Demand for Industrial Tyres Lifts Trelleborg Wheel System sales

Although its year-on-year sales share of the group total slipped from 11.1 per cent in the second quarter of 2009 to 10.7 per cent in quarter two of this year, sales at Trelleborg Wheel Systems grew two per cent year-on-year during the three month period. Sales for the division came to SEK 795 million (£70.7 million), a figure that represents eight per cent organic growth counterbalanced by negative six per cent exchange rate effects. EBITA margin in the three months between April and June 2010 was 10.3 per cent, down from 13.8 per cent a year earlier. The Swedish company states that markets outside North America and Europe recorded positive performance for volume and earnings.

In reference to the performance of its Wheel Systems division, Trelleborg notes that demand in the agricultural sector was below the level reported in the second quarter of 2009, while global demand for industrial tyres from manufacturers of material handling equipment improved steadily and was higher than in the corresponding period last year. The business area’s strength in large agricultural tyres contributed to this product’s increased market share during the quarter. “The range is continually being developed and expanded to further advance the business area’s position as a complete supplier,” Trelleborg reported.

Total Trelleborg AB net sales during the April to June quarter amounted to SEK 7,430 million, up 14.3 per cent on the previous year. Net sales, including discontinued operations, came to SEK 7,814 million (£695.0 million). Profit for the period was SEK 440 million; after taking discontinued operations and capital loss into account, this figure was revised to SEK 274 million (£24.4 million), a 496 per cent increase on the second quarter of 2009. The group’s EBITA margin for the quarter was 13.3 per cent.

“Demand during the quarter continued to improve in the majority of our segments and order book levels are favourable,” said Trelleborg AB president and CEO Peter Nilsson. “We continue to improve our market positions and build a stronger and more efficient Trelleborg. A strong organic growth of 21 per cent and an efficient cost structure were some of the factors behind the exceptionally strong trend in the Group’s margins. The EBITDA margin improved and was 13.3 percent for the quarter, compared to 8.6 percent in the year-earlier period, and 11.5 percent in the first quarter of 2010. At the same time we have had a good cash flow generation. We will continue to focus the business and increase our presence in selected, profitable segments and in expanding geographic markets. As part of this process, we divested part of the Trelleborg Automotive business area during the quarter.”