Trelleborg reports 22% increase in Q2 earnings

TRELLEBORG, Sweden—Trelleborg A.B. has reported a 22-percent year-on-year increase in earnings (EBIT) excluding items affecting comparability to $128 million (SEK 1,319 million) on net sales of $718 million, 21 percent higher than a year ago.

The sales gains reflected organic growth, contributing 11 percent, positive exchange rate effects 8 percent and acquisitions 2 percent, the group's interim financial report, April-June, shows.

The results were achieved despite a "continued sharp rise" in prices for raw materials, energy and freight continued to rise sharply and the negative impact of renewed COVID-19 lockdowns in China.

Other constraints during the quarter included shortages of certain raw materials and disruptions in the supply chain, the company said.

"The (sales) development was better than expected, given the challenges we faced during the period," said Trelleborg, declaring the figures its "highest second quarter sales, earnings and margin to date."

Trelleborg linked its earnings gains to higher volumes to efforts to offset inflation via price adjustments to customers, efficiency improvements and "strong operational implementation."

At Trelleborg Industrial Solutions, almost all end-user and geographic markets reported an upturn in demand, most notably in North America—delivering its highest margin on record.

Organic sales at Trelleborg Sealing Solutions "performed well" with deliveries to general industry up overall, despite lower in sales in Asia due to COVID lockdowns in China.

"Deliveries to the automotive industry declined somewhat, but nonetheless performed well in relation to the global market," noted Trelleborg, which was also buoyed by strong health care and medical and aerospace product sales.

Tire business Trelleborg Wheel Systems—now reported under "assets held for sale" due to its pending sale to Yokohama Rubber Co. Ltd.—posted a 20-percent rise in organic sales on increased demand in all product and geographic markets, particularly the Americas. This was despite Russia's war in Ukraine, freight shortages and drought in several countries.

Looking ahead, President and CEO Peter Nilsson noted "a slight downturn in order intake compared with previous quarters.

"There are clear indications of increased uncertainty ahead of the second half of the year," he added.

"We are highly confident in our ability to address the fluctuations in the market. For the third quarter, our overall assessment is that demand will be slightly lower than in the second quarter of the year," he concluded.