We seal damp and protect

THE GROUP IN BRIEF
A largely
satisfying year
A
Net sales
SEK M +10%
25,000
20,000
15,000
10,000
5,000
0
2014 2015
Ulf Berghult, Chief Financial Officer
Sales are increasing despite low organic growth – can you explain this?
The organic sales trend was negative during the year, reflecting the weaker
economic development. In parallel, structural growth – meaning acquired
operations – and, not least, positive exchange rate effects made a favorable
contribution to sales. Combined, this yielded a 10-percent increase in net sales
during the year for the Group.
If we study the organic sales trend, there are relatively large differences
between the various countries and geographic areas, although these disparities
become slightly less evident when project deliveries are excluded. The market
conditions also vary between the Group’s market segments where, for example,
sales in the capital-intensive industries related to agriculture were impacted by
adaptations made by OE manufactures to their own inventory levels and lower
production levels. General industry displayed a weak trend during the year,
particularly in North America. Other market segments, such as the aerospace
and light vehicle industries, performed at a satisfactory level.
Consolidated operating profit is the highest to date for a full-year.
Yes, despite a generally weak organic sales trend, operating profit rose by
7 percent compared with the preceding year. We have identified the drivers as
continued effective cost control, and the effects from our Excellence programme
and our restructuring actions in the Group. By leveraging our strong market
positions, we have been able to defend our margins, which in turn had a somewhat
negative impact on our volume trend. Companies acquired during the year
also made a positive contribution to the earning trend.
Changes in exchange rates from the translation of foreign subsidiaries had
a positive impact of sek 300 m on operating profit compared with 2014.
What are your comments on the operating cash flow?
Operating cash flow improved in three of our five business areas compared
with the preceding year. Trelleborg Wheel Systems was impacted by increased
investments in a new facility for manufacturing agricultural tires in the US, while
Trelleborg Offshore & Construction was affected by the slowdown in oil & gas in
the form of non-payment of advances from customers.
The Group’s capital expenditure increased by 28 percent year-on-year.
A dividend totaling sek 1,357 from TrelleborgVibracoustic was also recognized
in operating cash flow, which rose by 28 percent to sek 3,639 m including this
dividend.
Financial guidance, 2016
• Restructuring costs: ~ 250 sek m
• Investments: ~ 1,100-1,200 sek m
• Underlying taxation level 1) : ~ 27 percent
1)
Excluding items affecting comparability.
B
Operating profit 1)
SEK M
3,500
3,000
2,500
2,000
1,500
1,000
500
0
C
Earnings per share
SEK +17%
10
8
6
4
2
0
2014
2014 2015
Sensitivity analysis
2015
1)
Operating profit, excluding participations in TrelleborgVibracoustic and items
affecting comparability.
+7%
The calculations were based on
figures from the end of the year
and the assumption that all else
is equal.
Costs
• The annual cost for purchasing
mate rials and services amounted to
sek 11,787 m in 2015. Employee
remuneration amounted to sek 7,518 m.
An increase or reduction in purchasing
costs of 1 percent would reduce or
increase operating profit by approximately
sek 120 m. Correspondingly,
an increase in cost for employees of
1 percent would lead to a reduction in
10 Annual Report 2015 Trelleborg AB
GRI: G4-9