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Trelleborg — Interim / Quarterly Report 2010
Jul 21, 2010
2985_ir_2010-07-21_0287843b-86d0-49fe-86b9-9cd3e9a7391f.pdf
Interim / Quarterly Report
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Second quarter 2010
President and CEO Peter Nilsson
"Demand during the quarter continued to improve in the majority of our segments and order book levels are favorable. We continue to improve our market positions and build a stronger and more efficient Trelleborg.
A strong organic growth of 21 percent and an efficient cost structure were some of the factors behind the exceptionally strong trend in the Group's margins. The EBITDA margin improved and was 13.3 percent for the quarter, compared to 8.6 percent in the year-earlier period, and 11.5 percent in the first quarter of 2010. At the same time we have had a good cash flow generation.
We will continue to focus the business and increase our presence in selected, profitable segments and in expanding geographic markets. As part of this process, we divested part of the Trelleborg Automotive business area during the quarter."
- Net sales, including discontinued operations, increased to SEK 7,814 M (6,867). Profit for the period, including discontinued operations and accounting capital loss, increased to SEK 274 M (46).
- Further focusing of operations through the divestment of Fluid Solutions, which was part of the Trelleborg Automotive business area. Fluid Solutions is recognized as a discontinued operation in this report. All comparative figures have been restated to reflect this.
Continuing operations:
- Net sales increased to SEK 7,430 M (6,500).
- Operating profit rose to SEK 675 M (188). Items affecting comparability amounted to an expense of SEK 50 M (expense: 91).
- Earnings per share increased to SEK 1.60 (0.35).
- Operating cash flow was SEK 818 M (958). Free cash flow was SEK 591 M (653).
| Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | |
|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 |
| Continuing operations | ||||
| Net sales | 7,430 | 6,500 | 14,104 | 13,058 |
| Operating profit | 675 | 188 | 1,153 | 269 |
| Profit for the period | 440 | 86 | 739 | 211 |
| Earnings per share, SEK 1) | 1.60 | 0.35 | 2.70 | 1.00 |
| Operating profit, excl. items affecting comparability |
725 | 279 | 1,230 | 374 |
| Earnings per share, SEK, excl. items affecting comparability 1) |
1.75 | 0.65 | 2.90 | 1.35 |
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.
Market outlook for the third quarter of 2010
Market outlook for the third quarter of 2010. Overall, demand is expected to remain in line with or slightly better than the second quarter of 2010, adjusted for seasonal variations.
| Key ratios | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year |
|---|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations | ||||||
| Net sales | 7,430 | 6,500 | 14,104 | 13,058 | 26,723 | 25,677 |
| Operating profit | 675 | 188 | 1,153 | 269 | 1,726 | 842 |
| Profit before tax | 625 | 82 | 1,034 | 32 | 1,452 | 450 |
| Profit for the period | 440 | 86 | 739 | 211 | 1,063 | 535 |
| - attributable to equity holders of the parent | 435 | 84 | 727 | 209 | 1,043 | 525 |
| - attributable to minority interest | 5 | 2 | 12 | 2 | 20 | 10 |
| Earnings per share, SEK 1) | 1.60 | 0.35 | 2.70 | 1.00 | 3.90 | 2.20 |
| Average number of employees, of whom | 21,148 | 20,367 | 20,073 | |||
| - women | 5,178 | 5,081 | 4,981 | |||
| - men | 15,970 | 15,286 | 15,092 | |||
| Operating key ratios | Apr - Jun | Apr - Jun | Jan - Mar | Jan - Jun | Jul 2009 - | Full year |
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||||
| Operating profit | 725 | 279 | 1,230 | 374 | 2,052 | 1,196 |
| Earnings per share, SEK 1) | 1.75 | 0.65 | 2.90 | 1.35 | 4.70 | 3.20 |
| EBITDA, % | 13.3 | 8.6 | 12.4 | 7.1 | 11.6 | 8.9 |
| Operating margin (ROS), % | 9.7 | 4.3 | 8.7 | 2.8 | 7.7 | 4.6 |
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.
The Group's key figures
April – June 2010
Organic sales rose 21 percent Net sales. The Trelleborg Group's net sales for the second quarter of 2010 amounted to SEK 7,430 M (6,500), up 14 percent compared with the yearearlier period. Organic sales rose 21 percent. Exchange-rate effects were negative 7 percent and effects from structural changes were 0 percent.
Trelleborg's sales of input goods to the industrial sector were notably higher than the corresponding period in 2009 and the first quarter of 2010. There was a significant increase in light vehicles sales compared with the year-earlier period and an increase compared with the first quarter of 2010. Within project-related segments, which include offshore oil/gas and infrastructure construction, sales were in line with the corresponding period in the preceding year and higher than the first quarter of 2010. For the agricultural sector, sales were lower than the level recorded in the yearearlier period, but level with the first quarter of 2010
The Group continued to improve its market positions and to establish a better geographic balance through further investments in markets outside North America and Western Europe. This included such initiatives as the establishment of a new Trelleborg Automotive research and development center in Shanghai, China, marketing activities directed at customers in the Chinese market at the Shanghai World Expo, and an increased presence in Russia and India.
| Change in net sales, continuing operations | Apr - Jun | Apr - Jun |
|---|---|---|
| % | 201 0 |
2009 |
| Organic sales | +21 | -28 |
| Structural changes | 0 | 0 |
| Currency impact | -7 | +11 |
| Total | +14 | -17 |
Operating profit increased to SEK 675 M (188) Earnings. Operating profit for the quarter increased to SEK 675 M (188). Items affecting comparability were an expense of SEK 50 M (expense: 91), see page 5.
Compared with the year-earlier period and the first quarter of 2010, operating margins improved as a result of volume growth and a more efficient structure.
Cost increases for raw materials, which have a somewhat delayed impact on earnings, had a slight negative effect on earnings during the quarter, mainly affecting Trelleborg Wheels Systems. Rising raw material prices are expected to have a greater impact in the latter half of 2010, mainly for Trelleborg Automotive. Continuous actions are being taken to offset this.
Exchange-rate fluctuations arising in the translation of earnings of foreign Group companies had a negative impact on operating profit of about SEK 30 M compared with the corresponding period in 2009.
The Group posted a net financial expense of SEK 50 M (expense: 106), corresponding to an average interest rate of 2.5 percent (3.9).
Profit before tax increased to SEK 625 M (82). Net profit totaled SEK 440 M (86). The tax rate was 30 percent. Earnings per share totaled SEK 1.60 (0.35).
Return on capital. Return on shareholders' equity, excluding items affecting comparability, for the most recent twelve-month period amounted to 10.2 percent (full-year 2009: 6.9), while the return on capital employed, excluding items affecting comparability, for the same period was 10.2 percent (fullyear 2009: 5.5).
| Continuing operations |
Excl. items affecting comparability |
|||||
|---|---|---|---|---|---|---|
| Jul 2009 - | Full year | Jul 2009 - | Full year | |||
| % | Jun 2010 | 2009 | Jun 2010 | 2009 | ||
| Return on capital employed | 8.7 | 4.0 | 10.2 | 5.5 | ||
| Return on shareholders' equity | 8.3 | 4.7 | 10.2 | 6.9 |
Free cash flow was SEK 591 M (653)
Cash flow. Operating cash flow for the period was SEK 818 M (958), which was attributable to a continued improved generation of earnings from operations. Changes in working capital had a negative impact of SEK 35 M (positive: 580) on cash flow.
| Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year | |
|---|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations | ||||||
| Operating cash flow | 818 | 958 | 832 | 1,399 | 2,654 | 3,221 |
| Utilization of restructuring provisions | -139 | -166 | -204 | -251 | -485 | -532 |
| Dividend paid to minority | -1 | -2 | -1 | -2 | -1 | -2 |
| Financial items | -22 | -84 | -247 | -409 | -358 | -520 |
| Paid tax | -65 | -53 | -136 | -60 | -323 | -247 |
| Free cash flow | 591 | 653 | 244 | 677 | 1,487 | 1,920 |
Debt/equity ratio was 64 percent (79)
Net debt. Net debt decreased SEK 447 M compared with the preceding quarter and amounted to SEK 7,958 M, mainly as a result of the positive trend in cash flow. The debt/equity ratio was 64 percent (79).
| Change in net debt | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Full year |
|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | 2009 |
| Net debt, opening balance | -8,405 | -12,974 | -8,369 | -12,706 | -12,706 |
| Net cash flow for the period excl. rights issue | 428 | 585 | 26 | 590 | 1,680 |
| Rights issue | - | 2,070 | - | 2,070 | 2,070 |
| Additional payment, disposals | 77 | - | 77 | - | - |
| Disposals | 57 | - | 57 | - | - |
| Borrowing costs | - | 2 | - | 2 | - |
| Exchange rate differences | -115 | 271 | 251 | -2 | 587 |
| Net debt, closing balance | -7,958 | -10,046 | -7,958 | -10,046 | -8,369 |
| Debt/equity ratio, % | 64 | 79 | 68 |
January – June 2010
Net sales. The Trelleborg Group's net sales for the first six months of 2010 amounted to SEK 14,104 M (13,058), up 8 percent compared with 2009. Organic sales rose 16 percent. Exchange-rate effects were negative 8 percent and effects of structural changes 0 percent.
Earnings. Operating profit for the first half of 2010 totaled SEK 1,153 M (269). Items affecting comparability amounted to an expense of SEK 77 M (expense: 105). Refer to page 5. The Group posted a profit before tax of SEK 1,034 M (32). Net profit amounted to SEK 739 M (211). Earnings per share amounted to SEK 2.70 (1.00).
Operating cash flow for the first half-year totaled SEK 832 M (1,399)
Cash flow. Operating cash for the first half-year 2010 totaled SEK 832 M (1,399), which is attributable to continued improvement earnings generation from the operation and the fact that working capital increased due to higher volumes with a negative impact on cash flow. In 2009, working capital was freed up with a positive cash-flow effect.
Capital employed and shareholders' equity. Capital employed amounted to SEK 19,622 M at the end of the period, compared with SEK 21,428 M at the same time in 2009, and was mainly influenced by exchange-rate effects and a continued low rate of investment in relation to depreciation/amortization.
Shareholders' equity at the end of the period was SEK 12,363 M, excluding minority shares. The equity/assets ratio was 42 percent (39).
Items affecting comparability
comparability during the quarter: Expense of SEK 50 M before tax and SEK 40 M after tax
Items affecting Items affecting comparability for the calculation of key figures. Items affecting comparability during the second quarter of 2010 totaling an expense of SEK 50 M (expense: 91) 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 related to these measures totaling about SEK 125 M mainly pertain to Trelleborg Engineered Systems and will primarily be charged against the second half of 2010.
New initiated measures: Trade union consultations concerning the closure of Trelleborg Sealing Solutions' unit in Skellefteå, Sweden were initiated. Union consultations also commenced regarding the consolidation of parts of operations in Germany at the Trelleborg Automotive business area. If these new measures are implemented, costs are estimated at approximately SEK 200 M. No provisions were made for these costs during the first six months of the year.
In total, the above ongoing and new initiated measures, including expenses accrued to date during the year, will impact full-year earnings in 2010 by about SEK 300 M.
| Items affecting comparability | ||||||
|---|---|---|---|---|---|---|
| in operating profit 1) | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year |
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations | ||||||
| Trelleborg Engineered Systems | -27 | -1 | -41 | -6 | -198 | -163 |
| Trelleborg Automotive | -20 | -3 | -21 | -8 | -36 | - 23 |
| Trelleborg Sealing Solutions | - | -85 | -5 | -87 | -70 | -152 |
| Trelleborg Wheel Systems | -3 | -2 | -7 | -4 | -19 | -16 |
| Other | - | - | -3 | - | -3 | - |
| Total items affecting comparability | -50 | -91 | -77 | -105 | -326 | -354 |
1) Main part reported as other operating expenses
The Group's operating key figures
April – June 2010
Earnings. Operating profit increased to SEK 725 M (279). The operating margin was 9.7 percent (4.3).
Operating profit before depreciation (EBITDA) rose to SEK 989 M (557). EBITDA margin rose to The EBITDA margin amounted to 13.3 percent (8.6).
13.3 percent (8.6) Consolidated profit before tax amounted to SEK 675 M (174) and net profit to SEK 478 M (153). Earnings per share totaled SEK 1.75 (0.65).
January – June 2010
Earnings. Operating profit increased to SEK 1,230 M (374). The operating margin was 8.7 percent (2.8).
Operating profit before depreciation (EBITDA) rose to SEK 1,753 M (932). The EBITDA margin amounted to 12.4 percent (7.1).
Consolidated profit before tax amounted to SEK 1,111 M (137) and net profit to SEK 797 M (288). Earnings per share totaled SEK 2.90 (1.35).
Operating profit was SEK 725 M (279)
Jämförelses poster i kvartalet -xx MSEK före skatt och -xx M Focusing of operations through divestment of Fluid Solutions
Other information
Divestment of Fluid Solutions within the Trelleborg Automotive business area. As a further step in the strategy to focus the operation to selected segments, Trelleborg Automotive's Fluid Solutions business unit was divested to Bavaria Industriekapital AG, Munich, Germany.
In 2009, Fluid Solutions had sales of SEK 1,382 M and recorded a loss. The purchase price totaled about SEK 300 M based on estimated working capital levels at the date of divestment. Of the purchase price, slightly more than SEK 150 M comprises liquid assets, which are expected to reduce net liabilities during future quarters, and an additional purchase price conditional upon the future earnings performance of the divested unit. The additional purchase price has been recognized at a present value of SEK 77 M and as a financial receivable.
The divestment entailed an accounting capital loss of SEK 166 M after tax.
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, financial business environment risks and changes in value of fixed assets.
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 third quarter of 2010. Overall, demand is expected to remain in line with or slightly better than the second quarter of 2010, adjusted for seasonal variations.
Outlook from the interim report published on April 20, 2010: Market outlook for the second quarter of 2010. Overall, demand is expected to remain in line with or slightly better than the first quarter of 2010. _____________________________________________________________
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.
This report has been subject to special review by the company's auditors (refer to page 20).
| Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year | |
|---|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations excl items affecting comparability | ||||||
| Net sales | 2,872 | 2,868 | 5,420 | 5,730 | 10,859 | 11,169 |
| Operating profit | 294 | 187 | 442 | 304 | 882 | 744 |
| EBITDA margin, % | 13.5 | 9.8 | 11.7 | 8.5 | 11.5 | 9.9 |
| Operating margin (ROS), % | 10.3 | 6.5 | 8.3 | 5.3 | 8.2 | 6.6 |
| Operating cash flow | 223 | 502 | 88 | 787 | 999 | 1,698 |
| Operating cash flow/operating profit, % | 76 | 268 | 20 | 259 | 113 | 228 |
| Including items affecting comparability | ||||||
| Operating profit | 267 | 186 | 401 | 298 | 684 | 581 |
| ROS, % | 9.3 | 6.5 | 7.5 | 5.1 | 6.4 | 5.2 |
Trelleborg Engineered Systems
Additional key ratios on pages 14 - 17
Market trend. Overall, demand from general industry improved sharply compared with the year-earlier period. Demand from project-related segments, offshore oil/gas and infrastructure construction, improved steadily and was slightly higher than in the year-earlier period.
Net sales. Net sales during the quarter were on a par with the corresponding period in 2009. Organic sales rose 6 percent, exchange-rate effects were negative 6 percent and effects of structural changes 0 percent.
Operating profit and cash flow. Compared with the preceding year, operating profit and operating margin for the quarter improved primarily due to a generally enhanced cost structure, which means that higher volumes are now being produced in an even more efficient structure.
Profit for the quarter has also benefited from increased sales in projectrelated operations.
A consolidation and focusing of production units is under way in a number of countries in Europe to further improve the business area's competitiveness and production structure.
The business area is continuing its efforts to further broaden its geographical base and, among other activities, is studying the possibility of establishing a production unit in Brazil for the offshore oil/gas segment.
The oil spill in the Gulf of Mexico has led to some uncertainty regarding future deep-sea drilling. The accident is also expected to lead to intensified safety and quality demands on products and solutions in oil exploration at sea. This is in line with Trelleborg's offering of high-quality products and solutions.
Operating cash flow remained strong, principally as a result of an improvement in the generation of earnings and continued efficient management of working capital.
| Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year | |
|---|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations excl items affecting comparability | ||||||
| Net sales | 2,268 | 1,755 | 4,388 | 3,262 | 8,146 | 7,020 |
| Operating profit | 175 | 11 | 312 | -132 | 478 | 34 |
| EBITDA margin, % | 11.7 | 6.5 | 11.3 | 2.2 | 10.5 | 6.1 |
| Operating margin (ROS), % | 7.5 | 0.6 | 7.0 | neg | 5.7 | 0.4 |
| Operating cash flow | 328 | 135 | 432 | 81 | 802 | 451 |
| Operating cash flow/operating profit, % | 187 | 1,227 | 138 | neg | 168 | 1,326 |
| Including items affecting comparability | ||||||
| Operating profit | 155 | 8 | 291 | -140 | 442 | 11 |
| ROS, % | 6.6 | 0.4 | 6.5 | neg | 5.3 | 0.0 |
Trelleborg Automotive
Additional key ratios on pages 14 - 17
Market trend. During the quarter, global light vehicle production increased sharply compared with the corresponding period in 2009. Production in all geographic regions was higher, with the largest increase in percentage terms recorded in North America and Asia. A weakening is expected in Western Europe during the second half of the year.
Net sales. Net sales during the quarter increased 29 percent compared with the corresponding period in the preceding year. Organic sales increased 36 percent, exchange-rate effects were negative at 7 percent and effects of structural changes were 0 percent.
Operating profit and cash flow. There was a marked improvement in operating profit compared with the year-earlier period. Earnings were primarily improved by higher volumes and an improved cost structure resulting from implemented structural programs and other capacity and cost adaptations.
During the period, a further step was taken as part of the strategy to focus operations to selected segments with the divestment of the Fluid Solutions business unit. The business area will now focus more intently on strengthening its world-leading position in the field of noise and vibrationdamping solutions for the automotive industry.
The business area continued its geographic investment in markets outside North America and Western Europe through activities that included the establishment of a research and development center in Shanghai for the Chinese market.
During the period, the business area also approved the establishment of a new production unit in Nizhniy Novgorod, Russia, and the first serial deliveries from the unit will take place during the third quarter.
Trade union consultations were initiated regarding the consolidation of parts of operations in Germany (see page 5).
Operating cash flow remained strong in relation to the increase in sales, principally as a result of an improvement in the generation of earnings and continued efficient management of working capital.
| Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year | |
|---|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations excl items affecting comparability | ||||||
| Net sales | 1,522 | 1,129 | 2,872 | 2,405 | 5,140 | 4,673 |
| Operating profit | 251 | 22 | 422 | 63 | 639 | 280 |
| EBITDA margin, % | 19.7 | 6.8 | 18.1 | 7.2 | 16.4 | 10.6 |
| Operating margin (ROS), % | 16.5 | 1.9 | 14.7 | 2.6 | 12.4 | 6.0 |
| Operating cash flow | 237 | 163 | 369 | 285 | 867 | 783 |
| Operating cash flow/operating profit, % | 94 | 741 | 87 | 452 | 136 | 280 |
| Including items affecting comparability | ||||||
| Operating profit | 251 | -63 | 417 | -24 | 569 | 128 |
| ROS, % | 16.5 | neg | 14.5 | neg | 11.1 | 2.8 |
Trelleborg Sealing Solutions
Additional key ratios on pages 14 - 17
Market trend. Demand for input goods used in the industrial sector and light vehicles rose sharply compared with the second quarter of 2009. Demand in the aerospace sector declined compared with the corresponding period in the preceding year.
Net sales. Net sales during the quarter increased 35 percent compared with the corresponding period in 2009. Organic sales grew 44 percent, exchangerate effects were negative 9 percent and effects of structural changes were 0 percent.
Operating profit and cash flow. Compared with the year-earlier period, there was a significant improvement in operating profit as a result of volume growth and an improved cost structure. A strongly improved capacity utilization in manufacturing units resulted in a highly favorable productivity trend.
The Asian markets continue to perform in an excellent manner. During the quarter, the decision was taken to make a strategic investment and establish a Center of Excellence in Bangalore, India, for certain production processes and industrial niche segments.
The consolidation of production units in Europe and the US continues. At the business area's unit in Skellefteå, Sweden, union consultations were initiated concerning a closure of the unit (see page 5).
Operating cash flow remained strong in relation to the increase in sales, principally as a result of an improvement in the generation of earnings and continued efficient management of working capital.
| Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year | |
|---|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations excl items affecting comparability | ||||||
| Net sales | 795 | 782 | 1,520 | 1,732 | 2,779 | 2,991 |
| Operating profit | 59 | 83 | 135 | 185 | 233 | 283 |
| EBITDA margin, % | 10.3 | 13.8 | 12.0 | 13.6 | 11.8 | 12.8 |
| Operating margin (ROS), % | 7.4 | 10.6 | 8.9 | 10.7 | 8.4 | 9.5 |
| Operating cash flow | 97 | 203 | 58 | 325 | 253 | 520 |
| Operating cash flow/operating profit, % | 164 | 245 | 43 | 176 | 109 | 184 |
| Including items affecting comparability | ||||||
| Operating profit | 56 | 81 | 128 | 181 | 214 | 267 |
| ROS, % | 7.0 | 10.4 | 8.4 | 10.5 | 7.7 | 8.9 |
Trelleborg Wheel Systems
Additional key ratios on pages 14 - 17
Market trend. In the agricultural sector, demand was below the level reported in the second quarter of 2009, mainly due to the continued low rate of production of new agricultural equipment driven by the current situation of lower profits in the agricultural sector. Global demand for industrial tires from manufacturers of material-handling equipment improved steadily and was higher than in the corresponding period in 2009.
Net sales. Net sales during the quarter increased 2 percent compared with the preceding year. Organic sales grew 8 percent, exchange-rate effects were negative 6 percent and structural changes were 0 percent.
Operating profit and cash flow. Both second-quarter operating profit and operating margin declined compared with the year-earlier period, primarily due to a certain delay in compensation for increased costs for raw materials.
The business area's strong positions in large agricultural tires contributed to increased market shares during the quarter.
The range is continually being developed and expanded to further advance the business area's position as a complete supplier.
To strengthen its position for high-performance agricultural tires, the business area continued the development of performance, efficiency and quality.
Markets outside North America and Western Europe recorded positive performance for volume and earnings.
Operating cash flow was positively impacted by lower tied-up capital during the quarter, though not to the same extent as in the corresponding period in 2009.
.
Financial statements
| Income Statements | ||||||
|---|---|---|---|---|---|---|
| Group | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year |
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations | ||||||
| Net sales | 7,430 | 6,500 | 14,104 | 13,058 | 26,723 | 25,677 |
| Cost of goods sold | -5,366 | -4,927 | -10,264 | -9,963 | -19,615 | -19,314 |
| Gross profit | 2,064 | 1,573 | 3,840 | 3,095 | 7,108 | 6,363 |
| Selling expenses | -572 | -584 | -1,118 | -1,209 | -2,238 | -2,329 |
| Administrative expenses | -635 | -614 | -1,233 | -1,276 | -2,419 | -2,462 |
| Research and development costs | -150 | -138 | -296 | -292 | -574 | -570 |
| Other operating income/expense | -35 | -49 | -40 | -52 | -159 | -171 |
| Profit from part. in assoc. companies | 3 | 0 | 0 | 3 | 8 | 11 |
| Operating profit | 675 | 188 | 1,153 | 269 | 1,726 | 842 |
| Financial income and expenses | -50 | -106 | -119 | -237 | -274 | -392 |
| Profit before tax | 625 | 82 | 1,034 | 32 | 1,452 | 450 |
| Tax | -185 | 4 | -295 | 179 | -389 | 85 |
| Profit for the period | 440 | 86 | 739 | 211 | 1,063 | 535 |
| Discontinued operations | ||||||
| Net sales | 384 | 367 | 764 | 686 | 1,460 | 1,382 |
| Operating profit | -192 | -29 | -169 | -64 | -174 | -69 |
| Profit before tax | -191 | -36 | -169 | -79 | -171 | -81 |
| Profit for the period | -166 | -40 | -173 | -100 | -189 | -116 |
| Group, total | ||||||
| Net sales | 7,814 | 6,867 | 14,868 | 13,744 | 28,183 | 27,059 |
| Operating profit | 483 | 159 | 984 | 205 | 1,552 | 773 |
| Profit before tax | 434 | 46 | 865 | -47 | 1,281 | 369 |
| Profit for the period | 274 | 46 | 566 | 111 | 874 | 419 |
| - attributable to equity holders of the parent | 269 | 44 | 554 | 109 | 854 | 409 |
| - attributable to minority interest | 5 | 2 | 12 | 2 | 20 | 10 |
| Earnings per share | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year |
| SEK | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations | 1.60 | 0.35 | 2.70 | 1.00 | 3.90 | 2.20 |
| Discontinued operations | -0.60 | -0.20 | -0.65 | -0.50 | -0.65 | -0.50 |
| Group, total | 1.00 | 0.15 | 2.05 | 0.50 | 3.25 | 1.70 |
| Number of shares | ||||||
| End of period | 271,071,783 | 271,071,783 | 271,071,783 | 271,071,783 | 271,071,783 | 271,071,783 |
| Average number 1) | 271,071,783 | 222,476,281 | 271,071,783 | 210,327,406 | 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
| Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year | |
|---|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Profit for the period | 274 | 46 | 566 | 111 | 874 | 419 |
| Other comprehensive income | ||||||
| Cash flow hedges | -27 | 40 | -26 | 39 | 21 | 86 |
| Hedging of net investment | -92 | 110 | 294 | -30 | 770 | 446 |
| Translation difference | 208 | -223 | -506 | 187 | -1,455 | -762 |
| Income tax relating to components of other comprehensive income |
32 | -30 | -70 | 8 | -238 | -160 |
| Other comprehensive income, net of tax | 121 | -103 | -308 | 204 | -902 | -390 |
| Total comprehensive income | 395 | -57 | 258 | 315 | -28 | 29 |
| Total profit for the period | ||||||
| - attributable to equity holders of the parent | 388 | -61 | 241 | 313 | -54 | 18 |
| - attributable to minority interest | 7 | 4 | 17 | 2 | 26 | 11 |
Published on July 21, 2010 11 (22)
| Balance Sheets | |||
|---|---|---|---|
| Group | Jun 30 | Jun 30 | Dec 31 |
| SEK M | 2010 | 2009 | 2009 |
| Property, plant and equipment | 6,012 | 7,090 | 6,603 |
| Intangible assets | 10,863 | 11,903 | 11,282 |
| Financial assets | 1,478 | 1,761 | 1,620 |
| Total non-current assets | 18,353 | 20,754 | 19,505 |
| Inventories | 3,572 | 4,030 | 3,425 |
| Current operating receivables | 6,520 | 6,582 | 5,940 |
| Current interest-bearing receivables | 203 | 119 | 78 |
| Cash and cash equivalents | 800 | 701 | 591 |
| Total current assets | 11,095 | 11,432 | 10,034 |
| Total assets | 29,448 | 32,186 | 29,539 |
| Shareholders' equity, excluding minority share | 12,363 | 12,562 | 12,267 |
| Minority share | 119 | 85 | 94 |
| Total equity | 12,482 | 12,647 | 12,361 |
| Non-current interest-bearing liabilities | 6,003 | 8,760 | 6,516 |
| Other non-current liabilities | 1,237 | 1,769 | 1,559 |
| Total non-current liabilities | 7,240 | 10,529 | 8,075 |
| Interest-bearing current liabilities | 3,077 | 2,114 | 2,529 |
| Other current liabilities | 6,649 | 6,896 | 6,574 |
| Total current liabilities | 9,726 | 9,010 | 9,103 |
| Total equity and liabilities | 29,448 | 32,186 | 29,539 |
| Specification of changes in equity | Jun 30 | Jun 30 | Dec 31 |
|---|---|---|---|
| SEK M | 2010 | 2009 | 2009 |
| Attributable to equity holders of the parent | |||
| Opening balance, January 1 | 12,267 | 10,153 | 10,153 |
| Adjustment opening balance | -9 | - | - |
| Total comprehensive income | 241 | 313 | 18 |
| Dividend | -136 | - | - |
| Reduction of share capital 1) | - | -2,078 | -2,078 |
| Bonus issue 1) | - | 2,078 | 2,078 |
| Rights issue | - | 2,169 | 2,169 |
| Transaction costs 2) | - | -73 | -73 |
| Closing balance | 12,363 | 12,562 | 12,267 |
| Attributable to minority interest | |||
| Opening balance, January 1 | 94 | 85 | 85 |
| Adjustment opening balance | 9 | - | - |
| Total comprehensive income | 17 | 2 | 11 |
| Dividend | -1 | -2 | - 2 |
| Closing balance | 119 | 85 | 94 |
| Sum total equity, closing balance | 12,482 | 12,647 | 12,361 |
1) In accordance with the proposal by the Board of Directors, with the purpose to render possible and facilitate the rights issue, the Annual General Meeting on April 23, 2009 resolved to reduce the share capital by SEK 2,078,217,003, without redemption of shares, changing the shares' quota value from SEK 25 to SEK 2. The Annual General Meeting also resolved on a bonus issue of SEK 2,078,217,003, as a measure to ensure that neither the restricted equity, nor the share capital, will be reduced.
2) Includes tax effect of 25,8 SEK M (26,3%), which is not affecting cash flow during this period.
Cash flow statements
| Group | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year |
|---|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Operating activities | ||||||
| Operating profit | 675 | 188 | 1,153 | 269 | 1,726 | 842 |
| Adjustments for items not included in cash flow: | ||||||
| Depreciation, property, plant and equipment | 220 | 235 | 440 | 473 | 895 | 928 |
| Depreciation, intangible assets | 37 | 42 | 74 | 84 | 157 | 167 |
| Impairment losses, property, plant and equipment | 1 | 20 | 1 | 25 | 17 | 41 |
| Impairment losses, intangible assets | 7 | 1 | 9 | 1 | 13 | 5 |
| Provision for restructuring costs | 49 | 71 | 76 | 80 | 305 | 309 |
| Undistributed result from part. in assoc. companies | 14 | 14 | 20 | 21 | 12 | 13 |
| 1,003 | 571 | 1,773 | 953 | 3,125 | 2,305 | |
| Interest received and other financial items | 2 | -6 | 4 | 6 | 13 | 1 5 |
| Interest paid and other financial items | -24 | -78 | -251 | -415 | -371 | -535 |
| Taxes paid | -65 | -59 | -136 | -60 | -323 | -247 |
| Cash flow from operating activities before changes in | ||||||
| working capital | 916 | 428 | 1,390 | 484 | 2,444 | 1,538 |
| Cash flow from changes in working capital: | ||||||
| Change in inventories | -117 | 487 | -317 | 736 | 103 | 1,156 |
| Change in operating receivables | -276 | 274 | -950 | 741 | -553 | 1,138 |
| Change in operating liabilities | 358 | -181 | 579 | -650 | 556 | -673 |
| Utilization of restructuring provisions | -139 | -166 | -204 | -251 | -485 | -532 |
| Cash flow from operating activities | 742 | 842 | 498 | 1,060 | 2,065 | 2,627 |
| Investing activities | ||||||
| Acquisitions | -8 | -28 | -9 | -49 | -23 | -63 |
| Disposals | -18 | -34 | -73 | -38 | -212 | -177 |
| Capital expenditure, property, plant and equipment | -150 | -190 | -253 | -363 | -560 | -670 |
| Capital expenditure in intangible assets | -12 | -17 | -19 | -37 | -54 | - 72 |
| Sale of non-current assets | 11 | 14 | 19 | 19 | 36 | 36 |
| Cash flow from investing activities | -177 | -255 | -335 | -468 | -813 | -946 |
| Financing activities | ||||||
| Rights issue | - | 2,070 | - | 2,070 | - | 2,070 |
| Change in interest-bearing investments | -196 | -476 | 123 | 68 | 740 | 685 |
| Change in interest-bearing liabilities | -5 | -1,968 | 41 | -2,782 | -1,767 | -4,590 |
| Dividend paid to shareholders | -136 | - | -136 | - | -136 | - |
| Dividend paid to minority | -1 | -2 | -1 | -2 | -1 | -2 |
| Cash flow from financing activities | -338 | -376 | 27 | -646 | -1,164 | -1,837 |
| Cash flow for the period | 227 | 211 | 190 | -54 | 88 | -156 |
| Cash and cash equivalents: | ||||||
| At beginning of the period | 558 | 501 | 591 | 749 | 701 | 749 |
| Exchange rate differences | 15 | -11 | 19 | 6 | 11 | -2 |
| Cash and cash equivalents at end of period | 800 | 701 | 800 | 701 | 800 | 591 |
Group review
| Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year | |
|---|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||||
| Net sales | 7,430 | 6,500 | 14,104 | 13,058 | 26,723 | 25,677 |
| EBITDA | 989 | 557 | 1,753 | 932 | 3,113 | 2,292 |
| Operating profit | 725 | 279 | 1,230 | 374 | 2,052 | 1,196 |
| Profit for the period | 478 | 153 | 797 | 288 | 1,295 | 786 |
| Net sales | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year |
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations | ||||||
| Trelleborg Engineered Systems | 2,872 | 2,868 | 5,420 | 5,730 | 10,859 | 11,169 |
| Trelleborg Automotive | 2,268 | 1,755 | 4,388 | 3,262 | 8,146 | 7,020 |
| Trelleborg Sealing Solutions | 1,522 | 1,129 | 2,872 | 2,405 | 5,140 | 4,673 |
| Trelleborg Wheel Systems | 795 | 782 | 1,520 | 1,732 | 2,779 | 2,991 |
| Eliminations | -27 | -34 | -96 | -71 | -201 | -176 |
| Total | 7,430 | 6,500 | 14,104 | 13,058 | 26,723 | 25,677 |
| EBITDA | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year |
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||||
| Trelleborg Engineered Systems | 387 | 280 | 625 | 490 | 1,244 | 1,109 |
| Trelleborg Automotive | 270 | 114 | 502 | 73 | 867 | 438 |
| Trelleborg Sealing Solutions | 300 | 76 | 520 | 174 | 843 | 497 |
| Trelleborg Wheel Systems | 82 | 108 | 182 | 236 | 329 | 383 |
| Other companies | -3 | -1 | -6 | -4 | -8 | -6 |
| Group items | -47 | -20 | -70 | -37 | -162 | -129 |
| Total excl. items affecting comparability | 989 | 557 | 1,753 | 932 | 3,113 | 2,292 |
| Items affecting comparability | ||||||
| Trelleborg Engineered Systems | -27 | -1 | -41 | -1 | -181 | -141 |
| Trelleborg Automotive | -20 | -3 | -21 | -9 | -31 | -19 |
| Trelleborg Sealing Solutions | 1 | -66 | -4 | -67 | -70 | -133 |
| Trelleborg Wheel Systems | -3 | -1 | -7 | -3 | -20 | -16 |
| Other | - | - | -3 | - | -3 | - |
| Total items affecting comparability | -49 | -71 | -76 | -80 | -305 | -309 |
| Total incl. items affecting comparability | 940 | 486 | 1,677 | 852 | 2,808 | 1,983 |
| EBITDA | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year |
|---|---|---|---|---|---|---|
| % | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||||
| Trelleborg Engineered Systems | 13.5 | 9.8 | 11.7 | 8.5 | 11.5 | 9.9 |
| Trelleborg Automotive | 11.7 | 6.5 | 11.3 | 2.2 | 10.5 | 6.1 |
| Trelleborg Sealing Solutions | 19.7 | 6.8 | 18.1 | 7.2 | 16.4 | 10.6 |
| Trelleborg Wheel Systems | 10.3 | 13.8 | 12.0 | 13.6 | 11.8 | 12.8 |
| Total excluding items affecting comparability | 13.3 | 8.6 | 12.4 | 7.1 | 11.6 | 8.9 |
| Including items affecting comparability | ||||||
| Trelleborg Engineered Systems | 12.6 | 9.7 | 10.9 | 8.5 | 9.9 | 8.6 |
| Trelleborg Automotive | 10.8 | 6.3 | 10.8 | 2.0 | 10.1 | 5.9 |
| Trelleborg Sealing Solutions | 19.8 | 1.0 | 18.0 | 4.4 | 15.0 | 7.8 |
| Trelleborg Wheel Systems | 10.0 | 13.6 | 11.5 | 13.4 | 11.1 | 12.3 |
| Total including items affecting comparability | 12.6 | 7.5 | 11.9 | 6.5 | 10.5 | 7.7 |
| Operating profit | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year |
|---|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||||
| Trelleborg Engineered Systems | 294 | 187 | 442 | 304 | 882 | 744 |
| Trelleborg Automotive | 175 | 11 | 312 | -132 | 478 | 34 |
| Trelleborg Sealing Solutions | 251 | 22 | 422 | 63 | 639 | 280 |
| Trelleborg Wheel Systems | 59 | 83 | 135 | 185 | 233 | 283 |
| Other companies | -4 | -2 | -7 | -5 | -10 | -8 |
| Group items | -50 | -22 | -74 | -41 | -170 | -137 |
| Total excl. items affecting comparability | 725 | 279 | 1,230 | 374 | 2,052 | 1,196 |
| Items affecting comparability | ||||||
| Trelleborg Engineered Systems | -27 | -1 | -41 | -6 | -198 | -163 |
| Trelleborg Automotive | -20 | -3 | -21 | -8 | -36 | -23 |
| Trelleborg Sealing Solutions | - | -85 | -5 | -87 | -70 | -152 |
| Trelleborg Wheel Systems | -3 | -2 | -7 | -4 | -19 | -16 |
| Other | - | - | -3 | - | -3 | - |
| Total items affecting comparability | -50 | -91 | -77 | -105 | -326 | -354 |
| Total incl. items affecting comparability | 675 | 188 | 1,153 | 269 | 1,726 | 842 |
| Operating margin, (ROS) | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year |
|---|---|---|---|---|---|---|
| % | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Continuing operations excluding items affecting comparability | ||||||
| Trelleborg Engineered Systems | 10.3 | 6.5 | 8.3 | 5.3 | 8.2 | 6.6 |
| Trelleborg Automotive | 7.5 | 0.6 | 7.0 | neg | 5.7 | 0.4 |
| Trelleborg Sealing Solutions | 16.5 | 1.9 | 14.7 | 2.6 | 12.4 | 6.0 |
| Trelleborg Wheel Systems | 7.4 | 10.6 | 8.9 | 10.7 | 8.4 | 9.5 |
| Total excl. items affecting comparability | 9.7 | 4.3 | 8.7 | 2.8 | 7.7 | 4.6 |
| Including items affecting comparability | ||||||
| Trelleborg Engineered Systems | 9.3 | 6.5 | 7.5 | 5.1 | 6.4 | 5.2 |
| Trelleborg Automotive | 6.6 | 0.4 | 6.5 | neg | 5.3 | 0.0 |
| Trelleborg Sealing Solutions | 16.5 | neg | 14.5 | neg | 11.1 | 2.8 |
| Trelleborg Wheel Systems | 7.0 | 10.4 | 8.4 | 10.5 | 7.7 | 8.9 |
| Total incl. items affecting comparability | 9.0 | 2.9 | 8.2 | 2.0 | 6.4 | 3.2 |
| Capital employed | Jun 30 | Jun 30 | Dec 31 |
|---|---|---|---|
| SEK M | 2010 | 2009 | 2009 |
| Continuing operations | |||
| Trelleborg Engineered Systems | 6,972 | 7,503 | 6,711 |
| Trelleborg Automotive | 4,109 | 4,496 | 4,162 |
| Trelleborg Sealing Solutions | 6,953 | 7,833 | 7,156 |
| Trelleborg Wheel Systems | 1,876 | 2,001 | 1,835 |
| Other companies | 46 | 56 | 48 |
| Group items | -40 | 23 | 3 |
| Provision for restructing costs and legal costs | -294 | -484 | -416 |
| Total | 19,622 | 21,428 | 19,499 |
| Return on capital employed, (ROCE) | Jul 2009 - | Jul 2008 - | Full year |
|---|---|---|---|
| % | Jun 2010 | Jun 2009 | 2009 |
| Continuing operations excluding items affecting comparability | |||
| Trelleborg Engineered Systems | 12.8 | 9.9 | 10.0 |
| Trelleborg Automotive | 11.4 | neg | 0.8 |
| Trelleborg Sealing Solutions | 9.0 | 5.4 | 3.7 |
| Trelleborg Wheel Systems | 12.3 | 16.0 | 13.9 |
| Total excluding items affecting comparability | 10.2 | 4.4 | 5.5 |
| Including items affecting comparability | |||
| Trelleborg Engineered Systems | 10.0 | 9.1 | 7.9 |
| Trelleborg Automotive | 10.8 | neg | 0.2 |
| Trelleborg Sealing Solutions | 8.0 | 4.2 | 1.7 |
| Trelleborg Wheel Systems | 11.3 | 15.4 | 13.3 |
| Total including items affecting comparability | 8.7 | 0.8 | 4.0 |
| Cash flow report | Capital | Sold non | Change in | Total cash flow | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA 1) | expenditure | current assets | working capital | Jan - Jun | Jan - Jun | Jul 2009 - | |||||
| SEK M | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | Jun 2010 |
| Trelleborg Engineered Systems | 660 | 536 | -102 | -149 | 2 | 12 | -472 | 388 | 88 | 787 | 999 |
| Trelleborg Automotive | 523 | 93 | -76 | -127 | 1 | 3 | -16 | 112 | 432 | 81 | 802 |
| Trelleborg Sealing Solutions | 529 | 186 | -40 | -44 | 9 | 3 | -129 | 140 | 369 | 285 | 867 |
| Trelleborg Wheel Systems | 188 | 245 | -51 | -80 | 1 | 1 | -80 | 159 | 58 | 325 | 253 |
| Other companies | -6 | -4 | - | - | 6 | - | -1 | -1 | -1 | -5 | -4 |
| Group items | -121 | -103 | -3 | - | - | - | 10 | 29 | -114 | -74 | -263 |
| Operating cash flow | 1,773 | 953 | -272 | -400 | 19 | 19 | -688 | 827 | 832 | 1,399 | 2,654 |
| Utilization of restructuring provisions | -204 | -251 | -485 | ||||||||
| Dividend paid to minority | -1 | -2 | -1 | ||||||||
| Financial items | -247 | -409 | -358 | ||||||||
| Paid tax | -136 | -60 | -323 | ||||||||
| Free cash flow | 244 | 677 | 1,487 | ||||||||
| Acquisitions | -9 | -49 | -23 | ||||||||
| Disposals | -73 | -38 | -212 | ||||||||
| Dividend paid to shareholders | -136 | - | -136 | ||||||||
| Rights issue | - | 2,070 | - | ||||||||
| Sum net cash flow | 26 | 2,660 | 1,116 |
1) Excluding undistributed result from associated companies and allocated group expenses
| Acquisitions | Jan - Jun | Jan - Jun |
|---|---|---|
| SEK M | 2010 | 2009 |
| Purchase price | 9 | 24 |
| Acquisition expenses 1) | - | 2 5 |
| Net realizable value of acquired assets | 5 | 24 |
| Goodwill | 4 | 2 5 |
| Acquired assets and liabilities: | ||
| Property, plant and equipment | 3 | 19 |
| Intangible assets | 2 | - |
| Associated companies | - | 2 |
| Operating liabilities | - | 3 |
| Total | 5 | 2 4 |
1) Acquisitions costs relating to previous years acquisitions.
Key ratios per quarter - Group
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | |
|---|---|---|---|---|---|---|---|---|---|
| MSEK | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
| Continuing operations | |||||||||
| Net sales | 7,430 | 6,674 | 6,389 | 6,230 | 6,500 | 6,558 | 7,048 | 7,139 | 7,820 |
| Operating profit | 675 | 478 | 192 | 381 | 188 | 81 | -496 | 405 | 614 |
| Profit for the period | 440 | 299 | 89 | 235 | 86 | 125 | -558 | 227 | 374 |
| Operating cash flow | 818 | 14 | 886 | 936 | 958 | 441 | 603 | 656 | 778 |
| Items aff. comparability in operating profit | -50 | -27 | -218 | -31 | -91 | -14 | -579 | -104 | -137 |
| Operating profit, excl. items aff. comp. | 725 | 505 | 410 | 412 | 279 | 95 | 83 | 509 | 751 |
| EBITDA, %, excl. items aff. comparability | 13.3 | 11.5 | 10.6 | 10.8 | 8.6 | 5.7 | 5.2 | 10.6 | 12.5 |
Net sales by business area
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | |
|---|---|---|---|---|---|---|---|---|---|
| MSEK | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
| Continuing operations | |||||||||
| Trelleborg Engineered Systems | 2,872 | 2,548 | 2,699 | 2,740 | 2,868 | 2,862 | 3,244 | 2,957 | 3,171 |
| Trelleborg Automotive | 2,268 | 2,120 | 1,958 | 1,800 | 1,755 | 1,507 | 1,581 | 1,876 | 2,134 |
| Trelleborg Sealing Solutions | 1,522 | 1,350 | 1,164 | 1,104 | 1,129 | 1,276 | 1,361 | 1,480 | 1,606 |
| Trelleborg Wheel Systems | 795 | 725 | 629 | 630 | 782 | 950 | 903 | 866 | 977 |
| Eliminations | -27 | -69 | -61 | -44 | -34 | -37 | -41 | -40 | -68 |
| Total | 7,430 | 6,674 | 6,389 | 6,230 | 6,500 | 6,558 | 7,048 | 7,139 | 7,820 |
EBITDA % by business area
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | |
|---|---|---|---|---|---|---|---|---|---|
| MSEK | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
| Continuing operations excluding items affecting comparability | |||||||||
| Trelleborg Engineered Systems | 13.5 | 9.6 | 10.9 | 11.8 | 9.8 | 7.2 | 8.7 | 11.5 | 13.7 |
| Trelleborg Automotive | 11.7 | 10.8 | 10.1 | 8.9 | 6.5 | neg | neg | 3.9 | 5.8 |
| Trelleborg Sealing Solutions | 19.7 | 16.3 | 15.0 | 13.5 | 6.8 | 7.7 | 14.0 | 18.3 | 20.5 |
| Trelleborg Wheel Systems | 10.3 | 13.8 | 11.3 | 11.9 | 13.8 | 13.5 | 9.4 | 12.0 | 13.4 |
| Total | 13.3 | 11.5 | 10.6 | 10.8 | 8.6 | 5.7 | 5.2 | 10.6 | 12.5 |
Operating profit by business area
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | |
|---|---|---|---|---|---|---|---|---|---|
| MSEK | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
| Continuing operations excluding items affecting comparability | |||||||||
| Trelleborg Engineered Systems | 294 | 148 | 204 | 236 | 187 | 117 | 192 | 260 | 365 |
| Trelleborg Automotive | 175 | 137 | 101 | 65 | 11 | -143 | -258 | -24 | 37 |
| Trelleborg Sealing Solutions | 251 | 171 | 123 | 94 | 22 | 41 | 138 | 221 | 282 |
| Trelleborg Wheel Systems | 59 | 76 | 46 | 52 | 83 | 102 | 60 | 84 | 110 |
| Other companies | -4 | -3 | -1 | -2 | -2 | -3 | -2 | -1 | -3 |
| Group items | -50 | -24 | -63 | -33 | -22 | -19 | -47 | -31 | -40 |
| Total | 725 | 505 | 410 | 412 | 279 | 95 | 83 | 509 | 751 |
Income Statements
| Group | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 |
|---|---|---|---|---|---|---|---|---|---|
| MSEK | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
| Continuing operations | |||||||||
| Net sales | 7,430 | 6,674 | 6,389 | 6,230 | 6,500 | 6,558 | 7,048 | 7,139 | 7,820 |
| Cost of goods sold | -5,366 | -4,898 | -4,740 | -4,611 | -4,927 | -5,036 | -5,392 | -5,318 | -5,695 |
| Gross profit | 2,064 | 1,776 | 1,649 | 1,619 | 1,573 | 1,522 | 1,656 | 1,821 | 2,125 |
| Selling expenses | -572 | -546 | -589 | -531 | -584 | -625 | -679 | -564 | -578 |
| Administrative expenses | -635 | -598 | -631 | -555 | -614 | -662 | -741 | -664 | -748 |
| Research and development costs | -150 | -146 | -142 | -136 | -138 | -154 | -142 | -135 | -137 |
| Other operating income/costs | -35 | -5 | -98 | -21 | -49 | -3 | -594 | -58 | -56 |
| Share of profit or loss in assoc. companies | 3 | -3 | 3 | 5 | 0 | 3 | 4 | 5 | 8 |
| Operating profit | 675 | 478 | 192 | 381 | 188 | 81 | -496 | 405 | 614 |
| Financial income and expenses | -50 | -69 | -70 | -85 | -106 | -131 | -143 | -121 | -117 |
| Profit before tax | 625 | 409 | 122 | 296 | 82 | -50 | -639 | 284 | 497 |
| Tax | -185 | -110 | -33 | -61 | 4 | 175 | 81 | -57 | -123 |
| Profit for the period | 440 | 299 | 89 | 235 | 86 | 125 | -558 | 227 | 374 |
| Discontinued operations | |||||||||
| Net sales | 384 | 380 | 367 | 329 | 367 | 319 | 295 | 388 | 506 |
| Operating profit | -192 | 23 | 5 | -10 | -29 | -35 | -304 | -142 | -277 |
| Profit before tax | -191 | 22 | 6 | -8 | -36 | -43 | -314 | -151 | -285 |
| Profit for the period | -166 | -7 | 3 | -19 | -40 | -60 | -284 | -125 | -201 |
| Group, total | |||||||||
| Net sales | 7,814 | 7,054 | 6,756 | 6,559 | 6,867 | 6,877 | 7,343 | 7,527 | 8,326 |
| Operating profit | 483 | 501 | 197 | 371 | 159 | 46 | -800 | 263 | 337 |
| Pofit before tax | 434 | 431 | 128 | 288 | 46 | -93 | -953 | 133 | 212 |
| Profit for the period | 274 | 292 | 92 | 216 | 46 | 65 | -842 | 102 | 173 |
| - attrib. to equity holders of the parent | 269 | 285 | 87 | 213 | 44 | 65 | -845 | 102 | 171 |
| - attributable to minority interest | 5 | 7 | 5 | 3 | 2 | 0 | 3 | 0 | 2 |
| Earnings per share | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 |
| SEK | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
| Continuing operations | 1.60 | 1.10 | 0.30 | 0.90 | 0.35 | 0.65 | -2.85 | 1.15 | 1.90 |
| Discontinued operations | -0.60 | -0.05 | 0.05 | -0.05 | -0.20 | -0.30 | -1.45 | -0.65 | -1.00 |
| Group, total | 1.00 | 1.05 | 0.35 | 0.85 | 0.15 | 0.35 | -4.30 | 0.50 | 0.90 |
Parent company
Income Statements
| Parent company | Apr - Jun | Apr - Jun | Jan - Jun | Jan - Jun | Jul 2009 - | Full year |
|---|---|---|---|---|---|---|
| SEK M | 2010 | 2009 | 2010 | 2009 | Jun 2010 | 2009 |
| Administrative expenses | -87 | -84 | -158 | -153 | -394 | -389 |
| Other operating income | 10 | 158 | 27 | 175 | 141 | 289 |
| Operating profit | -77 | 74 | -131 | 22 | -253 | -100 |
| Financial income and expenses | 924 | -27 | 827 | -187 | 498 | -516 |
| Profit before tax | 847 | 47 | 696 | -165 | 245 | -616 |
| Tax | 46 | 11 | 84 | 66 | 162 | 144 |
| Profit for the period | 893 | 58 | 780 | -99 | 407 | -472 |
Balance Sheets Parent company Jun 30 Jun 30 Dec 31 SEK M 2010 2009 2009 Property, plant and equipment 28 29 29 Intangible assets 10 11 9 Financial assets 34,615 33,199 34,244 Total non-current assets 34,653 33,239 34,282 Current operating receivables 32 90 52 Current interest-bearing receivables 1,014 1,624 1,665 Cash and cash equivalents - - - Total current assets 1,046 1,714 1,717 Total assets 35,699 34,953 35,999 Shareholders' equity 11,654 10,663 11,005 Total equity 11,654 10,663 11,005 Non-current interest-bearing liabilities 52 51 51 Other non-current liabilities 3 3 6 Total non-current liabilities 55 54 57 Interest-bearing current liabilities 23,907 24,164 24,845 Other current liabilities 83 72 92 Total current liabilities 23,990 24,236 24,937 Total equity and liabilities 35,699 34,953 35,999
Board's assurance and Auditors' report
This interim report presents a fair overview of the operations, position and earnings of the Parent Company and the Group and describes significant risks and uncertainty factors that the Parent Company and the companies included in the Group face. Board's assurance Trelleborg, July 21, 2010 Trelleborg AB (publ) Anders Narvinger Heléne Bergquist Hans Biörck Chairman of the Board Board member Board member Claes Lindqvist Sören Mellstig Nina Udnes Tronstad Board member Board member Board member Bo Risberg Mikael Nilsson Alf Fredlund Board member Board member Board member Karin Linsjö Peter Nilsson Birgitta Håkansson Board member Board member and Deputy Board member President and CEO Auditors report We have reviewed this report for the period January 1, 2010 to June 30, 2010 for Trelleborg AB. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the Swedish Standard on Review Engagements SÖG 2410, Review of Interim Reports Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially smaller in scope than an audit conducted in accordance with the Standards on Auditing in Sweden (RS) and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain such assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report has not been prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Trelleborg, July 21, 2010 PricewaterhouseCoopers AB
Göran Tidström Eric Salander Auditor in charge
Authorized Public Accountant Authorized Public Accountant
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, %
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.
Average number of employees
Average number of employees during the year based on hours worked. Does not include insourced staff.
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/EBIT
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.
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 telephone conference on July 21 at 9:30 a.m.
A telephone conference will be held on July 21 at 9:30 a.m. To participate in the telephone conference, call +46 (0)8-5051 3643 or +44 20 7806 1968 and state the code 4651733 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
Interim report July-September October 28 Capital Markets Day (Stockholm) November 24 Year-end report February 15, 2011
For further information, please contact: Investors/analysts
Conny Torstensson, VP Investor Relations Tel: +46 (0)410 – 670 70 Mobile: +46 (0)734 – 08 70 70. E-mail: [email protected]
Media
Mikael Sjöblom, VP Media Relations Tel: +46 (0)410 – 670 15 Mobile: +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. Fax: +46 (0)410-427 63
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, July 21, 2010 at 7:45 a.m.