Trelleborg’s wheel systems unit recorded net sales of SEK 725 million (£65.8 million) in the first quarter of 2010, down from SEK 950 million a year earlier.
According to company president and CEO Peter Nilsson, continued weakness in the agricultural tire OE segment, which makes up two-thirds of the unit’s business, led to this 18% drop in organic sales and 24% in total net sales. Unit operating profit declined 25% to SEK 76 million (£6.9 million).
The unit’s industrial tire business faired better during the three-month period. “We see a slim improvement in the industrial tire market,” Nilsson noted. “We have completed the move from U.S. to Sri Lanka, so we are seeing the benefits from a more efficient structure.
“The first quarter of 2010 is showing that we are building a stronger Trelleborg and that we are constantly moving towards growing and profitable segments,” Nilsson said. “The implemented action programs continue to give positive effects and we are gradually growing in to a more efficient structure.”
Overall company sales grew 2.57% to SEK 7,054 million (£640.5 million) during the quarter, and operating profit rose year-on-year from SEK 46 million to SEK 501 million (£45.5 million). Profit during the January to March 2010 period increased 349% from SEK 65 million to SEK 292 million (£26.5 million).
Looking forward, company CEO Bo Jacobsson said Trelleborg expects increased sales and improved margins in the second quarter, and overall demand is expected to remain in line with or slightly better than the first quarter. Jacobson added that the company intends to focus on long-term positioning, and will continue the geographical shift in its footprint. (Tyres & Accessories)
