TRELLEBORG: Fourth quarter and Year-end report 2013

Regulatory News:

"Solid end to record year"

"2013 was the most profitable year ever for the Trelleborg Group, despite the fact that the anticipated economic recovery did not materialize. We further strengthened our market positions and closed in on the long-term targets we have set for our profitability. Our cost and capital efficiency programs continued to deliver favorable results. These successes strengthen the Group and provide a platform that motivates an intensified emphasis on growth and innovation moving forward.

"The sales performance reported by the Group in the fourth quarter was satisfactory, considering the lower level of project invoicing that was just for this period. The operating margin for all business areas improved in relation to the year-earlier period and both operating profit and operating margin were the highest ever recorded by the Group in a fourth quarter. Acquired operations made a positive contribution to earnings.

"Compared with the situation at the beginning of 2013, we now find ourselves on more stable ground. While some signs of economic recovery are visible, it is too early to talk about a broad-based upturn. We are continuously monitoring developments and are maintaining preparedness to adjust our various businesses to fluctuating demand,” says Peter Nilsson, President and CEO.

Continuing operations, fourth quarter

Net sales for the fourth quarter of 2013 increased by 4 percent (decrease: 3) and totaled SEK 5,145 M (4,966). Organic sales increased by nearly 2 percent (0). Effects of structural changes represented positive growth of 3 percent (0) while the effects of exchange-rates movement were a negative 1 percent (neg: 3).

Operating profit, excluding items affecting comparability and the participation in TrelleborgVibracoustic, rose by 26 percent to SEK 563 M (446), equivalent to an operating margin of 11.0 percent (9.0); the Group’s highest ever for a fourth quarter.

Items affecting comparability amounted to an expense of SEK 68 M (expense: 129), which was fully attributable to restructuring programs announced earlier.

Operating cash flow declined as a result of higher market activity and amounted to SEK 867 M (1,101).

Fourth-quarter operating profit for TrelleborgVibracoustic, excluding items affecting comparability, rose 46 percent to EUR 35 M (24), corresponding to an operating margin of 8.2 percent (5.9).

Trelleborg’s participation in TrelleborgVibracoustic, including negative items affecting comparability of SEK 4 M, amounted to SEK 123 M before tax (37).

Continuing operations, full year

Net sales for full-year 2013 rose 1 percent (1) and amounted to SEK 21,473 M (21,262). Organic sales increased 1 percent (1). Effects of structural changes represented positive growth of approximately 4 percent (1) while the effects of exchange-rate movements were a negative 4 percent (neg: 1).

Operating profit, excluding items affecting comparability and the participation in TrelleborgVibracoustic, increased to SEK 2,613 M (2,342), equivalent to an operating margin of 12.2 percent (11.0).

Items affecting comparability amounted to an expense of SEK 410 M (income: 11), of which restructuring costs accounted for SEK 255 M (expense: 192). In 2013, this item also included costs related to processes and disputes totaling SEK 155 M, while the figure in 2012 included a capital gain of SEK 203 M from the sale of a property in Stockholm.

Operating cash flow was SEK 2,162 M (2,248).

Operating profit for TrelleborgVibracoustic, excluding items affecting comparability, totaled EUR 125 M (pro forma: 99), corresponding to an operating margin of 7.3 percent (pro forma: 6.0).

Trelleborg’s participation in TrelleborgVibracoustic, including negative items affecting comparability of SEK 134 M, amounted to SEK 355 M before tax (SEK 109 M; note that TrelleborgVibracoustic was formed in July 2012 and is thus only included for six months in 2012).

Group in total

Fourth-quarter net sales for the Group increased to SEK 5,145 M (4,966). For full-year 2013, sales declined, mainly impacted by the formation of TrelleborgVibracoustic, and totaled SEK 21,473 M (25,237).

Operating profit for the quarter increased to SEK 579 M (365). On a full-year basis, operating profit declined to SEK 2,519 M (2,815), influenced by the earnings of discontinued operations and items affecting comparability.

Earnings per share for the quarter were SEK 1.31 (0.94). For full-year 2013, earnings per share declined to SEK 5.93 (7.53), impacted by effects from discontinued operations and items affecting comparability.

Market outlook for the first quarter of 2014

Demand is expected to be on a par with the fourth quarter of 2013, adjusted for seasonal variations.

http://mb.cision.com/Main/584/9536207/210043.pdf

This is information of the type that Trelleborg AB (publ) is obligated to disclose in accordance with the Swedish Securities Exchange and Clearing Operations Act and/or the Financial Instruments Trading Act. The information was issued for publication on Thursday, February 13, 2014, at 07:45 a.m. CET.

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