Trelleborg Q2 sales fall 2% as auto demand slows, profit margin improves

Published 17/07/2025, 13:14
© Reuters

Investing.com -- Trelleborg AB (ST:TRELb) on Thursday reported a 2% drop in second-quarter net sales as global uncertainty and weakened demand in the automotive sector weighed on results, though the company improved its profit margin.

Net sales for the April–June period totaled SEK 8.55 billion, down from SEK 8.71 billion a year earlier. Organic sales fell 1%, acquisitions added 6%, and currency effects reduced sales by 7%.

EBITA excluding items affecting comparability declined 1% to SEK 1.59 billion, compared with SEK 1.60 billion in the second quarter of 2024.

The EBITA margin rose to 18.6% from 18.4%. Exchange rate effects reduced EBITA by SEK 104 million. 

Including items affecting comparability, mainly restructuring costs of SEK 80 million, EBITA rose to SEK 1.51 billion from SEK 1.49 billion.

Earnings per share, excluding items affecting comparability, fell to SEK 4.31 from SEK 4.49. Including those items, earnings per share were SEK 4.03, compared with SEK 4.14. Net profit decreased 7% to SEK 923 million. The tax rate rose to 25% from 24%.

Operating cash flow declined 16% to SEK 1 billion, while free cash flow increased to SEK 896 million from SEK 867 million. The 12-month cash conversion ratio was 87%, compared with 88% a year earlier.

Trelleborg Sealing Solutions posted an 8% drop in sales to SEK 4.01 billion. Organic sales in the unit declined 4%, with reduced automotive demand noted. 

EBITA fell 12% to SEK 810 million, and the margin narrowed to 20.2% from 21.2%.

Trelleborg Medical (TASE:BLWV) Solutions reported a 25% increase in sales to SEK 832 million, driven by acquisitions. 

Organic sales declined 3%. EBITA rose 85% to SEK 170 million, with the margin improving to 20.4% from 13.9%. Growth in Europe was offset by lower medtech demand in North America.

Trelleborg Industrial Solutions reported a 1% sales decline to SEK 3.92 billion. Organic sales rose 2%. 

EBITA increased 1% to SEK 647 million, with a margin of 16.5%, up from 16.3%. Growth in marine and LNG segments offset weaker performance in construction-related seals.

Regionally, organic sales fell 2% in Europe and 3% in North and South America, but rose 5% in Asia and other markets.

Trelleborg completed acquisitions of National Gummi, Sico, and Aero-Plastics. After the quarter, it agreed to acquire Masterseals of Singapore. It also expanded production in Malta and announced new facilities in Vietnam and Costa Rica.

The company repurchased SEK 1,596 million in Series B shares and canceled 10.2 million shares. 

Capital employed rose to SEK 46.98 billion. Return on capital employed was 11.6%, down from 12.7%, while return on equity excluding comparability items rose to 9.9% from 9.4%.

Net debt stood at SEK 8.94 billion, compared to SEK 1.98 billion previously, both in net cash positions. The debt-to-equity ratio rose to 24% from 5%, and net debt to EBITDA increased to 1.2 from 0.3.

Trelleborg expects third-quarter demand to be somewhat higher than in the second quarter, adjusted for seasonal variation.

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