on the tax expense in the fourth quarter of SEK 15 M due to a decline in deferred tax liability in Sweden. Earnings per share were SEK 0.95 (0.95).
| Change in net debt | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Net debt, opening balance | -5,648 | -6,992 | -6,425 | -6,409 |
| Net cash flow for the period | 346 | 448 | 740 | -67 |
| Discontinued operations | - | - | - | 98 |
| Exchange rate differences | -58 | 119 | 325 | -47 |
| Net debt, closing balance | -5,360 | -6,425 | -5,360 | -6,425 |
| Debt/equity ratio, % | 38 | 48 | ||
| Net Debt/EBITDA Total Group | 1.4 | 1.8 | ||
| Net Debt/EBITDA continuing operations incl items affecting | ||||
| comparability | 1.7 | 2.3 |
Debt/equity ratio was 38 percent (48)
Net debt. Net debt decreased by SEK 288 M during the quarter and was negative SEK 5,360 M due to a continued strong cash flow.
The debt/equity ratio was 38 percent (48). Net debt in relation to EBITDA for the Group in total was 1.4 (1.8). The corresponding net debt in relation to EBITDA for continuing operations, including items affecting comparability, was 1.7 (2.3).
Group in total, full-year 2012
Net sales. Consolidated net sales for 2012 amounted to SEK 25,237 M (29,150). In 2011, net sales in now discontinued operations were consolidated for the entire year and amounted to SEK 8,107 M. The corresponding units, mainly comprising Trelleborg Automotive, were only included in the Group for the first six months of 2012, when their net sales amounted to SEK 3,975 M.
Earnings. Operating profit for 2012 totaled SEK 2,815 M (2,689). Financial income and expenses amounted to a net expense of SEK 189 M (expense: 209), corresponding to an average rate of interest of 3.0 percent (3.1). Profit before tax totaled SEK 2,626 M (2,480). Net profit was SEK 2,057 M (1,838). The tax rate was 22 percent (26). The lower rate of tax was mainly attributable to advantageous divestments of assets from a taxation point of view and the effects of a reduction in the Swedish corporate tax rate (refer to comments on the quarter on page 4). Earnings per share were SEK 7.55 (6.70).
Net debt. Net debt decreased by SEK 1,065 M compared with the level in December 2011 and amounted to negative SEK 5,360 M (neg: 6,425). Net debt was positively impacted by interest-bearing receivables from the associated company TrelleborgVibracoustic amounting to some SEK 800 M. The receivables were settled in the first quarter of 2013. Consequently, Trelleborg's gross financial debt was reduced in the corresponding amount but has a neutral impact on Trelleborg's consolidated net debt and debt/equity ratio.
Shareholders' equity. Shareholders' equity for the Group at the close of the period amounted to SEK 14,134 M (13,338), excluding non-controlling interests. Equity per share amounted to SEK 52.15 (49.20). The equity/asset ratio was 52 percent (47). Return on shareholders' equity for continuing operations, including TrelleborgVibracoustic and items affecting comparability, was 12.9 percent (10.4).
Important events during the quarter Restructuring in the fourth quarter 2012
New business area structure. At the Group's Capital Markets Day on December 6, 2012, it was announced that, as of year-end 2012, the Trelleborg Engineered Systems business area would be discontinued and split into three new business areas. Accordingly, Trelleborg will consist of five business areas: Trelleborg Coated Systems, Trelleborg Industrial Solutions, Trelleborg Offshore & Construction, Trelleborg Sealing Solutions and Trelleborg Wheel Systems. The purpose of the change is to obtain a stronger focus on core businesses. The new structure is reflected in this year-end report. Group items include central staff functions and two operations, the first of which is Group-wide and the second of which is in build-up and integration phase. Acquisition of industrial tire operation. Trelleborg Wheel Systems signed an agreement for and finalized the acquisition of Maine Industrial Tire, a market-leading company specialized in solid industrial tires for such vehicles as forklifts. The company has its head office in the U.S., while its production facilities are located in the U.S. and China. Annual sales amount to approximately SEK 600 M. The transaction broadens Trelleborg's industrial tire product portfolio and further strengthens its position as the globally leading supplier of solid industrial tires. Events after the close of the period Acquisition of marine docking and mooring solutions operation. Trelleborg Offshore & Construction has signed an agreement for and finalized the acquisition of Sea Systems Technology Ltd. The company is predominantly specialized in the development of software and manufacture of emergency shutdown systems and other communications systems primarily used when carriers transporting liquefied natural gas (LNG) berth at terminals. Annual sales for 2012 are estimated to amount to approximately SEK 55 M. Acquisition of specialty tire operation Acquisition of marine docking and mooring solutions operation New business area structure
The acquisition broadens Trelleborg's product portfolio of berthing, docking and mooring solutions for harbors and ships.
Acquisition of industrial tire distributor. Trelleborg Wheel Systems has signed an agreement for and finalized the acquisition of the industrial tire operation from the Dutch company Industriebanden Beheer B.V. The operation specializes in the distribution and service of industrial tires, such as those fitted on forklifts. The acquisition strengthens and enlarges Trelleborg's European industrial tire distribution network. Acquisition of industrial tire distributor
Other
New financial targets. Trelleborg's new financial targets were communicated at the Group's Capital Markets Day on December 6, 2012. The financial targets should be viewed in relation to the Group's ambition to increase value creation and be a global leader in selected market segments and geographic markets. They are also based on an assessment of global growth and a desire to maintain financial stability in the Group. New financial targets
The following financial targets apply to the Group: Continuing operations excluding participations in the associated company TrelleborgVibracoustic (over a business cycle):
-
Organic growth: ≥5 percent per year
-
EBIT margin excluding items affecting comparability: ≥12 percent (equivalent to an EBITDA margin of approximately 15 percent) Continuing operations including participations in the associated company TrelleborgVibracoustic plus items affecting comparability (over a business cycle):
-
Return on shareholders' equity (ROE): ≥15 percent
Financing of TrelleborgVibracoustic
Nomination Committee's proposal for adoption by the 2013 AGM
Long-term financing of TrelleborgVibracoustic. TrelleborgVibracoustic has secured a EUR 220 M and USD 75 M syndicated revolving credit facility with a five-year tenor. The facility is fully standalone and thus without recourse to the shareholders of TrelleborgVibracoustic. The maiden drawdown took place in the first quarter of 2013 and was used to repay existing shareholder loans. Trelleborg received a total of approximately SEK 800 M. This leads to a corresponding reduction in the interest-bearing loans granted by the Trelleborg Group as well as a matching reduction in the Trelleborg Group's gross financial debt with the overall impact on Trelleborg's consolidated net debt and gearing being neutral.
Nomination Committee. The Nomination Committee comprising representatives of the major owners, representing approximately 62 percent of the votes in Trelleborg AB, and the Chairman of the Board, has resolved to propose to the Annual General Meeting the reelection of the following Board members:
- Hans Biörck
- Claes Lindqvist
- Sören Mellstig
- Peter Nilsson
- Bo Risberg
- Nina Udnes Tronstad
- Heléne Vibbleus Bergquist
Chairman of the Board Anders Narvingar, after 14 years on the Board, 11 of which as Chairman, has declared that he will not be standing for reelection. The Nomination Committee has thus resolved to propose that the Annual General Meeting elect current Board Member Sören Mellstig as new Chairman of the Board.
The Nomination Committee has also resolved to propose that the Annual General Meeting elect Jan Carlson, CEO of Autoliv Inc., as new Board member of the company.
Furthermore, the Nomination Committee has resolved to propose to the Annual General Meeting the re-election of PricewaterhouseCoopers AB as the company's auditor for 2013.
The following people serve as members of the Nomination Committee:
- Rolf Kjellman, Henry and Gerda Dunker Foundation
- Henrik Didner, Didner & Gerge Funds
- Peter Rönström, Lannebo funds
- Åsa Nisell, Swedbank Robur funds
- Johan Strandberg, SEB Investment Management
The Annual General Meeting will be held in Trelleborg in April 24, 2013 at 5:00 p.m.
Risk management
Risk/risk management at Trelleborg. Trelleborg focuses continuously on identifying, evaluating and managing risks arising in the Group's companies, business areas, business units and processes. Trelleborg has an Enterprise Risk Management process (ERM process) that aims to provide a Groupwide overview of Trelleborg's risks, deliver a basis for risk management decisions and enable assessment of the risks and of how they are managed.
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, 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 2013. Demand is expected to be on a par with the fourth quarter of 2012, adjusted for seasonal variations.
Outlook from the interim report published on October 24, 2012: Market outlook for the fourth quarter of 2012. Demand is expected to be lower than in the third quarter of 2012, adjusted for seasonal variations.
Trelleborg, February 13, 2013 Board of Directors of Trelleborg AB (publ)
This report has been prepared in accordance with IAS 34 Interim Financial Reporting and applicable rules of the Annual Accounts Act. The interim report for the Parent Company has been 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.
This report has not been subject to special review by the company's auditors.
_____________________________________________________________
| Continuing operations | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 | |
| Excluding items affecting comparability | |||||
| Net sales | 406 | 434 | 1,738 | 1,810 | |
| Change total, % | -6.6 | -6.6 | -4.0 | -6.8 | |
| Organic, % | -3.9 | -6.2 | -4.6 | 0,0 | |
| Structural, % | - | - | - | -0.7 | |
| Exchange rate, % | -2.7 | -0.4 | 0.6 | -6.1 | |
| Operating profit | 37 | 41 | 177 | 227 | |
| Operating margin, % | 9.1 | 9.5 | 10.2 | 12.6 | |
| Operating cash flow | 91 | 60 | 167 | 187 | |
| Return on capital employed, % Additional key ratios on pages 19 - 21 |
8.6 | 11.8 | |||
| Fourth quarter 2012 | Market trend. Demand for printing blankets was generally weak in Europe and the U.S., with the exception for printing blanket applications for packaging, which continued to grow. Demand in Asia and South America remained largely positive for all printing blanket applications. Demand for coated fabrics was mixed both in Europe and North America, while it remained strong in Asia. |
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| Net sales. Net sales declined 7 percent during the quarter compared with the corresponding quarter in 2011. Sales were negatively impacted by the generally weak trend in printing blankets in Europe. Operating profit and cash flow. Operating profit declined year-on-year and was negatively impacted by lower sales and costs in the form of bad debt losses. The integration of Printec, the Brazilian printing blanket operation |
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| acquired during the third quarter of 2012, continues. Printec contributed to a positive result during the quarter. Operating cash flow was positively affected by a reduction in tied-up working capital. Other. During the quarter, a facility was inaugurated in Brazil that will |
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| produce and develop printing blankets, which are used for example in offset printing on such applications as packaging material. |
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| Full-year 2012 | Net sales. Net sales in 2012 declined by 4 percent compared with 2011. Sales from printing blankets was negatively impacted by generally weak demand in Europe and the bankruptcy of a major printing press manufacturer, which brought forward the need for a somewhat modified distribution model. Sales from coated fabrics increased, primarily due to the positive trend in North America. |
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| Operating profit and cash flow. Operating profit fell compared with 2011, mainly due to lower level of sales, start-up and integration costs in Brazil and costs in the form of bad debt losses. While operating cash flow was negatively affected by lower earnings and higher capital expenditure, it was positively impacted by a reduction in tied up working capital. |
Trelleborg Coated Systems
| Continuing operations | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | ||||
|---|---|---|---|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 | ||||
| Excluding items affecting comparability | ||||||||
| Net sales | 1,107 | 1,140 | 4,502 | 4,612 | ||||
| Change total, % | -2.8 | 2.7 | -2.4 | 2.8 | ||||
| Organic, % | 0.1 | 2.8 | -2.2 | 8.0 | ||||
| Structural, % | - | 1.0 | 0.8 | 0.3 | ||||
| Exchange rate, % | -2.9 | -1.1 | -1.0 | -5.5 | ||||
| Operating profit | 93 | 88 | 328 | 387 | ||||
| Operating margin, % | 8.4 | 7.8 | 7.3 | 8.4 | ||||
| Operating cash flow | 152 | 73 | 428 | 230 | ||||
| Return on capital employed, % | 11.8 | 14.0 | ||||||
| Additional key ratios on pages 19 - 21 | ||||||||
| Fourth quarter 2012 | Market trend. The underlying demand trend within general industry was weak across the globe. The demand during the quarter for project-related operations remained favorable for offshore oil/gas. |
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| Net sales. Net sales during the quarter declined by 3 percent compared with the year-earlier period. Sales in general industry and construction-related operations declined, while sales in transportation and offshore oil/gas were higher than in the corresponding period in 2011. |
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| Operating profit and cash flow. Operating profit increased year-on-year, mainly due to enhanced cost efficiency and improved product mix. Operating cash flow was positively impacted by operating profit and reduced tied-up working capital. |
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| Other. During the quarter, two operations were inaugurated in India that will develop and produce industrial antivibration systems and specialty molded components for various industrial segments. |
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| Full-year 2012 | Net sales. In 2012, net sales declined by 2 percent compared with 2011. Sales from general industry and construction-related operations declined, while sales from transportation and offshore oil/gas were higher than in 2011. |
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| Operating profit and cash flow. Operating profit declined compared with 2011, predominantly due to lower volumes and an unfavorable product mix in certain market segments. Operating cash flow was primarily impacted by efficient management of working capital. |
Trelleborg Industrial Solutions
| Continuing operations | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | ||||
|---|---|---|---|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 | ||||
| Excluding items affecting comparability | ||||||||
| Net sales | 944 | 804 | 3,718 | 3,199 | ||||
| Change total, % | 17.4 | -22.7 | 16.2 | -12.7 | ||||
| Organic, % | 18.5 | -25.3 | 13.5 | -10.1 | ||||
| Structural, % | - | 2.4 | 0.3 | 2.7 | ||||
| Exchange rate, % | -1.1 | 0.2 | 2.4 | -5.3 | ||||
| Operating profit | 57 | -30 | 221 | 113 | ||||
| Operating margin, % | 6.1 | neg | 5.9 | 3.5 | ||||
| Operating cash flow | 191 | -16 | 233 | -12 | ||||
| Return on capital employed, % Additional key ratios on pages 19 - 21 |
10.5 | 5.7 | ||||||
| Fourth quarter 2012 | Market trend. The demand during the quarter for project-related operations remained favorable, both for offshore oil/gas and infrastructure. |
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| Net sales. Net sales during the quarter increased by 17 percent compared with the corresponding quarter in 2011. The sharp organic increase was partially attributable to higher sales, partially attributable to low comparative figures. The low comparative figures originate from production disruptions, which have been communicated earlier, experienced by a unit active in offshore oil/gas in the year-earlier period. Operating profit and cash flow. Operating profit rose year-on-year as a |
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| result of higher volumes, an improved product mix and implemented restructuring measures. The negative earnings recorded in the year-earlier period were attributable to production disruptions in offshore oil/gas (see above). Operating cash flow was positively impacted by operating profit and lower tied-up working capital. |
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| Other. After the close of the period, the business area signed an agreement for and finalized the acquisition of Sea Systems Technology Ldt., active in marine docking and mooring solutions, primarily for LNG (see page 6). |
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| Full-year 2012 | Net sales. In 2012, net sales increased by 16 percent compared with 2011. Sales in all market segments increased in 2012. |
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| Operating profit and cash flow. Operating profit rose compared with 2011, principally due to higher volumes, an improved product mix and implemented restructuring measures. Start-up costs for new units adversely affected earnings. Operating cash flow was positively impacted by the operating profit and lower tied-up working capital. |
Trelleborg Offshore & Construction
| Continuing operations | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Excluding items affecting comparability | ||||
| Net sales | 1,592 | 1,707 | 7,215 | 7,288 |
| Change total, % | -6.7 | 8.4 | -1.0 | 13.2 |
| Organic, % | -4.1 | 3.5 | -2.0 | 15.0 |
| Structural, % | - | 5.6 | 0.9 | 5.1 |
| Exchange rate, % | -2.6 | -0.7 | 0.1 | -6.9 |
| Operating profit | 277 | 301 | 1,513 | 1,495 |
| Operating margin, % | 17.4 | 17.7 | 20.9 | 20.5 |
| Operating cash flow | 454 | 346 | 1,695 | 1,361 |
| Return on capital employed, % | 20.9 | 20.7 |
Trelleborg Sealing Solutions
Additional key ratios on pages 19 - 21
Fourth quarter 2012
Market trend. The underlying demand trend within general industry was weak across the globe. For the aerospace industry, the global trend remained favorable while the trend was weak in the light vehicles industry in Europe.
Net sales. Net sales during the quarter declined by 7 percent compared with the corresponding quarter in 2011.
Sales from light vehicles and general industry fell, while an increase was noted for sales from aerospace.
Operating profit and cash flow. Operating profit and the operating margin remained healthy and were on a par with the seasonal variations noted in previous years. The quarter was impacted by lower sales and inventory reductions, which were partially offset by reduced overheads.
The operating cash flow remained strong during the quarter, primarily as a result of efficient management of working capital.
Other. The business area is investing in life sciences. The new production facility in the U.S. for the development and production of products with high cleanliness standards (cleanroom manufacturing) will be completed in the first quarter of 2013.
Net sales. Net sales in 2012 declined by 1 percent compared with 2011. Sales from general industry and light vehicles fell, while sales from aerospace were higher than in 2011. Full-year 2012
Operating profit and cash flow. Operating profit increased compared with 2011 as a result of increased efficiency and effective capacity utilization.
Operating cash flow remained highly robust, mainly due to the increased operating profit and the continued efficient management of working capital.
| Continuing operations | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Excluding items affecting comparability | ||||
| Net sales | 833 | 954 | 3,865 | 3,863 |
| Change total, % | -12.6 | 29.4 | 0.1 | 29.2 |
| Organic, % | -9.2 | 20.6 | 2.7 | 27.2 |
| Structural, % | - | 10.9 | -1.1 | 10.0 |
| Exchange rate, % | -3.4 | -2.1 | -1.5 | -8.0 |
| Operating profit | 72 | 99 | 449 | 401 |
| Operating margin, % | 8.5 | 10.4 | 11.6 | 10.4 |
| Operating cash flow | 263 | 219 | 227 | 185 |
| Return on capital employed, % | 18.4 | 18.2 |
Trelleborg Wheel Systems
Additional key ratios on pages 19 - 21
Fourth quarter 2012
Market trend. The seasonally weak fourth quarter was distinguished by a lower rate of production in Europe, in contrast to the higher number of tractor registrations. This prompted a number of OEMs to reduce their inventory levels. The global trend for material handlings vehicles were mixed, with lower sales in Europe but a stable market in North America. In China, the market for industrial tires as well as agricultural tires continued to develop positively.
Net sales. Net sales during the quarter declined by 13 percent compared with the corresponding period in 2011.
Sales in all market segments were lower year-on-year.
Operating profit and cash flow. Operating profit declined compared with the year-earlier period, predominantly due to the lower sales.
The trend in operating cash flow tracks seasonal variations and was positively impacted by the reduction in tied-up working capital.
Other. During the quarter, the business area signed an agreement for and finalized the acquisition of Maine Industrial Tire, a market-leading company specialized in solid industrial tires for vehicles, such as forklifts (see page 6).
After the close of the period, the business area signed an agreement for and finalized the acquisition of the Dutch industrial tire operation of Industriebanden Beheer B.V. The operation is specialized in the distribution and service of industrial tires (see page 6).
Full-year 2012
Net sales. Net sales in 2012 were unchanged compared with 2011, with considerable variation during the year. Demand was particularly strong for agricultural tires during the first six months of the year.
Operating profit and cash flow. Operating profit increased as a consequence of enhanced efficiency and favorable capacity utilization. Operating cash flow increased during the year, mainly due to the improved operating profit and reduced tied-up working capital.
TrelleborgVibracoustic joint venture
In July 2012, Trelleborg and Freudenberg formed a 50/50 joint venture in antivibration solutions for light and heavy vehicles, TrelleborgVibracoustic. The company is reported as an associated company in the financial accounts and recognized in accordance with the equity method, see page 24 for further information.
| proforma 1) | proforma 1) | proforma 1) | proforma 1) | |||
|---|---|---|---|---|---|---|
| TrelleborgVibracoustic | Oct - Dec | Oct - Dec | July - Dec | July - Dec | Jan - Dec | Full year |
| SEK M | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Excluding items affecting comparability | ||||||
| Net sales | 3,457 | 3,459 | 6,856 | 6,917 | 14,225 | 13,673 |
| EBITDA | 326 | 391 | 605 | 707 | 1,318 | 1,330 |
| Operating profit | 204 | 269 | 377 | 469 | 860 | 870 |
| Operating margin (ROS), % | 5.8 | 7.7 | 5.4 | 6.7 | 6.0 | 6.3 |
| Operating cash flow | 447 | 644 | ||||
| Capital employed, closing balance | 3,886 | |||||
| Net debt, closing balance | 1,380 | |||||
| Equity, closing balance | 2,500 |
Fourth quarter 2012 1) The proforma figures are based on a combination of previous consolidation of entities within Trelleborg Automotive and Vibracoustic.
Market trend. Global production of light vehicles remained stable during the quarter, with growth in North America and China. In Europe, the trend remained negative.
Net sales. Net sales during the quarter were unchanged compared with pro forma figures for the year-earlier period. Organic growth was 4 percent, which was better than the underlying market.
Operating profit and cash flow. The operating profit and operating margin were lower compared with pro forma figures in the corresponding period in 2011, principally due to expenses in conjunction with the formation of the new company. Earnings were charged with start-up costs in China and Mexico, in addition to high product development costs and exchange-rate effects. The corresponding quarter in the preceding year was positively impacted by non-recurring transactions.
Operating cash flow was stable for the quarter.
Other. The joint venture has been operational for seven months. During the fourth quarter 2012, the integration process was intensified, which is reflected in higher costs. These costs are expected also during 2013. All staff functions have been established according to plan and synergies on future profit are expected to be in line with the ones that were communicated at the Group's Capital Markets Day in December 2012.
During the quarter, the company secured a syndicated credit facility for EUR 220 M and USD 75 M with a five-year tenor (see page 7).
Full-year 2012 Pro forma
Net sales. Net sales in 2012 increased organically by 6 percent compared with pro forma 2011.
Operating profit and cash flow. The operating profit and operating margin were in line with pro forma figures for 2011. The positive effects of higher volumes were offset by costs in conjunction with the formation of the new company. Earnings were charged with start-up costs in China and Mexico, in addition to high product development costs and exchange-rate effects.
| Oct - Dec | Oct - Dec | July - Dec | July - Dec | |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Operating profit excl items affecting comparability | 204 | - | 377 | - |
| Acquisition related costs | -27 | - | -37 | - |
| Amortization of intangible assets 1) | -44 | - | -44 | - |
| Restructuring items | -27 | - | -32 | - |
| Operating profit | 106 | - | 264 | - |
| Profit before tax | 76 | - | 217 | - |
| Trelleborg share | 37 | - | 109 | - |
| Tax | -28 | - | -64 | - |
| Trelleborg share | -14 | - | -32 | - |
| Net profit | 48 | - | 153 | - |
| Trelleborg share | 24 | - | 77 | - |
Trelleborg's participations in TrelleborgVibracoustic
1) Related to split of acquisition balance. The impact shown relates to six months.
Fourth quarter 2012
As presented in the table above, TrelleborgVibracoustic's operating profit, excluding items affecting comparability, was SEK 204 M, of which Trelleborg's share was SEK 102 M. For the comparable part of Trelleborg that is now part of TrelleborgVibracoustic, operating profit amounted to SEK 131 M in the corresponding period in 2011. The comparative figure was positively impacted by transactions of a non-recurring nature at the end of 2011.
Trelleborg's participation in the associated company TrelleborgVibracoustic is included in operating profit and amounted to SEK 37 M before tax (-), according to the equity method. This participation was charged with expenses of SEK 49 M, corresponding to half of the expenses affecting comparability in the joint venture.
July-December 2012
TrelleborgVibracoustic's operating profit, excluding items affecting comparability, was SEK 377 M, of which Trelleborg's share was SEK 188 M. For the comparable part of Trelleborg that is now part of TrelleborgVibracoustic, operating profit amounted to SEK 198 M in the corresponding period in the preceding year.
Trelleborg's participation in the associated company TrelleborgVibracoustic for July-December is included in operating profit and amounted to SEK 109 M before tax (-), according to the equity method. This participation was charged with expenses of SEK 56 M, corresponding to half of the expenses affecting comparability in the joint venture.
The final acquisition balance has been finalized during the quarter. Some minor changes may still occur. Amortization of intangible assets arose in conjunction with the distribution of the purchase consideration in the acquisition analysis. This amortization does not impact cash and bank balances and will be charged to operating profit in the amount of SEK 22 M per quarter. During the quarter, two quarters of amortizations have been charged to operating profit.
Financial statements
| Income Statements | ||||
|---|---|---|---|---|
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Continuing operations | ||||
| Net sales | 4,966 | 5,104 | 21,262 | 21,043 |
| Cost of goods sold | -3,404 | -3,570 | -14,395 | -14,225 |
| Gross profit | 1,562 | 1,534 | 6,867 | 6,818 |
| Selling expenses | -501 | -506 | -2,028 | -2,025 |
| Administrative expenses | -597 | -654 | -2,336 | -2,400 |
| Research and development costs | -80 | -72 | -309 | -273 |
| Other operating income/expenses | 62 | 74 | 145 | 111 |
| Profit from TrelleborgVibracoustic | 37 | - | 109 | - |
| Profit from part in other assoc companies | 0 | 0 | 3 | 0 |
| Items affecting comparability | -129 | -63 | 11 | -138 |
| Operating profit | 354 | 313 | 2,462 | 2,093 |
| Financial income and expenses | -37 | -70 | -154 | -164 |
| Profit before tax | 317 | 243 | 2,308 | 1,929 |
| Tax | -59 | -110 | -488 | -596 |
| Tax related to part in TrelleborgVibracoustic | -14 | - | -32 | - |
| Total tax | -73 | -110 | -520 | -596 |
| Net profit | 244 | 133 | 1,788 | 1,333 |
| Discontinued operations 1) | ||||
| Net sales | 0 | 2,002 | 3,975 | 8,107 |
| Operating profit | 11 | 146 | 353 | 596 |
| Profit before tax | 12 | 153 | 318 | 551 |
| Net profit | 13 | 133 | 269 | 505 |
| Group, total | ||||
| Net sales | 4,966 | 7,106 | 25,237 | 29,150 |
| Operating profit | 365 | 459 | 2,815 | 2,689 |
| Profit before tax | 329 | 396 | 2,626 | 2,480 |
| Total net profit | 257 | 266 | 2,057 | 1,838 |
| of which attributable to: | ||||
| - equity holders of the parent | 256 | 262 | 2,042 | 1,819 |
| - non-controlling interest | 1 | 4 | 15 | 19 |
| Earnings per share | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
| SEK | 2012 | 2011 | 2012 | 2011 |
| Continuing operations | 0.90 | 0.50 | 6.55 | 4.90 |
| Discontinued operations 1) | 0.05 | 0.45 | 1.00 | 1.80 |
| Group, total | 0.95 | 0.95 | 7.55 | 6.70 |
| Number of shares | ||||
| End of period | 271,071,783 | 271,071,783 | 271,071,783 | 271,071,783 |
| Average number | 271,071,783 | 271,071,783 | 271,071,783 | 271,071,783 |
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Total net profit | 257 | 266 | 2,057 | 1,838 |
| Other comprehensive income | ||||
| Cash flow hedges | 6 | 0 | 10 | -74 |
| Hedging of net investment 2) | -78 | 190 | 536 | -72 |
| Translation difference 2) | 140 | -385 | -972 | 15 |
| Income tax relating to components of other comprehensive | ||||
| income 2) | 17 | -53 | -142 | 46 |
| Other comprehensive income, net of tax | 85 | -248 | -568 | -85 |
| Total comprehensive income | 342 | 18 | 1,489 | 1,753 |
| Total profit for the period | ||||
| Published February 13, 2012 - equity holders of the parent |
336 | 11 | 1,474 | 1,733 |
| - non-controlling interest | 6 | 7 | 15 | 20 |
| Group | Dec 31 | Dec 31 |
|---|---|---|
| SEK M | 2012 | 2011 |
| Property, plant and equipment | 4,909 | 5,958 |
| Intangible assets | 8,824 | 10,457 |
| Shares in asscociated companies | 2,867 | 54 |
| Other financial assets | 1,052 | 1,230 |
| Total non-current assets | 17,652 | 17,699 |
| Inventories | 3,275 | 4,001 |
| Current operating receivables | 4,420 | 6,025 |
| Current interest-bearing receivables | 1,143 | 213 |
| Cash and cash equivalents | 660 | 753 |
| Total current assets | 9,498 | 10,992 |
| Total assets | 27,150 | 28,691 |
| Equity holders of the parent | 14,134 | 13,338 |
| Non-controlling interest | 35 | 166 |
| Total equity | 14,169 | 13,504 |
| Non-current interest-bearing liabilities | 4,942 | 5,452 |
| Other non-current liabilities | 888 | 1,125 |
| Total non-current liabilities | 5,830 | 6,577 |
| Interest-bearing current liabilities | 2,433 | 2,171 |
| Other current liabilities | 4,718 | 6,439 |
| Total current liabilities | 7,151 | 8,610 |
| Total equity and liabilities | 27,150 | 28,691 |
| Specification of changes in equity | Dec 31 | Dec 31 |
|---|---|---|
| SEK M | 2012 | 2011 |
| Attributable to equity holders of the parent | ||
| Opening balance, January 1 | 13,338 | 12,079 |
| Total comprehensive income | 1,474 | 1,733 |
| Dividend | -678 | -474 |
| Closing balance | 14,134 | 13,338 |
| Attributable to non-controlling interest | ||
| Opening balance, January 1 | 166 | 117 |
| Total comprehensive income | 15 | 20 |
| Acquisition | -14 | 32 |
| Divested operations | -127 | - |
| Dividend | -5 | -3 |
| Closing balance | 35 | 166 |
| Sum total equity, closing balance | 14,169 | 13,504 |
| Items affecting comparability | ||||
|---|---|---|---|---|
| in operating profit | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Cost of goods sold | -41 | -47 | -65 | -77 |
| Selling expenses | -8 | -9 | -12 | -13 |
| Administrative expenses | -7 | -4 | -32 | -18 |
| Research and development costs | -1 | -1 | -1 | -1 |
| Other operating income | - | 0 | 203 | 6 |
| Other operating expenses | -72 | -2 | -82 | -35 |
| Total items affecting comparability | -129 | -63 | 11 | -138 |
Cash flow statements
| Group | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Operating activities | ||||
| Operating profit incl part in associated companies | 354 | 313 | 2,462 | 2,093 |
| Adjustments for items not included in cash flow: | ||||
| Depreciation, property, plant and equipment | 162 | 150 | 628 | 593 |
| Amortization, intangible assets | 14 | 17 | 48 | 52 |
| Impairment losses, property, plant and equipment | 17 | -1 | 22 | 7 |
| Impairment losses, intangible assets | -1 | -1 | 0 | -3 |
| Provision for restructuring costs | 105 | 64 | 168 | 131 |
| Other, non cash-flow affecting items | -35 | -14 | -122 | 37 |
| Operating activities in discontiuned operations | -6 | 220 | 310 | 518 |
| 610 | 748 | 3,516 | 3,428 | |
| Interest received and other financial items | 14 | 10 | 40 | 17 |
| Interest paid and other financial items | -31 | -58 | -190 | -255 |
| Interest and other financial items in discontinued operations | 1 | 6 | -35 | -45 |
| Taxes paid | -156 | -130 | -460 | -400 |
| Taxes paid in discontinued operations | 1 | -14 | -34 | -79 |
| Cash flow from operating activities before changes in working capital | ||||
| 439 | 562 | 2,837 | 2,666 | |
| Cash flow from changes in working capital: | ||||
| Change in inventories | 311 | 113 | 322 | -479 |
| Change in operating receivables | 514 | 426 | -488 | 85 |
| Change in operating liabilities | -89 | -103 | 262 | -194 |
| Change in working capital in discontinued operations | 4 | -11 | -400 | -204 |
| Utilization of restructuring provisions | -38 | -87 | -122 | -223 |
| Cash flow from operating activities | 1,141 | 900 | 2,411 | 1,651 |
| Investing activities | ||||
| Acquisitions | -526 | 0 | -744 | -746 |
| Discontinued operations | 18 | 3 | 328 | 602 |
| Capital expenditure, property, plant and equipment | -264 | -322 | -847 | -773 |
| Capital expenditure in intangible assets | -35 | -34 | -63 | -40 |
| Capital expenditure in non-current assets in discontinued operations | -8 | -110 | -134 | -323 |
| Sale of non-current assets | 48 | 12 | 59 | 30 |
| Sale of non-current assets in discontinued operations | - | - | 24 | 9 |
| Cash flow from investing activities | -767 | -451 | -1,377 | -1,241 |
| Financing activities | ||||
| Change in interest-bearing investments | -25 | -20 | -125 | -152 |
| Change in interest-bearing liabilities | -315 | -724 | -273 | 153 |
| Dividend - equity holders of the parent | - | - | -678 | -474 |
| Dividend - non-controlling interest | - | -1 | -5 | -3 |
| Cash flow from financing activities | -340 | -745 | -1,081 | -476 |
| Cash flow for the period | 34 | -296 | -47 | -66 |
| Cash and cash equivalents: | ||||
| At beginning of the period | 629 | 1,053 | 753 | 832 |
| Exchange rate differences | -3 | -4 | -46 | -13 |
| Cash and cash equivalents at end of period | 660 | 753 | 660 | 753 |
TRELLEBORG AB FOURTH QUARTER AND YEAR-END REPORT 2012
Group review
| Continuing operations | ||||
|---|---|---|---|---|
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Net sales | 4,966 | 5,104 | 21,262 | 21,043 |
| Operating profit excl items affecting comparability and part | ||||
| in TrelleborgVibracoustic | 446 | 376 | 2,342 | 2,231 |
| Items affecting comparability, operating profit | -129 | -63 | 11 | -138 |
| Profit from part in TrelleborgVibracoustic | 37 | - | 109 | - |
| Operating profit | 354 | 313 | 2,462 | 2,093 |
Net sales
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Trelleborg Coated Systems | 406 | 434 | 1,738 | 1,810 |
| Trelleborg Industrial Solutions | 1,107 | 1,140 | 4,502 | 4,612 |
| Trelleborg Offshore & Construction | 944 | 804 | 3,718 | 3,199 |
| Trelleborg Sealing Solutions | 1,592 | 1,707 | 7,215 | 7,288 |
| Trelleborg Wheel Systems | 833 | 954 | 3,865 | 3,863 |
| Group items | 226 | 278 | 1,002 | 1,300 |
| Eliminations | -142 | -213 | -778 | -1,029 |
| Total | 4,966 | 5,104 | 21,262 | 21,043 |
Net sales per market
| Oct - Dec | Jan - Dec | ||
|---|---|---|---|
| 2012 | 2012 | ||
| % - share of sales, organic growth % | share | growth | growth |
| Western Europe | 56 | -4 | -4 |
| Other Europe | 5 | 3 | -3 |
| North America | 20 | 12 | 15 |
| South America | 3 | 3 | 0 |
| Asia and other markets | 16 | 1 | 2 |
| Total | 100 | 0 | 1 |
Operating profit
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Excluding items affecting comparability | ||||
| Trelleborg Coated Systems | 37 | 41 | 177 | 227 |
| Trelleborg Industrial Solutions | 93 | 88 | 328 | 387 |
| Trelleborg Offshore & Construction | 57 | -30 | 221 | 113 |
| Trelleborg Sealing Solutions | 277 | 301 | 1,513 | 1,495 |
| Trelleborg Wheel Systems | 72 | 99 | 449 | 401 |
| Group items | -90 | -123 | -346 | -392 |
| Total | 446 | 376 | 2,342 | 2,231 |
Return on sales
| Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec | |
|---|---|---|---|---|
| % | 2012 | 2011 | 2012 | 2011 |
| Excluding items affecting comparability | ||||
| Trelleborg Coated Systems | 9.1 | 9.5 | 10.2 | 12.6 |
| Trelleborg Industrial Solutions | 8.4 | 7.8 | 7.3 | 8.4 |
| Trelleborg Offshore & Construction | 6.1 | neg | 5.9 | 3.5 |
| Trelleborg Sealing Solutions | 17.4 | 17.7 | 20.9 | 20.5 |
| Trelleborg Wheel Systems | 8.5 | 10.4 | 11.6 | 10.4 |
| Total | 9.0 | 7.4 | 11.0 | 10.6 |
Capital employed
| Dec 31 | Dec 31 | |
|---|---|---|
| SEK M | 2012 | 2011 |
| Trelleborg Coated Systems | 2,149 | 1,975 |
| Trelleborg Industrial Solutions | 2,532 | 2,867 |
| Trelleborg Offshore & Construction | 1,893 | 1,991 |
| Trelleborg Sealing Solutions | 6,892 | 7,339 |
| Trelleborg Wheel Systems | 2,754 | 2,191 |
| Group items | 514 | 292 |
| TrelleborgVibracoustic | 2,860 | - |
| Provision for restr. costs and legal costs | -130 | -93 |
| Total | 19,464 | 16,562 |
Return on capital employed
| Jan - Dec | Jan - Dec | |
|---|---|---|
| % | 2012 | 2011 |
| Excluding items affecting comparability | ||
| Trelleborg Coated Systems | 8.6 | 11.8 |
| Trelleborg Industrial Solutions | 11.8 | 14.0 |
| Trelleborg Offshore & Construction | 10.5 | 5.7 |
| Trelleborg Sealing Solutions | 20.9 | 20.7 |
| Trelleborg Wheel Systems | 18.4 | 18.2 |
| Total | 13.7 | 13.6 |
Cash flow report
| Capital | Sold non | Change in | Total cash flow | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA 1) | expenditure | current assets | working capital | Jan - Dec | Jan - Dec | |||||
| SEK M | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Trelleborg Coated Systems | 251 | 320 | -96 | -68 | 0 | 3 | 12 | -68 | 167 | 187 |
| Trelleborg Industrial Solutions | 488 | 556 | -133 | -130 | 5 | 2 | 68 | -198 | 428 | 230 |
| Trelleborg Offshore & Construction | 332 | 222 | -139 | -148 | 4 | 4 | 36 | -90 | 233 | -12 |
| Trelleborg Sealing Solutions | 1,754 | 1,710 | -285 | -241 | 7 | 10 | 219 | -118 | 1,695 | 1,361 |
| Trelleborg Wheel Systems | 562 | 503 | -200 | -156 | 2 | 4 | -137 | -166 | 227 | 185 |
| Group items | -384 | -401 | -57 | -70 | 41 | 7 | -102 | 52 | -502 | -412 |
| Operating cash flow | 3,003 | 2,910 | -910 | -813 | 59 | 30 | 96 | -588 | 2,248 | 1,539 |
| Utilization of restructuring provisions/sale of property | 81 | -223 | ||||||||
| Dividend - non-controlling interest | -5 | -3 | ||||||||
| Financial items | -150 | -238 | ||||||||
| Paid tax | -460 | -400 | ||||||||
| Free cash flow | 1,714 | 675 | ||||||||
| Acquisitions | -744 | -746 | ||||||||
| Discontinued operations | 448 | 478 | ||||||||
| Dividend - equity holders of the parent | -678 | -474 | ||||||||
| Sum net cash flow | 740 | -67 |
1) Excluding other non cash-flow affecting items
Acquisition
The acquisition of a market-leading company specialized in solid industrial tires for such vehicles as forklifts was finalized during the quarter. The acquisition is not considered to have a material impact on the Group's sales and earnings. See page 6 for further information.
After the close of the period, two acquisitions were completed. These acquisitions are not considered to have a material impact on the Group's sales and earnings. See page 6 for further information.
Key ratios per quarter Continuing operations
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |
|---|---|---|---|---|---|---|---|---|---|
| SEK M | 2012 | 2012 | 2012 | 2012 | 2011 | 2011 | 2011 | 2011 | 2010 |
| Net sales | 4,966 | 4,961 | 5,612 | 5,723 | 5,104 | 5,187 | 5,492 | 5,260 | 4,995 |
| Operating profit excl items affecting comparability | |||||||||
| and part in TrelleborgVibracoustic | 446 | 528 | 702 | 666 | 376 | 612 | 674 | 569 | 398 |
| Items aff. comparability in operating profit | -129 | -12 | 171 | -19 | -63 | -46 | -28 | -1 | -63 |
| Profit from part in TrelleborgVibracoustic | 37 | 72 | - | - | - | - | - | - | - |
| Operating profit | 354 | 588 | 873 | 647 | 313 | 566 | 646 | 568 | 335 |
Net sales
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |
|---|---|---|---|---|---|---|---|---|---|
| SEK M | 2012 | 2012 | 2012 | 2012 | 2011 | 2011 | 2011 | 2011 | 2010 |
| Trelleborg Coated Systems | 406 | 399 | 464 | 469 | 434 | 432 | 475 | 469 | 466 |
| Trelleborg Industrial Solutions | 1,107 | 1,031 | 1,162 | 1,202 | 1,140 | 1,118 | 1,219 | 1,135 | 1,109 |
| Trelleborg Offshore & Construction | 944 | 911 | 944 | 919 | 804 | 738 | 851 | 806 | 1,040 |
| Trelleborg Sealing Solutions | 1,592 | 1,706 | 1,944 | 1,973 | 1,707 | 1,863 | 1,905 | 1,813 | 1,574 |
| Trelleborg Wheel Systems | 833 | 852 | 1,052 | 1,128 | 954 | 953 | 1,006 | 950 | 738 |
| Group items | 226 | 212 | 275 | 289 | 278 | 354 | 311 | 357 | 331 |
| Eliminations | -142 | -150 | -229 | -257 | -213 | -271 | -275 | -270 | -263 |
| Total | 4,966 | 4,961 | 5,612 | 5,723 | 5,104 | 5,187 | 5,492 | 5,260 | 4,995 |
Operating profit
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |
|---|---|---|---|---|---|---|---|---|---|
| SEK M | 2012 | 2012 | 2012 | 2012 | 2011 | 2011 | 2011 | 2011 | 2010 |
| Excluding items affecting comparability | |||||||||
| Trelleborg Coated Systems | 37 | 30 | 53 | 57 | 41 | 55 | 67 | 64 | 42 |
| Trelleborg Industrial Solutions | 93 | 70 | 76 | 89 | 88 | 91 | 116 | 92 | 93 |
| Trelleborg Offshore & Construction | 57 | 47 | 68 | 49 | -30 | 40 | 57 | 46 | 109 |
| Trelleborg Sealing Solutions | 277 | 343 | 464 | 429 | 301 | 422 | 420 | 352 | 233 |
| Trelleborg Wheel Systems | 72 | 88 | 133 | 156 | 99 | 98 | 108 | 96 | 52 |
| Group items | -90 | -50 | -92 | -114 | -123 | -94 | -94 | -81 | -131 |
| Total | 446 | 528 | 702 | 666 | 376 | 612 | 674 | 569 | 398 |
Return on sales
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |
|---|---|---|---|---|---|---|---|---|---|
| % | 2012 | 2012 | 2012 | 2012 | 2011 | 2011 | 2011 | 2011 | 2010 |
| Excluding items affecting comparability | |||||||||
| Trelleborg Coated Systems | 9.1 | 7.7 | 11.3 | 12.2 | 9.5 | 12.8 | 14.0 | 13.7 | 9.0 |
| Trelleborg Industrial Solutions | 8.4 | 6.8 | 6.6 | 7.4 | 7.8 | 8.1 | 9.5 | 8.1 | 8.5 |
| Trelleborg Offshore & Construction | 6.1 | 5.2 | 7.2 | 5.3 | neg | 5.5 | 6.6 | 5.7 | 10.5 |
| Trelleborg Sealing Solutions | 17.4 | 20.0 | 23.8 | 21.7 | 17.7 | 22.6 | 22.0 | 19.4 | 14.8 |
| Trelleborg Wheel Systems | 8.5 | 10.4 | 12.6 | 13.8 | 10.4 | 10.3 | 10.8 | 10.1 | 7.0 |
| Total | 9.0 | 10.6 | 12.5 | 11.6 | 7.4 | 11.8 | 12.3 | 10.8 | 8.0 |
Income Statements
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |
|---|---|---|---|---|---|---|---|---|---|
| SEK M | 2012 | 2012 | 2012 | 2012 | 2011 | 2011 | 2011 | 2011 | 2010 |
| Continuing operations | |||||||||
| Net sales | 4,966 | 4,961 | 5,612 | 5,723 | 5,104 | 5,187 | 5,492 | 5,260 | 4,995 |
| Cost of goods sold | -3,404 | -3,402 | -3,720 | -3,869 | -3,570 | -3,440 | -3,635 | -3,580 | -3,422 |
| Gross profit | 1,562 | 1,559 | 1,892 | 1,854 | 1,534 | 1,747 | 1,857 | 1,680 | 1,573 |
| Selling expenses | -501 | -468 | -542 | -517 | -506 | -502 | -513 | -504 | -509 |
| Administrative expenses | -597 | -545 | -605 | -589 | -654 | -584 | -609 | -553 | -616 |
| Research and development costs | -80 | -74 | -79 | -76 | -72 | -65 | -66 | -70 | -69 |
| Other operating income/costs | 62 | 54 | 35 | -6 | 74 | 16 | 5 | 16 | 20 |
| Profit from TrelleborgVibracoustic | 37 | 72 | - | - | - | - | - | - | - |
| Profit from part in other assoc companies | 0 | 2 | 1 | 0 | 0 | 0 | 0 | 0 | 0 |
| Items affecting comparability | -129 | -12 | 171 | -19 | -63 | -46 | -28 | -1 | -63 |
| Operating profit | 354 | 588 | 873 | 647 | 313 | 566 | 646 | 568 | 336 |
| Financial income and expenses | -37 | -39 | -34 | -44 | -70 | -27 | -41 | -26 | -35 |
| Profit before tax | 317 | 549 | 839 | 603 | 243 | 539 | 605 | 542 | 301 |
| Tax | -59 | -133 | -130 | -166 | -110 | -143 | -176 | -167 | -68 |
| Tax related to TrelleborgVibracoustic | -14 | -18 | - | - | - | - | - | - | - |
| Total tax | -73 | -151 | -130 | -166 | -110 | -143 | -176 | -167 | -68 |
| Net profit | 244 | 398 | 709 | 437 | 133 | 396 | 429 | 375 | 233 |
| Discontinued operations 1) | |||||||||
| Net sales | 0 | 4 | 1,921 | 2,050 | 2,002 | 2,004 | 2,091 | 2,010 | 2,050 |
| Operating profit | 11 | 3 | 242 | 97 | 146 | 55 | 58 | 337 | 87 |
| Profit before tax | 12 | 3 | 217 | 86 | 153 | 28 | 50 | 320 | 79 |
| Net profit | 13 | 0 | 192 | 64 | 133 | 24 | 38 | 310 | 29 |
| Group, total | |||||||||
| Net sales | 4,966 | 4,965 | 7,533 | 7,773 | 7,106 | 7,191 | 7,583 | 7,270 | 7,045 |
| Operating profit | 365 | 591 | 1,115 | 744 | 459 | 621 | 704 | 905 | 423 |
| Profit before tax | 329 | 552 | 1,056 | 689 | 396 | 567 | 655 | 862 | 380 |
| Total net profit | 257 | 398 | 901 | 501 | 266 | 420 | 467 | 685 | 262 |
| - equity holders of the parent | 256 | 396 | 896 | 494 | 262 | 413 | 465 | 679 | 257 |
| - non-controlling interest | 1 | 2 | 5 | 7 | 4 | 7 | 2 | 6 | 5 |
| Earnings per share | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
| SEK | 2012 | 2012 | 2012 | 2012 | 2011 | 2011 | 2011 | 2011 | 2010 |
| Continuing operations | 0.90 | 1.45 | 2.60 | 1.60 | 0.50 | 1.45 | 1.55 | 1.40 | 0.85 |
| Discontinued operations 1) | 0.05 | 0.00 | 0.75 | 0.20 | 0.45 | 0.10 | 0.15 | 1.10 | 0.10 |
| Group, total | 0.95 | 1.45 | 3.35 | 1.80 | 0.95 | 1.55 | 1.70 | 2.50 | 0.95 |
1) Mainly operations included in the joint venture TrelleborgVibracoustic as from beginning Q3 2012.
Parent Company
Income Statements
| Parent company | Oct - Dec | Oct - Dec | Jan - Dec | Jan - Dec |
|---|---|---|---|---|
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Administrative expenses | -155 | -134 | -313 | -355 |
| Other operating income | 30 | 31 | 221 | 229 |
| Operating profit | -125 | -103 | -92 | -126 |
| Financial income and expenses | -285 | 197 | -652 | 524 |
| Profit before tax | -410 | 94 | -744 | 398 |
| Appropriations | 1,372 | 940 | 1,372 | 940 |
| Tax | -272 | -153 | -88 | 4 |
| Net profit | 690 | 881 | 540 | 1,342 |
Statements of comprehensive income
| Net profit | 690 | 881 | 540 | 1,342 |
|---|---|---|---|---|
| Other comprehensive income | ||||
| Fair value | - | 19 | - | - |
| Income tax relating to components of other | ||||
| comprehensive income | - | -5 | - | - |
| Other comprehensive income, net of tax | - | 14 | - | - |
| Total comprehensive income | 690 | 895 | 540 | 1,342 |
Balance Sheets Parent company Dec 31 Dec 31 SEK M 2012 2011 Property, plant and equipment 24 23 Intangible assets 2 4 Financial assets 35,744 34,732 Total non-current assets 35,770 34,759 Current operating receivables 85 53 Current interest-bearing receivables 2,102 597 Cash and cash equivalents 0 0 Total current assets 2,187 650 Total assets 37,957 35,409 Shareholders' equity 13,339 13,477 Total equity 13,339 13,477 Untaxed reserves 105 - Non-current interest-bearing liabilities 33 29 Other non-current liabilities 18 16 Total non-current liabilities 51 45 Interest-bearing current liabilities 24,210 21,789 Other current liabilities 252 98 Total current liabilities 24,462 21,887 Total equity and liabilities 37,957 35,409
Financial definitions
Return on shareholders' equity, %
Profit for the period, attributable to shareholders of the Parent Company as a percentage of average shareholders' equity, excluding non-controlling interests.
Return on capital employed, %
Operating profit divided by the average capital employed.
EBITDA
Operating profit excluding depreciation of PPE and amortization of intangible assets.
Free cash flow
Operating cash flow, cash flow from financial items, taxes and the effect of restructuring measures on cash flow.
Equity method
Shares in associated companies are accounted for according to equity method, in which the initial share of the associated company is adjusted to reflect the Group's share of the profit and also adjusted due to dividends. As regards the share in TrelleborgVibracoustic the share in profit is reported on two lines in the Income Statement; profit before tax and tax.
Net debt
Interest-bearing liabilities less interest-bearing assets and cash and cash equivalents.
Operating cash flow
EBITDA excluding other non-cash items, investments, sold non-current assets and changes in working capital but excluding cash flow pertaining to restructuring.
Earnings per share
Profit for the period, attributable to shareholders of the Parent Company, divided by the average number of shares outstanding.
Operating margin, %
Operating profit as a percentage of net sales.
Operating profit
Operating profit as stated in the income statement.
Debt/equity ratio, %
Net debt divided by total equity.
Net debt/EBITDA
Net debt divided by EBITDA.
Equity/assets ratio, %
Total equity divided by 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.
The Trelleborg Group's operations
Continuing operations
Refer to operations within Trelleborg's five business areas: Trelleborg Coated Systems, Trelleborg Industrial Solutions, Trelleborg Offshore & Construction, Trelleborg Sealing Solutions and Trelleborg Wheel Systems. It also includes Group items defined as central staff functions and two operations, the first of which is Group-wide and the second of which is in build-up and integration phase.
TrelleborgVibracoustic
In July 2012, Trelleborg and Freudenberg formed a 50/50 joint venture in antivibration solutions for light and heavy vehicles, TrelleborgVibracoustic. The company is reported as an associated company in the financial accounts and recognized in accordance with the equity method, see page 24 for further information.
Discontinuing operations
Refer generally to operations that are discontinuing or will be discontinued. As for 2012, discontinuing operations are primarily operations within Trelleborg Automotive, now part of TrelleborgVibracoustic, a protective products operation and a French light-vehicle component operation.
For 2011, discontinuing operations also includes a roofing operation.
Group in total
The above three parts consolidated sum up to the Trelleborg Group in total.
Invitation to presentation and telephone conference on February 13 at 10:30 a.m.
A presentation and telephone conference will be held on February 13 at 10:30 a.m. The presentation will be held at Operaterrassen in Stockholm. To participate in the telephone conference, call +46 (0)8 505 564 76 or +44 203 364 5373 or +1877 679 29 93. Code: "Trelleborg". The conference will also be broadcast on the Internet in real time. Visit our website at: www.trelleborg.com/en/Investors/Presentations for the Internet link and presentation materials.
Calendar
| Interim report January-March 2013 | April 24, 2013 |
|---|---|
| Annual General Meeting (Trelleborg) 2013 | April 24, 2013 |
| Interim report, April-June 2013 | July 23, 2013 |
| Interim report July-September 2013 | October 23, 2013 |
| Year-end report 2013 | February 13, 2014 |
For further information, please contact:
Investors/analysts Media Christofer Sjögren, VP Investor Relations Karin Larsson, VP Media Relations Tel: +46 (0)410 - 670 68Tel: +46 (0)410 - 670 15 Mobile: +46 (0)708 - 66 51 40 Mobile: +46 (0)733 - 74 70 15 E-mail: [email protected] E-mail: [email protected]
For information about the Trelleborg Group, Annual Reports, the stakeholder magazine T-TIME and other information, please visit the Group's website: www.trelleborg.com or download "Trelleborg IR" from the App Store.
Trelleborg AB (publ) Corp. reg. no. 556006-3421 PO Box 153, SE-231 22 Trelleborg Sweden Tel: +46 (0)410-670 00 www.trelleborg.com
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 Wednesday, February 13, 2013, at 7:45 a.m.