Annual report 2011 - Trelleborg

THE GROUP IN BRIEF
IMPROVED EARNINGS AND
STRENGTHENED FINANCES
Developments in the Group’s segments
The market conditions among the Group’s segments varied over the course of
the year. Demand for industrial capital goods was strong throughout the year,
particularly during the first six months. Demand remained healthy in the automotive
industry, principally in Germany, the US and Asia. In the agricultural industry,
demand was highly favorable. The total order level for project-related operations
in offshore oil & gas and infrastructure varied during the year, particularly during
the latter part, impacted by extended lead times. The Group’s market positions
were generally retained or improved during the year.
Net sales
Demand was favorable in most of Trelleborg’s segments. The Group’s sales to
the general industry, light vehicles, transportation equipment, agriculture and
aerospace segments were higher than in 2010. Sales in the offshore oil & gas
and infrastructure segments were lower compared with the preceding year. Net
sales increased by 7 percent for the Group’s continuing operations.
Earnings
Consolidated operating profit rose compared with 2010. The improvement was
attributable to higher sales volumes and a strengthened offering, combined with
the more efficient use of resources.
Operating profit increased in the Trelleborg Sealing Solutions and Trelleborg
Wheel Systems business areas, driven by a high organic growth rate within the
scope of a streamlined cost structure.
Operating profit for Trelleborg Engineered Systems declined, mainly due to
lower project deliveries, production disruptions in offshore oil & gas and start-up
costs in Brazil. Other parts of the business area performed well during the year.
Operating profit declined slightly for Trelleborg Automotive, primarily as a result
of higher and volatile raw material prices. For further information, refer to the
respective business areas on pages 8, 10, 12 and 14.
Cash flow
Cash flow was lower than in 2010. The favorable generation of earnings was
offset by a significant rise in working capital, which was a direct result of
increased sales. A higher investment level compared with the preceding year
also impacted cash flow.
Net debt – capital structure
The capital structure remained favorable. Net debt was maintained at a level
that was on a par with 2010. Combined with the improved earnings generation,
this also resulted in a marginal improvement of the key figure net debt in relation
to EBITDA.
Continuing operations
Net sales 2011 2010
Net sales, sek m 29,106 27,196
Change in %
Organic sales +11 +17
Structural change +2 0
Currency effect –6 –7
Total +7 +10
Earnings 2011 2010
Operating profit, sek m 2,431 2,036
Net profit, sek m 1,578 1,284
Earnings per share, sek
Excluding items affecting comparability
5.75 4.65
Operating profit, sek m 2,635 2,286
Operating margin, (ROS), % 9.0 8.4
EBITDA margin, % 12.1 12.1
Earnings per share, sek 6.30 5.35
Cash flow 2011 2010
Operating cash flow, sek m 1,655 2,190
Free cash flow, sek m 594 1,173
Net cash flow, sek m –67 950
Net debt – capital structure 2011 2010
Net debt, sek m 6,425 6,409
Net debt/EBITDA, times 1.8 1.9
Debt/equity ratio, % 48 53
Significant events during the year
First Quarter Second Quarter Third Quarter Fourth Quarter
January 5 – Acquisition of UK-based
PPL Polyurethane Products finalized.
January 17 – Letter of intent signed
between Trelleborg and Freudenberg
covering the formation of a global
leader in antivibration solutions.
February 1 – Divestment of roofing
operation finalized.
February 7 – Acquisition of Watts Tyre
Group finalized.
March 8 – Acquisition of specialty tires
operation in China finalized.
March 14 – Investment to create platform
for growth in the graphics industry
in Brazil.
March 24 – Strengthened long-term
financing.
6 Annual Report 2011 Trelleborg AB
April 1 – Acquisition of precision seal
business for life science finalized.
April 5 – Divestment of operations in
brake hoses for light vehicles finalized.
April 13 – Acquisition of business in
offshore oil & gas in Brazil finalized.
June 20 – Continued aggressive investment
in China – R&D center inaugurated.
July 15 – Acquisition of
industrial hose business.
October 3 – Divestment of
gas spring operation for
light vehicles finalized.
December 22 – Trelleborg
signs agreement with
Freudenberg covering
the formation of a global
company in antivibration
solutions.
All of Trelleborg’s press releases are available at www.trelleborg.com/en/Media/Press-Releases
GRI: 2.8, 2.9