“Better" Trelleborg sets out new growth ambitions

Trelleborg, Sweden – Trelleborg Group has raised its financial targets under its ‘new horizons’ strategy and is eyeing further growth with bolt-on acquisitions.

Over the “mid-term” Trelleborg aims to increase annual sales growth from previous guidance of 5-8% to more than 8%, CFO Fredrick Nilsson told financial analysts 23 May.

Furthermore, the group aims to increase EBIT margin guidance of 16% to an EBITA margin of more than 20%, said the finance chief during a Trelleborg capital markets day.

The shift to EBITA, explained Nilsson, is due to the fact that the group intends to continue acquisitions so that this will be a better guide to performance.

Trelleborg expects to deliver these business improvements through ‘scaling up the pace of our M&As, mainly focusing on the bolt-on acquisitions.’

The group has identified 200 acquisition propects, with which it could ‘work on building a relationship and then accelerate the closing of a deal.’

The rubber/polymer industrial products maker has also earmarked SEK1.5 billion for its capital expenditure programme over the next two years.

Investment targets, said the CFO, include new factories in Vietnam, capacity expansions in India and China, consolidating footprint in the US and Europe and improved IT systems.

Also presenting at the event, Trelleborg CEO and president Peter Nilsson said the group had changed significantly over the past 10 years to become a “better Trelleborg”.

The changes included the group’s reducing exposure to cyclical agriculture and oil & gas industries as well as the automotive segment, noted Nilsson.

This included divesting its subsea oil & gas operations, printing blankets, Vibracoustic, certain moulded parts units and lately Trelleborg Wheel Systems.

Going forward, Trelleborg aims to offer high-value products with critical functions, including those which present a barrier to switching to another supplier.

“Trelleborg has never been as strong operationally or financially, and it is for this reason that we are continuing to raise our level of ambition,” concluded Nilsson.