Trelleborg profitability down, despite higher sales

Trelleborg, Sweden – Trelleborg AB has reported a 6.4% year-on-year decline in earnings (EBITDA) over the third quarter of 2019, despite higher sales.

EBITDA excluding items affecting comparability (earnings) fell to SEK1.13 billion (€105 million) on 6% higher sales of SEK 8.8 billion, Trelleborg reported 24 Oct.

Over the nine-month period, earnings fell 1% to SEK3.9 billion on 7% higher sales of SEK27.5 billion.

Commenting on the third quarter results, group president and CEO Peter Nilsson said the quarter saw a weaker organic sales trend in a number of markets, which was partly offset by a good development in the aerospace business as well as “significant” sales in the oil & gas operations.

“Overall, organic sales decreased by 1% and by 3% excluding our positive project transactions,” he said, adding that operating profit (EBIT) for the period declined 9%, mainly due to reduced sales and stock adjustments in Trelleborg Wheel Systems.

Commenting on cost-saving measures announced at the end of the second quarter, Nilsson said he expected the initiatives to have an impact toward the end of the year and during 2020. 

The industrial trend, Nilsson noted, is generally weaker in most geographical markets compared with the first half of the year, reflecting the trade conflict between the US and China, as well as the uncertainty related to Brexit. 

“This global economic slowdown has impacted sales volumes, not least to customers in the automotive and general engineering industries for both Trelleborg Sealing Solutions and Trelleborg Industrial Solutions,” Nilsson added. 

Overall, the company official anticipated that the demand in the last quarter of the year would be on a par with the third quarter, and with an unfavourable sales mix similar to the third quarter. 

“As previously, we are carefully monitoring economic developments and stand well prepared to manage fluctuating market conditions,” he concluded.