Trelleborg boosts profit margin despite a dip in sales

Swedish industrial firm Trelleborg AB on Thursday reported a higher second-quarter profit margin despite a dip in sales, citing strong operational execution in an uncertain market.

Net sales for the quarter fell 2% to 8.55 billion Swedish kronor from a year earlier, as a 1% decline in organic sales and negative currency effects offset contributions from acquisitions, the company said.

Adjusted operating profit, or EBITA, decreased 1% to 1.59 billion kronor, while the corresponding margin improved to 18.6% from 18.4%.

"We maintained solid profitability and even strengthened our EBITA margin, both sequentially and year-on-year, despite challenging market conditions and lower production volumes," Chief Executive Peter Nilsson said in a statement.

The company attributed the performance to flexible production and a balanced pricing strategy.

Trelleborg saw a clear drop in sales to the automotive industry and weaker demand from North American medical technology customers, which was partly offset by solid growth in its aerospace and marine project businesses.

During the quarter, the company completed three bolt-on acquisitions and signed an agreement to acquire Singapore-based Masterseals after the period ended.

Trelleborg said it expects demand in the third quarter to be somewhat higher than in the second, but noted continued uncertainty due to the geopolitical situation.