Trelleborg — Interim / Quarterly Report 2016

Feb 1, 2017

New platform – focus on profitable growth

Fourth quarter 2016

• Net sales for the fourth quarter of 2016 amounted to SEK 7,434 M (5,927), the highest on record for the Group in a single quarter. Organic sales declined by 4 percent, mainly driven by the anticipated downturn in deliveries to the oil/gas segment. The effects of exchange rate movements on sales were positive 3 percent.
• Effects of structural changes made a positive contribution of 26 percent on net sales, with the acquisition of CGS accounting for the main part of this increase.
• EBIT, excluding items affecting comparability, rose by 19 percent to SEK 841 M (705), which was the Group's highest figure on record for a fourth quarter and equivalent to an EBIT margin of 11.3 percent (11.9).
• Items affecting comparability for the quarter amounted to an expense of SEK 118 M (expense: 90), in line with earlier communication.
• Earnings per share for continuing operations totaled SEK 1.92 (1.62), up 19 percent.
• Operating cash flow amounted to SEK 1,331 M (854), up 56 percent. The cash conversion ratio for the most recent 12 month period was 99 percent (71).
• The Board of Directors and President propose a cash dividend of SEK 4.25 per share (4.00).

SEK M	Q4 2016	Q4 2015	Change, %	12M 2016	12M 2015	Change, %
Net sales	7,434	5,927	25	27,145	24,803	9
Organic sales, %	- 4	0		- 5	- 2
EBITA, excluding items affecting comparability	916	736	24	3,700	3,325	11
EBITA margin, %	12.3	12.4		13.6	13.4
EBIT, excluding items affecting comparability	841	705	19	3,496	3,219	9
EBIT margin, %	11.3	11.9		12.9	13.0
Items affecting comparability	-118	-90	-31	-391	-257	-52
EBIT	723	615	18	3,105	2,962	5
Profit before tax	670	572	17	2,896	2,809	3
Net profit, discontinuing operations 1)	0	104	-100	4,369	509	758
Net profit, Group	519	544	- 5	6,585	2,605	153
Earnings per share continuing operations, SEK	1.92	1.62	19	8.18	7.73	6
Earnings per share Group, SEK	1.92	2.00	- 4	24.30	9.60	153
Operating cash flow 2)	1,331	854	56	3,460	2,282	52

1) Relates to Vibracoustic 2 ) Continuing operations

Full-year 2016

• Net sales for full-year 2016 increased by 9 percent and totaled SEK 27,145 M (24,803). Organic sales declined by 5 percent. Effects of structural changes made a positive contribution of 15 percent, while the effects of exchange rate movements had a negative impact of 1 percent on sales. Sales were the highest on record for the Group for a full year.
• EBIT, excluding items affecting comparability, rose 9 percent to SEK 3,496 M (3,219) and was the highest figure on record for the Group for a full year. This corresponds to an EBIT margin of 12.9 percent (13.0).
• Earnings per share for continuing operations rose 6 percent to SEK 8.18 (7.73).
• Net profit for discontinuing operations for full-year 2016 amounted to SEK 4,369. This amount included a capital gain of SEK 4,070 M and a reclassification of shareholders' equity of SEK 299 M. The net effect on shareholders' equity was SEK 4,070 M. Both items are attributable to the divestment of Vibracoustic.
• Net profit for the Group totaled SEK 6,585 M (2,605), positively impacted by the divestment of Vibracoustic.
• Operating cash flow for continuing operations amounted to SEK 3,460 M (2,282), up 52 percent. The cash conversion ratio was 99 percent (71).

Market outlook for the first quarter of 2017

Demand is expected to be slightly improved compared with the fourth quarter of 2016, adjusted for seasonal variations.

Market outlook from the interim report published on October 25, 2016, relating to the fourth quarter of 2016 Demand is expected to be on a par with the third quarter of 2016, adjusted for seasonal variations.

Dividend 2016

Proposed dividend. The Board of Directors and President propose a cash dividend of SEK 4.25 per share (4.00).

New platform – focus on profitable growth

"2016 was a very eventful year in Trelleborg's history. The Group was reshaped by major acquisitions as well as a significant divestment. We reported our best profit on record for a single year, despite a number of our operations fighting an uphill battle throughout the period due to challenging market conditions.

On this basis, there is a significant potential to become even more profitable and grow faster than we have had in recent years. Several initiatives are ongoing and more will be launched to address the sales and profitability trend moving forward. As a consequence of this, we raised our EBIT margin target at the end of the year from 12 to 15 percent over an economic cycle.

This does not mean we haven't encountered any challenges. Following a protracted downward trend, raw material prices have started to move upward and we will address this trend by further improving efficiency, but also by leveraging our strong market positions and offering competitive solutions at the right price.

Our investments during the year totaled about SEK 1.1 billion. Our level of investment will remain at a relatively high level over the next few years, and this should be seen as confirmation of our growth ambitions as well as our endeavor to continuously increase our efficiency.

We completed seven acquisitions in 2016, contributing nearly SEK 7 billion to sales on an annual basis. The largest of these was of course CGS Holding, Trelleborg's largest acquisition in decades, which reinforces our overall offering and our market positions in several segments. Although we will now temporarily reduce our pace of acquisition slightly, we will continue to acquire companies that complement our organic growth initiatives. Having jointly owned Vibracoustic during a successful journey toward higher profitability, we divested our share in the company as planned during the summer. In terms of timing, this divestment coincided well with the acquisition of CGS.

We can see some signs that markets in certain geographies and in some segments are starting to improve. In general industry in Europe, for example, we reported organic growth in the fourth quarter, which is the first time this has occurred for some period of time. Our sales to the aerospace and automotive industries are continuing to develop at a satisfactory level. The signals from the agricultural markets in various regions are somewhat ambivalent. The assessment is that the recovery in South America has already begun, while the downward trend in the OE market, particularly in North America, is continuing. In Europe, there are signs of an improvement mainly in the aftermarket.

The share of our order backlog related to oil/gas remained at a low level, why we expect fewer project deliveries and lower profitability in this segment at least for the first six months of 2017. Adaptations to the lower level of activity have been made and further measures are ongoing.

2017 will be characterized by intensive efforts to integrate all recently acquired operations, at the same time as we will ensure that synergies are realized, thereby further improving the Group's market positions. We are in the process of building a stronger Trelleborg with our sights set on a long-term plan, which is a strategy that could potentially impact earnings for an individual quarter.

We are maintaining a high level of preparedness to adjust our various businesses to fluctuating demand. My colleagues and I are looking forward to further developing Trelleborg in 2017, making it into an even bigger and more profitable company."

Peter Nilsson, President and CEO

Fourth quarter ²⁰¹⁶

Net sales

SEK M, growth	Q4 2016	Q4 2015	12M 2016	12M 2015
Net sales	7,434	5,927	27,145	24,803
Change total, %	25	6	9	10
Organic sales, %	- 4	0	- 5	- 2
Structural change, %	26	2	15	2
Currency effects, %	3	4	- 1	10

Net sales for the fourth quarter of 2016 amounted to SEK 7,434 M (5,927). Organic sales declined by 4 percent during the quarter, mainly due to the previously communicated reduction in deliveries to the oil/gas segment. Effects from structural changes contributed a positive 26 percent, where the acquisition of CGS accounted for the main part of this increase. Exchange rate effects accounted for positive 3 percent on sales compared with the year-earlier period.

Excluding project deliveries1): The Group's organic sales increased 2 percent year on year. Organic sales in Western Europe were unchanged compared with the year-earlier period. In the rest of Europe, organic sales rose by 6 percent. Organic sales declined by 6 percent in North America, while an increase of 23 percent was noted in South & Central America, driven by newly established businesses in the region. In Asia and other markets, organic sales increased by 19 percent.

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

Result

Q4 2016	Q4 2015	Change, %	12M 2016	12M 2015	Change, %
916	736	24	3,700	3,325	11
12.3	12.4		13.6	13.4
841	705	19	3,496	3,219	9
11.3	11.9		12.9	13.0
-118	-90	-31	-391	-257	-52
723	615	18	3,105	2,962	5
-53	-43	-23	-209	-153	-37
670	572	17	2,896	2,809	3
-151	-132	-14	-680	-713	5
-	104	-100	4,369	509	758
519	544	- 5	6,585	2,605	153

EBITA, excluding items affecting comparability, totaled SEK 916 M (736), corresponding to a margin of 12.3 percent (12.4).

EBIT, excluding items affecting comparability, amounted to SEK 841 M (705) for the fourth quarter, a year-on-year increase of 19 percent. The total exchange rate effects on EBIT, excluding items affecting comparability, from the translation of foreign subsidiaries had a positive impact of SEK 22 M on earnings compared with the year-earlier period. The EBIT margin, excluding items affecting comparability, amounted to 11.3 percent (11.9). The seasonal pattern of a weaker fourth quarter has been accentuated with the acquisition of CGS.

The integration of units acquired during the year continued during the quarter. The acquired units contributed positively to the Group's earnings and their results are on par with the year-earlier outcome, although they continue to be impacted by the ongoing integration. EBIT was charged with

amortization of surplus values totaling SEK 75 M, an increase of SEK 42 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 118 M (expense: 90).

EBIT, including items affecting comparability, for the quarter amounted to SEK 723 M (615), up 18 percent.

The net financial expense was SEK 53 M (expense: 43), corresponding to an interest rate of 1.8 percent (2.4).

Net profit in discontinuing operations in the year-earlier period related to Vibracoustic.

Net profit for the Group totaled SEK 519 M (544). Excluding discontinuing operations, the tax rate was 23 percent (23), impacted by positive non-recurring items.

Return on capital employed

%	12M 2016	12M 2015
Excluding items affecting comparability	11.3	14.3
Including items affecting comparability	10.0	13.2
Capital employed for continuing operations increased year on	excluding items affecting comparability, was 11.3 percent

year to SEK 37,670 M (22,254), impacted by acquisitions carried out during the year. The return on capital employed, excluding items affecting comparability, was 11.3 percent (14.3).

Cash flow

SEK M	Q4 2016	Q4 2015	Change, %	12M 2016	12M 2015	Change, %
EBITDA, operating profit before depreciation	1,166	923	26	4,565	4,053	13
Capital expenditure	-494	-560	12	-1,148	-1,314	13
Sold non-current assets	14	12		37	59
Change in w orking capital	649	476		9	-513
Dividend from associated companies	-	0		2	1
Non cash-flow affecting items	- 4	3		- 5	- 4
Operating cash flow	1,331	854	56	3,460	2,282	52
Cash impact from items affecting comparability	-88	-83		-326	-192
Financial items	-50	-59		-173	-166
Paid tax	-166	-157		-593	-472
Free cash flow	1,027	555	85	2,368	1,452	63
Acquisitions	-1,276	-567		-13,380	-681
Discontinuing operations	-20	1,357		6,165	1,390
Dividend - equity holders of the parent company	-	-		-1,084	-1,017
Sum net cash flow	-269	1,345	-120	-5,931	1,144	-618

Operating cash flow during the fourth quarter amounted to SEK 1,331 M (854). A higher EBITDA, a slightly lower rate of capital expenditure year on year and a positive change in working capital contributed to this improvement. The cash conversion ratio for the most recent 12-month period was 99 percent (71).

Free cash flow amounted to SEK 1,027 M (555), up 85 percent.

The net cash flow amounted to a negative SEK 269 M (pos: 1,345) and was mainly impacted by acquisitions in the negative amount of SEK 1,276 M (neg: 567).

Net debt

Change in net debt, SEK M	12M 2016	12M 2015
Net debt, opening balance	-6,282	-7,195
Net cash flow for the period	-5,931	1,144
Exchange rate differences	-597	-231
Receivable related to the divestment of Vibracoustic	685	-
Net debt, closing balance	-12,125	-6,282
Debt/equity ratio, %	48	34
Net debit/EBITDA
Continuing operations, excluding items affecting comparability	2.7	1.5
Continuing operations, including items affecting comparability	2.9	1.6
Proforma continuing operations, including items affecting comparability and acquisitions 1)	2.5	-
Total Group 2)	1.4	1.4

2 ) 2016 includes the capital gain from the disposal of Vibracoustic. 1) The proforma calculation is based on available information with a certain degree of uncertainty as regards differences in accounting principles and methodology

Since the beginning of the year, net debt has increased by SEK 5,843 M, significantly affected by acquisitions implemented during the year, mainly CGS, and negative exchange rate differences.

The payment for the divestment of Vibracoustic totaling SEK 6,185 M was received earlier during the year and is recognized in net cash flow. In addition, net debt is impacted by a receivable totaling SEK 685 M linked to Vibracoustic's realized sales performance in 2016 and 2017. A part payment of the receivable will be made at the beginning of the second quarter of 2017.

The debt/equity ratio at the end of the period was 48 percent (34).

Net debt in relation to EBITDA, excluding items affecting comparability, amounted to 2.7 (1.5). The ratio for the Group as a whole, including the capital gain generated in connection with the divestment of Vibracoustic, was 1.4 (1.4). According to a pro forma calculation including rolling 12-month EBITDA for continuing operations and acquisitions carried out during the most recent 12-month period, the underlying net debt in relation to EBITDA was approximately 2.5.

Return on equity

%	12M 2016	12M 2015
Continuing operations, excluding items affecting comparability	11.4	12.5
Continuing operations, including items affecting comparability	10.1	11.5
Total Group 1)	30.1	14.3
1 ) 2016 includes the capital gain from the disposal of Vibracoustic.

Shareholders' equity for the Group at the close of the period amounted to SEK 25,137 M (18,622 at January 1, 2016). Shareholders' equity improved as a result of divestment of the participation in Vibracoustic and an improved result, a situation that also yielded a negative effect on return on shareholders'

equity. Equity per share amounted to SEK 93 (69), up 35 percent. The equity/assets ratio was 52 percent (54). The total return on shareholders' equity for the Group was 30.1 percent (14.3), affected by the capital gain generated by the divestment of Vibracoustic.

Earnings per share

Earnings per share, SEK	Q4 2016	Q4 2015	12M 2016	12M 2015
Continuing operations	1.92	1.62	8.18	7.73
Discontinuing operations	0.00	0.38	16.12	1.87
Group, total	1.92	2.00	24.30	9.60
Continuing operations, excluding items affecting comparability	2.23	1.84	9.23	8.39

Earnings per share for continuing operations during the fourth quarter totaled SEK 1.92 (1.62).

For the Group in total, earnings per share amounted to SEK 1.92 (2.00).

Operating cash flow, SEK M

Full-year 2016

Net sales in 2016 totaled SEK 27,145 M (24,803), up 9 percent compared with 2015.

EBIT, including items affecting comparability, for the full year amounted to SEK 3,105 M (2,962), up 5 percent compared with the preceding year.

The financial net expense was SEK 209 M (expense: 153), corresponding to an average interest rate of 2.0 percent (2.0).

Profit before tax totaled SEK 2,896 M (2,809).

Net profit for discontinuing operations was SEK 4,369 M (509). Net profit for the Group amounted to SEK 6,585 M (2,605).

Total earnings per share for the Group were SEK 24.30 (9.60).

Significant events during the quarter

Acquisition of anti-vibration supplier. Trelleborg Industrial Solutions finalized the acquisition of Schwab Vibration Control, a German and Swiss technology-leading supplier of components and systems for antivibration solutions for the rail market.

Schwab Vibration Control is headquartered and has its production site in Velten, Germany. It also has engineering and sales offices in Adliswil, Switzerland and Laudenbach, Germany. Sales amounted to approximately SEK 575 M in 2015.

The acquisition was consolidated from October 1, 2016. Press releases were published on August 10, 2016, and on October 3, 2016, respectively.

Web shop for precision seals. Trelleborg Sealing Solutions, launched Seals-Shop.com, an e-commerce platform focusing primarily on hydraulic seals for the Maintenance, Repair and Operations (MRO) market and smaller Original Equipment Manufacturing (OEM) customers in Europe.

The investment enables the business area to reach new customers, primarily in the aftermarket, and offers them convenient and direct access to a wide portfolio of quality precision seals. It broadens Trelleborg's offering and strengthens the position of Trelleborg in attractive market segments.

The press release was published on November 4, 2016.

Acquisition of manufacturer of precision seals. Trelleborg Sealing Solutions finalized the acquisition of a U.S.-based subsidiary of CoorsTek, Inc. that specializes in the manufacturing of precision seals for the aerospace industry.

The acquisition strengthens Trelleborg's presence in North America and in sealing solutions for major aircraft programs.

The operation is located in El Segundo, California. Sales amounted to approximately SEK 115 M in 2015. This bolt-on acquisition is part of Trelleborg's strategy to strengthen its positions in attractive market segments.

The press releases were published on September 28, 2016 and November 22, 2016.

New financial targets. At Trelleborg's Capital Markets Day in December 2016, the Group presented new financial targets: Continuing operations (over an economic cycle):

• Total sales growth, including organic growth in excess of the underlying market growth: 5-8 percent over an economic cycle - EBIT margin excluding items affecting comparability: ≥15 percent

Continuing operations including items affecting comparability (over an economic cycle):

• Return on equity (ROE): ≥12 percent

The press release was published on December 15, 2016.

Significant events after the close of the period

Acquisition of seal distributor. Trelleborg Sealing Solutions, signed an agreement to acquire the privately owned U.S. based Carolina Seal Inc. The business specializes in the distribution of polymer seals such as O-rings, hydraulic seals and specialty kitting. The company's largest market segment is in transportation equipment, and primarily within the fastgrowing sub-segment for transportation of chemicals.

The business has its office and warehouse in Charlotte, North Carolina, and has annual sales of approximately SEK 50 M. This bolt-on acquisition is part of Trelleborg's strategy to strengthen its positions in attractive market segments.

A press release was published on January 23, 2017.

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

Nomination Committee's proposals ahead of the 2017

AGM. The Nomination Committee, comprising representatives of the major shareholders who together control approximately 64 percent of the votes in Trelleborg AB, and the Chairman of the Board have decided to propose to the Annual General Meeting the following:

• Re-election of Board members: Hans Biörck, Gunilla Fransson, Johan Malmquist, Sören Mellstig, Peter Nilsson, Anne Mette Olesen, Susanne Pahlén Åklundh and Bo Risberg.

• Re-election of Sören Mellstig as Chairman of the Board.

• Election of auditing firm Deloitte AB as the company's new auditor.

Jan Carlson is not available for re-election. He will therefore resign his seat on the Board in conjunction with the 2017 Annual General Meeting after three years of commendable work. The Nomination Committee's proposal to the 2017 Annual General Meeting is that the number of Board members revert to the number prior to the 2014 Annual General Meeting, that is, eight members. Therefore, there will be no proposed replacement of Jan Carlson.

The Annual General Meeting will be held in Trelleborg, Sweden, on April 27, 2017, at 5:00 p.m. CET.

Press releases were published on January 25, 2017, and on January 31, 2017.

Investment in Trelleborg Wheel Systems tire operation in Serbia. The Board has decided to make a major investment in Trelleborg Wheel Systems tire operation in Serbia, to improve the footprint and increase production capacity to accommodate additional future sales.

Risk management

Trelleborg serves a broad range of customers in a variety of market segments and niches. Sales, and thereby invoicing, are made to approximately 140 countries worldwide and the Group has manufacturing operations at more than 100 production units in around 40 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.

This report has been prepared in accordance with IAS 34 Interim Financial Reporting and the applicable rules of the Swedish Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with Chapter 9 of the Swedish Annual Accounts Act, Interim Reports. 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 except as regards the accounting of Vibracoustic. As of the first quarter of 2016, the equity method is no longer applicable. Instead IFRS 5 is applied and recognition occurs under discontinuing operations.

New and amended standards applied from January 1, 2016

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, February 1, 2017 Board of Directors of Trelleborg AB (publ)

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

deployed in several industrial applications.
Excluding items affecting comparability, SEK M	Q4 2016	Q4 2015	Change, %	12M 2016	12M 2015	Change, %
Net sales	671	602	11	2,526	2,559	- 1
Change total, %	11	11		- 1	32
Organic sales, %	5	0		- 2	1
Structural change, %	-	5		-	17
Currency effects, %	6	6		1	14
EBIT	87	74	18	323	317	2
EBIT, %	12.9	12.3		12.8	12.4

Additional key ratios on pages 20 - 21

Fourth quarter 2016. Organic sales for the quarter increased by 5 percent year on year, due in part to a favorable project transaction of a non-recurring nature. Organic sales of coated fabrics increased in all regions with the exception of Asia. Apart from the transportation equipment segment, sales to all segments were favorable. Organic sales of printing blankets rose slightly year on year, with stronger sales to Asia counterbalancing the weaker sales trend in Europe and North and South America.

EBIT improved compared with the corresponding period in 2015. The EBIT margin strengthened primarily as a result of ongoing restructuring measures and effective cost control. Exchange rate effects from the translation of foreign subsidiaries had a positive impact of SEK 8 M on earnings compared with the year-earlier period.

Full-year 2016. Organic sales for the full year decreased 2 percent compared with 2015. Sales of coated fabrics declined during the year. A positive organic performance was reported primarily in Asia, although this could not fully offset lower sales in Europe and North America. Organic sales of printing blankets were unchanged during the year as a result of a favorable trend in Asia in parallel with a weaker performance in other regions.

EBIT and EBIT margin rose somewhat compared with the preceding year, mainly due to implemented restructuring programs, streamlining of production and effective cost control. Measures to further improve profitability are proceeding according to plan. Exchange rate effects from the translation of foreign subsidiaries had a positive impact of SEK 5 M on EBIT compared with 2015.

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

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	Q4 2016	Q4 2015	Change, %	12M 2016	12M 2015	Change, %
Net sales	1,390	1,204	15	5,193	5,117	1
Change total, %	15	- 6		1	3
Organic sales, %	0	- 9		- 2	- 5
Structural change, %	13	-		4	2
Currency effects, %	2	3		- 1	6
EBIT	155	141	10	541	560	- 3
EBIT, %	11.2	11.7		10.4	10.9

Additional key ratios on pages 20 - 21

Fourth quarter 2016. Organic sales for the quarter were unchanged year on year. Structural growth contributed 13 percent in total. Sales to the automotive industry were favorable, while sales to general industry remained subdued in large parts of the world. Low activity in the oil/gas segment had a negative impact on sales. Adjustments are ongoing within the oil/gas operations and these are expected to have a positive impact on the result in the quarters ahead. Deliveries to the insulation solutions product area varied between different sub-segments and geographic markets. Europe and North and South America reported a downturn in organic sales, in contrast to the positive trend in Asia.

EBIT increased primarily as a result of acquisitions at the same time as the EBIT margin declined slightly compared with the corresponding period in 2015, mainly due to an unfavorable sales mix. Exchange rate effects from the translation of foreign subsidiaries had a positive impact of SEK 1 M on earnings compared with the year-earlier period. The business area finalized the acquisition of a German and Swiss leading supplier of components and systems for antivibration solutions for the rail market. Refer to page 8.

Full-year 2016. Organic sales for the full-year declined by 2 percent compared with 2015. Most geographic markets reported negative organic sales, apart from Asia where the organic sales trend was marked by healthy deliveries to principally the automotive industry.

EBIT and EBIT margin declined compared with the preceding year, due primarily to lower project deliveries. Exchange rate effects from the translation of foreign subsidiaries had a negative impact of SEK 10 M on EBIT compared with 2015.

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

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	Q4 2016	Q4 2015	Change, %	12M 2016	12M 2015	Change, %
Net sales	893	1,149	-22	3,467	4,331	-20
Change total, %	-22	20		-20	17
Organic sales, %	-27	9		-23	4
Structural change, %	3	4		5	1
Currency effects, %	2	7		- 2	12
EBIT	17	77	-78	108	199	-46
EBIT, %	1.9	6.6		3.1	4.6

Additional key ratios on pages 20 - 21

Fourth quarter 2016. Organic sales for the quarter declined by 27 percent year-on-year. The decline was mainly the result of a significant reduction in the number of project transactions in the oil/gas segment as well as lower sales in parts of the infrastructure construction segment.

EBIT and EBIT margin decreased compared with the corresponding period in 2015, due entirely to the decline in project deliveries. Implemented acquisitions and proactive efforts to adapt the offshore oil/gas operations to the challenging market environment have enabled the business area to post a profit despite significantly lower organic sales.

Investment readiness among customers in the oil/gas segment remains subdued. This is expected to lead to lower project deliveries also in 2017 and impacts about half of the business area's sales. Exchange rate effects from the translation of foreign subsidiaries had a negative impact of SEK 4 M on EBIT compared with the year-earlier period.

Full-year 2016. Organic sales for the full-year declined by 23 percent compared with 2015, primarily resulting from the challenging market situation in oil/gas. The global market price for oil remained at a low level throughout the year, which yielded a markedly lower order book for project transactions.

EBIT and EBIT margin were lower compared with the preceding year, mainly as a result of lower project deliveries in oil/gas but also due to lower sales in certain niches in infrastructure. Activities to adapt the organization to the lower market activity took place throughout the year and continues in 2017. Exchange rate effects from the translation of foreign subsidiaries had a negative impact of SEK 17 M on EBIT compared with 2015.

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

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	Q4 2016	Q4 2015	Change, %	12M 2016	12M 2015	Change, %
Net sales	2,164	1,909	13	8,559	8,302	3
Change total, %	13	3		3	9
Organic sales, %	2	- 2		1	- 1
Structural change, %	7	0		3	0
Currency effects, %	4	5		- 1	10
EBIT	434	401	8	1,903	1,885	1
EBIT, %	20.1	21.0		22.2	22.7

Additional key ratios on pages 20 - 21

Fourth quarter 2016. Organic sales for the quarter increased by 2 percent year on year. The organic sales trend was favorable in Europe and Asia but remained subdued in both South and North America. Deliveries to general industry increased slightly compared with the year-earlier period, which is mainly attributable to strong sales in Asia in addition to a moderate improvement in Europe. Sales to the automotive industry were healthy during the quarter, with all regions – except for North America – displaying improved organic growth. Organic sales to the aerospace industry were slightly lower during the quarter.

EBIT improved due to higher sales and implemented acquisitions. Meanwhile, the EBIT margin declined slightly year on year, which was mainly attributable to consolidation of newly acquired units with lower margins. Exchange rate effects from the translation of foreign subsidiaries had a positive impact of SEK 11 M on earnings compared with the yearearlier period.

During the quarter, a web shop for precision seals was launched, Seals-Shop.com. In addition, the acquisition of a

U.S. manufacturer specialized in precision seals for the aerospace industry was finalized. Refer to page 8.

Full-year 2016. Organic sales for the full year rose 1 percent compared with 2015. Europe reported an unchanged organic trend, where a decline in general industry was offset by higher sales to the automotive and aerospace industries. North America reported negative organic sales resulting from a downturn in several sectors. Positive organic growth in Asia was predominantly driven by healthy sales to the automotive and aerospace industries, and by general industry to a lesser extent.

EBIT rose primarily as a result of acquisitions and effective cost control. However, earnings were charged with unfavorable exchange rate movements and integration of implemented acquisitions. The EBIT margin was maintained at a high level throughout the year. Exchange rate effects from the translation of foreign subsidiaries had a negative impact of SEK 14 M on EBIT compared with 2015.

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

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	Q4 2016	Q4 2015	Change, %	12M 2016	12M 2015	Change, %
Net sales	1,883	1,020	85	6,354	4,315	47
Change total, %	85	5		47	4
Organic sales, %	0	- 2		1	- 6
Structural change, %	80	3		47	2
Currency effects, %	5	4		- 1	8
EBIT	174	95	83	720	468	54
EBIT, %	9.2	9.3		11.3	10.8

Additional key ratios on pages 20 - 21

Fourth quarter 2016. Organic sales for the quarter were unchanged year on year. Structural growth contributed 80 percent in total, of which the CGS acquisition accounted for the majority.

Organic sales of agricultural tires increased slightly during the quarter. Sales to OEMs of agricultural machinery decreased in Europe, but trended favorably in North America and Asia, albeit from low levels. Aftermarket sales rose in all regions, and outperformed the underlying market.

Organic sales of tires for materials handling vehicles and construction vehicles declined slightly year on year. Sales to both the European and Asian markets increased, but were counterbalanced by a decline in North America.

EBIT increased sharply on account of the consolidation of CGS. The EBIT margin was negatively impacted by inventory adjustments that were consistent with the adjustments made among the business area's customers, which created a certain degree of under-absorption of fixed cost in the quarter. Earnings were also charged with integration costs related to implemented acquisitions. Exchange rate effects from the translation of foreign

subsidiaries had a positive impact of SEK 3 M on earnings compared with the year-earlier period.

Full-year 2016. Organic sales for the full-year increased by 1 percent compared with 2015. Structural growth contributed 47 percent in total. Organic agriculture-related sales rose slightly while the organic sales trend for tires for materials handling vehicles and construction vehicles was slightly negative.

EBIT rose sharply, due mainly to the implemented acquisitions. The EBIT margin increased as a result of effective cost control, successful positioning in the market and an improved sales mix. Earnings were charged with integration costs related to implemented acquisitions and start-up costs for the U.S. agricultural tire production site.

Exchange rate effects from the translation of foreign subsidiaries had a negative impact of SEK 19 M on EBIT compared with 2015. After the closing of the period, a decision was taken to make a major investment in the tire operation in Serbia, to improve the footprint and increase production capacity to accommodate additional future sales.

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	Q4 2016	12M 2016 1)
Net sales	447	1,063
EBIT	31	112
EBIT, %	7.0	10.5

Additional key ratios on pages 20 - 21

1) Key ratios refer to the period of June to December

Fourth quarter 2016. During the quarter, demand for niche products for the automotive and general industries remained strong, at the same time as the volume of publicly awarded projects was weak. A number of long-term supply agreements for components were signed during the period.

The fourth quarter was characterized by seasonally lower volumes, accentuated by customer requirements to reduce inventory levels prior to year-end, which created underabsorption of fixed costs. In contrast and for the same reasons, cash generation during the period was highly favorable.

The order status for the first quarter of 2017 is stable and both sales and profitability are expected to clearly improve already from the start of the new year. As part of the integration work with the Trelleborg Industrial Solutions and Trelleborg Coated Systems business areas, a number of integration and cooperation projects were identified and initiated during the quarter.

June - December 2016. For the seven months Rubena and Savatech have been part of Trelleborg, the units have demonstrated stable sales and satisfactory profitability, which were however impacted by a seasonally weaker final quarter.

Capacity utilization for several product lines remained at a high level. A number of investment projects aimed at increasing manufacturing capacity for selected niche products are ongoing and will gradually enable increased growth and profitability.

EBIT and EBIT margin were charged with costs associated with preparations aimed at integrating Rubena Savatech in the Trelleborg Industrial Solutions and Trelleborg Coated Systems business areas. This work is proceeding according to schedule ahead of a planned consolidation in 2017.

Financial statements

Income Statements

SEK M	Q4 2016	Q4 2015	12M 2016	12M 2015
Net sales	7,434	5,927	27,145	24,803
Cost of goods sold	-5,077	-3,956	-18,079	-16,522
Gross profit	2,357	1,971	9,066	8,281
Selling expenses	-629	-480	-2,302	-2,044
Administrative expenses	-828	-724	-2,955	-2,731
Research and development costs	-128	-101	-433	-383
Other operating income/expenses	66	38	111	94
Profit from associated companies	3	1	9	2
EBIT, excluding items affecting comparability	841	705	3,496	3,219
Items affecting comparability	-118	-90	-391	-257
EBIT	723	615	3,105	2,962
Financial income and expenses	-53	-43	-209	-153
Profit before tax	670	572	2,896	2,809
Tax	-151	-132	-680	-713
Net profit in continuing operations	519	440	2,216	2,096
Net profit in discontinuing operations 1)	0	104	4,369	509
Total net profit	519	544	6,585	2,605
- equity holders of the parent company	519	544	6,585	2,603
- non-controlling interest	-	0	-	2
1) Relates to Vibracoustic
Earnings per share, SEK	Q4 2016	Q4 2015	12M 2016	12M 2015
Continuing operations	1.92	1.62	8.18	7.73
Discontinuing operations	0.00	0.38	16.12	1.87
Group, total	1.92	2.00	24.30	9.60

Continuing operations, excluding items affecting comparability	2.23	1.84	9.23	8.39
Number of shares
End of period	271,071,783	271,071,783	271,071,783	271,071,783
Average number	271,071,783	271,071,783	271,071,783	271,071,783

Statements of comprehensive income

SEK M	Q4 2016	Q4 2015	12M 2016	12M 2015
Total net profit	519	544	6,585	2,605
Other comprehensive income
Items that will not be reclassified to the income statement
Reassessment of net pension obligation	20	1	-46	2
	20	1	-46	2
Items that may be reclassified to the income statement
Cash flow hedges	89	-161	165	-175
Hedging of net investment	6	205	-502	-32
Translation difference	81	-497	1,552	-471
Income tax relating to components of other comprehensive income	-21	-55	99	20
Other comprehensive income relating to discontinuing operations	0	-57	-254	-66
	155	-565	1,060	-724
Other comprehensive income, net of tax	175	-564	1,014	-722
Total comprehensive income	694	-20	7,599	1,883

EBIT specification

SEK M	Q4 2016	Q4 2015	12M 2016	12M 2015
EBITDA, excluding items affecting comparability	1,166	923	4,565	4,053
Depreciation, property, plant and equipment	-251	-187	-866	-728
EBITA, excluding items affecting comparability	916	736	3,700	3,325
Amortization, intangible assets	-75	-31	-204	-106
EBIT, excluding items affecting comparability	841	705	3,496	3,219
Items affecting comparability	-118	-90	-391	-257
EBIT	723	615	3,105	2,962

Balance Sheets
Group	Dec 31	Dec 31
SEK M	2016	2015
Property, plant and equipment	9,435	6,446
Intangible assets	23,203	12,227
Other financial assets	1,289	3,627
Total non-current assets	33,927	22,300
Inventories	5,060	3,758
Current operating receivables	6,710	5,387
Current interest-bearing receivables	778	393
Cash and cash equivalents	1,879	2,552
Total current assets	14,427	12,090
Total assets	48,354	34,390
Equity holders of the parent company	25,137	18,622
Non-controlling interest	-	0
Total equity	25,137	18,622
Non-current interest-bearing liabilities	9,852	5,302
Other non-current liabilities	1,832	1,213
Total non-current liabilities	11,684	6,515
Interest-bearing current liabilities	5,282	4,077
Other current liabilities	6,251	5,176
Total current liabilities	11,533	9,253
Total equity and liabilities	48,354	34,390

Specification of changes in equity	Dec 31	Dec 31
SEK M	2016	2015
Attributable to equity holders of the parent company
Opening balance, January 1	18,622	17,767
Total comprehensive income	7,599	1,882
Acquisitions	-	-10
Dividend	-1,084	-1,017
Closing balance	25,137	18,622
Attributable to non-controlling interest
Opening balance, January 1	-	9
Total comprehensive income	-	1
Acquisitions	-	-10
Closing balance	-	0
Sum total equity, closing balance	25,137	18,622

Specification of capital employed	Dec 31	Dec 31
SEK M	2016	2015
Total assets	48,354	34,390
Less:
Interest-bearing receivables 1)	1,137	564
Cash and cash equivalents	1,879	2,552
Tax assets	1,570	1,325
Operating liabilities	6,180	5,012
Capital employed	37,588	24,937
of w hich discontinuing operations	-82	2,683
Capital employed excluding discontinuing operations	37,670	22,254

1) including receivable relating to disposal of Vibracoustic

Cash flow statements
Group, SEK M	Q4 2016	Q4 2015	12M 2016	12M 2015
Operating activities
EBIT incl part in associated companies	723	615	3,105	2,962
Adjustments for items not included in cash flow :
Depreciation, property, plant and equipment	254	189	868	726
Amortization, intangible assets	74	32	203	107
Impairment losses, property, plant and equipment	- 2	- 2	54	21
Impairment losses, intangible assets	-	9	-	9
Dividend from associated companies	0	-	2	1
Part in associated companies and other non cash-flow affecting items	- 5	3	- 5	- 4
Cash-flow effects from items affecting comparability	4	0	4	4
Interest received and other financial items	14	9	40	35
Interest paid and other financial items	-64	-68	-213	-201
Taxes paid	-166	-157	-593	-472
Cash flow from operating activities before changes in
working capital	832	630	3,465	3,188
Cash flow from changes in w orking capital:
Change in inventories	118	214	- 5	-17
Change in operating receivables	686	509	1,047	7
Change in operating liabilities	-155	-247	-1,033	-503
Change in items affecting comparability	26	- 3	5	32
Cash flow from operating activities	1,507	1,103	3,479	2,707
Investing activities
Acquisitions	-1,276	-567	-13,380	-681
Discontinuing operations	-20	1,357	6,165	1,390
Capital expenditure, property, plant and equipment	-464	-528	-1,074	-1,241
Capital expenditure, intangible assets	-30	-32	-74	-73
Sale of non-current assets	14	12	37	59
Cash flow from investing activities	-1,776	242	-8,326	-546
Financing activities
Change in interest-bearing investments	-303	-202	-323	-402
Change in interest-bearing liabilities	-398	67	5,457	684
Dividend - equity holders of the parent company	-	-	-1,084	-1,017
Cash flow from financing activities	-701	-135	4,050	-735
Cash flow for the period	-970	1,210	-797	1,426
Cash and cash equivalents:
At beginning of the period	2,814	1,351	2,552	1,141
Exchange rate differences	35	- 9	124	-15
Cash and cash equivalents at end of period	1,879	2,552	1,879	2,552

SEK M	Q4 2016	Q4 2015	12M 2016	12M 2015
Net sales
Trelleborg Coated Systems	671	602	2,526	2,559
Trelleborg Industrial Solutions	1,390	1,204	5,193	5,117
Trelleborg Offshore & Construction	893	1,149	3,467	4,331
Trelleborg Sealing Solutions	2,164	1,909	8,559	8,302
Trelleborg Wheel Systems	1,883	1,020	6,354	4,315
Rubena Savatech	447	-	1,063	-
Group items	61	111	339	505
Eliminations	-75	-68	-356	-326
Total	7,434	5,927	27,145	24,803
EBIT, excluding items affecting comparability
Trelleborg Coated Systems	87	74	323	317
Trelleborg Industrial Solutions	155	141	541	560
Trelleborg Offshore & Construction	17	77	108	199
Trelleborg Sealing Solutions	434	401	1,903	1,885
Trelleborg Wheel Systems	174	95	720	468
Rubena Savatech	31	-	112	-
Group items	-57	-83	-211	-210
Total	841	705	3,496	3,219
EBIT %, excluding items affecting comparability
Trelleborg Coated Systems	12.9	12.3	12.8	12.4
Trelleborg Industrial Solutions	11.2	11.7	10.4	10.9
Trelleborg Offshore & Construction	1.9	6.6	3.1	4.6
Trelleborg Sealing Solutions	20.1	21.0	22.2	22.7
Trelleborg Wheel Systems	9.2	9.3	11.3	10.8
Rubena Savatech	7.0	-	10.5	-
Total	11.3	11.9	12.9	13.0

Net sales per market, share and organic growth, %	Q4 2016	Q4 2015	12M 2016	12M 2015
Western Europe (47%)	- 4	- 2	- 5	- 2
Other Europe (9%)	10	9	7	- 3
North America (23%)	- 4	-18	- 7	-10
South and Central America (4%)	-25	71	-13	32
Asia and other markets (17%)	- 2	11	- 3	3
Total (100% refer to share 2016)	- 4	0	- 5	- 2

Net sales per market excl. project related 1), organic growth, %	Q4 2016	Q4 2015	12M 2016	12M 2015
Western Europe	0	- 2	- 2	- 3
Other Europe	6	9	6	4
North America	- 6	- 7	- 7	- 5
South and Central America	23	1	8	- 1
Asia and other markets	19	- 2	11	0
Total	2	- 2	- 1	- 3

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

SEK M Net sales	Q4 2016	Q3 2016	Q2 2016	Q1 2016	Q4 2015	Q3 2015	Q2 2015	Q1 2015	Q4 2014
Trelleborg Coated Systems	671	596	628	631	602	602	672	683	542
Trelleborg Industrial Solutions	1,390	1,199	1,321	1,283	1,204	1,215	1,358	1,340	1,280
Trelleborg Offshore & Construction	893	837	835	902	1,149	1,019	1,174	989	954
Trelleborg Sealing Solutions	2,164	2,148	2,120	2,127	1,909	2,060	2,129	2,204	1,845
Trelleborg Wheel Systems	1,883	1,855	1,472	1,144	1,020	1,037	1,136	1,122	976
Rubena Savatech	447	450	166	-	-	-	-	-	-
Group items	61	73	98	107	111	118	149	127	70
Eliminations	-75	-86	-96	-99	-68	-76	-87	-95	-75
Total	7,434	7,072	6,544	6,095	5,927	5,975	6,531	6,370	5,592
EBIT, excluding items affecting comparability
Trelleborg Coated Systems	87	74	86	76	74	66	87	90	63
Trelleborg Industrial Solutions	155	114	149	123	141	124	154	141	141
Trelleborg Offshore & Construction	17	42	26	23	77	46	68	8	53
Trelleborg Sealing Solutions	434	467	506	496	401	463	496	525	407
Trelleborg Wheel Systems	174	204	186	156	95	132	125	116	103
Rubena Savatech	31	55	26	-	-	-	-	-	-
Group items	-57	-41	-80	-33	-83	-33	-47	-47	-77
Total	841	915	899	841	705	798	883	833	690
EBIT %, excluding items affecting comparability
Trelleborg Coated Systems	12.9	12.4	13.7	12.1	12.3	11.0	12.9	13.2	11.8
Trelleborg Industrial Solutions	11.2	9.5	11.3	9.6	11.7	10.2	11.4	10.5	11.0
Trelleborg Offshore & Construction	1.9	5.1	3.1	2.6	6.6	4.6	5.8	0.8	5.5
Trelleborg Sealing Solutions	20.1	21.7	23.8	23.3	21.0	22.4	23.3	23.8	22.1
Trelleborg Wheel Systems	9.2	11.0	12.6	13.6	9.3	12.7	11.0	10.3	10.5
Rubena Savatech	7.0	12.1	15.6	-	-	-	-	-	-
Total	11.3	12.9	13.7	13.8	11.9	13.4	13.5	13.1	12.3
Items affecting comparability	-118	-51	-107	-115	-90	-109	-23	-35	-68
EBIT	723	864	792	726	615	689	860	798	622

Q4 2015,	Organic	Structural	Currency	Q4 2016,
SEK M	sales, %	change, %	effects, %	SEK M
602	5	-	6	671
1,204	0	13	2	1,390
1,149	-27	3	2	893
1,909	2	7	4	2,164
1,020	0	80	5	1,883
-	-	100	-	447
43	-	-	-	-14
5,927	- 4	26	3	7,434

Exchange rate differences impacting EBIT excluding items affecting
comparability 1), SEK M	Q4 2016	12M 2016
Trelleborg Coated Systems	8	5
Trelleborg Industrial Solutions	1	-10
Trelleborg Offshore & Construction	- 4	-17
Trelleborg Sealing Solutions	11	-14
Trelleborg Wheel Systems	3	-19
Rubena Savatech	-	-
Group items	3	11
Total	22	-44
1 ) Impact on EBIT excluding items affecting comparability in translation of foreign subsidiaries.

Income Statements, SEK M	Q4 2016	Q3 2016	Q2 2016	Q1 2016	Q4 2015	Q3 2015	Q2 2015	Q1 2015	Q4 2014
Net sales	7,434	7,072	6,544	6,095	5,927	5,975	6,531	6,370	5,592
Cost of goods sold	-5,077	-4,749	-4,269	-3,984	-3,956	-3,983	-4,332	-4,251	-3,779
Gross profit	2,357	2,323	2,275	2,111	1,971	1,992	2,199	2,119	1,813
Selling expenses	-629	-591	-558	-524	-480	-502	-537	-525	-467
Administrative expenses	-828	-757	-712	-658	-724	-651	-694	-662	-626
Research and development costs	-128	-100	-105	-100	-101	-91	-95	-96	-88
Other operating income/costs	66	36	- 3	12	38	50	9	- 3	59
Profit from associated companies	3	4	2	0	1	0	1	0	- 1
EBIT, excluding items affecting comparability	841	915	899	841	705	798	883	833	690
Items affecting comparability	-118	-51	-107	-115	-90	-109	-23	-35	-68
EBIT	723	864	792	726	615	689	860	798	622
Financial income and expenses	-53	-46	-63	-47	-43	-34	-41	-35	-33
Profit before tax	670	818	729	679	572	655	819	763	589
Tax	-151	-187	-192	-150	-132	-170	-200	-211	-161
Net profit in continuing operations	519	631	537	529	440	485	619	552	428
Net profit in discontinuing operations	-	-	4,369	-	104	131	137	137	73
Total net profit	519	631	4,906	529	544	616	756	689	501
- equity holders of the parent company	519	631	4,906	529	544	616	755	688	501
- non-controlling interest	0	0	0	0	0	0	1	1	0
Earnings per share, SEK	Q4 2016	Q3 2016	Q2 2016	Q1 2016	Q4 2015	Q3 2015	Q2 2015	Q1 2015	Q4 2014
Continuing operations	1.92	2.33	1.98	1.95	1.62	1.80	2.28	2.03	1.58
Discontinuing operations	0.00	0.00	16.12	0.00	0.38	0.48	0.50	0.51	0.27
Group, total	1.92	2.33	18.10	1.95	2.00	2.28	2.78	2.54	1.85
Continuing operations, excluding items affecting
comparability	2.23	2.46	2.31	2.23	1.84	2.07	2.35	2.13	1.78

Acquisitions

Carrying amounts of identifiable acquired assets and assumed liabilities

Acquisition of CGS

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. Mitas will be integrated into the Trelleborg Wheel Systems business area. The other businesses will be recognized separately from Trelleborg's business areas during a transition period, before being gradually integrated into the current business areas. The total cash consideration amounted to approximately SEK 10.9 billion on a cash and debt-free basis. CGS is headquartered in the Czech Republic and generated sales of approximately SEK 5.6 billion in 2015 with an EBIT margin of 16.5 percent. The transaction was consolidated from May 31, 2016. As a result of this acquisition, Trelleborg will almost double its sales in agricultural tires, strengthen its leading position in industrial tires and add new positions in complementary specialty tires segments. CGS's engineered polymer solutions add new interesting positions as well as strengthen Trelleborg's existing leading positions in several of the Group's current business areas.

CGS Holding a.s.

SEK M	12M 2016
		Adjustment to
	Book value	fair value	Fair value
Developed technology 1)		206	206
Trademarks 2)	5	1,296	1,301
Customer relationships 3)		1,164	1,164
Other intangible assets	15		15
Property, plant and equipment	2,284	-160	2,124
Deferred tax assets	30		30
Shares in associated companies	67		67
Interest-bearing receivables	4		4
Inventories	906		906
Operating receivables	1,712		1,712
Current tax asset	34		34
Cash and cash equivalents	277		277
Deferred tax liabilities	-27	-228	-255
Interest-bearing liabilities	-15		-15
Post employment benefits	-74		-74
Provision obligations	-144		-144
Current tax liability	-101		-101
Operating liabilities	-1,468		-1,468
Net assets	3,505	2,278	5,783
Goodw ill			5,094
Total purchase price	3,505	2,278	10,877
Cash and other net debt in acquired operations			-266
Impact shown in cash flow statement	3,505	2,278	10,611

1) Excess value of developed technology is amortized over 10 years

2) The value of brands considered to have an indefinite useful life and thus no amortization takes place

3) Excess value of customer relationships are amortized over 15 years

The above goodwill is attributable to purchase-specific synergies, the value of new future customers, the value of new future technologies and the manpower existing in CGS. The fair value of acquired, identifiable, intangible assets is preliminary.

Other acquisitions

In addition to CGS, six acquisitions have been carried out during the year:

First quarter

Through the Trelleborg Industrial Solutions business area, Trelleborg signed an agreement and 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.

Second quarter

Through the Trelleborg Sealing Solutions business area, Trelleborg signed an agreement and finalized the acquisition of 100 percent of Specialty Silicone Fabricators Inc. (SSF), a U.S.-based privately owned manufacturer of high-precision silicone components for medical technology original equipment manufacturers (OEMs).

Third quarter

Through the Trelleborg Wheel Systems business area, Trelleborg signed an agreement and finalized the acquisition of 100 percent of International Tyre and Wheel Solutions Ltd. (ITWS). ITWS is a UK-based privately owned distributor of large solid off-the-road (OTR) tires for the waste, recycling and demolition industries. The acquisition complements the recent acquisition of Mitas pneumatic construction tires and gives Trelleborg a clear and broad offering in both pneumatic and solid tires across Europe, the Middle East and Africa.

Through the Trelleborg Sealing Solutions business area, Trelleborg signed an agreement and finalized the acquisition of 100 percent of the privately owned U.S.-based Anderson Seal LLC. The business specializes in the distribution and service of seals, gaskets and custom-molded products for Original Equipment Manufacturers (OEMs) in several industries. The acquisition will increase Trelleborg's presence in the Midwestern United States.

Fourth quarter

Through the Trelleborg Industrial Solutions business area, Trelleborg finalized the acquisition of 100 percent of Schwab Vibration Control, a German and Swiss technology-leading supplier of components and systems for antivibration solutions for the rail market. Schwab Vibration Control is headquartered and has its production site in Velten, Germany. It also has engineering and sales offices in Adliswil, Switzerland and Laudenbach, Germany. Sales amounted to approximately SEK 575 M in 2015.

Through the Trelleborg Sealing Solutions business area, Trelleborg finalized the acqusition of 100 percent of a U.S.-based subsidiary of CoorsTek, Inc. that specializes in the manufacturing of precision seals for the aerospace industry. The acquisition will further strengthen Trelleborg's presence in North America and in sealing solutions for major aircraft programs. The operation is located in El Segundo, California. Sales amounted to approximately SEK 115 M in 2015. This bolt-on acquisition is part of Trelleborg's strategy to strengthen its positions in attractive market segments.

In addition, certain adjustments were made to the acquisitions analyses due to acquisitions carried out at the end of 2015.

Other acquisitions

SEK M	12M 2016
		Adjustment to
	Book value	fair value	Fair value
Developed technology 1)		43	43
Trademarks 2)		109	109
Customer relationships 3)		823	823
Other intangible assets	4		4
Property, plant and equipment	427		427
Deferred tax assets	30		30
Interest-bearing receivables	10		10
Inventories	202		202
Operating receivables	191		191
Cash and cash equivalents	106		106
Deferred tax liabilities	-14	-221	-235
Interest-bearing liabilities	-372		-372
Post employment benefits	-34		-34
Provision obligations	-19		-19
Current tax liability	-39		-39
Operating liabilities	-142		-142
Net assets	350	754	1,104
Goodw ill			1,409
Total purchase price			2,513
Cash and other net debt in acquired operations			256
Impact shown in cash flow statement			2,769

1) Excess value of developed technology is amortized over 10 years

2) The majority have an indefinite useful life, no amortization takes place. A minor part is amortized over 8 years

3) Excess value of customer relationships are amortized over 12-15 years

The above goodwill of SEK 1,409 M pertaining to "Other acquisitions", which was recognized in 2016, was 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.

The Group´s financial assets and liabilities measured at fair value

At December 31, 2016	Derivatives valued at		Derivatives used for
	fair value in profit and		hedging purposes
SEK M	loss
	Carrying	M easure	Carrying	M easure
	amount	ment level	amount	ment level	Total
Accounts receivable and other receivables	- 3	2	17	2	14
Current interest-bearing receivables	51	2	189		240
Total assets	48		206		254
Other non-current liabilities	-		122	2	122
Interest-bearing non-current liabilities	19	2	-		19
Accounts payable and other liabilities	8	2	105	2	113
Interest-bearing current liabilities	210	2	-	2	210
Total liabilities	237		227		464

At December 31, 2015		Derivatives valued at fair value in profit and loss
SEK M	Carrying	M easure	Carrying	M easure
	amount	ment level	amount	ment level	Total
Other financial non-current assets	7	2	4	2	11
Accounts receivable and other receivables	2	2	6	2	8
Current interest-bearing receivables	88	2	161	2	249
Total assets	97		171		268
Other non-current liabilities	-		118	2	118
Interest-bearing current liabilities	128	2	1	2	129
Accounts payable and other liabilities	6	2	258	2	264
Total liabilities	134		377		511

Valuation techniques used to derive Level 2 fair values

Level 2 derivatives comprise forw ard foreign contracts and interest rate sw aps and are used mainly for hedging purposes but also for proprietary trading. These forw ard foreign exchange contracts have been fair valued using forw ard exchange rates that are quoted in an active market. Interest rate sw aps are fair valued using forw ard 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 receivable totaling SEK 685 M, related to Vibracoustic's realized sales development in 2016 and 2017, has been classified in accordance w ith 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	Q4 2016	Q4 2015	12M 2016	12M 2015
Administrative expenses	-104	-98	-313	-280
Other operating income	155	70	477	395
Other operating expenses	-258	-176	-309	-225
EBIT	-207	-204	-145	-110
Financial income and expenses	-281	-69	-273	410
Profit before tax	-488	-273	-418	300
Appropriations	450	567	450	567
Tax	-26	-54	34	3
Net profit	-64	240	66	870

Statements of comprehensive income, SEK M	Q4 2016	Q4 2015	12M 2016	12M 2015
Net profit	-64	240	66	870
Total comprehensive income	-64	240	66	870

Balance sheets	Dec 31	Dec 31
SEK M	2016	2015
Property, plant and equipment	16	19
Intangible assets	2	3
Financial assets	35,533	35,760
Total non-current assets	35,551	35,782
Current receivables	130	107
Interest-bearing receivables	556	622
Cash and cash equivalents	0	0
Total current assets	686	729
Total assets	36,237	36,511
Shareholders' equity	10,311	11,329
Total equity	10,311	11,329
Untaxed reserves	-	-
Interest-bearing non-current liabilities	4,374	4,378
Other non-current liabilities	24	29
Total non-current liabilities	4,398	4,407
Interest-bearing current liabilities	21,374	20,590
Other current liabilities	154	185
Total current liabilities	21,528	20,775
Total equity and liabilities	36,237	36,511

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 liabilities.1)

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.

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.

1) The 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, the end producer of, for example, a tractor.

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.

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.

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.

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.

Core 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, longterm shareholder value and added value are generated for customers. Trelleborg works with the strategy, both Group-wide 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 indepth 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:

							Capital
	General						intensive	Light
	industry						industry	Vehicles
			Transport		Infrastructure
Business area/Segment distribution		Oil & gas	equipment	Agriculture	construction	Aerospace
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 business. In addition, it includes central staff functions and a Group-wide operation.

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 presentation and telephone conference on February 1 at 9:00 a.m. CET

A presentation and telephone conference will be held on February 1 at 9:00 a.m. CET. The presentation will take place at Operaterrassen in Stockholm, Sweden. To participate in the telephone conference, call +46 8 566 42 695 (Sweden), +44 20 3008 9809 (U.K.) or +1 855 831 5944 (U.S.). 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 2017

Annual Report 2016	March 17
Interim report January-March 2017	April 27
Annual General Meeting 2017	April 27
Interim report April-June 2017	July 20
Interim Report July-September	October 27
Year-end report 2016	February 2, 2018

For further information

Investors/analysts

Christofer Sjögren, VP Investor Relations Phone: +46 (0)410 - 670 68 Mobile: +46 (0)708 - 66 51 40 E-mail: christofer.sjogren@trelleborg.com Media

Karin Larsson, VP Media Relations Phone: +46 (0)410 - 670 15 Mobile: +46 (0)733 - 74 70 15 E-mail: 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 7:45 a.m. CET on February 1, 2017.

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