Analysis: Trelleborg results slump as pandemic bites 

Trelleborg, Sweden – Trelleborg AB's announcement of restructuring measures on 20 July follows a challenging first half of trading for the Sweden-based rubber-based products and systems manufacturer.  

Group earnings (EBIT excluding items affecting comparability) fell 17% year-on-year to SEK2.17 billion (€212 million) on 9% lower sales of SEK17 billion during the first six months of the year, Trelleborg said in its first half report 20 July. 

The second quarter was particularly impacted by Covid-19 shutdowns and slow demand, which contributed to a 29% decline in earnings at SEK942 million and an 18% drop in sales to SEK7.6 billion.

“It was a very challenging quarter in many respects and without the extensive efforts… [of] employees at all of our sites throughout the world, this [performance] would not have been possible,” said CEO Peter Nilsson. 

The pandemic negatively impacted organic sales and earnings in most regions within the Trelleborg Industrial Solutions and Trelleborg Sealing Solutions.

Trelleborg Wheel Systems’ sales of tires to OE manufacturers of agricultural machinery was negatively impacted by several customers closing their production sites for a number of weeks. 

However, according to Nilsson, there was “a slightly positive trend” for agricultural tire deliveries to the aftermarket. 

Sales of tires for material handling and construction vehicles were particularly affected by Covid-19, since deliveries to OE manufacturers and aftermarket customers declined significantly, the group CEO noted. 

The volume loss was partly offset by the positive sales mix, strict cost control and the benefits gained from structural measures implemented earlier, Nilsson added.

Organic sales in Businesses Under Development declined in spite of “continued strong development for offshore oil & gas.” Other operations were affected by temporary facility closures caused by customers suspending production and official decisions.

According to Nilsson, the near future will remain challenging as the company does not expect a return to normal market conditions. 

For the third quarter, however, the group expects demand to be "slightly better than in the second quarter of 2020," despite considerable uncertainty regarding demand.