A solid end to the year
”2023 was Trelleborg’s best year to date, with the Group reporting its highest sales and earnings on record. During the year, we transformed and improved Trelleborg in a number of ways. We established the platform that we will continue to build on and which is characterized by higher growth and profitability. At the same time the business has become less cyclical and gained a better sustainability profile.
During the fourth quarter, sales increased by 4 percent. Organic sales remained unchanged and acquisitions contributed 3 percent. EBITA, excluding items affecting comparability, increased 6 percent, corresponding to an operating margin of 16.9 percent. Both sales and EBITA, with corresponding margin, were the best to date for a fourth quarter and represented a solid end to the year.
Trelleborg Industrial Solutions reported organic sales for the quarter that were marginally lower year-on-year. This minor decline was primarily due to lower sales in Asia and weaker construction markets. In contrast, sales to the marine segment remained strong, mainly supported by larger project transactions, while deliveries to the automotive industry increased. It was particularly gratifying that the business area further improved its profitability.
The performance of Trelleborg Sealing Solutions’ market segments also varied. Overall, organic sales increased slightly year-on-year. The organic trend was primarily due to price adjustments for customers. Sales to general industry were weaker in Europe and North America. Deliveries to the automotive industry developed positively, while sales to healthcare & medical slowed slightly due to inventory adjustments among customers. Deliveries to the aerospace industry continued to perform strongly.
The integration of the acquired Minnesota Rubber & Plastics is progressing according to plan. A range of initiatives are in progress that will lead to greater sales synergies over time. During the quarter a new state-of-the-art facility was inaugurated in Vietnam, which will strengthen Trelleborg Sealing Solutions’ presence and capacity, primarily in Southeast Asia.
In December, we signed an agreement to acquire the South Korean MNE Group, a leading manufacturer of precision seals for semiconductor production equipment. The acquisition brings new technology and provides a base in Asia in this attractive segment.
We maintained a high level of investment activity during the year in the form of new capacity and expansion of our presence in selected geographies and market segments. In 2024, we will continue to invest at a high rate. We will focus on fast-growing segments, for example aerospace, healthcare & medical, semiconductors and other selected industrial niches.
We find ourselves in a somewhat cooler macro environment compared to the beginning of 2023. However, the Group stands well equipped with a very strong balance sheet that enables both value-creating acquisitions and continued share repurchases. We look to the future with confidence.
Our general assessment in the current situation is that demand in the first quarter will be on a par with the fourth quarter”, says Peter Nilsson, President and CEO.
Fourth quarter 2023 – continuing operations
Full-year 2023 – continuing operations
Market outlook for the first quarter of 2024
Demand is expected to be on a par with the fourth quarter of 2023, adjusted for seasonal variations. The geopolitical situation entails a heightened degree of uncertainty. For further information, refer to page 12.
Market outlook from the interim report published on October 26, 2023, relating to the fourth quarter of 2023
Demand is expected to be on a par with the third quarter of 2023, adjusted for seasonal variations. The geopolitical situation entails a heightened degree of uncertainty.
Dividend 2023
The Board of Directors proposes a cash dividend of SEK 6.75 per share (6.00).
This is a translation of the company’s Interim Report in Swedish.