CEO Peter Nilsson,said 'There were challenges during the quarter. The prices of raw materials continued their upward movement. The supply chains were disrupted by shortages of some components and raw materials, occasionally with temporary production stoppages as a result. A continued shortage of containers in some regions and historically high freight costs continued to present challenges, at the same time as the sudden and clear increase of energy costs pose an additional test.'
But, he added, the company is entering the fourth quarter with well-filled order books, and with a high level of activity in most of our manufacturing units.
In its industrial business, sales rose by 9.1% between the third quarter of 2020 and the third quarter of 2021, at SEK2.7bn, up from SEK2.5bn. EBIT in the division rose 19.0% and hit SEK326m. In the third quarter of 2020 it was SEK274m.
Sales to the construction and industry-related market segments were significantly higher compared with the preceding year. But the shortage of chips hit demand from the automotive industry, and sales were down in the third quarter. This is likely to get worse in the last quarter of the year, the company said.
Although EBIT rose year on year, rising freight costs and raw materials prices and energy slowed the rate of margin growth in the quarter.
Quarterly sales in the company's wheel systems business rose by 14.2% at SEK2.4bn, which contrasts with SEK2.1bn in the equivalent period last year. EBIT in the division fell to SEK238m, from SEK272m in the equivalent period in 2020.
Sales to all tyre categories grew in the quarter, with agricultural machinery taking the lead through strong demand from North and South America. EBIT decreased for the same reasons as the industrial segment. Trelleborg made a priority of supplying its long-term original equipment customers to protect the business. The company will inch up prices to try and improve profitability.
In sealing, sales were up by 22.8% at SEK3.1bn in the quarter. This compares with SEK2.5bn in the same quarter last year. EBIT rose by 58.6% at SEK720m in the quarter.
Trelleborg said sales to all segments and geographies displayed uniform and high growth. But production disruption at automotive customers hit the business towards the end of the quarter, and this is likely to get worse in the final quarter for the year.
Higher volume sales and strict cost controls drove EBIT and the EBIT margin improvements.