Publication of Trelleborg's 2000 Annual Report Trelleborg - A Streamlined, Global Industrial Group, Well Equipped for Growth

    STOCKHOLM, Sweden--March 14, 2001--Trelleborg's Annual Report for fiscal 2000 is published today, March 14 at 10.00, on the Group website at www.trelleborg.com.
    Available in the form of an Acrobat file, the Report can be read directly on-screen, printed or downloaded. Printed copies of the Annual Report will be distributed to Trelleborg's shareholders in the next few days and may also be ordered via the Internet or through the Corporate Communications Department by calling +46 (0) 410-670 00.
    In addition to reporting on the Group's operations during 2000, the Annual Report describes Trelleborg's new strategic direction, in other words how the Group has developed in recent years to become a focused industrial group that is growing through products based on polymer materials.
    In April 1999, the Group's industrial core operations accounted for approximately 40% of the Group's capital employed. Today, two years later, Trelleborg's core operations account for more than 90% of the capital employed in the Trelleborg Group.
    At the same time that operations have been concentrated to the Group's core business, industrial operations have expanded sharply. Trelleborg's core operations has grown by an average of 30% per year during the past five years and the Group's operating profit has developed by a corresponding amount.
    Trelleborg's President and CEO Fredrik Arp devotes much of his message to the shareholders describing how Trelleborg's operations have been concentrated to focus on core industrial operations and how these have been expanded through both organic and acquired growth.

Continued growth

    "During the past year we took some decisive steps in our continuing growth by acquiring Invensys' AVS business and Laird's automotive- components business," he writes. "With these two acquisitions Trelleborg has established a dominant position - with a 20% share - in the world market for antivibration components used in the automotive industry.
    "Another important part involves 'normalizing' our balance sheet and achieving the objective we have set for return on equity," notes Arp. "For this, a financial structure different from today's in required. Accordingly, Trelleborg continued - and is continuing - to buy back the Company own shares. If the buy-back programs are fully implemented, nearly 35% of the outstanding shares - calculated from the beginning of 2000 - will have been repurchased."
    If Trelleborg achieves the upper portion of its corporate objective, namely a debt/equity ratio of 125%, and also uses the company's shares that it purchased and retained, the total financial resources available to the Group for acquisitions would exceed SEK 6 billion.
    "In addition, there are the values that remain to be realized in the Trenor Group, for example," says Fredrik Arp. "Trelleborg also has current earnings that further strengthen its financial capacity. We thus stand well equipped for growth."
    In terms of prospects during 2001, Fredrik Arp notes that Trelleborg is anticipating an unchanged market in Europe and believes that growth in Asia and Latin America will be favorable.
    "Operations in the U.S. face weaker demand in 2001," he adds. "The year 2000 was a strong car year, with total sales of approximately 17.4 million vehicles. The most recent sales forecasts point to more normal production of about 15.5 million vehicles in 2001.
    "But the larger car makers in the U.S. are beginning 2001 with surplus inventories. It is therefore reasonable to assume that there will be an adjustment of the inventory situation during the first half of the year, and possibly during parts of the third quarter. Taken as a whole, the weaker demand and the adjustment of inventories in North America are expected to have a negative impact on profit. However, this should be compensated through the contribution to earnings that is being obtained via the acquisition of LAC and the effects of the integration process in Europe.
    "A stable trend of business is anticipated for the Group's other business areas, despite somewhat lower growth in GDP in the U.S. in particular."

    Trelleborg is a global industrial group. Operations are based on spearhead competence within polymer materials and a high level of industrial know-how, with functional solutions and systems designed to meet the needs of our customers. The Group has annual sales of SEK 17 billion (pro forma 2000, including the acquisition of LAC), with approximately 16,000 employees in 40 countries. Trelleborg consists of four business areas: Trelleborg Automotive, Trelleborg Wheel Systems, Trelleborg Engineered Systems and Trelleborg Building Systems. The Trelleborg share has been quoted on the A list of the OM Stockholm Exchange since 1964.

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