Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
  • Tire Business
web
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • Silicone
    • Latex
    • Coronavirus
    • Executive Action
    • Government/Legal
    • Opinion
    • Technical Notebooks
    • Women in Tire & Rubber
    • ITEC
    • International Elastomer Show
    • HEXPOL Sponsored Content
    • Continental invests in AI company
      Michelin launching ‘eco-responsible' performance tire for sporty EVs
      GM promotes Siemen to lead sustainability; Parker to retire
      Video: Michelin driving for ‘100% sustainable' tires by 2050
    • Michelin launching ‘eco-responsible' performance tire for sporty EVs
      Video: Michelin driving for ‘100% sustainable' tires by 2050
      USTMA: U.S. tire shipments to rebound in 2021
      TIA among associations against increase to minimum wage
    • Continental invests in AI company
      To boost U.S. microchip production, Biden administration must find supply chains weaknesses
      USTMA, NAM among associations backing passage of Equality Act
      ASC seeks presenters for fall convention
    • Sibur set to launch production at new halobutyl rubber facility
      Braskem to invest $61M to expand green ethylene production capacity
      Zeon receives pair of ISO certifications
      Trinseo taps K.D. Feddersen to supply soft-touch elastomers
    • Stockwell Elastomerics' legacy moves on
      Larger mixers tout economies of scale, along with the need for speed
      Hexpol, Bloom deal with COVID, reorganization, fire since start of 2020
      Small, mid-size compounders keep value, agility, service 'in the mix'
    • Ohio firm focuses on making better masks in U.S.
      U.S. to increase NBR, make gloves using Defense Production Act
      Tire Cologne canceled; rescheduled for 2022
      Tire Technology Expo canceled for 2021
    • Harwick Standard adds Flores to West Coast sales team
      GM promotes Siemen to lead sustainability; Parker to retire
      9 Goodyear-Cooper Tire stories you may have missed
      Goodyear promotes Chris Helsel, expanding his global technology, operational role
    • To boost U.S. microchip production, Biden administration must find supply chains weaknesses
      TIA among associations against increase to minimum wage
      9 Goodyear-Cooper Tire stories you may have missed
      Cooper recalling 430,000+ whitewall LT tires in multiple brands
    • Column: Discussions of race, equality may mean uncomfortable moments
      Column: Business trips possible because of essential workers
      Editorial: Associations see opportunity for progress under new administration
      Editorial: Against a backdrop of turmoil, M&A deals give glimpse of normalcy
    • Studying RPA ASTM methods for detecting compound quality differences
      Damage mechanism in oil and gas formulations during downhole testing
      Advancements in synchronous drive belt design for industrial and consumer markets
      Effects of multiple repurposed materials for reinforcements of standard rubber compounds
    • Rubber Division introduces WORD webinar series
      WORD panelists say evolution, authenticity keys to success
      New video celebrates women in rubber industry
      ITEC panelists say women can thrive in tire industry
    • Goodyear recognized by Lockheed Martin as 'elite supplier'
      EV tire advancements to help secure future
      Lambillotte: Only question on AVs is timing
      CAR official says EV future brighter than autonomous
    • Rubber Division introduces WORD webinar series
      Rubber Division seeks abstracts for 200th Technical Meeting
      WORD panelists say evolution, authenticity keys to success
      IEC keynote: Communication key to logistics
    • Sponsored By HEXPOL Compounding
      Faster Access to Your Polymer Compounding Experts Around the World
      Sponsored By HEXPOL Compounding
      Take a walk thru a HEXPOL Lab
      Sponsored By HEXPOL Compounding
      HEXPOL offers a unique selection of High Performance Elastomers to match your application requirements
      Sponsored By HEXPOL Compounding
      It’s what you can’t see that makes the Difference at HEXPOL
  • Blogs
    • Products
    • Wacky World of Rubber
    • New Products: Starrett expands field-of-view for multi-sensor vision system
      New Products: Nova thinks outside the box with sealing tech
      New Products: MonTech introduces 1,500 kN lab press
      New products: 3M introduces new durable, pliable medical adhesive
    • Wacky World of Rubber: How Trelleborg, teens sealed a spot in the world record book
      Wacky World of Rubber: Of chicken and feet, but not chicken feet
      Wacky World of Rubber: Time to go mattress shopping
      Wacky World of Rubber: Because nothing says football like 'frunk' shrimp
  • Newsletters
    • Rubber in Automotive
    • Silicone News
    • Latex News
    • Sign Up for Newsletters
    • Continental invests in AI company
      Michelin launching ‘eco-responsible' performance tire for sporty EVs
      GM promotes Siemen to lead sustainability; Parker to retire
      Video: Michelin driving for ‘100% sustainable' tires by 2050
    • Stockwell Elastomerics' legacy moves on
      Larger mixers tout economies of scale, along with the need for speed
      Hexpol, Bloom deal with COVID, reorganization, fire since start of 2020
      Small, mid-size compounders keep value, agility, service 'in the mix'
    • Sri Trang Gloves starts major capacity expansion
      Synthomer dismisses takeover reports
      Combined Goodyear-Cooper Tire company has tire technology, sustainability edge
      Helixtap launches new digital marketplace for rubber
  • Multimedia
    • Videos
    • Photo Galleries
  • Directory
  • Resources
    • Classifieds & Mold Mart
    • Sponsored Content
    • White Papers
    • HB Chemical
      Sponsored By HB Chemical
      The HB Chemical and Ravago Partnership: Taking Customer Service to a New Level
      Sponsored By HB Chemical
      Above and Beyond with HB Chemical
      Sponsored By HB Chemical
      The Company Behind the Inventory
      Sponsored By French Oil Mill Machinery
      Process Improvement, Cost Reduction with Custom Press Systems
    • Sponsored By Uncountable Inc.
      Labs of the Future: How to Choose a Laboratory Information Management System in 2021
      Sponsored By Uncountable Inc.
      Cooper Standard deploys lab informatics platform to synchronize R&D
      Sponsored By Elkem
      LSR Select™: A solution to improve your financial impact in molding applications
      Sponsored By HEXPOL Compounding
      Peroxide Cureable Silicone Injection Molding
  • Data
  • Events
    • RPN Events
    • RPN Livestreams/Webinars
    • Industry Events
    • Past Events
    • ITEC Library
    • International Silicone Conference Library
    • 2021 Healthcare Elastomers Virtual Edition
      2021 Rubber in Automotive Virtual Edition
      2021 International Latex Conference Virtual Edition
      2022 ITEC
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. Financial
April 15, 2020 01:30 PM

Trelleborg streamlines operations to boost profitability

Andrew Schunk
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    TRELLEBORG, Sweden—At the end of 2019, Trelleborg undertook a major restructuring effort intended to improve profitability by reducing its main segments from five to three and creating a new reporting segment for under-performing operations.

    The Trelleborg Group now comprises Trelleborg Industrial Solutions, focusing on polymer products for niche applications and infrastructure; Trelleborg Sealing Solutions, with its focus on polymer-based seals; and Trelleborg Wheel Systems, which makes tires for off-road vehicles.

    Trelleborg Coated Systems and Trelleborg Offshore and Construction have been discontinued, and their various operations were placed either within Trelleborg Industrial Solutions, which saw the biggest changes in business structure, or Business Under Development, the new reporting segment.

    "The difference is that we have chosen to highlight operations in which we want to see an improvement in a way that we haven't done previously," a Trelleborg spokeswoman said.

    The moves are meant to streamline operations and improve the bottom line for the $3.5 billion producer of polymer-engineered seals, dampening equipment and tires. Optimism, however has been replaced with uncertainty due to the global coronavirus pandemic, Trelleborg leaders said during a March 31 webcast with investors.

    Under the restructuring, the five operations demonstrating weak profitability—with combined annual sales of about $410 million—that are now under the auspices of Business Under Development include the printed blankets operations of the now-defunct Trelleborg Coated Systems; the oil and gas operations of the now-defunct Trelleborg Offshore and Construction; the Swedish and Estonian operations for specialty molded products of Trelleborg Industrial Solutions; the Czech operations for specialty molded components and technical rubber products of Trelleborg Industrial Solutions; and the bicycle tire operations of Trelleborg Wheel Systems.

    "It is our hope that this will be simpler and clearer for external target groups, such as shareholders and investors, that want to understand Trelleborg and where we are headed," said the spokeswoman.

    The reporting segment's structure is likely to change, as the company decides on the future of those operations.

    "They may also be divested, reorganized into a joint venture or become a minority holding for the (Trelleborg) Group," the spokeswoman said.

    Related to the business structure changes will be a capital employment impairment of about $338 million, according to Trelleborg. There will no cash-flow impact. Total restructuring costs came to $52 million, according to company.

    "These were, however, not fully attributable to the new reporting segment," said the spokeswoman. "Restructuring costs in recent years are mainly a result of the large number of acquisitions finalized. We've had some larger relocations and adjustments to production in conjunction with acquisitions, like with the integration of the industrial Group CGS's tire business, which was acquired in 2016."

    Trelleborg expects 2020 restructuring costs to be roughly a bit more than $30 million, though these figures may be adjusted as industries worldwide face a slowdown.

    While Trelleborg noted in its Feb. 12 interim financial report that the profitability of the offshore oil and gas operations (formerly within Trelleborg Offshore and Construction) changed from loss to profit with volume recovery in 2019, the other four operations in Business Under Development demonstrated a negative trend that "accelerated during the second half of the year," according to the spokeswoman.

    Peter Nilsson

    The factors restricting profitability for these operations, she said, are not necessarily market-oriented, but rather the fault of poor business models, necessitating a change in product categories.

    "In general terms we believe all these operations have the potential to increase their positions and profitability," she said. "At the same time, the operations must fit Trelleborg's structure and strategy—like we're positioning ourselves in niches or product categories with the aim of being among the three top players in terms of market share or having an acceptable geographical reach."

    The Business Under Development operations will be reviewed again in between one and two years, with a focus on improved market position and profitability. Such improvements could see the operations return either partially or entirely to the Trelleborg Group's foundational business structure.

    The company already divested a unit in January that the spokeswoman said "was not a good fit," a smaller French operation that was in the printing blanket operation, making rubber-covered rollers and rubber belts.

    "I want to be clear that we are demanding that profitability should be significantly improved within a 12- to 24-month period in order for these operations to be included in the Group. As the improvement work is in progress, we will continuously evaluate various structural alternatives," said Peter Nillson, Trelleborg president and CEO.

    Looking ahead

    The 2019 fourth quarter and year-end news of the struggling operations, however, is tempered by a renewed focus—albeit with the uncertainty from the pandemic being realized in the first quarter of 2020—on the industrial, sealing and wheel segments, Nillson said.

    "We are now putting a stronger focus on our strategically well-positioned businesses," the CEO said. "This will involve continued development and investments in organic growth and various types of bolt-on acquisitions, which in different ways can complement and strengthen our positions in selected segments."

    The former Trelleborg Coated Systems saw its engineered coated fabrics operations move underneath the auspices of the industrial segment, as did the marine solutions and infrastructure projects of the former Trelleborg Offshore and Construction.

    And while Trelleborg Wheel Systems only will be marginally affected by the restructuring with the move of its bicycle tire operations to Business Under Development, Trelleborg Sealing Solutions remains unaffected, according to Trelleborg.

    "The Group's financial structure would allow more acquisitions," the spokeswoman said. "Moving forward, we expect that we will continue to make smaller bolt-on acquisitions."

    Trelleborg restructured at the conclusion of 2019, transitioning from five segments to three.

    Letter
    to the
    Editor

    Rubber & Plastics News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber & Plastics News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber & Plastics News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    web
    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Contact the Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • Silicone
      • Latex
      • Coronavirus
      • Executive Action
      • Government/Legal
      • Opinion
      • Technical Notebooks
      • Women in Tire & Rubber
      • ITEC
      • International Elastomer Show
      • HEXPOL Sponsored Content
    • Blogs
      • Products
      • Wacky World of Rubber
    • Newsletters
      • Rubber in Automotive
      • Silicone News
      • Latex News
      • Sign Up for Newsletters
    • Multimedia
      • Videos
      • Photo Galleries
    • Directory
    • Resources
      • Classifieds & Mold Mart
      • Sponsored Content
      • White Papers
    • Data
    • Events
      • RPN Events
      • RPN Livestreams/Webinars
      • Industry Events
      • Past Events
      • ITEC Library
      • International Silicone Conference Library
    • Advertise
    • DIGITAL EDITION