Trelleborg reports flat quarter with ‘mixed performance’ across segments

Trelleborg, Sweden – Trelleborg Group has reported flat sales for the third quarter of 2024 as some market segments and geographies “moved in different directions.”

The Swedish group posted sales of SEK8.4 billion (€739 million) for the three months to end of September, marginally down from the same period last year.

Here, Trelleborg reported that a 3% negative currency exchange impact offset a 1% increase in organic sales and a 2% positive effect of acquisitions.

Group earnings (EBITA) for the period fell 2% year-on-year to SEK1.4 billion, corresponding to a margin of 17.3%, down from 17.6% last year.

Year-to-date, earnings fell 1% to SEK4.55 billion on 2% lower revenue of SEK25.3 billion, Trelleborg reported 24 Oct.

According to president and CEO Peter Nilsson during the latter part of the third quarter, the macroeconomic environment weakened, particularly affecting some industrial segments.

This mainly impacted deliveries to construction and agricultural machinery, while the underlying demand remained “at a good level” within the aerospace industry.

Breaking down segments, Trelleborg Industrial Solutions (TIS) reported flat sales of SEK3.6 billion during the third quarter but earnings fell 8% year-on-year to SEK548 million.

Demand among the industrial market segments was varied, with sales to LNG and larger infrastructure projects growing.

By contrast, sales to the construction industry remained sluggish in both Europe and North America.

The operating margin declined, due higher comparison level in 2023, which was boosted by the launch of its ‘SafePilot P3’ navigation system for Panama Canal transits.

Trelleborg Medical Solutions reported a 32% year-on-year increase in revenue to SEK852 million, helped largely by the acquisition of Baron Group during the quarter.

Sales of polymer solutions remained largely unchanged in both Europe and North America.

The Baron Group acquisition (ERJ report) also helped boost earnings by 67% year-on-year to SEK165 million during the period.

Furthermore, Nilsson said the segment is building up new capacity in several different geographic regions in order to meet “an expected increase in demand in coming years.”

Trelleborg Sealing Solutions (TSS) reported a 1% year-on-year decline in earnings to SEK826 million, as revenue fell 1% to SEK4.1 billion.

Here, Trelleborg said it expected synergies from the acquisition of Minnesota Rubber & Plastics (ERJ report) in the US to positively impact sales and earnings next year.

TSS sales to the aerospace industry remained favourable, impacted only marginally by an ongoing strike in the industry.

Deliveries to the automotive industry increased in Europe and Asia but declined in North America.

In the general industry market segment, the weaker performers were primarily deliveries to construction vehicles and agricultural machinery in North America.

Commenting on the group performance, Nilsson said “substantial investments” continued in “a number of rapidly expanding market segments.”

The investments, he said, are expected to have a positive effect “in several dimensions” in the long term.

“Our build-out of new production units continues in several geographic regions with good growth and cost structure,” the group leader added.

Examples, he said, include Costa Rica, Morocco, Vietnam and India where the group has launched new facilities.

Additionally, Nilsson said the group was "expanding and upgrading" several existing production units in the US, Bulgaria and Malta but did not provide further details.

With external factors creating “significant uncertainty”, Nilsson said the group expected to see slightly lower demand in the final quarter of the year, compared to the third quarter.