Trelleborg Wheel Systems reports double-digit gains in Q3

TRELLEBORG, Sweden—Trelleborg Wheel Systems reported double-digit gains in earnings and sales for the quarter and nine months ended Sept. 30 largely due to higher selling prices enacted throughout the year to counter increased costs for raw materials and energy.

The Trelleborg A.B. operating unit, which is being sold to Yokohama Rubber Co. Ltd., reported a 29.8-percent jump in operating income for the quarter to $29.3 million on 33-percent higher sales of $299 million, despite weakening aftermarket demand for agricultural tires in Europe. The operating ratio dropped slightly to 9.8 percent.

Organic sales of tires for agricultural machinery increased in most markets during the quarter, Trelleborg said, with a strong growth noted in North and South America. At the same time, aftermarket demand in Europe declined in part due to the increasing geopolitical uncertainty in the region.

Organic sales of tires for materials-handling and construction vehicles grew in all regions compared with the 2021 quarter.

For the January-September period, operating income was up 42.6 percent to $135.3 million on 34.9-percent higher sales of $998 million, yielding a 13.6-percent ratio

Regarding the divestment of Trelleborg Wheel Systems, Trelleborg said the transaction, which is subject to approvals from relevant authorities, is expected to be completed before year-end or early in 2023 at the latest.

Trelleborg agreed in March to accept Yokohama's offer of $2.3 billion for Trelleborg Wheel Systems, which generated $1.17 billion in sales in 2021 on the sale of agricultural and industrial tires and wheels.

Trelleborg Wheel Systems' assets include 10 tire plants in seven countries on three continents—China, Czech Republic, India, Italy, Serbia, Sri Lanka and the U.S.—and four wheel plants in four nations. In the U.S. the company operates tire factories in Charles City, Iowa, and Spartanburg, S.C.

Agricultural tires account for about 60 percent of TWS' sales, industrial tires about 20 percent, with the remainder being tires for construction machinery and motorcycles. North America accounted for 17 percent of the unit's global revenue in 2021.