Trelleborg AB Business Report FY ended Dec. 2016
Financial Overview |
(in million SEK) |
| FY ended Dec. 31, 2016 | FY ended Dec. 31, 2015 | Rate of change (%) |
Factors | |
| Overall | ||||
| Net Sales | 27,145 | 24,803 | 9.4 | 1) |
| EBIT | 3,105 | 2,962 | 4.8 | 2) |
| Major automotive related segments | ||||
| Trelleborg Sealing Solutions - Sales | 8,494 | 8,242 | 3.1 | 3) |
| Trelleborg Sealing Solutions - EBIT | 1,902 | 1,850 | 2.8 | - |
| Other automotive related segments | ||||
| Trelleborg Industrial Solutions - Sales | 5,138 | 5,069 | 1.4 | - |
| Trelleborg Coated Systems - Sales | 2,398 | 2,432 | (1.4) | - |
Factors
1) Net Sales
-The Company’s net sales in the fiscal year ended December 31, 2016 increased by 9.4% over the previous year to SEK 27,145 million. Despite a decline in organic sales of approximately 5%, structural changes including the acquisition of CGS Holding increased sales by approximately 15%. Negative currency exchange effects also had a slight negative effect on the Company’s sales.
2) EBIT
-In the fiscal year ended December 31, 2016, the Company’s EBIT was SEK 3,105 million, an increase of 4.8% over the previous year. The increase in earnings was due to continued improvements in efficiency, cost control and overall strong market positions.
3) Sealing Solutions Sales
-Sales in the Company’s Sealing Solutions business area increased by 3.1% in the fiscal year ended December 31, 2016 to SEK 8,494 million. Organic sales within the business area increased by approximately 1%, with a decline in general industry sales offset by increased sales in automotive and aerospace sectors. While organic sales declined in North America, organic sales in Asia increased to offset those losses.
Acquisitions
-The Company has finalized the acquisition of CGS Holding a.s. – a privately owned company with leading positions in agricultural, industrial and specialty tires as well as engineered polymer solutions. The total cash consideration amounted to approximately SEK 10.9 billion (USD 1.34 billion). CGS is headquartered in the Czech Republic and generated sales of approximately SEK 5.6 billion (USD 686 million) in 2015. (From a press release on May 31, 2016)
Chronology of Vibracoustic divestiture
-The Company announced that it has signed an agreement with its joint venture partner Freudenberg to sell its entire 50% share in TrelleborgVibracoustic to Freudenberg. TrelleborgVibracoustic was formed in July 2012 as a 50:50 joint venture. The transaction is expected to be completed in the second quarter of 2016 and would be effective from January 1, 2016. The transaction is based on an enterprise value of EUR 1.8 billion for TrelleborgVibracoustic. The Company will receive a purchase consideration equivalent to an equity value of SEK 6.8 billion (EUR 731.8 million), in addition to the dividend of SEK 1.4 billion (EUR 150.7 million) received in December 2015. This corresponds to a total value of SEK 8.2 billion (EUR 882.5 million). In accordance with this transaction, TrelleborgVibracoustic was renamed Vibracoustic GmbH on April 4, 2016. (From a press release on April 7, 2016)
-The Company and the Freudenberg Group announced that the 50% shareholding held by the Company in the joint venture Vibracoustic GmbH was transferred to Freudenberg. The total purchase price was approximately SEK 6.8 billion (EUR 795.4 million). Vibracoustic was founded in July 2012 as a 50:50 joint venture between Freudenberg and the Company. In the 2015 financial year, Vibracoustic generated sales of almost EUR 2 billion with some 9,400 employees. (From a press release on July 5, 2016)
R&D Expenditure |
(in million SEK) |
| FY ended Dec. 31, 2016 | FY ended Dec. 31, 2015 | FY ended Dec. 31, 2014 | |
| Overall | 433 | 383 | 348 |
Product Development
Gasket with sealing and damping characteristics
-In 2016, the Company’s Sealing Solutions business area launched a gasket that combines both sealing and damping characteristics.
Capital Expenditure |
(in million SEK) |
| FY ended Dec. 31, 2016 | FY ended Dec. 31, 2015 | FY ended Dec. 31, 2014 | |
| Overall | 1,148 | 1,314 | 1,025 |
| -Sealing Solutions | 310 | 320 | 334 |
General Investments
-The Trelleborg Sealing Solutions business area upgraded several manufacturing facilities in Bulgaria, China, Sweden, the UK, and the U.S. in 2016.
Investments Outside Sweden
-The Company announced the opening of a new facility in Queretaro to manufacture high-performance automotive components, including transmission and steering gear thermoplastic boots for passenger cars. The 3,300-square-foot facility will supply both OEMs and Tier 1 suppliers. The intention of the facility is to develop a central automotive boots hub that will service both North and South American markets. The Company has more than 400 employees in Mexico. (From a Mexico-Now article on December 14, 2016)
-In 2016, the Trelleborg Industrial Solutions business area decided to construct a facility for automotive boots in China.