Trelleborg's shift toward leading positions in selected segments and emerging geographic markets continue
Dec 08, 2010
“Trelleborg’s focus on creating leading positions in selected market segments is continuing. The Group now has an increasingly concentrated and profitable operation within demanding industrial segments. We have also upped the pace to further strengthen our presence in emerging geographic markets, and during recent years created a considerably more efficient structure,” says Trelleborg’s CEO Peter Nilsson, ahead of the Group’s capital markets day.
The geographic shift to emerging countries has been considerable in recent years. Since 2005, the number of production units has declined by more than 30 in Western Europe and North America, while more than 15 production units have been substantial upgraded or established outside these regions.
“We have now increased our sales in markets outside Western Europe and North America to about 25 percent of the Group’s total sales. This figure will rise further in the next few years through already realized measures and through continued offensive measures aimed at capitalizing on the growth in these markets,” says Peter Nilsson.
The Trelleborg Group works continuously to improve and enhance the efficiency of the Group’s structure. Combined with cost savings and higher volumes, the improved structure has led to a strong improvement in the EBITDA margin in recent quarters and this is now in line with the Group’s target of ≥ 12 percent.
The Group's financial targets stand firm. The growth target focuses on organic growth and is set at an average of 5 percent per year over a business cycle. In addition, further growth will occur through complementary acquisitions. The target for the EBITDA margin is ≥ 12 percent and the target for the return on equity is 12 percent.
The Trelleborg Engineered Systems business area’s strategy for creating a structure for profitable growth is producing results. A key component is to continuously enhance positions in such selected segments as offshore oil/gas, infrastructure and selected areas of general industry. The business area has a continued focus on portfolio management and geographic expansion, and in recent years, its activities have included opening three new production facilities in China. A decision was taken recently to invest in a plant for the oil and gas industry in Brazil (see separate press release from November 24, 2010).
Business Area President Roger Johansson will leave his position for a new post outside Trelleborg (see separate press release from November 24, 2010). The new Business Area President will be Jim Law, who is currently in charge of the business unit Antivibration Solutions, which accounts for about 75 percent of Trelleborg Automotive’s operations.
Profitability for Trelleborg Sealing Solutions has increased significantly in the past year as a result of comprehensive measures taken to enhance efficiency and adapt the production structure which has given a good gearing in increasing volumes. Profitability is now back on the same level as during the first half of 2008 despite lower volumes. To capitalize on the upturn in the markets where growth is occurring, the business area has increased its presence in markets in Eastern Europe, South America and Asia. A continued consolidation and geographic shift is also taking place of production facilities and a platform for long-term growth has been created in India, China and Brazil. The business area has in a systematic way developed and increased customer interaction over digital media.
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