Trelleborg — Interim / Quarterly Report 2017

Jul 20, 2017

Interim report April-June 2017

market trend Continued good

• Net sales for the second quarter of 2017 rose 26 percent to SEK 8,265 M (6,544). Organic sales increased 3 percent. Excluding project deliveries, the corresponding increase was 5 percent.
• Effects of structural changes made a positive contribution of 20 percent to net sales, with the acquisition of CGS accounting for the main part of this increase.
• EBIT, excluding items affecting comparability, rose 21 percent to SEK 1,089 M (899), equivalent to an EBIT margin of 13.2 percent (13.7).
• Items affecting comparability for the quarter were a negative SEK 76 M (neg: 107), in line with information previously communicated.
• Earnings per share for continuing operations excluding items affecting comparability totaled SEK 2.92 (2.31), up 26 percent
• The second quarter of 2016 included net profit for discontinuing operations of SEK 4,369 M related to Vibracoustic.
• Operating cash flow amounted to SEK 1,096 M (835), up 31 percent. The cash conversion ratio for the most recent 12 month period was 98 percent (83).

SEK M	Q2 2017	Q2 2016	Change, %	6M 2017	6M 2016	Change, %
Net sales	8,265	6,544	26	16,563	12,639	31
Organic sales, %	3	-6		3	-5
EBITA, excluding items affecting comparability	1,163	935	24	2,390	1,804	32
EBITA margin, %	14.0	14.3		14.4	14.3
EBIT, excluding items affecting comparability	1,089	899	21	2,243	1,740	29
EBIT margin, %	13.2	13.7		13.5	13.8
Items affecting comparability ¹	-76	-107	29	290	-222	231
EBIT	1,013	792	28	2,533	1,518	67
Profit before tax	957	729	31	2,426	1,408	72
Net profit, discontinuing operations ²	-	4,369		-	4,369
Net profit, Group	737	4,906	-85	1,966	5,435	-64
Earnings per share, SEK
Continuing operations, excluding items affecting comparability	2.92	2.31	26	6.04	4.54	33
Continuing operations	2.72	1.98	37	7.25	3.93	84
Group	2.72	18.10	-85	7.25	20.05	-64
Operating cash flow ³	1,096	835	31	1,513	1,063	42

¹ 6M 2017 includes capital gain from the divestment of the compounding operation in Lesina, Czech Republic, with SEK 472 M, and restructuring expenses of SEK -182 M.

² Relates to Vibracoustic. ³ Continuing operations.

market trend Continued good

"During the second quarter of the year, sales increased by 26 percent, of which acquired units contributed 20 percentage points. Organic sales rose 3 percent. Excluding project businesses, comprising mainly offshore oil & gas-related operations – which are currently experiencing a difficult market situation – organic sales rose 5 percent, driven by improved demand in most market segments and in all geographic regions.

General industry continued to develop well in all regions, and continued highly favorable organic trend was noted in Asia. Demand for our tires for both the agricultural sector and industrial and construction machinery is continuing to grow. Following a scenario during which the prices for the majority of raw materials dramatically skyrocketed over the course of a few months, these have subsequently fallen to approximately the same levels as during last summer. Our premium position has limited the impact these turbulent movements had on our earnings. We are continuing to work with pricing to offset the effect of this, and the outcome moving forward is largely dependent on how the players in the various stages of the market react.

The market for our operations in oil & gas remains weak, which mainly affects the Trelleborg Offshore & Construction business area, which reported a minor loss for the quarter. The market situation is similar to the first quarter, with intense price pressure for the small number of outstanding project transactions. However, this business had only a minor impact on our quarterly earnings from a Group perspective. We are continuing to adapt the oil & gas business to the lower level of activity, and these efforts are aimed at building a long-term attractive structure that will be ready when the market outlook improves.

We have completed a number of acquisitions in past year and we are working hard to ensure that the integration of these new units is carried out in a long-term and structured fashion. This could mean that we may decide to recognize costs in individual quarters aimed at generating synergies and thus providing scope for improved earnings in the future. It is also of the utmost importance that, during the integration work, we do not lose focus on the daily sales work, and I believe that we have been successful in that regard.

We have talked a lot about digitalization recently, and I can't emphasize enough how important it is that we are at the forefront of our industry to respond to the changes brought about by new technology in terms of how we do business with customers. A key word we use internally is 'easy. We want to make it as easy as possible for customers to do business with Trelleborg. If we also combine this with our strong niche positions, and continue to offer the highest product quality and smartest comprehensive solutions, then we as a Group have an exciting future ahead of us.

In summary, we saw a general improvement in the demand situation in most of our segments during the quarter. For the third quarter, our overall assessment is that demand will be in line with the second quarter of the year. We are continuing to carefully monitor economic developments and maintain a high level of preparedness to manage fluctuating market conditions."

Peter Nilsson, President and CEO

Market outlook for the third quarter 2017

Demand is expected to be in line with the second quarter of 2017, adjusted for seasonal variations.

Market outlook from the interim report published on April 27, 2017, relating to the second quarter of 2017 Demand is expected to be in line with, or slightly higher than, the first quarter of 2017, adjusted for seasonal variations.

Net sales 2017 Second quarter

SEK M, growth	Q2 2017	Q2 2016	6M 2017	6M 2016	R12 2017	12M 2016
Net sales	8,265	6,544	16,563	12,639	31,069	27,145
Change total, %	26	0	31	-2		9
Organic sales, %	3	-6	3	-5		-5
Structural change, %	20	9	25	5		15
Currency effects, %	3	-3	3	-2		-1

Net sales for the second quarter of 2017 amounted to SEK 8,265 M (6,544). Organic sales increased by 3 percent during the quarter, impacted by improved demand in most market segments. Effects from structural changes contributed a positive 20 percent, with the acquisition of CGS accounting for the main part of this increase. Exchange rate effects accounted for a positive 3 percent contribution to sales compared with the year-earlier period.

Excluding project deliveries¹:

The Group's organic sales increased 5 percent year on year. Organic sales in Western Europe rose 3 percent compared with the year-earlier period. In the rest of Europe, organic sales increased by 6 percent. Organic sales rose by 5 percent in North America, while an increase of 6 percent was noted in South & Central America. Asia and other markets reported an increase in organic sales of 11 percent.

¹ Project deliveries refer to the whole of Trelleborg Offshore & Construction and minor parts of Trelleborg Industrial Solutions operations. Overall, project deliveries account for approximately 10 percent of the Group's net sales.

Result

SEK M	Q2 2017	Q2 2016	Change, %	6M 2017	6M 2016	Change, %
EBITA, excluding items affecting comparability	1,163	935	24	2,390	1,804	32
EBITA margin, %	14.0	14.3		14.4	14.3
EBIT, excluding items affecting comparability	1,089	899	21	2,243	1,740	29
EBIT margin, %	13.2	13.7		13.5	13.8
Items affecting comparability ¹	-76	-107	29	290	-222	231
EBIT	1,013	792	28	2,533	1,518	67
Financial income and expenses	-56	-63	11	-107	-110	3
Profit before tax	957	729	31	2,426	1,408	72
Taxes	-220	-192	-15	-460	-342	-35
Net profit, discontinuing operations ²	-	4,369		-	4,369
Net profit, Group	737	4,906	-85	1,966	5,435	-64

¹ 6M 2017 includes capital gain from the divestment of the compounding operation in Lesina, Czech Republic, with SEK 472 M, and restructuring expenses of SEK -182 M. ² Relates to Vibracoustic.

EBITA, excluding items affecting comparability, totaled SEK 1,163 M (935), corresponding to a margin of 14.0 percent (14.3).

EBIT, excluding items affecting comparability, amounted to SEK 1,089 M (899) for the second quarter, a year-on-year increase of 21 percent. The total exchange rate effects on EBIT, excluding items affecting comparability, from the translation of foreign subsidiaries had a positive impact of SEK 37 M on earnings compared with the year-earlier period. The EBIT margin, excluding items affecting comparability, amounted to 13.2 percent (13.7).

The integration of operations acquired continued during the quarter. The acquired operations performed well and contributed positively to the Group's earnings. EBIT was charged with amortization of surplus values totaling SEK 74 M, an increase of SEK 38 M compared with the year-earlier period, primarily related to completed acquisitions and principally in Trelleborg Wheel Systems.

The quarter was charged with items affecting comparability amounting to an expense of SEK 76 M (expense: 107).

EBIT for the quarter, including items affecting comparability, amounted to SEK 1,013 M (792), up 28 percent.

The net financial expense was SEK 56 M (expense: 63), corresponding to an interest rate of 1.9 percent (2.3).

Comparative figures in the year-earlier period for net profit in discontinuing operations related to Vibracoustic.

Net profit for the Group totaled SEK 737 M (4,906). Excluding items affecting comparability, the tax rate for the quarter was 23 percent (25), impacted by a favorable country mix.

Return on capital employed

%	R12 2017	R12 2016	12M 2016
Excluding items affecting comparability	10.6	13.6	11.3
Including items affecting comparability	11.0	11.9	10.0

Capital employed for continuing operations increased year on year to SEK 37,922 M (35,663).

comparability, was 10.6 percent (13.6), impacted by acquisitions.

The return on capital employed, excluding items affecting

Cash flow

SEK M	Q2 2017	Q2 2016	Change, %	6M 2017	6M 2016	Change, %
EBITDA, operating profit before depreciation	1,416	1,127	26	2,894	2,172	33
Capital expenditure	-247	-210	-18	-416	-404	-3
Sold non-current assets	6	4		7	13
Change in working capital	-71	-84		-962	-716
Dividend from associated companies	1	1		1	1
Non cash-flow affecting items	-9	-3		-11	-3
Operating cash flow	1,096	835	31	1,513	1,063	42
Cash impact from items affecting comparability	-56	-122		-113	-185
Financial items	-35	-4		-115	-100
Paid tax	-220	-147		-419	-249
Free cash flow	785	562	40	866	529	64
Acquisitions	-30	-11,801		-104	-11,981
Disposed/discontinuing operations ¹	-	0		649	0
Dividend - equity holders of the parent company	-1,152	-1,084		-1,152	-1,084
Sum net cash flow	-397	-12,323	97	259	-12,536	102

¹ Relates to divestment of compounding operation in Lesina, Czech Republic.

Operating cash flow during the second quarter amounted to SEK 1,096 M (835). A higher year-on-year EBITDA had a positive impact on cash flow, while the change in working capital during the period was on a par with the preceding year. The cash conversion ratio for the most recent 12-month period was 98 percent (83).

Acquisitions negatively impacted cash flow in the amount of SEK 30 M (neg: 11,801). The second quarter of 2016 included the acquisition of CGS.

The net cash flow amounted to a negative SEK 397 M (neg: 12,323) following deduction for a dividend of SEK 1,152 M (deduction: 1,084).

Free cash flow amounted to SEK 785 M (562).

Net debt

Change in net debt, SEK M	6M 2017	6M 2016	12M 2016
Net debt, opening balance	-12,125	-6,282	-6,282
Net cash flow for the period	259	-12,536	-5,931
Exchange rate differences	312	-169	-597
Receivable related to the divestment of Vibracoustic	-	6,900	685
Net debt, closing balance	-11,554	-12,087	-12,125
Debt/equity ratio, %	45	52	48
Net debt/EBITDA
Continuing operations, excluding items affecting comparability	2.2	2.9	2.7
Continuing operations, including items affecting comparability	2.1	3.2	2.9
Total Group	2.1	1.5	1.4

Since the beginning of the year, net debt has decreased by SEK 571 M, affected by net cash flow for the year and positive exchange rate differences.

The debt/equity ratio at the end of the period was 45 percent (52).

Net debt in relation to EBITDA, excluding items affecting comparability, amounted to 2.2 (2.9). The ratio for the Group as a whole was 2.1 (1.5).

Return on equity

%	R12 2017	R12 2016	12M 2016
Continuing operations, excluding items affecting comparability	11.8	11.0	11.4
Continuing operations, including items affecting comparability	12.7	9.6	10.1
Total Group ¹	12.7	31.8	30.1

¹ 2016 key figures include the capital gain from the disposal of Vibracoustic.

Shareholders' equity for the Group at the close of the period amounted to SEK 25,939 M (25,137 at January 1, 2017). Equity per share amounted to SEK 96 (86), up 12 percent. The equity/assets ratio was 53 percent (44). The total return on

shareholders' equity for the Group was 12.7 percent (31.8), with the year-earlier period being positively affected by the capital gain in connection with the divestment of Vibracoustic.

Earnings per share

Earnings per share, SEK	Q2 2017	Q2 2016	6M 2017	6M 2016	R12 2017	12M 2016
Continuing operations	2.72	1.98	7.25	3.93	11.50	8.18
Discontinuing operations	0.00	16.12	0.00	16.12	0.00	16.12
Group, total	2.72	18.10	7.25	20.05	11.50	24.30
Continuing operations, excluding items affecting comparability	2.92	2.31	6.04	4.54	10.73	9.23

Earnings per share for continuing operations excluding items affecting comparability during the second quarter totaled SEK 2.92 (2.31).

For the Group in total, earnings per share amounted to

0 8,000 16,000 24,000 32,000 0 2,500 5,000 7,500 10,000 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Net sales, SEK M quarter (LHS) R12 (RHS)

EBIT excl. items affecting comparability, SEK M / EBIT %, R12

January-June 2017

Net sales for the first six months of 2017 totaled SEK 16,563 M (12,639), up 31 percent year on year.

EBIT for the first six months of 2017 amounted to SEK 2,533 M (1,518), which includes a capital gain of SEK 472 M from the divestment of the compounding operation in Lesina in the Czech Republic.

The financial net expense was SEK 107 M (expense: 110), corresponding to an average interest rate of 1.8 percent (2.4).

Significant events during the quarter

Acquisition of manufacturer of advanced composite components. Trelleborg Sealing Solutions signed an agreement to acquire the U.S.-based privately-owned Automated Dynamics that specializes in the manufacturing of advanced composite components for particularly demanding applications. These composites are a strategic, adjacent technology for Trelleborg with high potential in a multiple of industries such as aerospace and chemical applications, and in the long term also for other markets. Completion of the transaction is subject to the approval of the relevant authorities.

Profit before tax totaled SEK 2,426 M (1,408).

The first six months of 2016 included net profit for discontinuing operations relating to Vibracoustic in the amount of SEK 4,369 M.

Net profit for the Group totaled SEK 1,966 M (5,435). Total earnings per share for the Group were SEK 7.25

(20.05).

The company is located in Niskayuna, New York. Sales amounted to approximately SEK 65 M in 2016. This bolt-on acquisition is part of Trelleborg's strategy to strengthen its positions in attractive market segments.

The transaction is expected to be finalized in the third quarter of 2017.

The press release was published on June 23, 2017.

Significant events after the close of the period

No significant events were reported after the close of the period.

Risk management

Trelleborg serves a broad range of customers in a variety of market segments and niches. Sales are made to approximately 150 countries worldwide and the Group has manufacturing operations at 120 production units in around 50 countries. Although the business is diversified, deploying several business models and operating a number of production units, and has an effective underlying spread of financial risks, a number of risks remain.

Trelleborg has identified nine major risks in five areas. These include risks that may result in damage or loss with substantial impact on the entire Group and therefore justify management of the risk exposure at Group level.

For information regarding the Group's risks, risk exposure and risk management, refer to the latest Trelleborg Annual Report, www.trelleborg.com and the information published in this interim report.

Board of Directors' assurance

This interim report provides a fair overview of the operations, position and results of the Parent Company and the Group, and describes material risks and uncertainties faced by the Parent Company and the companies that are included in the Group.

Trelleborg, July 20, 2017

Trelleborg AB (publ)
Hans Biörck	Gunilla Fransson
Board Member	Board Member
Peter Nilsson	Anne Mette Olesen
Board Member and President/CEO	Board Member
Susanne Pahlén Åklundh
Board Member
Peter Larsson	Mikael Nilsson
Employee representative	Employee representative

This report has been prepared in accordance with IAS 34 Interim Financial Reporting and the applicable rules of the Swedish Annual Accounts Act. The Parent Company applies recommendation RFR 2, Accounting for Legal Entities of the Swedish Financial Reporting Board and Chapter 9 of the Swedish Annual Accounts Act, Interim Report. 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.

New and amended standards applied from January 1, 2017

New and amended standards are not considered to have had a material impact on the Group's or Parent Company's earnings or financial position.

This report was not subject to special review by the company's auditor.

Trelleborg Coated Systems is a leading global supplier of unique customer solutions for polymer-coated fabrics deployed in several industrial applications.

Excluding items affecting comparability, SEK M	Q2 2017	Q2 2016	Change, %	6M 2017	6M 2016	Change, %
Net sales	644	628	3	1,318	1,259	5
Change total, %	3	-7		5	-7
Organic sales, %	-3	-5		0	-6
Structural change, %	-	-		-	-
Currency effects, %	6	-2		5	-1
EBIT	69	86	-20	141	162	-13
EBIT, %	10.7	13.7		10.7	12.9

Additional key ratios on pages 18 - 19

Organic sales for the quarter declined by 3 percent year on year.

Coated fabrics declined compared with the year-earlier period, impacted by lower demand in individual market segments. Demand from general industry and the aerospace industry was generally favorable, while sales to the automotive industry demonstrated a more subdued trend.

Printing blankets noted slightly lower organic sales, with

sales to Europe and North and South America showing weaker development at the same time as Asia was more stable. EBIT and EBIT margin declined compared with the corresponding period in 2016, with production disturbances in one of the business area's units in North America continuing to have a negative impact. Exchange rate effects from the translation of foreign subsidiaries had a positive impact of SEK 6 M on earnings compared with the year-earlier period.

Trelleborg Industrial Solutions is a leading supplier of polymer-based critical solutions in such industrial application areas as selected hose and sealing systems and antivibration solutions for rail vehicles, vessels and industrial equipment.

Excluding items affecting comparability, SEK M	Q2 2017	Q2 2016	Change, %	6M 2017	6M 2016	Change, %
Net sales ¹	1,468	1,250	17	2,896	2,459	18
Change total, %	17	-6		18	-6
Organic sales, %	2	-5		3	-4
Structural change, %	12	2		13	1
Currency effects, %	3	-3		2	-3
EBIT ¹	168	143	17	328	261	26
EBIT, %	11.4	11.4		11.3	10.6

Additional key ratios on pages 18 - 19

¹ Certain operations previously reported in the Trelleborg Industrial Solutions business area have, January 1, 2017 been transferred to the Trelleborg Sealing Solutions business area. The previous year's key ratios have been adjusted. Total turnover moved from Trelleborg Industrial Solutions amounted to SEK 269 M for the full year 2016 and for EBIT SEK 16 M.

Organic sales for the quarter increased 2 percent year on year. Sales to most market segments increased, although the favorable trend was hampered by fewer oil & gas-related deliveries. Sales to general industry and the automotive industry rose, while deliveries to the construction-related industry were unchanged. Europe, North America and Asia reported higher organic sales.

EBIT increased year on year due to higher organic sales and contributions from acquired units. The EBIT margin was

maintained at the same level as in the year-earlier period. Exchange rate effects from the translation of foreign subsidiaries had a positive impact of SEK 4 M on earnings compared with the year-earlier period.

The work on strengthening our position within antivibration outside the light vehicles segment continues, where, among other things, the integration of the previously acquired Schwab Vibration Control, is proceeding well and according to plan.

Trelleborg Offshore & Construction is a leading global project supplier of polymer-based critical solutions deployed in highly demanding offshore oil & gas and infrastructure construction environments.

Excluding items affecting comparability, SEK M	Q2 2017	Q2 2016	Change, %	6M 2017	6M 2016	Change, %
Net sales	775	835	-7	1,529	1,737	-12
Change total, %	-7	-29		-12	-20
Organic sales, %	-9	-30		-14	-22
Structural change, %	-	5		-	6
Currency effects, %	2	-4		2	-4
EBIT	-19	26	-173	-16	49	-133
EBIT, %	-2.5	3.1		-1.1	2.8

Additional key ratios on pages 18 - 19

Organic sales for the quarter declined by 9 percent year on year. The decline was mainly the result of fewer project transactions in the offshore oil & gas segment as well as lower sales in the infrastructure construction segment.

EBIT and EBIT margin were negative during the quarter on account of fewer deliveries and intensified competition for outstanding project businesses. Exchange rate effects from the translation of foreign subsidiaries had a negative impact of SEK 2 M on earnings compared with the year-earlier period.

The market price of oil remains at a level that confirms a scenario of continued uncertainty moving forward. The business area's efforts to proactively adapt the operation are continuing and aim to build a long-term attractive structure that will be ready when the market outlook improves.

Trelleborg Sealing Solutions is a leading global supplier of polymer-based critical sealing solutions deployed in demanding general industry, light vehicle and aerospace environments.

Excluding items affecting comparability, SEK M	Q2 2017	Q2 2016	Change, %	6M 2017	6M 2016	Change, %
Net sales ¹	2,596	2,176	19	5,219	4,360	20
Change total, %	19	-1		20	-3
Organic sales, %	6	1		8	-1
Structural change, %	9	0		8	0
Currency effects, %	4	-2		4	-2
EBIT ¹	611	512	19	1,229	1,013	21
EBIT, %	23.5	23.5		23.5	23.2

Additional key ratios on pages 18 - 19

¹ Certain operations previously reported in the Trelleborg Industrial Solutions business area have, January 1, 2017 been transferred to the Trelleborg Sealing Solutions business area. The previous year's key ratios have been adjusted. Total turnover moved to Trelleborg Sealing Solutions amounted to SEK 212 M for the full year 2016 and for EBIT SEK 16 M.

Organic sales for the quarter increased by 6 percent year on year. Sales increased in all geographic regions.

Deliveries to general industry increased in all geographic regions, but primarily in Asia. The positive sales trend to the automotive industry continued during the quarter, driven by stronger performance in Europe and Asia. Deliveries to the aerospace industry were also satisfactory, with sales to North America and Asia displaying favorable growth, at the same time as Europe demonstrated a mixed trend among various subsegments.

EBIT increased compared with the corresponding period in 2016, primarily due to the organic sales growth as well as

acquisitions. The EBIT margin remained at the same level as in the preceding year, despite consolidation of units with lower margins. Exchange rate effects from the translation of foreign subsidiaries had a positive impact of SEK 18 M on earnings compared with the year-earlier period.

During the quarter, an agreement was signed to acquire a company specialized in the manufacture of advanced composite components for particularly demanding applications. These composites have high potential for Trelleborg in several industries, including aerospace and chemical applications, as well as other markets in the long term. Refer to page 7.

Trelleborg Wheel Systems is a leading global supplier of tires and complete wheels for agricultural and forestry machines, materials handling and construction vehicles and two-wheeled vehicles.

Excluding items affecting comparability, SEK M	Q2 2017	Q2 2016	Change, %	6M 2017	6M 2016	Change, %
Net sales	2,360	1,472	60	4,688	2,616	79
Change total, %	60	30		79	16
Organic sales, %	8	1		8	2
Structural change, %	48	32		67	16
Currency effects, %	4	-3		4	-2
EBIT	278	186	49	561	342	64
EBIT, %	11.8	12.6		12.0	13.1

Additional key ratios on pages 18 - 19

Organic sales for the quarter increased 8 percent year on year. Sales of agricultural tires increased to both OEMs and the aftermarket in all geographic regions. Sales of tires for materials handling vehicles and construction equipment increased slightly during the quarter. Sales increased in both Europe and North America.

EBIT increased year on year on account of the consolidation of the CGS tire operation as of June 1, 2016, and higher volumes in primarily agricultural tires.

The significant fluctuations in raw material prices in the first six months had a negative impact on earnings and the EBIT margin. Efforts to compensate for this are underway, but were unable to fully offset the effects in the second quarter. In the late spring and summer, raw material prices have fallen

significantly, which has created uncertainty concerning the strategies of the various operators in the market. Exchange rate effects from the translation of foreign subsidiaries had a positive impact of SEK 9 M on earnings compared with the year-earlier period.

During the quarter, the business area launched a more market-oriented organizational structure aimed at leveraging, in the long term, the new opportunities brought about by the acquisition of the CGS tire operation.

In the spring, the business area's VIP system was introduced featuring variable inflation pressure on a broader scale, which offers several advantages, including lower soil compaction, increased traction and lower fuel consumption.

EBIT excl. items affecting comparability, SEK M / EBIT %, R12

Rubena Savatech is a leading supplier of engineered polymer solutions to the general and automotive industries.

The business, which was acquired as part of CGS, will be recognized separately from Trelleborg's business areas during a transition period, before being gradually integrated into Trelleborg Industrial Solutions and Trelleborg Coated Systems business areas.

Excluding items affecting comparability, SEK M	Q2 2017	Q2 2016 ¹	Change, %	6M 2017	6M 2016 ¹	Change, %
Net sales	520	166	213	1,017	166	513
Change total, %	213	-		513	-
Organic sales, %	-	-		-	-
Structural change, %	208	-		508	-
Currency effects, %	5	-		5	-
EBIT	48	26	85	109	26	319
EBIT, %	9.3	15.6		10.7	15.6

Additional key ratios on pages 18 - 19

¹ Key ratios 2016 include only the month of June.

Sales of niche products to both the automotive industry and general industry were satisfactory for the quarter. Capacity utilization for most product lines was high. The volume of publicly awarded projects remained subdued. The order situation for the third quarter is satisfactory, although volumes will be impacted by normal seasonal variations. The number of signed long-term delivery agreements for components is at a stable level.

EBIT and EBIT margin were adversely impacted by the sharp movements in raw material prices during the spring.

Integration activities with Trelleborg Industrial Solutions and Trelleborg Coated Systems are progressing according to plan, and Rubena Savatech is scheduled to be integrated into the above-mentioned business areas as of 2017/2018. In preparation for this integration, investment projects are underway aimed at increasing manufacturing capacity, in addition to other efficiency-enhancement measures. Earnings for the quarter were charged with certain non-recurring costs related to these actions.

Income Statements

Income Statements, SEK M	Q2 2017	Q2 2016	6M 2017	6M 2016	R12 2017	12M 2016
Net sales	8,265	6,544	16,563	12,639	31,069	27,145
Cost of goods sold	-5,586	-4,269	-11,151	-8,253	-20,977	-18,079
Gross profit	2,679	2,275	5,412	4,386	10,092	9,066
Selling expenses	-670	-558	-1,327	-1,082	-2,547	-2,302
Administrative expenses	-797	-712	-1,575	-1,370	-3,160	-2,955
Research and development costs	-131	-105	-260	-205	-488	-433
Other operating income/expenses	6	-3	-12	9	90	111
Profit from associated companies	2	2	5	2	12	9
EBIT, excluding items affecting comparability	1,089	899	2,243	1,740	3,999	3,496
Items affecting comparability ¹	-76	-107	290	-222	121	-391
EBIT	1,013	792	2,533	1,518	4,120	3,105
Financial income and expenses	-56	-63	-107	-110	-206	-209
Profit before tax	957	729	2,426	1,408	3,914	2,896
Tax	-220	-192	-460	-342	-798	-680
Net profit in continuing operations	737	537	1,966	1,066	3,116	2,216
Net profit in discontinuing operations ²	-	4,369	-	4,369	-	4,369
Total net profit	737	4,906	1,966	5,435	3,116	6,585
- equity holders of the parent company	737	4,906	1,966	5,435	3,116	6,585

¹ 6M 2017 includes capital gain from the divestment of the compounding operation in Lesina, Czech Republic, with SEK M 472, and restructuring expenses of SEK M -182.

² Relates to Vibracoustic.

Earnings per share, SEK	Q2 2017	Q2 2016	6M 2017	6M 2016	R12 2017	12M 2016
Continuing operations	2.72	1.98	7.25	3.93	11.50	8.18
Discontinuing operations	0.00	16.12	0.00	16.12	0.00	16.12
Group, total	2.72	18.10	7.25	20.05	11.50	24.30
Continuing operations, excluding items affecting comparability	2.92	2.31	6.04	4.54	10.73	9.23
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	271,071,783	271,071,783	271,071,783	271,071,783	271,071,783	271,071,783

Statements of comprehensive income, SEK M	Q2 2017	Q2 2016	6M 2017	6M 2016	R12 2017	12M 2016
Total net profit	737	4,906	1,966	5,435	3,116	6,585
Other comprehensive income
Items that will not be reclassified to the income statement
Reassessment of net pension obligation	15	-66	15	-66	35	-46
Total	15	-66	15	-66	35	-46
Items that may be reclassified to the income statement
Cash flow hedges	27	30	50	65	150	165
Hedging of net investment	23	-272	62	-267	-173	-502
Translation difference Income tax relating to components of other comprehensive	-15	836	-117	741	694	1,552
income	-5	72	-19	76	4	99
Other comprehensive income relating to disposed / discontinuing operations	0	-283	-3	-254	-3	-254
Total	30	383	-27	361	672	1,060
Other comprehensive income, net of tax	45	317	-12	295	707	1,014
Total comprehensive income	782	5,223	1,954	5,730	3,823	7,599

EBIT specification, SEK M	Q2 2017	Q2 2016	6M 2017	6M 2016	R12 2017	12M 2016
EBITDA, excluding items affecting comparability	1,416	1,127	2,894	2,172	5,287	4,565
Depreciation, property, plant and equipment	-253	-192	-504	-368	-1,002	-866
EBITA, excluding items affecting comparability	1,163	935	2,390	1,804	4,286	3,700
Amortization, intangible assets	-74	-36	-147	-64	-287	-204
EBIT, excluding items affecting comparability	1,089	899	2,243	1,740	3,999	3,496
Items affecting comparability	-76	-107	290	-222	121	-391
EBIT	1,013	792	2,533	1,518	4,120	3,105

Balance Sheets

Balance Sheets, SEK M	Jun 30 2017	Jun 30 2016	Dec 31 2016
Property, plant and equipment	9,045	9,069	9,435
Intangible assets	23,062	21,189	23,203
Other financial assets	861	1,311	1,289
Total non-current assets	32,968	31,569	33,927
Inventories	5,191	4,869	5,060
Current operating receivables	7,820	7,410	6,710
Current interest-bearing receivables	459	7,109	778
Cash and cash equivalents	2,096	1,675	1,879
Total current assets	15,566	21,063	14,427
Total assets	48,534	52,632	48,354
Equity	25,939	23,268	25,137
Non-current interest-bearing liabilities	8,745	7,779	9,852
Other non-current liabilities	1,790	1,817	1,832
Total non-current liabilities	10,535	9,596	11,684
Interest-bearing current liabilities	5,368	13,435	5,282
Other current liabilities	6,692	6,333	6,251
Total current liabilities	12,060	19,768	11,533
Total equity and liabilities	48,534	52,632	48,354

Specification of changes in equity, SEK M	Jun 30	Jun 30	Dec 31
	2017	2016	2016
Opening balance, January 1	25,137	18,622	18,622
Total comprehensive income	1,954	5,730	7,599
Dividend	-1,152	-1,084	-1,084
Closing balance	25,939	23,268	25,137

Specification of capital employed, SEK M	Jun 30 2017	Jun 30 2016	Dec 31 2016
Total assets	48,534	52,632	48,354
Less:
Interest-bearing receivables ¹	477	7,479	1,137
Cash and cash equivalents	2,096	1,675	1,879
Tax assets	1,546	1,503	1,570
Operating liabilities	6,573	6,447	6,180
Capital employed	37,842	35,528	37,588
of which discontinuing operations	-80	-135	-82
Capital employed excluding discontinuing operations	37,922	35,663	37,670

¹ Including receivable relating to disposal of Vibracoustic.

Cash-flow statements

Cash flow statements, SEK M	Q2 2017	Q2 2016	6M 2017	6M 2016	R12 2017	12M 2016
Operating activities
EBIT incl part in associated companies	1,013	792	2,533	1,518	4,120	3,105
Adjustments for items not included in cash flow from operating activities:
Depreciation, property, plant and equipment	253	193	504	369	1,003	868
Amortization, intangible assets	74	37	147	65	285	203
Impairment losses, property, plant and equipment	0	-	0	51	3	54
Impairment losses, intangible assets	0	-	25	-	25	-
Dividend from associated companies Participations in associated companies and other non cash	1	1	1	1	2	2
flow affecting items	-9	-4	-11	-4	-12	-5
Cash-flow effects from items affecting comparability	0	-	-472	-	-468	4
Interest received and other financial items	9	8	20	17	43	40
Interest paid and other financial items	-44	-12	-135	-117	-231	-213
Taxes paid Cash flow from operating activities before changes in	-220	-147	-419	-249	-763	-593
working capital	1,077	868	2,193	1,651	4,007	3,465
Cash flow from changes in working capital:
Change in inventories	-142	-1	-288	-75	-218	-5
Change in operating receivables	-27	622	-1,202	-17	-138	1,047
Change in operating liabilities	98	-705	528	-624	119	-1,033
Change in items affecting comparability	20	-15	44	-14	63	5
Cash flow from operating activities	1,026	769	1,275	921	3,833	3,479
Investing activities
Acquisitions	-30	-11,801	-104	-11,981	-1,503	-13,380
Disposed/ discontinuing operations	-	-	649	-	6,814	6,165
Capital expenditure, property, plant and equipment	-235	-173	-396	-354	-1,116	-1,074
Capital expenditure, intangible assets	-12	-37	-20	-50	-44	-74
Sale of non-current assets	6	4	7	13	31	37
Cash flow from investing activities	-271	-12,007	136	-12,372	4,182	-8,326
Financing activities
Change in interest-bearing investments	293	-160	992	-81	750	-323
Change in interest-bearing liabilities	54	12,561	-970	11,693	-7,206	5,457
Dividend - equity holders of the parent company	-1,152	-1,084	-1,152	-1,084	-1,152	-1,084
Cash flow from financing activities	-805	11,317	-1,130	10,528	-7,608	4,050
Cash flow for the period	-50	79	281	-923	407	-797
Cash and cash equivalents:
At beginning of the period	2,230	1,547	1,879	2,552	1,675	2,552
Exchange rate differences	-84	49	-64	46	14	124
Cash and cash equivalents at end of period	2,096	1,675	2,096	1,675	2,096	1,879

Key figures

SEK M	Q2 2017	Q2 2016	6M 2017	6M 2016	R12 2017	12M 2016
Net sales
Trelleborg Coated Systems	644	628	1,318	1,259	2,585	2,526
Trelleborg Industrial Solutions ¹	1,468	1,250	2,896	2,459	5,361	4,924
Trelleborg Offshore & Construction	775	835	1,529	1,737	3,259	3,467
Trelleborg Sealing Solutions ¹	2,596	2,176	5,219	4,360	9,630	8,771
Trelleborg Wheel Systems	2,360	1,472	4,688	2,616	8,426	6,354
Rubena Savatech ²	520	166	1,017	166	1,914	1,063
Group items/Eliminations	-98	17	-104	42	-106	40
Total	8,265	6,544	16,563	12,639	31,069	27,145
EBIT, excluding items affecting comparability
Trelleborg Coated Systems	69	86	141	162	302	323
Trelleborg Industrial Solutions ¹	168	143	328	261	592	525
Trelleborg Offshore & Construction	-19	26	-16	49	43	108
Trelleborg Sealing Solutions ¹	611	512	1,229	1,013	2,135	1,919
Trelleborg Wheel Systems	278	186	561	342	939	720
Rubena Savatech ²	48	26	109	26	195	112
Group items	-66	-80	-109	-113	-207	-211
Total	1,089	899	2,243	1,740	3,999	3,496
EBIT %, excluding items affecting comparability
Trelleborg Coated Systems	10.7	13.7	10.7	12.9	11.7	12.8
Trelleborg Industrial Solutions ¹	11.4	11.4	11.3	10.6	11.0	10.7
Trelleborg Offshore & Construction	-2.5	3.1	-1.1	2.8	1.3	3.1
Trelleborg Sealing Solutions ¹	23.5	23.5	23.5	23.2	22.2	21.9
Trelleborg Wheel Systems	11.8	12.6	12.0	13.1	11.1	11.3
Rubena Savatech ²	9.3	15.6	10.7	15.6	10.2	10.5
Total	13.2	13.7	13.5	13.8	12.9	12.9

¹ Certain operations previously reported in the Trelleborg Industrial Solutions business area have, January 1, 2017 been transferred to the Trelleborg Sealing Solutions business area. The previous year's key ratios have been adjusted for this internal allocation. Total turnover moved from Trelleborg Industrial Solutions amounted to SEK 269 M for the full year 2016 and for EBIT SEK 16 M.

² Key ratios 2016 include only the month of June.

Net sales per market, share and organic growth, %	Q2 2017	Q2 2016	6M 2017	6M 2016
Western Europe (47%)	-2	-4	1	-4
Other Europe (9%)	3	6	6	5
North America (23%)	6	-9	5	-11
South and Central America (4%)	17	-33	-6	-11
Asia and other markets (17%)	7	-4	7	-2
Total (100% refer to share 2016)	3	-6	3	-5

Net sales per market excluding project related ³, organic growth, %	Q2 2017	Q2 2016	6M 2017	6M 2016
Western Europe	3	-1	4	-2
Other Europe	6	9	10	7
North America	5	-5	5	-5
South and Central America	6	-1	11	0
Asia and other markets	11	9	14	4
Total	5	0	7	-1

³ Project deliveries refer to the whole of Trelleborg Offshore & Construction and minor parts of Trelleborg Industrial Solutions' operations.

TRELLEBORG AB – SECOND QUARTER 2017

SEK M	Q2 2017	Q1 2017	Q4 2016	Q3 2016	Q2 2016	Q1 2016	Q4 2015	Q3 2015	Q2 2015
Net sales
Trelleborg Coated Systems	644	674	671	596	628	631	602	602	672
Trelleborg Industrial Solutions ¹	1,468	1,428	1,326	1,139	1,250	1,209	1,136	1,152	1,281
Trelleborg Offshore & Construction	775	754	893	837	835	902	1,149	1,019	1,174
Trelleborg Sealing Solutions ¹	2,596	2,623	2,216	2,195	2,176	2,184	1,981	2,125	2,209
Trelleborg Wheel Systems	2,360	2,328	1,883	1,855	1,472	1,144	1,020	1,037	1,136
Rubena Savatech ²	520	497	447	450	166	-	-	-	-
Group items/Eliminations	-98	-6	-2	0	17	25	39	40	59
Total	8,265	8,298	7,434	7,072	6,544	6,095	5,927	5,975	6,531
EBIT, excluding items affecting comparability
Trelleborg Coated Systems	69	72	87	74	86	76	74	66	87
Trelleborg Industrial Solutions ¹	168	160	153	111	143	118	137	117	146
Trelleborg Offshore & Construction	-19	3	17	42	26	23	77	46	68
Trelleborg Sealing Solutions ¹	611	618	436	470	512	501	405	470	504
Trelleborg Wheel Systems	278	283	174	204	186	156	95	132	125
Rubena Savatech ²	48	61	31	55	26	-	-	-	-
Group items	-66	-43	-57	-41	-80	-33	-83	-33	-47
Total	1,089	1,154	841	915	899	841	705	798	883
EBIT %, excluding items affecting comparability
Trelleborg Coated Systems	10.7	10.7	12.9	12.4	13.7	12.1	12.3	11.0	12.9
Trelleborg Industrial Solutions ¹	11.4	11.2	11.5	9.7	11.4	9.8	12.1	10.1	11.4
Trelleborg Offshore & Construction	-2.5	0.4	1.9	5.1	3.1	2.6	6.6	4.6	5.8
Trelleborg Sealing Solutions ¹	23.5	23.6	19.7	21.4	23.5	22.9	20.5	22.1	22.8
Trelleborg Wheel Systems	11.8	12.1	9.2	11.0	12.6	13.6	9.3	12.7	11.0
Rubena Savatech ²	9.3	12.3	7.0	12.1	15.6	-	-	-	-
Total	13.2	13.9	11.3	12.9	13.7	13.8	11.9	13.4	13.5
Items affecting comparability	-76	366	-118	-51	-107	-115	-90	-109	-23
EBIT	1,013	1,520	723	864	792	726	615	689	860

¹ Certain operations previously reported in the Trelleborg Industrial Solutions business area have, January 1, 2017 been transferred to the Trelleborg Sealing Solutions business area. The previous year's key ratios have been adjusted. Total turnover moved from Trelleborg Industrial Solutions amounted to SEK 269 M for the full year 2016 and for EBIT SEK 16 M.

² Key ratios 2016 include only the month of June.

Bridge net sales SEK M, %	Q2 2016, SEK M	Organic sales, %	Structural change, %	Currency effects, %	Q2 2017, SEK M
Trelleborg Coated Systems	628	-3	0	6	644
Trelleborg Industrial Solutions	1,250	2	12	3	1,468
Trelleborg Offshore & Construction	835	-9	0	2	775
Trelleborg Sealing Solutions	2,176	6	9	4	2,596
Trelleborg Wheel Systems	1,472	8	48	4	2,360
Rubena Savatech	166	0	208	5	520
Group items/Eliminations	17	-	-	-	-98
Total	6,544	3	20	3	8,265

Exchange rate differences impacting EBIT excluding items affecting comparability ², SEK M	Q2 2017	6M 2017
Trelleborg Coated Systems	6	12
Trelleborg Industrial Solutions	4	8
Trelleborg Offshore & Construction	-2	-4
Trelleborg Sealing Solutions	18	28
Trelleborg Wheel Systems	9	12
Rubena Savatech	2	2
Group items	0	-1
Total	37	57

³ Impact on EBIT excluding items affecting comparability in translation of foreign subsidiaries.

TRELLEBORG AB – SECOND QUARTER 2017

Income Statements, SEK M	Q2 2017	Q1 2017	Q4 2016	Q3 2016	Q2 2016	Q1 2016	Q4 2015	Q3 2015	Q2 2015
Net sales	8,265	8,298	7,434	7,072	6,544	6,095	5,927	5,975	6,531
Cost of goods sold	-5,586	-5,565	-5,077	-4,749	-4,269	-3,984	-3,956	-3,983	-4,332
Gross profit	2,679	2,733	2,357	2,323	2,275	2,111	1,971	1,992	2,199
Selling expenses	-670	-657	-629	-591	-558	-524	-480	-502	-537
Administrative expenses	-797	-778	-828	-757	-712	-658	-724	-651	-694
Research and development costs	-131	-129	-128	-100	-105	-100	-101	-91	-95
Other operating income/costs	6	-18	66	36	-3	12	38	50	9
Profit from associated companies	2	3	3	4	2	0	1	0	1
EBIT, excluding items affecting comparability	1,089	1,154	841	915	899	841	705	798	883
Items affecting comparability	-76	366	-118	-51	-107	-115	-90	-109	-23
EBIT	1,013	1,520	723	864	792	726	615	689	860
Financial income and expenses	-56	-51	-53	-46	-63	-47	-43	-34	-41
Profit before tax	957	1,469	670	818	729	679	572	655	819
Tax	-220	-240	-151	-187	-192	-150	-132	-170	-200
Net profit in continuing operations	737	1,229	519	631	537	529	440	485	619
Net profit in discontinuing operations	-	-	-	-	4,369	-	104	131	137
Total net profit	737	1,229	519	631	4,906	529	544	616	756
- equity holders of the parent company	737	1,229	519	631	4,906	529	544	616	755
- non-controlling interest	-	-	-	-	-	-	0	0	1
Earnings per share, SEK	Q2 2017	Q1 2017	Q4 2016	Q3 2016	Q2 2016	Q1 2016	Q4 2015	Q3 2015	Q2 2015
Continuing operations	2.72	4.53	1.92	2.33	1.98	1.95	1.62	1.80	2.28
Discontinuing operations	0.00	0.00	0.00	0.00	16.12	0.00	0.38	0.48	0.50
Group, total	2.72	4.53	1.92	2.33	18.10	1.95	2.00	2.28	2.78

comparability 2.92 3.12 2.23 2.46 2.31 2.23 1.84 2.07 2.35

Continuing operations, excluding items affecting

Acquisitions

Carrying amounts of identifiable acquired assets and assumed liabilities

First six months of 2017

Trelleborg Sealing Solutions signed an agreement and finalized the acquisition of the privately owned U.S.-based Carolina Seal Inc during the first quarter. The business specializes in the distribution of polymer seals such as O-rings, hydraulic seals and specialty kitting. The largest market segment is in transportation equipment, including the fast-growing sub-segment for transportation of chemicals. In addition, final settlement of earlier acquisitions and certain adjustments to acquisition analyses attributable to acquisitions in 2016 were conducted.

First six months of 2016

On May 31, 2016, Trelleborg finalized the acquisition of 100 percent of the shares in CGS Holding a.s., a privately owned company with leading positions in agricultural, industrial and specialty tires as well as engineered polymer solutions. CGS Holding includes the businesses Mitas, Rubena and Savatech. The total cash consideration amounted to approximately SEK 10.9 billion on a cash and debt-free basis.

In addition to CGS, two additional acquisitions were carried out during the year. In the first quarter, Trelleborg finalized the acquisition of 100 percent of Loggers Rubbertechniek B.V., a privately owned engineering company based in the Netherlands, which offers specially developed antivibration solutions, mainly for marine applications. In the second quarter, Trelleborg finalized the acquisition of 100 percent of Specialty Silicone Fabricators Inc. (SSF), a U.S.-based privately owned manufacturer of highprecision silicone components for medical technology original equipment manufacturers (OEMs).

Acquisitions, SEK M	Acquired 2017		Adjustm. to acquisitions 2016			Acquisitions 2016
	6M 2017		6M 2017			6M 2016
	Adjustment			Adjustment			Adjustment
	Book value to fair value	Fair value	Book value	to fair value	Fair value	Book value	to fair value	Fair value
Developed technology ¹							206	206
Trademarks ²				-158	-158	5	1,296	1,301
Customer relationships ³	30	30		53	53		1,222	1,222
Other intangible assets			1		1	15		15
Property, plant and equipment	2	2				2,692	-160	2,532
Deferred tax assets			-1		-1	37		37
Shares in associated companies			-23		-23	67		67
Interest-bearing receivables						14		14
Inventories	8	8	6		6	989		989
Operating receivables	8	8	1		1	1,820		1,820
Current tax asset			2		2	34		34
Cash and cash equivalents	3	3				368		368
Deferred tax liabilities			13	-12	1	-45	-243	-288
Interest-bearing liabilities						-13		-13
Post employment benefits			-1		-1	-53		-53
Provision obligations						-98		-98
Current tax liability						-91		-91
Operating liabilities	-3	-3				-1,574		-1,574
Net assets	18 30	48	-2	-117	-119	4,167	2,321	6,488
Goodwill		61			117			5,862
Total purchase price		109			-2			12,350
Cash and other net debt in acquired operations		-3						-369
Impact shown in cash flow statement		106			-2			11,981

¹ Excess value of developed technology is amortized over 10 years

² The majority have an indefinite useful life, no amortization takes place.

³ Excess value of customer relationships are amortized over 12-14 years.

The above goodwill for 2017 is attributable to acquired non-separable customer relationships and synergy effects expected after the acquisition. The fair value of acquired, identifiable, intangible assets is provisional pending final measurement of these assets.

Financial assets and liabilities measured at fair value

At June 30, 2017, SEK M		Derivatives valued at fair value in profit and loss	Derivatives used for hedging	purposes
	Carrying amount	Measurement level	Carrying amount	Measurement level	Total
Other financial non-current assets	-		3	2	3
Accounts receivable and other receivables	-5	2	74	2	69
Current interest-bearing receivables	101	2	129	2	230
Total assets	96		206		302
Other non-current liabilities	-		125	2	125
Interest-bearing non-current liabilities	25	2	-		25
Accounts payable and other liabilities	4	2	60	2	64
Interest-bearing current liabilities	87	2	2	2	89
Total liabilities	116		187		303

At June 30, 2016, SEK M		Derivatives valued at fair value in profit and loss	Derivatives used for hedging
	Carrying amount	Measurement level	Carrying amount	purposes Measurement level	Total
Accounts receivable and other receivables	15	2	31	2	46
Current interest-bearing receivables	308	2	15	2	323
Total assets	323		46		369
Other non-current liabilities	-		220	2	220
Interest-bearing non-current liabilities	10	2	-		10
Accounts payable and other liabilities	11	2	114	2	125
Interest-bearing current liabilities	101	2	133	2	234
Total liabilities	122		467		589

Valuation techniques used to derive Level 2 fair values

Level 2 derivatives comprise forward foreign contracts and interest rate swaps and are used mainly for hedging purposes but also for proprietary trading. These forward foreign exchange contracts have been fair valued using forward exchange rates that are quoted in an active market. Interest rate swaps are fair valued using forward interest rated extracted from observable yield curves. The effects of discounting are generally insignificant for level 2 derivatives.

Disclosure of fair value for debt and other financial instruments

The majority of the Group's loans carry a variable interest rate, meaning that the carrying amount of the total loan liability is considered to represent a good estimation of the fair value due to the short maturity. For other financial instruments the recognized amounts are also deemed to correspond to their fair value.

The outstanding receivable of approximately SEK 224 M, related to Vibracoustic's realized sales development in 2017, has been classified in accordance with level 3 of the fair value hierarchy due to inputs derived from unobservable market data, including the counterparty's credit risk.

Parent Company

Income statements, SEK M	Q2 2017	Q2 2016	6M 2017	6M 2016	R12 2017	12M 2016
Administrative expenses	-76	-79	-147	-140	-320	-313
Other operating income	284	240	347	281	543	477
Other operating expenses	-20	-17	-39	-35	-313	-309
EBIT	188	144	161	106	-90	-145
Financial income and expenses	-59	67	298	-41	66	-273
Profit before tax	129	211	459	65	-24	-418
Appropriations	-	-	-	-	450	450
Tax	-19	-5	14	26	22	34
Net profit	110	206	473	91	448	66
Statements of comprehensive income, SEK M	Q2 2017	Q2 2016	6M 2017	6M 2016	R12 2017	12M 2016
Net profit	110	206	473	91	448	66
Total comprehensive income	110	206	473	91	448	66

Balance sheets, SEK M	Jun 30 2017	Jun 30 2016	Dec 31 2016
Property, plant and equipment	15	18	16
Intangible assets	1	2	2
Financial assets	35,536	35,639	35,533
Total non-current assets	35,552	35,659	35,551
Current receivables	73	134	130
Current tax asset	-	1	-
Interest-bearing receivables	1	1	556
Cash and cash equivalents	0	0	0
Total current assets	74	136	686
Total assets	35,626	35,795	36,237
Equity	9,632	10,336	10,311
Interest-bearing non-current liabilities	4,374	4,374	4,374
Other non-current liabilities	19	18	24
Total non-current liabilities	4,393	4,392	4,398
Interest-bearing current liabilities	21,407	20,885	21,374
Other current liabilities	194	182	154
Total current liabilities	21,601	21,067	21,528
Total equity and liabilities	35,626	35,795	36,237

Financial definitions

Trelleborg uses the following alternative performance measures relating to its financial position, return on shareholders' equity and capital employed, net debt, debt/equity ratio and equity/assets ratio. The Group believes that these performance measures can be utilized by users of the financial statements as a supplement in assessing the possibility of dividends, making strategic investments and assessing the Group's ability to meet its financial commitments. Trelleborg also uses the cash flow metrics of operating cash flow and free cash flow to provide an indication of the funds generated by the operations in order to conduct strategic investments, carry out amortizations and generate a return for its shareholders. Trelleborg uses the performance metrics of EBITDA, EBITA and EBIT excluding items affecting comparability, which the Group considers to be relevant for investors seeking to understand its earnings generation before items affecting comparability. The Group defines its key figures as follows.

Capital employed Total assets less interest-bearing financial assets and non-interest-bearing operating liabilities (including pension liabilities) and excluding tax assets and tax liabilities¹.

Cash conversion ratio Operating cash flow as a percentage of EBIT.

Debt/equity ratio, % Net debt divided by total equity.

Discontinuing operations Profit from discontinuing operations is recognized net in the consolidated income statement under the item "Net profit in discontinuing operations".

Earnings per share Net profit for the period, attributable to shareholders of the Parent Company, divided by the average number of shares outstanding.

EBIT Operating profit including items affecting comparability.

EBIT, excluding items affecting comparability Operating profit excluding items affecting comparability.

EBIT margin excluding items affecting comparability, % EBIT excluding items affecting comparability as a percentage of net sales.

EBITA Operating profit excluding amortization and impairment of intangible assets and excluding items affecting comparability.

EBITA margin, % EBITA as a percentage of net sales.

EBITDA Operating profit excluding depreciation and impairment of PPE and amortization and impairment of intangible assets and excluding items affecting comparability.

Equity/assets ratio, % Total equity divided by total assets.

Equity method Shares in associated companies and joint ventures are recognized according to the equity method, in which the initial participation is adjusted to reflect the Group's participation in the profit of the company and any dividends.

Free cash flow Operating cash flow reduced by cash flow from financial items, taxes and the effect of restructuring measures on cash flow.

Items affecting comparability The total of the restructuring costs approved by the Board of Directors and major nonrecurring items.

Net debt Interest-bearing liabilities less interest-bearing assets and cash and cash equivalents¹.

Net debt/EBITDA Net debt divided by EBITDA.

Operating cash flow EBITDA excluding other non-cash items, investments, sold non-current assets and changes in working capital. In the key figure, cash flow from items affecting comparability is excluded.

Organic growth The sales growth in comparable exchange rates that is generated by the Group itself on its own merits and in the existing structure. An acquisition is reported only as organic growth if it is included in an equal number of months in the current period and the corresponding period of the previous year. Otherwise, it is reported as structural growth.

Pro forma Pro forma calculations include total Group consolidation from the most recent 12-month period plus acquisitions and divestments in order to reflect current continuing operations.

Return on capital employed, % EBIT divided by the average capital employed.

Return on shareholders' equity, % Profit for the period, attributable to shareholders of the Parent Company as a percentage of average shareholders' equity, excluding noncontrolling interests.

¹The remaining receivable for the divestment of Vibracoustic is recognized as a financial receivable and thus impacts the Group's net debt.

Glossary

OEM (Original Equipment Manufacturer) A company that manufactures an end-product that can be sold on the open market. The product often consists of a combination of proprietarily manufactured and purchased components from suppliers that are assembled by the OEM company to make the final product.

Plastics can be divided into two main groups: Thermoplastics are non-cross-linked plastics that are solid at room temperature but become soft and moldable when heated, and Hard plastics are cross-linked plastics that disintegrate upon heating and do not regain their properties.

Seasonal effects

The various market segments are subject to seasonal effects. Demand for the Group is normally higher in the first six months of the year than in the last six months.

Polymer The word is derived from the Greek "poly," meaning "many" and "meros" meaning "parts." Polymers are made up of many small molecules – monomers – that are linked in long chains. Examples of polymers are plastics and rubber.

Polymer technology The technology relating to manufacturing processes for polymers in combination with their unique properties.

About Trelleborg

Trelleborg is a world leader in engineered polymer solutions that seal, damp and protect critical applications in demanding environments. Our innovative solutions accelerate performance for customers in a sustainable way.

Business concept

Trelleborg's business concept is to seal, damp and protect in demanding industrial environments.

Strategy

Trelleborg's strategy is to secure leading positions in selected segments. This means that Trelleborg seeks segments, niches and product categories that – by virtue of the Group's market insights, core competencies and offering of advanced products and solutions – provide market leadership. In this manner, long-term shareholder value and added value are generated for customers. Trelleborg works with the strategy, both Groupwide and in the business areas, supported by four strategic cornerstones that – individually and in combination – underpin the strategy. The strategic cornerstones are: Geographic balance, Portfolio optimization, Structural improvements and Excellence.

Value drivers

Polymer engineering. Within our selected segments, we have pioneered applied polymer-engineering and materials technology for more than a century.

Local presence, global reach. Wherever we conduct business, our teams act both as a local partner and leverage our global strength and capabilities.

Application expertise. We have leading-edge technology and in-depth understanding of the challenges our customers must overcome to seal, damp and protect their critical applications. Customer integration. We always make it easy to do business with us, by integrating closely with markets and customers through multiple channels.

Business accelerator. We work as a proactive and long-term business partner, delivering solutions based on market foresight, contributing to better business for our customers

Trelleborg's market segments:

Business area/Segment distribution	General industry						Capital intensive	Light Vehicles
		Oil & gas	Transport equipment	Agriculture	Infrastructure construction	Aerospace	industry
Trelleborg Coated Systems	80%		2%			16%	18%	2%
Trelleborg Industrial Solutions	56%	3%	19%		12%		34%	10%
Trelleborg Offshore & Construction		51%			49%		100%
Trelleborg Sealing Solutions	47%	2%	7%	3%		15%	27%	26%
Trelleborg Wheel Systems			43%	57%			100%
Rubena Savatech	89%		4%				4%	7%
Total	36%	7%	17%	16%	8%	6%	54%	10%

Net sales per market segment and business area based on Annual accounts 2016, including a proforma calculation on acquisitions carried out in 2016.

The Trelleborg Group's operations

Continuing operations

Refers to operations within Trelleborg's five business areas: Trelleborg Coated Systems, Trelleborg Industrial Solutions, Trelleborg Offshore & Construction, Trelleborg Sealing Solutions and Trelleborg Wheel Systems, as well as the Rubena Savatech operation. In addition, it includes central staff functions.

Discontinuing operations

Refers generally to operations that have been discontinued or are in the process of being divested. The joint venture Vibracoustic's historical comparative figures are included here, for example.

Group in total

The above parts consolidated sum up to the Trelleborg Group in total.

Invitation to a telephone conference on July 20 at 10:00 a.m. CET

A telephone conference will be held on July 20 at 10:00 a.m. CET. To participate in the telephone conference, call +46 (0)8 566 426 64 (Sweden) or +44 203 008 9811 (U.K.). Code: "Trelleborg". The conference will also be broadcast on the Internet in real time. Visit our website www.trelleborg.com for the Internet link and presentation materials

Financial calendar

Interim report July-September 2017 October 27, 2017 Year-end report 2017 February 2, 2018 Annual Report 2017 Week starting March 19, 2018 Interim report January-March 2018 April 25, 2018 Annual General Meeting 2018 (Trelleborg) April 25, 2018 Interim report April-June 2018 July 20, 2018

For further information

Investors/analysts Media Christofer Sjögren, VP Investor Relations Karin Larsson, VP Media Relations Phone: +46 (0)410 - 670 68 Phone: +46 (0)410 - 670 15 Mobile: +46 (0)708 - 66 51 40 Mobile: +46 (0)733 - 74 70 15 E-post: christofer.sjogren@trelleborg.com E-post: karin.larsson@trelleborg.com

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.

Trelleborg AB (publ) Corp. Reg. No. 556006-3421 PO Box 153, SE-231 22 Trelleborg, Sweden. Phone: +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 forwardlooking 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 information is information that Trelleborg AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 07:45 a.m. CET on July 20, 2017.

This is a translation of the company's Interim Report in Swedish.