TRELLEBORG, Sweden — Trelleborg A.B. is eyeing growth through mergers and acquisitions and investment in "high potential" segments following the completion of a series of divestments that have revamped the firm's structure.
Through M&As, increasing global footprint and "speedboat accelerating" of growth in certain segments, Trelleborg expects annual revenue to increase by 5% to 8%, Chief Financial Officer Fredrik Nilsson said during the firm's annual Capital Market Day presentation.
At the same time, the Trelleborg-based polymer engineering firm aims to raise it pre-tax operating margin (EBIT) to over 16% "in the near term," Mr. Nilsson said.
"We have a strong list of [acquisition] prospects which we now like to turn into pipeline, and we are also allocating more resources internally to drive the M&A agenda," the CFO said, noting the firm has identified 200 acquisition prospects.
Other targets Trelleborg is pursuing include: annual capital expenditures at 3.5% to 5% of annual sales and a net debt/EBITDA leverage of less than two times.
In addition, the group's board has called an extraordinary general meeting for Dec. 28 to discuss a share-repurchase program to "adapt the group's capital structure" and deliver "shareholder value."
The goal is to repurchase shares valued at roughly $225 million to $335 million per year.
Trelleborg President and CEO Peter Nilsson said during the event that the company continues to focus on the "good positions" offered by its three main segments: sealing solutions, industrial solutions and wheel systems.
In addition, Trelleborg aims to expand its presence in "speedboat areas" such as healthcare, medical, aerospace, green aviation, semiconductor business, e-mobility and sensor technology, he said.
"We have had M&A ambitions but we have not been able to execute, but we feel we have good prospects and are able to execute some M&As," the CEO noted.
"The conditions are better than ever, both operationally and thanks to trends such as increased electrification, digitization, and industrial automation," he added.