Trelleborg Q1 results show effect of weaker market
In its interim report covering January – March 2013, Sweden’s Trelleborg “noted a strong first quarter despite weaker market conditions”, or in other words, its figures are down on a year earlier but show a respectable performance given the current market. The company anticipates its performance in the second quarter will be on a par with the first quarter.
Net sales for the first quarter of 2013 declined 5.8 per cent to SEK 5.4 billion (£533.1 million); organic sales decreased by five per cent. Operating profit for the quarter, excluding items affecting comparability and the participation in TrelleborgVibracoustic, declined 4.1 per cent to SEK 639 million (£63.2 million), equivalent to an operating margin of 11.8 per cent, up from 11.6 per cent a year earlier. Net profit amounted to SEK 491 million (£48.5 million), a year-on-year decrease of 2.0 per cent.
The business area of interest to us is of course Trelleborg Wheel Systems. Sales here amounted to SEK 1.1 billion (£109.6 million), a decrease of 1.7 per cent on the first quarter of 2012. Operating profit fell 7.7 per cent to SEK 144 million (£14.2 million) and operating margin decreased from 13.8 per cent to 13.0 per cent. “Adjusted for acquisitions and exchange-rate effects, organic sales declined by seven per cent,” the company states. “Sales of tyres fitted on materials handling vehicles in Europe declined significantly compared with the corresponding period in 2012. Sales of agricultural tyres fell slightly less and performed in line with the underlying market. The quarter was the second best to date in terms of agricultural tyres, despite a substantially weaker market climate.”
The impact of lower sales on Trelleborg Wheel Systems’ operating profit was in part offset by reduced costs excluding exchange-rate effects.