By Mike McNulty, Crain News Service
STOCKHOLM, Sweden (Aug. 25, 2015) — Weaker market conditions in the U.S. have continued through the first half of 2015, Europe is still struggling, and there's uncertainty in the market in China.
At least that's how Peter Nilsson, president and CEO of Trelleborg A.B., views the current worldwide market.
He said Trelleborg's overall assessment “is that the market is continuing to move sideways. We are continuously monitoring developments and are maintaining preparedness to adjust our various businesses to fluctuating demand.”
A challenging market situation in the segment has impacted Trelleborg's agricultural tire operation, as well, according to Mr. Nilsson.
Despite that view, Trelleborg's various business groups and the firm's TrelleborgVibracoustic joint venture recorded improved sales during the second quarter.
However, Mr. Nilsson said, the organic sales trend was still weak, primarily due to a prevailing challenging market situation in agriculture and oil and gas, along with continued market discipline.
In the company's interim report, he said sales across the board had increased for all of the firm's businesses, compared to the year earlier period — mainly because of positive currency effects and various acquisitions made by the company.
Net sales for the quarter increased by 14 percent over revenues recorded in the 2014 period to $747 million, the highest to date for a single quarter, the company said. Organic revenues declined by 1 percent.
Excluding Trelleborg/Vibracoustic, operating profit, which improved for four of the firm's five business segments, rose 10 percent to about $101 million.
According to Mr. Nilsson, Trelleborg/Vibracoustic “performed well, with continued organic sales that outperformed the underlying market.
“The company achieved its highest operating margin to date in a single quarter.”
In Europe, the markets continued to perform in line with the first quarter, “but with relatively large differences between the regions and the various market segments,” he said.
“The signs of weaker market conditions in the U.S. that we noted at the beginning of the year continued in the second quarter,” Mr. Nilsson said.
He said it is apparent “that our export-dependent customers in the U.S. are being impacted by the stronger U.S. dollar. Uncertainty is also growing in China, underlined by stock market turbulence in the region.”
Lower global market prices for oil continues to impact parts of the Trelleborg group of companies, he said. It has created a negative effect on demand from customers and increases uncertainty in the firm's deliveries to the oil and gas industry, he noted.
But, he added, “other market segments, such as the aerospace and automotive industries, continue to develop satisfactorily.”
This report appeared on the website of Rubber & Plastics News, an Akron-based sister publication of Tire Business.