Marine hose investigations may cost Trelleborg over Euro 80 million

Trelleborg, Sweden -- Trelleborg AB has said its marine hose operations, Trelleborg Industrie SAS, are now under investigation by Japanese and British anti-competition authorities. The company said these new investigations cover a number of international companies, including its subsidiary, Trelleborg SAS. The investigations follow an investigation and arrests by US Dept of Justice officials in May.

Trelleborg said it could not yet calculate how much the investigation and subsequent fines and legal action might cost. The company added, however, that the "combined financial impact could reach amounts that correspond to a predominant proportion of the Group's pre-tax profits for 2006." The company made operating profits of SEK1478 million (Euro 160 million)in 2006.

Trelleborg said the expenses would be higher if were discovered thzt improper activities had been going on for an extended period. "It is at present unclear when any improper behaviour was commenced but if irregularities have been ongoing over an extended period, this is expected to increase the level of possible costs for Trelleborg."

>Trelleborg said "expenses for the ongoing investigations and the adopted action program are estimated to amount to between approximately SEK 75 million and SEK 100 million (around Euro 10 million) during 2007 and 2008. The bulk of these expenses are external expenses for investigations in progress and provisions will be posted in the interim accounts for the first six months of 2007."

This estimate only relates to Trelleborg's legal expenses, and does not include fines or legal action.

In a stattement, Trelleborg said "However, based mainly on the assessment of Trelleborg's external legal representatives, it can be assumed that the ongoing investigations may lead to the Group incurring significant costs of a nonrecurring nature in gradual stages during 2007 and 2008. Currently, all estimations of the possible financial impact involve considerable uncertainty, but the potential combined financial impact could reach amounts that correspond to a predominant proportion of the Group's pre-tax profits for 2006."

Trelleborg said it would not comment further on the investigation while the authorities' investigations continue

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Press releasefrom Trelleborg