rsred. -97 del 1. trelleborgtrelleborg’s core operations if we look, then, at trelleborg’s core...

Annual Report 1997

Comfort Safety

Environment

2

Contents

Innehåll

Highlights 1997 3

Comments by the President 4–5

Group review 8–13

Industrial operations 16–19

Trelleborg Automotive 20–21

Trelleborg Wheel Systems 22–23

Trelleborg Engineered Systems 24–25

Trelleborg Building Systems 26–27

Distribution operations 28–31

Ahlsell 32–33

Bröderna Edstrand 34–35

Reynolds 36–37

Starckjohann 38–39

Associated companies 40–41

Environment, health and saftey 44–47

Research and development 48–51

Skills and commitment 54–57

Financial reporting 58–81

Administration report 58

Proposed disposition of unappropriated earnings 59

Consolidated income statement, and comments 60–61

Consolidated balance sheet, and comments 62–63

Statement of changes in financial position and comments 64–65

Income statement and Statement of changes in financial position, Parent Company 66

Balance sheet, Parent Company 67

Accounting and Valuation principles 68–69 Notes, no 1–57 70–80

Auditors’ report 81

Board of Directors and Auditors 82–83

Group management 84

Group addresses 86–87

Glossaries 88

Five-year review 89

Share capital and ownership 90–92

Shareholder information 93

Annual General Meeting 94

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

Diagrams and tabels

Highlights 1997Key figures, Trelleborg Group 3

Group reviewIndustrial operations:

Sales distributed by business area 8Average operating capital employedby business area 8

Distribution operations:Sales distributed by business area 8Average operating capital employedby business area 9

Operating income by business areaper quarter 9Sales and operating incomeby business area 10Operating key figures 10Earnings per share after full tax andprofit margin 1993–1996 11Average number of employees 11Cash flow report 11Net assets abroad 12Flow exposures 13Committed credit facilities andmaturity structure 13

Industrial operationsFacts 18Invoiced sales by quarter 1997 18Invoiced sales 18Earnings and operating margin 18Sales by business area 19Sales by geographic market 19Sales by customer category 19

Trelleborg Automotive:Facts 20Sales by geographic market 21

Trelleborg Wheel Systems:Facts 22Sales by geographic market 23

Trelleborg Engineered Systems:Facts 24Sales by geographic market 25

Trelleborg Building Systems:Facts 26Sales by geographic market 27

Distribution operationsFacts 30Invoiced sales 30Earnings and operating margin 30Invoiced sales by quarter 1997 31Sales by business area 31Sales by geographic market 31

Ahlsell:Facts 32The Swedish electrical, heating & plumbingand refrigeration market by player 33

Bröderna Edstrand:Facts 34Sales by product group 35The Swedish wholesale market forsteel and aluminum 35

Reynolds:Facts 36Sales by geographic market 37

Starckjohann:Facts 38Sales by division 39

Associated companiesBoliden’s mining production 40

Average number of employees 57

Financial reportingConsolidated income statement,and comments 60–61

Consolidated balance sheet,and comments 62–63

Statement of changes in financialposition and comments 64–65

Income statement and Statementof changes in financial position,Parent Company 66

Balance sheet, Parent Company 67

Notes, no 1–57 70–80

Five-year review 89

Trelleborg Series B share 90–92

Reader informationFigures in parantheses refer to 1996 unless otherwise stated. The abbreviation SEK forSwedish kronor is used throughout. “Thousands of SEK” is abbreviated SEK K and“millions of SEK” is abbreviated SEK M.“Trelleborg” comprises both Trelleborg AB and the Trelleborg Group. Glossaries arefound on page 88 which explain certain technical and financial terms. Words definedon these pages are marked with a ▲.

This Annual Report is also available in Swedish.Denna årsredovisning finns även i en svensk version.

3

Invoiced sales, SEK M

Earnings after financial items, SEK MNet earnings, SEK MReturn on shareholders´equity after full tax, %Return on operating capital, including associated companies, excluding items affecting comparability, %Equity/assets ratio, %

Earnings per share after full tax, SEK Ditto, excluding items affecting comparability

Shareholders´equity per share, SEK

Financial assets less liabilities at year-end, SEK M

Capital expenditure, SEK M

Average number of employees

Dividend per Series A and B share 1), SEK

Market price at December 31, Series B share, SEK

20,825

2,5502,03819.9

12.653.8

17.407.65

94.20

– 868

963

13,525

3.50

100.00

20,574

1,0181,00310.9

9.549.6

8.608.60

80.40

– 464

1,134

13,086

3.00

90.50

1997Highlights

Listing of Boliden Ltd on the stock exchanges in Toronto and Montreal.

Acquisition of the American company, Yale-South Haven Inc, which hasmanufacturing units in the USA and Mexico.

Acquisition of the Swedish electrical wholesaler, Skoogs.

Acquisition of majority holdings in the Finnish wholesaler, Starckjohann.

Sales of newly-acquired companies exceed the loss of sales involved inlisting Boliden on the stock exchanges.

During the year, earnings after financial income and expenses increasedby SEK 1,532M to SEK 2,550M.Earnings after tax were SEK 2,038M, equivalent toSEK 17.40 per share (8.60).

SEK 100M is invested in a new research center.

The proposed dividend is SEK 3.50 per Series A and Series B share (3.00)plus a bonus of SEK 1.50 (0) per share.

Året i sammandrag

1) For 1997, in accordance with the proposal of the Board of Directors and the President, excluding bonusof SEK 1.50 per Series A and Series B share. For a more detailed summary of the financial developments andother key figures as well as definitions, see pages 88–89.


Key figures, Trelleborg Group

4

“A concentration to our core opera-tions.” For us, at Trelleborg, this is noempty phrase but rather a statementof practical reality and an excellentdescription of the program of meas-ures upon which we have expendeda great deal of time and energy inrecent years.

Boliden to CanadaThe decision last year to list Bolidenin Toronto and Montreal may be saidto represent the culmination of allour work in this area, and it was adecisive step on the way towardsachieving today’s Trelleborg – astreamlined industrial and distribu-tion Group. At virtually the sametime as our decision to list Boliden onthe Toronto Stock Exchange, weacquired the US rubber company,Yale-South Haven, with annual salesof around SEK 1 billion, and the muchsmaller, but strategically equallyimportant, Park Rubber in GreatBritain.

This “flying start” to our 1997financial year illustrates very well thepolicy we have followed for a numberof years, namely: concentration to ourcore business and the divestment ofthose activities which, according toour strategic plan, can no longer bedefined as core operations – withexpansion and globalization as ourmain goal.

Bearing in mind the Group’salready intensive workload, the deci-sion to introduce Boliden on theToronto Stock Exchange was a realchallenge. At the same time, we imple-mented – in record time – an extensiveexpansion within both our industrialand distribution areas of operations.

The listing of Boliden Ltd was wellreceived and the entire 55 percentblock of the company’s shares wasfully subscribed. Trading in theBoliden share on the Toronto Exchangecommenced on June 17.

Later, like all of the world’s othermining companies, Boliden wasaffected by falling metal prices and,at the end of the year, by the adverseeffects of the financial crisis in Asia.However, in contrast to many of itscompetitors, Boliden was able toimprove its earnings during 1997.During this period, the company alsomanaged to take yet another impor-tant step in its development byacquiring the mining company,

Westmin Resources. Canada-basedWestmin has very attractive opera-tions in western Canada and Chile.

Trelleborg’s core operationsIf we look, then, at Trelleborg’s coreoperations, I can start by noting thatour industrial operations had a goodyear in 1997. Demand was favorableand all of the business areas consoli-dated their market positions.

A number of strategic acquisitionsfurther strengthened Trelleborg’s posi-tion as one of the leading producersof industrial rubber. The goal is thatthe Trelleborg Group will become oneof the five largest producers of indus-trial rubber in the world, at the be-ginning of the next millenium.

Our distribution operations arealso continuing to make rapid pro-gress. The goal for them is that at theturn of the millenium Trelleborg shallhave become a full-line distributor ofheating & plumbing, electrical, refrig-eration and tool products in Scandi-navia and the Baltic area. And we arealready well on the way. Factorswhich contributed significantly tothis good start were the acquisitionsin 1997 of Swedish electric goodswholesaler, Skoogs, and a majorityinterest in the major Finnish whole-saler, Starckjohann. During 1997, wealso acquired the Polish company,Elwar, and a couple of Norwegiandistributors, PeFo and Hillco.

In our opinion, conducting opera-tions within both the industrial anddistribution areas is a highly successfulcombination, since these activitiescomplement each other very well.The Group’s forceful expansion andglobalization in the years ahead will

Comments by

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • C o m m e n t s b y t h e P r e s i d e n t

Continued the President

Kjell Nilsson, President and CEO.

5

necessitate good access to major capi-tal resources. A significant part of thefinancing is based on the strong posi-tive cash flow generated within theGroup’s distribution operations

More efficient organizationIn addition to the acquisitions,divestments and ongoing operations,we spent 1997 reviewing the Group’sprincipal organization. Our opera-tions are now organized in a mannerthat provides us with better opportu-nities to profitably exploit coordi-nation gains and utilize ourpotential to become more efficient.At the same time, we have been pro-vided with greater direct contact andshorter decision-making channels byremoving a level in the organizationbetween the business areas and theGroup’s executive management.

Today, Trelleborg is organized ineight business areas, four with indus-trial operations and four with distri-bution operations. Parallel with therestructuring of the company, we arecurrently informing the external worldabout the advantages associated withour products and services and howthey serve to improve the quality ofour everyday lives. The simple fact is,that most of our products directly orindirectly improve the comfort, safetyand environment for most of us.

This is by no means a new con-cept for any of us within Trelleborg,but our ambition now is to commu-nicate the message to a wider audi-ence of stakeholders, both at home inSweden and abroad. Many of you willalready have seen examples of this inour advertising campaigns during thewinter and spring which, following a

break during summer 1998, willreturn again in the autumn.

Focus on Technical CenterAt the time of writing, we are someway into 1998 and there are a numberof good reasons why we should, at thisstage, take a look at events ahead. Ourwork continues in accordance with ourstrategic plan, which very briefly canbe summarized by the words: “expan-sion“ and “globalization.“ But our fo-cus is not merely confined to theexpansion of markets and volumes;our aim is to also increase the techno-logical content of our products.

It is against this background thatone should view the SEK 100 millioninvestment in the Group’s technicaldevelopment center in Trelleborg.

The current upgrade and moderni-zation of the Technical Center is astrong indication of our confidence inthe future. A state-of-the-art TechnicalCenter gives us greater possibilities,working jointly with researchers fromuniversities and colleges of technology,to further improve our products – andfind new areas of application for them.

It is our ambition that the Techni-cal Center becomes a respected andleading arena for polymer research!

Asia – an opportunityThe crisis in Asia does nothing to di-minish our confidence in the future.Rather, we regard it as a necessarycorrection to a sometimes inflatedmarket value. At the same time, weare conscious of the fact that all thoseexposed to competition from theAsian economies – in which devalua-tions of up to 50 percent haveoccurred – face a real challenge.

C o m m e n t s b y t h e P r e s i d e n t • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

expansion

Kjell NilssonTrelleborg, March 1998

In the Trelleborg Group, we find our-selves in a position where we bothobtain raw materials from SoutheastAsia and are currently building upour own production operations in theregion – with a plant in Shanghai. Wesee an opportunity here to improvethe terms of our raw-materials pur-chasing and our production potentialin the area.

One factor that is of crucialimportance to the development ofour distribution operations is thedomestic building market, which hasled a languishing life, to say the least,during recent years.

As a result of their skillful adjust-ment to the changed customer struc-ture, changed demand patterns andthe penetration of partly newmarkets, both Ahlsell and BrödernaEdstrand have succeeded in main-taining a good level of volumes andearnings.

New challengesNaturally, no one company can hopeto influence global economic develop-ments. Instead, we must concentrateour efforts to monitoring and tryingto anticipate developments, thereafteradapting our operations to prevailingand expected conditions.

Each new financial year bringswith it new challenges, and I am con-vinced that 1998 is a year duringwhich Trelleborg will experience anumber of positive changes – bothwithin and outside the company.

The strive for well-being is one of mankind’smost basic and fundamental driving forces.It’s about making life easier, more manageableand comfortable in a variety of ways. Makingthe functions more quiet, quick, soft…

Comfort

Environment


Trelleborg has a series of products and servicesthat strive to improve comfort. Some exam-ples are scaling systems, low-pressure tires,antivibration systems, brake shims and sealingstrips.

Rail passengers in Great Britain travel in com-fort partly as a result of antivibration systemsfrom Trelleborg.

But comfort is not only a question of soundproduct properties for our customers. It is also

Safety


an important starting point for our service.We are doing our part to make life easier andless complicated for our customers andcustomers’ customers.

From initial contact to after-sales.

8

Trelleborg Automotive 37 %

Trelleborg Wheel Systems 28 %

Trelleborg Engineered Systems21 %

Trelleborg Building Systems12 %

Other 2 %

Ahlsell 49 %

Bröderna Edstrand 25 %

Reynolds 12 %

Intermarket 14 %Trelleborg Automotive 31 %

Trelleborg Wheel Systems26 %

Trelleborg Engineered Systems29 %

Trelleborg Building Systems13 %

Other 1 %

T

Trelleborg 1997

The Trelleborg Group has undergonevigorous restructuring in recent yearsand is now a well-structured indus-trial and distribution group.

Now that Boliden, the miningand metal company, is listed on theToronto Stock Exchange, the Groupconsists of eight business areas asof January 1, 1998: Trelleborg Auto-motive, Trelleborg Wheel Systems,Trelleborg Engineered Systems,Trelleborg Building Systems, Ahlsell,Bröderna Edstrand, Reynolds andStarckjohann.

Continued expansionDuring 1997, expansion continued inline with already presented strategies.With an increased presence on themost important markets of therespective business area, market sharesare also increasing.

The combined sales of acquiredcompanies and operations exceed theloss of sales brought about by the list-ing of Boliden on the stock exchanges.

The Group’s operations are basedon customers demands on the respec-tive markets.

For the industrial operations thismeans, among other things, a contin-ued global expansion and close coop-eration with customers aimed atjointly developing the best possibleproducts.

To increase competitiveness, the fourbusiness areas included in the indus-trial operations shall take advantageof the synergies inherent in theGroup’s collective resources, such asresearch and development, marketing,human resources management andinformation technology.

In the distribution operations, expan-sion is concentrated in the Baltic area.The well-known wholesaler nameshave a strong position on theirdomestic markets in Scandinaviaand the objective is also to strengthenthe market positions in Finland,Poland and the Baltic States.

Groupreview

Trelleborg’s products and services within the industrial and distribution operationsare an important component in modern society. The Group contributes to morecomfortable, safer and environmentally-friendly developments.

Sales of industrial operationsdistributed by business area

In total, Group external sales of theindustrial operations amounted toSEK 6,820M in 1997.

Average operating capital employedin industrial operations distributedby business area

Average operating capital employedin industrial operations amounted toSEK 3,581M in 1997.

Sales of distribution operationsdistributed by business area

In total, Group external sales of thedistribution operations amounted toSEK 8,270M in 1997.

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • G r o u p r e v i e w

9

Ahlsell 45 %


Reynolds 10 %

Intermarket 13 %

Other 13 %

Operating income by business area per quarter 1), 1997SEK M Jan–Mar Apr–Jun Jul–Sep Oct–Dec Full-year

Trelleborg Automotive 28 67 46 66 207Trelleborg Wheel Systems 25 28 23 24 100Trelleborg Engineered Systems 23 32 8 7 70Trelleborg Building Systems 11 29 40 32 112Other 4 – 22 – 8 – 18 – 44

Industrial operations 91 134 109 111 445

Ahlsell 11 40 43 72 166Bröderna Edstrand 23 30 29 16 98Reynolds 3 5 8 0 16Intermarket 15 18 25 27 85Other – 3 – 2 – 1 0 – 6

Distribution operations 49 91 104 115 359

Boliden 185 206 126 72 589

Other2) – 16 – 7 – 34 – 36 – 93

Group total 309 424 305 262 1,3001) Including participations in associated companies.2) Comprises Groupwide costs. In addition, Metech International, Inc., Sorb Industri AB,Trelleborg NV-SA, Chapman and Velox are included.

Footnote: Starckjohann is not included in 1997 operating income.

The utilizing of centralized logisticssystems strengthens the purchasing situ-ation for the distribution operations.

SalesDuring the year, Group-invoiced salesincreased from SEK 20,574M to SEK

20,825M. Excluding Boliden, invoic-ing amounted to SEK 16,804M

(12,681). For the industrial opera-tions, invoicing amounted to SEK

6,820M (4,685) – an increase of SEK

2,135M. Newly-acquired companiesaccounted for approximately SEK

1,700M of the increase. For compara-ble units, the sales increase wasapproximately 9 percent. Invoicing bythe distribution operations increasedto SEK 8,270M (7,267), of whichnewly-acquired companies contrib-uted approximately SEK 630M.

ResultsOperating income, excluding itemsaffecting comparability, totalled SEK

1,300M (877), a 48 percent improve-ment in earnings. Operating incomeof the industrial operations increasedby 50 percent – from SEK 296M to SEK

445M. The newly-acquired companiesaccounted for the majority of theearnings improvement.

Operating income of the distri-bution operations improved by 21percent to SEK 359M (297). The

improvement is partly due to the factthat 1996 operating income wascharged with inventory losses.

Effective July 1997, the Group’s44.9 percent holding in Boliden Ltd isreported as share in profits of associ-ated companies. For the entire year,the Trelleborg Group’s share in Bolidengenerated earnings of SEK 589M com-pared with SEK 441M in the previousyear, i.e. an earnings improvement ofSEK 148M despite the fact that Trelle-borg reduced its share in Bolidenduring the second half of the year.

Items affecting comparabilityamounted to SEK 1,309M net (0). Theseinclude a capital gain of SEK 1,468M onthe sale of the shares in Boliden Ltd,as well as provisions of SEK 159M relat-ing to costs for restructuring within theGroup. Operating income includingitems affecting comparability amountedto SEK 2,609M (877).

Financial income and expensesamounted to SEK –59M (141). Thechange is due to the higher average netdebt ratio during the year and the factthat the certificates of claim for theFalconbridge shares matured for pay-ment in July 1996 and January 1997.Earnings after financial income andexpenses totalled SEK 2,550M (1,018).

Earnings after minority interestand tax amounted to SEK 2,038M

(1,003), which is equivalent to SEK

17.40 per share (8.60).

Return on shareholders’ equity aftertax amounted to 19.9 percent (10.9)and on operating capital employed,including items affecting compara-bility, to 25.3 percent (9.5). Exclud-ing items affecting comparability,return on operating capital employedwas 12.6 percent (9.5).

For further information, see com-ments under the section “Financialreporting” page 58, etc. and thereporting of the respective businessareas, page 20, etc.

Financial positionThe Group’s net liability increasedfrom SEK 464M to SEK 868M. The risein the debt ratio of SEK 404M is due tothe sales settlement for the Bolidenshares (SEK +4,357M), dividend to theshareholders (SEK –424M), acquisi-tions (SEK –4,153M) and the balanceof earnings generation, and increasedcapital tied up in capital employed.

The equity ratio increased by 4.2percentage points to 53.8 percent.SEK 963M was invested in tangiblefixed assets.

PersonnelThe average number of employeesincreased by 439 to 13,525. At theyear-end, the Group had 13,443employees. Of this figure, 4,818 wereemployed in Sweden and 8,625abroad.

Average operating capital employedin distribution operations distributedby business area

Average operating capital employedin distribution operations amounted toSEK 1,836M in 1997.

G r o u p r e v i e w • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

10

Trelleborg AutomotiveTrelleborg Wheel SystemsTrelleborg Engineered SystemsTrelleborg Building SystemsOther

Industrial operations

AhlsellBröderna EdstrandReynoldsIntermarketOther

Distribution operations

Boliden

Other

Total Group, excluding items affecting comparability

Total Group, including items affecting comparability

Average capitalemployed, SEK M

1997 1996

1,33597775144771

3,581

820337191243 245

1,836

3,624

1,267

10,308

10,308

493798487321126

2,225

646377177253– 5

1,448

4,382

1,148

9,203

9,203

Operating margin, % 1)

1997 1996

8.55.53.5

12.1

6.2

4.04.61.77.5

4.3

7.8

4.7

11.0

6.76.52.9

11.2

6.3

4.83.00.46.5

4.0

4.6

3.8

3.8

Return on capital employed, % 2)

1997 1996

15.510.39.4

25.1

12.4

20.229.18.4

35.1

19.5

16.3

12.6

25.3

14.412.49.1

24.0

13.3

25.417.41.9

24.6

20.5

10.2

9.5

9.5

Trelleborg AutomotiveTrelleborg Wheel SystemsTrelleborg Engineered SystemsTrelleborg Building SystemsOther

Industrial operations

AhlsellBröderna EdstrandReynoldsIntermarketOther

Distribution operations

Boliden

Other 2)

Items affecting comparability

Total Group

Invoiced sales, SEK M 1997 1996 ± %

+ 111+ 21+ 34+ 32– 17

+ 46

+ 22– 2

+ 16+ 18

+ 14

– 49

+ 135

+ 1

Operating income 1), SEK M 1997 1996 ±SEK M

2,1201,7741,973

89558

6,820

4,0842,093

9631,130

8,270

4,021

1,714

20,825

1,0051,4621,470

67870

4,685

3,3442,134

829960

7,267

7,893

729

20,574

+ 136+ 1

+ 26+ 35– 49

+ 149

+ 2+ 33+ 13+ 23

– 9

+ 62

+ 148

+ 64

+ 1,309

+ 1,732

20710070

112– 44

445

166981685– 6

359

589

– 93

1,309

2,609

719944775

296

164653

623

297

441

– 157

877

Groupreview Trelleborg 1997


Sales and operating income by business area

1) Including participations in associated companies2) From July 1997, operating income includes the sharein Boliden Ltd (44.9%)3) Comprises Group-wide costs. In addition Metech International, Inc.,

Sorb Industri AB, Trelleborg NV-SA, Chapman and Velox are included

Starckjohann is not included in 1997 operating income.

Operating key figures

11

Sweden 33%

Other Nordic countries 4%Other European countries 24%

North America 15%

Other 6%

Companies which are no longer consolidated 18%

– 151993 1994 1995 1996 1997

Earnings per share, SEK

Profit margin, %

SEK %

5.60

8.60

neg

3.6

7.3

4.96.0

– 10

– 5

0

5

10

15

20

25

30

– 6

– 4

– 2

0

2

4

6

8

10

12–

13

.50

24.4

0

17.4

0

Average number of employees by region 1997

The average number of employees totals 13,525.At the year-end the Group had 13,443 employees.Of this figure, 4,818 were employed in Sweden and8,625 abroad.

Earnings per share after full tax andprofit margin 1993–1997

Company (Business Area) Sales

1996CMPP (TES) SEK 600M

Horda (TRA+TBS) SEK 360M

Ibercaucho (TRA) SEK 300M

Snowden Rubber and

Anderson CP Rubber (TES) SEK 300M

Gelia Industri (AHL) SEK 160M

1997Tornab (AHL) SEK 100M

Yale-South Haven (TRA) SEK 1,000M

Pe Fo (AHL) SEK 25M

Hillco (AHL) SEK 25M

Vorwerk & Sohn (TWS) SEK 250M

HPT (TES) SEK 4,5M

Wheelbond Africa (TWS) SEK 25 M

Projetos e Aplições de

Vibrotécnica e Vedação (TRA) SEK 55M

Elwar (AHL) SEK 100M

Skoogs Elektriska (AHL) SEK 2,100M

Starckjohann (54 %) SEK 5,300M

Landol (AHL) SEK 90M

Värmekällan (AHL) SEK 25M

1998SRG Bevco (TES) SEK 70M

VVS-Trading (AHL) SEK 70M

Acquisitions


The abbreviations in parantheses stands for the various business areas:Trelleborg Automotive (TRA), Trelleborg Wheel Systems (TWS), TrelleborgEngineered Systems (TES), Trelleborg Building Systems (TBS) and Ahlsell (AHL).

*) Comprises Group-wide costs. In addition Trelleborg NV-SA, Chapman and Velox are included as well as financial transactions, items affecting comparability, taxes, etc.

Cash flow report

1997 Earnings Depreci- Gross Other change Total operating Acquisi- Totalexcluding ation investments in operating cash flow, tions operating

associated capital employed excluding cash flowSEK M companies acquisitions

Industrial operations 425 277 – 347 – 4 351 – 972 – 621

Distribution operations 359 94 – 116 153 490 – 2,716 – 2,226

Boliden 327 230 – 437 – 424 – 304 — – 304

Other/Group*) – 130 85 – 63 – 111 – 219 – 465 – 684

Operating cash flow 981 686 – 963 – 386 318 – 4,153 – 3,835

Dividend to shareholders – 424

Divestment Boliden + 4,357

Other (financial transactions,

items affecting comparability, taxes etc) – 502

Change in financial net assets/liabilities – 404

12

FRF 128

DKK 109GBP 110

BEF 200

DEM 315

FIM 983

ESP 448

USD 2,800

Other 55

Net assets abroad, SEK M

The Group has total net assets outside Sweden equivalentto a value of approximately SEK 5.15 billion.

T

Koncernchefen har ordet

TreasuryGroupreview Trelleborg 1997


In line with current policy, interest onborrowing and investment of liquidfunds can be fixed for up to four years.At the turn of the year, the averageterm of the contracts of borrowing wasapproximately four months.

The average period for short-termand long-term interest-bearing invest-ments was six months at the turn ofthe year 1997/1998.

Financial instrumentsIn order to secure the various risks towhich the Group is exposed, forwardcontracts, swap contracts▲ and op-tions are used. These instruments arecombined to achieve the best possibleoutcome.

FinancingFor continued expansion, there is atotal of granted long-term creditcommitments amounting to approxi-mately SEK 10.1 billion, see diagramopposite page.

Translation exposureThe currency exposure arising throughinvestments in foreign net assets ishedged. The size of the hedging variesbut can be up to the value of the in-vestment including the tax effect.

The book value of the Group’s netassets outside Sweden totalled SEK

5,150M (1,700) as of December 31,1997.

Interest exposureThe Group’s net liability increasedfrom SEK 464M to SEK 868M. The netliability increased as a result of the re-ported acquisitions in both the indus-trial and distribution operations bySEK 4,153M and decreased by SEK

4,357M in connection with the sale of55.1 percent in Boliden Ltd.

The interest rate on the interest-bearing assets was fixed at an averageperiod of one year, while most of theborrowings has been characterized byshorter term of the contracts.

The treasury activities for the Groupare centralized at Trelleborg ABTreasury in Stockholm. The unit isresponsible for the internal bank,short-term and long-term financingand for managing exposure to theforeign exchange and the interest andcommodity markets.

The internal bank managesdeposits and loans, foreign exchangeand commodity hedging, nettings▲

of intra-Group payments as well asconsulting activities in the area ofcapital rationalization vis-à-vis theGroup companies.

The Group is exposed to variousrisks in the form of fluctuating for-eign exchange rates, interest rates andcommodity prices as well as financingand credit risks. To reduce exposures,the Board of Directors has set guide-lines for the Group’s management ofthese risks.

In addition to hedging of curren-cies, interest and commodities, sometrading is carried out in order tomaintain a flow of information, testvarious strategies and to improve theperformance of the hedging programand to reduce financing costs.

Currency exposureThe Trelleborg Group’s transaction ex-posures are imports and exports in for-eign currencies. Trelleborg’s policystates that hedging of these flows canbe made at a volume equivalent of upto two years’ flow, distributed over aperiod of up to 3 years.

Currency hedging varies depend-ing on the market development.As of Decemder 31, 1997, hedging wasequivalent to approximately 80 percentof one year´s exposure. A market valua-tion of our hedge program as of Decem-ber 31, 1997, indicates a marginal profit.

The net flow of foreign currenciesinto SEK amounts to slightly more thanSEK 1 billion, see diagram.

13

01998 1999 2000 2001 2002

500

1,000

1,500

2,000

2,500

3,500

3,000

2003

SEK M

223

265

1,2

25

1,6

73

3,3

01

3,3

65

0 USD

and CAD

100

200

300

400

500

GBP Euro*) Other

SEK M

100

478

141

353

In the Group’sinternal bank thereis collectiveknowledge aboutvarious financialmarkets´.


Committed credit facilities and maturity structureat December 31, 1997, SEK M

The Trelleborg Group has access to a total of approxi-mately SEK 10 billion in the form of committed mediumand long-term credit facilities.

The Trelleborg Group is organized ineight business areas that are based onproducts and services in industry anddistribution.

In turn, each of the eight businessareas consists of a number of divisionsand product areas or similar units.The operating organization does notalways correspond with the legalorganization.

The business areas are indivuallyresponsible for development, qualityand marketing and have access tothe Group’s combined expertise andresources. The common denominatorfor the business areas is their focuson comfort, safety and environment.

Transaction exposures, SEK M

Trelleborg’s net inflow in foreign currencies amountsto more than SEK 1 billion (excluding Boliden).

*) DEM, FRF, BEF, NLG, FIM, ITL & ESP

Operative structure 1998

We live in a time with an increasing need forsecurity. The more complicated and complexthe context, the greater the need for safetyconcepts. Many products from the TrelleborgGroup represent the front line of development

Comfort

in their respective fields: product solutions andsystems which in various ways reduce the riskand threats. Through products like chemical-protection suits, fireproof rubber sheeting,hospital tents, dry suits for diving, faucets safe-

Environment


Safety

guarded against scalding, pipe seals, air pressurehose, industrial flooring or aluminum to theSwedish combat Boat 90H and fireproofequipment for the offshore sector, Trelleborgcontributes to increasing safety. But the safety

concept is more than just an importantcharacteristic of many of our products. It alsomeans reliable deliveries, precision, accessibilityand quality. Our ambition is the right product atthe right place at the right time.


16

A global

Trelleborg in more locations.Since 1996, ten acquisitionscomplement the global strategy in theTrelleborg Group’s industrial operations.

“In addition to competitive prices, Trelleborg will also be able to meetcustomer requirements with regard to global presence, high-technologyexpertise and quality- and environmental certification.”

supplier

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • I n d u s t r i a l o p e r a t i o n s

17

I

Industrialoperations

Production sitesand sales offices, etc.

I n d u s t r i a l o p e r a t i o n s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

In 1897, rubber production started inthe town of Trelleborg, through VeloxAB, one of the building stones oftoday’s Trelleborg Group. Over these100 years, the original material hasbeen developed to such an extent thatit can now be used in thousands ofapplications, from the chewing gumof the Indians in Brazil to a compo-nent in laminated products▲ such asTrelleborg’s CQ materials.

Rubber is still an important mate-rial and has a broad area of use. Instep with other industrial develop-ments, the material has been chemi-cally developed, and today industryincreasingly uses the term polymers▲to denote the smallest commondenominator for a material whichmakes life easier, safer and more envi-ronmentally friendly.

Increased demand for polymers1997 was a very good and positiveyear for the four business areas in theTrelleborg Group’s industrial opera-

tions which have their common foun-dation in polymer-based productsand technology. Last year was charac-terized by positive demand for theproducts of the industrial operationsand all business areas strengthenedtheir market positions.

Expansion within the businessareas continue, and a number of strate-gic acquisitions were made in 1997that aimed to strengthen Trelleborg’sposition as a leading producer. Theobjective is to make the TrelleborgGroup one of the five largest manufac-turers of industrial rubber in the worldat the beginning of the next millenium.

To be a large and internationalcompany with sound profitability isno end in itself, but a necessity forbeing able to continue to develop theoperations in the future.

Meets market needsThe operations are organized in fourbusiness areas:

• Trelleborg Automotive

• Trelleborg Wheel Systems

• Trelleborg Engineered Systems

• Trelleborg Building Systems

All business areas work with customerswhose needs are becoming increasinglyglobal. This makes great demands onTrelleborg as an able supplier to meetcustomer demands with regard toglobal presence, high-tech expertiseand quality assurance, in addition atcompetitive prices.

Trelleborg, with a presence in theform of manufacturing and salescompanies in 35 countries, offers itscustomers local product adaptation,manufacturing and service. In 1997,new operations were established on anumber of important growth marketssuch as China, South Africa, Mexicoand Brazil. In order to consolidate stillfurther the Trelleborg Group’s positionand investment in technology-drivingareas, more than SEK 100M will beinvested in a new technical center inTrelleborg. (continued)

18

1993 1994 1995 1996 1997

Invoiced sales

0

1,000

2,000

3,000

4,000

5,000

7,000

6,000

SEK M

3,4

93

3,9

18

4,4

21

4,6

85

6,8

20

0

100

200

300

400

500

1993 1994 1995 1996 19970

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Operating income, SEK M

Operating margin, %

SEK M

13

0

%

23

5

31

1

29

6

44

5

3.7

6.0

7.0

6.3 6.2

Here, technical spearhead-knowledgewill be combined with increased con-tacts with international institutes,universities and research centers. TheTechnical Center will contribute toenabling Trelleborg to operate moreeasily (and at an early stage) indevelopment projects and product ad-aptation in cooperation with partners.

In order to meet customerrequirements for quality, all manufac-turing plants will be able to meetestablished standards such as ISO9001, US 9000, etc. Most of theTrelleborg Group’s plants now meetthese requirements and work hasinitiated that aims at environmentalcertification in accordance with ISO14000. Quality assurance and envi-

ronmental assurance now form anintegral part of the business operationsvis-à-vis both customers and suppliers.

MarketThe four business areas in Trelleborg’sindustrial operations are active ondifferent parts of a market which toa great extent is undergoing majorrestructuring and consolidation. Trel-leborg takes an active role in thisrestructuring. By being involved andactively influencing matters, there areopportunities for rapidly meetingcustomers’ changed demands andrequirements.

The prime reason for the ongoingrestructuring is the demand for globalservice from customers in leadingindustries such as automotive, off-shore and OEM▲.

Facts 1997 1996

Invoiced sales, SEK M 6,820 4,685

Operating income, SEK M 445 296

Operating margin, %▲ 6.2 6.3

Average operating margin, SEK M 3,581 2,225

Return on operating capital employed, %▲ 12.4 13.3

Operating cash flow, including acquisitions, SEK M – 621 – 582

Operating cash flow, excluding acquisitions, SEK M 351 329

Capital expenditure, SEK M 347 278

Number of employees at December 31 7,728 6,329

Industrialoperations A globalsupplier

Hans Porat, Executive Vice President andhead of industrial operations.

Invoiced sales

Invoiced sales of the industrial operationsincreased by 46 percent in 1997.

Earnings and operating margin

Operating income increased by50 percent during 1997.

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • I n d u s t r i a l o p e r a t i o n s

Invoiced sales, SEK M,by quarter (Group external)

1997 1996

Q 1 1,496 1,085

Q 2 1,832 1,225

Q 3 1,684 1,081

Q 4 1,808 1,294

Total 6,820 4,685

19

Vehicles & Transportation

31%

Building 17%Metal & Engineering 16 %

Offshore & Chemicals 11%

Agri & Food 9%

Forestry & Paper 6%

Military & Government 3%Other 7%

Trelleborg Automotive

31 %

Trelleborg Wheel Systems 26 %

Trelleborg Engineered Systems 29 %

Trelleborg Building Systems 13 %

Other 1 %

Other 1%Scandinavia 26 %

Other European countries 41%

NorthAmerica 28 %

Latin America 2 %Asia & Australia 2 %

SalesGroup external sales increased by 46percent to SEK 6,820M (4,685).Cleared of acquisitions, the salesincrease was about 9 percent. Ofinvoiced sales, 83 percent (77) wasmade outside Sweden.

ResultsThe combined operating income ofthe industrial operations improved by50 percent to SEK 445M (296).

A significantly faster than antici-pated integration of acquisitions, as wellas a streamlining of the manufacturingunits were primary contributions to theimproved result.

InvestmentsThe year’s capital expenditure (ex-cluding acquisitions) amounted to SEK

347M which is well in line with theincreased activity.

Prospects for 1998Trelleborg’s strategy to aggresivelygrow the four business areas of theindustrial operations remains.

Over the next few years, the focusand clarity vis-à-vis the market andcustomers will increase in order to

This, in combination with new tech-nology and low production utilizationamong several suppliers, means thatmany of the smaller producers willhave problems meeting the newdemands.

Trelleborg has the right criteriafor being one of the leading compa-nies in this restructuring process.

Common objectivesOn the following pages, the four busi-ness areas in the industrial operationsgive an account of their respectiveoperations. The common objectivesfor the industrial operations are:

• To be an internationally leadingcompany in few clearly-definedproduct areas,

• To grow by an average of 15percent a year with the aim ofcreating necessary economy ofscale in research and developmentas well as in production andmarketing,

• To reach satisfactory and sustainedprofitability over one business cy-cle, which in the long term means15 percent on capital employedand 8 percent net margin.

Sales by business area Sales by geographic market

The business areas in the industrial operationscontinued to increase their sales outside Sweden.

Sales by customer category

satisfy their global demands of manu-facturing and service.

Internally, rationalization contin-ues. This work is of the utmostimportance, especially to materializethe synergies of acquired entities.

I n d u s t r i a l o p e r a t i o n s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

In 1997, total sales of the industrialoperations amounted to SEK 6,820M.

20


Share of Group sales, %


Operating margin, %Average capital employed, SEK M

Return on capital employed, %


Number of employees on 31 December

Production in the USA, Mexico, Brazil, Germany, Spain, Sweden, Norway, Great Britain och China.

1,0054.9

716.7

49314.4

136

1,453

2,12010.2

2078.5

1,33515.5

142

2,650

T

TrelleborgAutomotive

A business area

In December, the remaining 15 percentof the Spanish company, TrelleborgIbercaucho, was acquired. Thus, thecompany is a wholly-owned unit withinTrelleborg Automotive.

The marketWithin the sector focused on by Trelle-borg Automotive, the largest segmentsare Antivibration Systems, SealingSystems and Hose Systems. Based on astrategy of building a strong andworldwide operation, Trelleborg Auto-motive expanded mainly withinAntivibration Systems during 1997.

Business Area President:Mikael Jonson

On the Scandinavian market, therestructuring of four small independ-ent units is in progress. TrelleborgSigma, Trelleborg TTC, TrelleborgHorda and Trelleborg Viking willbecome the Automotive ComponentsDivision.

Within the product area ofRubber Composites, managementand production are being concen-trated to the main plant in Izarra,outside Bilbao, Spain, to utilize thissynergies between the acquired theFrench company, CMPP, the Spanishcompany, Ibercaucho, and the exist-ing operation in Trelleborg.

Approximately SEK 142M wasinvested in plants (excluding acquisi-tion) during 1997. Investments weremade in research and developmentincreased capacity and to furtherimprove the level of service.

OrganizationDuring the year, the business area hasbeen restructured into a more cus-tomer-oriented organization with fivedivisions:

• Antivibration & Acoustic Sys-tems. The division develops,manufactures and markets prod-ucts which solve structural noiseproblems and antivibration witha focus on light vehicles.

The business areamanufactures awide range ofantivibrationcomponents, forexample, for trains.

Facts / Trelleborg Automotive

positioned forgrowth

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • Tr e l l e b o r g A u t o m o t i v e

The rapidly-growing business areaTrelleborg Automotive brings togetherthe Group’s development, productionand marketing of products and serv-ices to the world’s automotive indus-try. The product range consists ofantivibration systems, acoustic insula-tion materials, engine hose, profiles,laminated products and other rubbercomponents.

Business developmentThe business area’s results continued todevelop positively. Earnings increasedfrom SEK 71M in 1996 to SEK 207M.

During the 1997 financial year,operations were acquired with annualsales of approximately SEK 1,000M

and more than 1,000 employees.In February, the American com-

pany, Yale-South Haven Inc, wasacquired which has its head office inSouth Haven, Michigan, and fiveproduction units in the USA and onein Mexico. The main products areantivibration components for theautomotive industry, and the largestcustomers include General Motors,Chrysler and Ford. The acquisitionincluded 45 percent of DawsonManufacturing Company with twoproduction units for antivibrationcomponents in the USA.

In July, the Brazilian company,Projectos e Aplicações de Vibro-técnica e Vedação Ltda (now Trelle-borg PAV) with plants in São Paulowas acquired. Its main products areantivibration components of rubber/metal primarily for manufacturers ofheavy vehicles.

21

North America 29%

Sweden 23%

Other European countries36%

LatinAmerica 4%

Other 8%

• Automotive Components.Together with customers, thedivision develops and designs awide range of moulded products,profiles, hose and antivibrationcomponents for heavy vehicles,trains and the Scandinavianautomotive industry.

• Automotive Laminates &Calendered Materials. Thedivision is a leader in the develop-ment of existing and new materialsand methods for noise-damping invehicles.

• Moulded Goods. Well-definedproduct areas with technology formoulded products.

• Technical Laminates. Within thedivision, laminated▲ products,both as bulk and niche products,are developed and manufactured.The division is the leader on theEuropean market.

CustomersThe customers include some of theworld’s largest automotive manufac-turers such as General Motors, Ford,Chrysler, Volkswagen, Audi, Skoda,Volvo and Scania as well as train

manufacturers and thebrake and engineeringindustries.

CompetitorsThe largest competitorsare BTR, Freudenberg,Cooper Tire & RubberCo, Hutchinson andConti-Tech.

ProductionWith production in sev-eral locations in Europe,the USA, Latin Americaand China, the businessarea is present on themost important markets.

Certification in accordance withQS 9000 has a high priority. Theunits in the USA and Germany aswell as one unit in Sweden are alreadycertified and other units will followduring 1998.

Research and developmentResearch centers for antivibration andsound-proofing for passenger cars arefound in South Haven, Neumünsterand Kalmar. A new research centerfor trucks will be completed in Trelle-borg during 1998.

The business area and its custom-ers increasingly co-operate on productdevelopment. One example from theUS market is so-called links that havebeen developed in cooperation withChrysler. The links▲ enables lighttrucks to have the same driving qual-ity as passenger cars.

In Europe, Trelleborg Automotivecooperates with Volvo Car Corpora-tion in the development of crankcaseventilation for passenger car engines.

The futureThe automotive industry is currentlyundergoing extensive structural changestowards outsourcing of OEM’s▲ pro-duction, research and development,

reduction in number of suppliers andglobal platform projects. Within afew years, the three segments: Anti-vibration Systems, Sealing Systems,and Hose Systems will be structuredso that five to seven companies willcover 75 percent of the market ofeach segment. Trelleborg Automotiveintends to be active within at leasttwo of these segments and to con-tinue to invest further in productdevelopment and global productionin order to become a “problemsolver” to the customers instead ofmerely a component supplier.

Trelleborg is themarket-leadingmanufacturer of,among otherthings, brake shimsto the Europeanautomotiveindustry.

Efficient andquiet brakesare a deand ina modernpassenger car.

BusinessTrelleborg Automotive will be one of the leadingglobal automotive suppliers within at least two ofthree segments: Antivibration Systems, SealingSystems and Hose Systems.

concept

Sales by geographic market

Today, Trelleborg Automotive has salesin more than 50 countries.

Tr e l l e b o r g A u t o m o t i v e • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

22

1,4627.1

996.5

79812.4

74

1,725

1,7748.5

1005.5

97710.3

69

2,103








Production in Belgium, Denmark, the Netherlands,Great Britain, Sri Lanka, Sweden and the USA.

T

TrelleborgWheelSystems

The world’s largest manufacturer of

The acquisition of Vorwerk in 1997meant that Trelleborg strengthened itsrole as a leading international manu-facturer and distributor of industrialsolid tires, twice as large as thenumber two on the market.

The business area’s tires divisionscontinued to develop products withintheir respective niches and offer in-creased service by providing wheelsystems, in line with customer specifi-cations and direct to the locationwhere the wheel is needed.

The Protective Products Divisionconcentrates on offering a full rangeof protective products to a number ofselected customer categories such asthe emergency services and defenseindustry.

Business developmentThe business area’s sales increased in1997, from SEK 1,462M to SEK

1,774M. Earnings in the same periodamounted to SEK 100M (99).

During the year Vorwerk & Sohn,a German company, was acquired.Vorwerk produces a range of solidtires, primarily for materials-handlingvehicles such as forklift trucks. Theacquisition means that Trelleborg isnow the largest manufacturer of solidtires with more than 20 percent of theworld market.

Sales of solid tires in Europeincreased by 28 percent to 46 percentof the business area’s total sales. TheNorth American market accountedfor a quarter of the sales and there areopportunities for a rapid expansion

on that market. The objective is toincrease sales in North America andon the new markets in Asia, LatinAmerica and South Africa.

The acquisition of Wheelbond, aSouth African company, opened up anew continent for the business area.The company is a market-leading dis-tributor of industrial tires in SouthAfrica with Bergougnan as the mainbrand and will now also sell Trelle-borg’s product range of forest & farmtires, TWIN low profile low groundpressure tires as well as the industrialtire brand, Vorwerk.

80 percent of sales by the Protec-tive Products Division are made out-

side Sweden and new geographicmarkets account for a large propor-tion of the sales increase during 1997.

MarketTrelleborg Wheel Systems strives toattain a market-leading position withtires and wheel systems in a number ofselected niches. In addition to focusingon the product, the business area investsin raising the level of service to distribu-tors and customers.

Work continues on the integra-tion of the business area’s manufac-turing units.

OrganizationThe business area consists of threedivisions:• Industrial Tires. As the largest

division, it develops, manufacturesand markets solid tires for trucksand other materials-handlingequipment.

• Forest and Farms Tires develops,manufactures and markets a widerange of tires and wheels for forestand farm machinery.

• Protective Products. The divisiondevelops, manufactures and marketspersonal protection equipment suchas chemical and fire-protectionclothing and diving suits for profes-sional use, tents and special productsfor, among other things, health care.

Trelleborg is theworld’s largestproducer of solidtires which areused on, amongother things,forklift trucks.

Business Area President:Anders Pettersson

solid tires

Facts / Trelleborg Wheel Systems

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • Tr e l l e b o r g W h e e l S y s t e m s

23

Sweden 12%


NorthAmerica 25%

Latin America 3%Asia & Australia 5%

Africa 3%

CustomersThe customers include a broad spec-trum of manufacturers of specialvehicles. Several of the big manufac-turers of trucks, combine harvesters,planting machines and tractors arefound among the customers togetherwith manufacturers of forest machin-ery, materials-handling vehicles, portsand air traffic administration as wellas various suppliers of equipment.

Three-fourths of Protective Prod-ucts’ range of chemical-protectionclothing and diving suits as well astents are sold to customers like emer-gency services and the defense indus-try which have strict demands onquality.

CompetitorsAmong the big manufacturers, thetrend is towards continued globaliza-tion and growth via acquisition.Trelleborg is one of the world’s lead-ing manufacturers of special tires,with production on three continents,whereas most competitors are mainlylocal.

Trelleborg’s chemi-cal-protection suitsof the Trellchemtype have a largemarket among themore than 80countries whichhave signed theUN resolutionregarding thedismantling ofchemical weapons.

Sales of TWINtires for tractorsand tires forplanting machines,for example,increased followingcampaigns inSweden, Norway,Great Britain andSouth Africa.

Competitors include thelarge tire manufacturers,Michelin, Goodyear, etc.,as well as Alliance (Israel),Watts (Great Britain), andTitan (USA). In some segments, thereis also competition fromlow-price manufacturers inEastern Europe and Asia.

ProductionIn connection with theacquisition of Vorwerk,production was movedfrom Germany to theplants in Belgium and SriLanka. Production in thetwo units in Sri Lanka isbeing coordinated. Work still aims at certi-fying the business area’smanufacturing units in

accordance with ISO 9001 and ISO14000.

New productsAlthough the tire market must beconsidered to be a mature market,Trelleborg develops and markets anumber of special niches. Someexamples in 1997 are special wheelsfor baggage trolleys and special appli-cations for the forest industry.

The futureTrelleborg Wheel Systems continuesto focus on profitable niches forspecial tires and strives for a market-leading position in these segments.

The investment in a broaderrange of tires for the forest industryhas provided a stronger positionwhich should mean continued satis-factory sales in 1998.

Cooperation with the customersaimed at developing complete wheelsystems is becoming increasinglyimportant, new product groups area central part in the future of thebusiness area.

BusinessIndustrial Tires manufactures special wheelsfor trucks and other materials-handlingvehicles. Forest & Farms Tires developscomplete wheels with low-pressure tiresand solid tires for forestry and agriculture.Protective Products develops, manufacturesand markets protective products for peopleworking in hazardous environments.

concept

Trelleborg’s Protective Products areknown for their high quality whichcontributes strongly to increasedmarket shares mainly in Asia, andnew customers, partly in connectionwith the UN position regarding thedismantling of chemical weapons.


The acquisition of Vorwerk & Sohn hasstrengthened Trelleborg Wheel Systems’position on the German market.

Tr e l l e b o r g W h e e l S y s t e m s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

24

1,4707.1

442.94879.1

29

1,530

1,9739.5

703.57519.4

76

1,978








Production in Canada, France, the Netherlands,Norway, Sweden and the USA. Distribution organization for industrial supply products in North America.

Facts / Trelleborg Engineered Systems

T

The market leader in

Trelleborg Engineered Systems devel-ops, manufactures, markets anddistributes a wide range of industrialhose and other industrial supplyproducts. Rolls for customers in thepaper and pulp industry are coatedwith advanced composite materials.

In addition, special products aresupplied for infrastructure projectssuch as expansion joints, special hosefor dredging work, as well as coatingsfor fire and corrosion protection for,for example, the offshore industry allover the world.

Business developmentInvoiced sales increased by 34 percentto SEK 1,973M (1,470) during 1997.

The business area’s operatingincome improved during the yearthanks to increased volumes, earningscontributions from acquired unitsand comprehensive restructuring ofthe Engineered Products Division’soperations in Germany. However,operating income remains unsatisfac-tory.

Both the European and NorthAmerican markets show strong salesincreases and increased market shares.

In December 1996, the Canadiancompanies, Anderson CP Rubber andSnowden Rubber, were acquired.From January 1, both acquisitionswere integrated with Goodall, theNorth American subsidiary, and havecontributed significantly to a positivedevelopment of the business area’ssales and profitability.

In January 1998, these acquisi-tions were supplemented following

the acquisition of SRG Bevco, a hosedistributor in northeast USA.

During the autumn, the opera-tions of the British company, HPT,which was acquired in summer 1997,were integrated into the offshoreoperations of the Norwegian subsidi-ary, Trelleborg Viking.

MarketDemand for advanced industrial hoseimproved slightly during 1997 bothin North America and Europe.However, disturbing surplus capacityremains on the European marketwhich results in tough price competi-tion. The market for offshore andinfrastructure products developedpositively during 1997.

The business area is well-posi-tioned with significant shares on themarket of the respective product area.

An investment program for in-creased capacity and reduced costswas initiated for the plants in Swedenand France during 1997.

Substantial investments were alsomade in Trelleborg as the industrialroll operations are being moved fromÖrebro to Trelleborg. For this pur-pose, a new factory building is underconstruction in Trelleborg.

Introduction of modern and inte-grated IT systems is underway inmany units of the business area.

OrganizationThe business area consists of a largenumber of companies and productareas organized in three divisions:

• Industrial Hose Division develops,manufactures, markets and distrib-utes industrial hose, couplings andindustrial supply products.

• Goodall is North America’s leadingdistributor of industrial hose andother industrial supply products.

• Engineered Products develops,manufactures and markets a numberof products with a high technologycontent for offshore, infrastructureand the paper and pulp industry.

Business Area President:Georg Brunstam

Goodall is NorthAmerica’s largestdistributor of hoseand industrialsupply products.

industrial hosein Europe and North America

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • Tr e l l e b o r g E n g i n e e r e d S y s t e m s

TrelleborgEngineered

Systems

25

Sweden 10 %

Other Nordic countries 9 %

Other European countries 34 %

NorthAmerica 41 %

Latin America 0.5 %Asia & Australia 5 %

Other 0.5 %

Bild:Bro

CustomersThe business area’s customers aremainly found in Western Europe andNorth America. However, significantgrowth is taking place on new markets.

Customers consist extensively ofmanufacturing industry and suppliersto that industry as well as within theoffshore and defense industries.

The business area is the leadingsupplier for tunnel-sealing productsfor, among other things, the Öresundlink between Malmö and Copenhagen.

CompetitorsTrelleborg is the market leader in in-dustrial hose in Europe and NorthAmerica with competitors like IVG,ITR and Alfagomma (Italy), Dunlop(Great Britain), Goodyear and Gates(USA), Continental and Phoenix(Germany).

The market is characterized bysurplus capacity and needs to berestructured. Trelleborg EngineeredSystems intends to participate activelyin this process.

Competitors in advanced engi-neered products are Vredestein (theNetherlands) and Scapa (Austria),among others.

Hose fromTrelleborg doesnot affect the tasteof sensitive foodproducts, such asmilk, and meetsthe sector’s stricthygiene require-ments.

The Erasmus bridgein Rotterdam, TheNetherlands, issupported by theworld’s largestelastomeric bearingsystems to transferloads and move-ments between thesteel bridge deckand concrete foun-dations.

ProductionProduction volumes have increased inall divisions. Extensive changes in theproduction structure were implementedin the Industrial Hose Division and theGerman profile operations within Engi-neered Products were closed in 1997.

All manufacturing units withinthe business area are third-party certi-fied in accordance with ISO 9001 or9002. Work on environmental certifi-cation in accordance with ISO 14000has started, and Trelleborg Vikingreceived third-party certification dur-ing the year in accordance with ISO14000.

New productsExtensive resources are being spent ondeveloping new products for custom-ers like the offshore industry. WithinIndustrial Hose, entire systems arebeing developed which include bothindustrial hose and couplings. Duringthe year, a large number of new prod-ucts were introduced on the market,such as improved industrial hose forfood, materials-handling and dredg-ing as well as new products for theoffshore industry. One example isScirocco II, a hose which enables

efficient, economic handling of pow-dered materials with the aid of thegravitational forces.

New composite coatings for rollsfor super-calendering▲ of fine paperhave also been developed.

The futureThe market for industrial hose andadvanced engineered products isexpected to be positive during 1998.

BusinessTrelleborg Engineered Systems will cost-efficientlydevelop, manufacture, market and distributeindustrial hose systems, expansion joints andindustrial supply products for customers all overthe world, and develop, manufacture and marketniche products with large components ofengineering services to advanced customers inthe offshore and infrastructure sectors as well asthe paper and pulp industry.

concept

Trelleborg Engineered Systems holds astrong position on the European andNorth American markets.


Tr e l l e b o r g E n g i n e e r e d S y s t e m s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

Trelleborg Engineered Systems seals the Öresund tunnelbetween Malmö and Copenhagen.

26

6783.3

7711.2321

24.0

25

773

8954.3

11212.1447

25.1

32

872








Production in Sweden, Great Britain,Czech Republic and Russia.

Facts / Trelleborg Building Systems

TTrelleborg Building Systems develops,manufactures and markets a widerange of sealing products such as seal-ing strips, rubber membranes andbitumen-based▲ roofing felt.

Restructuring of the operations of theIndustrial Profiles Division in GreatBritain and Belgium affected theearnings during the year but has laidthe foundation for a competitive basefor the business area’s future incomedevelopment.

The Swedish Horda Group wasacquired during the fall of 1996. Thebuilding-related units were graduallyintegrated into the building organiza-tion until the turn of the year 1997/1998.

In March, Park Rubber – one ofGreat Britain’s leading industrialprofile companies – was acquired.The business area’s previous produc-tion was moved, and the new unit,Trelleborg Industrial Profiles UK, isthe leader on the British market forsealing strips.

MarketThe Nordic countries have tradition-ally been the main market for thebusiness area’s products. In recentyears, however, the market orienta-tion has increasingly been movedtowards the rest of Europe, especiallythe eastern regions.

Demand in the building sectordeveloped weakly during 1997. Onimportant markets – such as Swedenand Germany – demand fell, while

the growth rate in Eastern Europetemporarily stagnated. The Finnishmarket was one of the few exceptionswith a growth of more than 10 per-cent.

OrganizationThe business area consists of fivedivisions:

• Industrial Profiles. Manufacturesand develops sealing profiles tobuilding-related industry andother specialist segments.

• Consumer Profiles. Manufacturesand markets self-adhesive sealingprofiles to the DIY market.

• Materials. Manufactures anddevelops granules and mixes forthe cable and retreading industries.

• Rubber Membranes. Manufac-tures and markets rubber sheetingfor sealing systems for roofs,landfills and water storage.

• Mataki. Under the Mataki brandname, the division manufacturesand markets bitumen-based seal-ing systems for roofs and othermoisture-resistant applications.

CustomersThe business area’s customers aremainly found in building-related

TrendLine is amodern glazingmethod in whichthe sealing stripsare fixed betweenthe glass pane andthe window frame.A strip of woodwith hidden nail-heads fixes thewindow.

Business developmentInvoiced sales increased by 32 percentto SEK 895M (678) during 1997. Salesto Eastern Europe developed posi-tively, whereas building-related salesto the Swedish market continued toweaken.

The acquisitions of the HordaGroup and Park Rubber contributedstrongly to the sales increase duringthe year. For comparable units, saleswere on a par with the previous year.

The business area’s operatingincome increased by 46 percent to SEK

112M, mainly through the contribu-tion from the acquisition of Horda’sbuilding-related operation and astrong earnings development in theConsumer Profiles Division.

Business Area President: Peter Suter

Leading brandson the European building market

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • Tr e l l e b o r g B u i l d i n g S y s t e m s

TrelleborgBuildingSystems

27

Sweden39%

Other Nordic countries 14%

WesternEurope 37%

Eastern Europe 8%Other 2%

BusinessTrelleborg Building Systems will be a leadingsupplier of rubber and bitumen-based sealingproducts to the building-related industrywith a focus on well-defined niche segments.

concept

Austrian company,Semperit, and the Brit-ish company, Schlegel,being the exceptions.In certain segmentsthere is some low pricecompetition fromEastern Europe.

ProductionThe manufacturingunit in Belgium wasclosed in 1997 andproduction transferredto other units withinthe industrial profilesoperation. To meet increasingdemand, the businessarea has invested in ahighly-efficient extru-sion line for sealingprofiles in the Britishcompany, TrelleborgIndustrial Profiles UK. The restructuringand specialization ofthe units in Värnamo

was completed in 1997.Of the business area’s eight manu-

facturing units, six are certified inaccordance with ISO 9001. In theremaining two units, an adaptationto the quality assurance systems tothe ISO 9000 structure is underway.

New productsDuring the year, the business areadeveloped more than 500 new sealingprofiles in cooperation with customers.

For the Continental timber-framed windows market, TrendLine, aunique dry-glazing system for which apatent has been applied, is beinglaunched.

Technology development has pro-vided opportunities for producing ma-terials for several new interesting areasof application for cable granulates.

Mataki is one ofthe leadingmanufacturersin the Nordiccountries of mois-ture-resistant andwater-repellentsealing systemsfor roofs, walls,floors andfoundations.

Thanks to profilesfrom TrelleborgBuilding Systems,even the cat is ableto enjoy itself in itsfavorite place withno risk of draft.

industry with the exception of Indus-trial Profile’s important customers inother manufacturing industry.

In recent years, the developmenthas been characterized by the fact thatthe larger customers establish manu-facturing operations in several coun-tries. Requests for single-sourcing areincreasingly being formulated.

CompetitorsEach division is focused within clearly-defined niches and all have leadingpositions within their prioritized mar-ket segments.

Most of the competitors operatelocally on their respective domesticmarkets with the German companies,Phoenix and SaarGummi, the


The countries in Eastern Europe are thebusiness area’s fastest growing market.

The futureThe European building market, withthe exception of the German market,is expected to develop positively dur-ing 1998, spearheaded by EasternEurope, Finland and Great Britain,with an anticipated growth of morethan 5 percent.

The operations established by thebusiness area in Poland, the CzechRepublic, Hungary and Russia as wellas strengthening in Great Britain andFinland, create sound criteria forparticipation in the positive develop-ment.

The sealing strips are fixed between thewindow pane and frame.

Tr e l l e b o r g B u i l d i n g s S y s t e m s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

28

Packed

“We will play an impor-tant part for customers’materials flows, produc-tion and application ofcapital. Through localand flexible organiza-tions, we will offer highaccessibility, a high levelof service and quality,with a customer-adaptedproduct range.”

Dataprodukter

and readyComfort

Environment

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • D i s t r i b u t i o n o p e ra t i o n s

During 1997, Ahlsell extended its product range with an increasingnumber of articles to the expanding communications market, in theform of servers and other computer equipment.

29

T

Distributionoperations

The illustration shows the wholesaler’s role in simplifying the flow of information andtransport between five suppliers and five customers. Without the wholesale function,all parties are forced to make a large number of time-consuming direct contacts.

Safety

D i s t r i b u t i o n o p e ra t i o n s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

Customers

Suppliers

Customers

Suppliers

decreased. Growth was only noted inthe export industry.

Improved market positionsAhlsell offers contractors, industry andmunicipalities a high-quality productrange in heating & plumbing supplies,electrical products, refrigeration andtools from leading producers. The com-pany’s strength on the Swedish marketis its proximity to the customer.

This is achieved through some 80professional marts which have been es-tablished in around 50 locations inSweden. The combination of these pro-fessional marts and a central warehousein Hallsberg creates rapid and efficientdistribution.

During 1997, a number of Nordiccompanies were acquired in the effortsto achieve a significantly stronger posi-tion, with the Swedish electricalwholesaler, Skoogs, as the most impor-tant. International expansion contin-ued, partly through the acquisition ofthe Polish company, Elwar.

Increased demand forpre-treatment

Sweden is also the main market forthe steel wholesaler, Bröderna

Edstrand. The company’s strength isits nationwide network with ware-houses and systems which provide 24-hour service. For several years,Bröderna Edstrand has had well-established relations with the majorityof the European steel mills and is theindependent import alternative.

Customers increasingly requestpre-treatment and further processingof materials from Bröderna Edstrand.This has been developed into a deci-sive competition factor, and to meetthe requests, Bröderna Edstrand hasinvested in increased capacity at theplants in Jönköping and Norrköping.

New servicecenter

Reynolds is primarily known as oneof the major producers independentdistributors of metals with regard tonon-ferric products in France, Ger-many and Great Britain.

Reynolds’ share of the Britishmarket has grown in recent years, andlast year a service center was estab-lished for the distribution of alu-minum to the British market.

(continued)

Wholesaler

The distribution operations within theTrelleborg Group are characterized bywell-known names and strong profilessuch as Ahlsell, Bröderna Edstrand,Reynolds and Starckjohann.

The wholesaler role is a commondenominator for the four businessareas and the decisive factors for suc-cess are:

• Rational flow• Local ties• Composition of product range• Accessibility

The objective of the distributionoperations is to satisfy the Nordic mar-ket’s needs, primarily for steel, othermetals, heating & plumbing supplies,electrical and refrigeration products.

ResultsThe results of the business areasimproved, as compared to 1996. Vol-umes increased towards the end ofthe year and the price scenario wasrelatively stable.

The realized profitability is satis-factory, bearing in mind that thepreviously weak building trend inSweden weakened still further andthat investments in the infrastructure

30

Distributionoperations

Supplementation inEastern Europe

In 1997, a majority interest in Starck-johann, a large Finnish wholesaler,was acquired. Today, the TrelleborgGroup has 53.7 percent of votes andcapital in this listed Finnish company.

Starckjohann’s operations comple-ment both Ahlsell and BrödernaEdstrand with large sales to the engi-neering and building industries inFinland.

International contact networkIntermarket enjoyed some very strongmonths during the fall and soldsignificantly more than in 1996with continued satisfactory pricedevelopment.

The common denominator for thecompanies in Intermarket is sulfuricacid. Intertrade has its own plant inthe USA that produces sulfuric acidand at the same time carries on trad-ing in the southeast USA withsulfuric acid from US and Canadiansmelters.

Chemtrade has a very well-estab-lished contact network with bothsuppliers (smelters and refineries) andcustomers virtually all over the world.Its operations are founded on a well-functioning logistics system withtankers, trailers and a large terminalin Rotterdam for the interim storageof sulfuric acid.

Following the Trelleborg Group’ssale of its majority interest in Boliden,

Packedand ready

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • D i s t r i b u t i o n o p e ra t i o n s

the sulfuric acid companies are nolonger regarded as parts of the coreoperation and, in connection withBoliden’s listing on the Toronto StockExchange, a decision was made to sellIntermarket. The sale is planned to becompleted for the beginning of 1998.

New locationIt is estimated that Fillite in Runcornoutside Liverpool accounts for 30percent of the world market forcenospheres▲, a filling material, the

Invoiced sales of the distribution opera-tions increased by 14 procent during 1997.

Earnings increased by 21 percent during 1997.

Earnings and operating margin

Facts 1997 1996



Operating margin, %▲ 4.3 4.0

Average operating margin, SEK M 1,836 1,448

Return on operating capital employed, %▲ 19.5 20.5

Operating cash flow, including acquisitions, SEK M – 2,226 412

Operating cash flow, excluding acquisitions, SEK M 490 481

Capital expenditure, SEK M 116 51


Footnote: Starckjohann is included in the balance sheet but not in the income statement

Björn Ogard, Executive Vice Presidentand head of distribution operations.

Invoiced sales

31

Other markets 1%

Sweden 72%

OtherNordiccountries 2%


North America 9%Ahlsell 49 %


Reynolds 12 %

Intermarket 14 %

primary area of application of whichis the cementing of oil and gas wellsand filling agents in bitumen rubberfor sound-proofing in vehicles. Filliteis also the leading company in thedevelopment of new applications forcenospheres.

Fillite’s result was on a par withthe record year of 1996 and deliveriesreached the same level.

As of the turn of year, Filliteorganizationally belongs to businessarea Trelleborg Automotive.

D i s t r i b u t i o n o p e ra t i o n s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

Sales by business area

In total, external sales of the distributionoperations amounted to SEK 8,270M.


The strategy of the distribution operationsis to increase sales in the Baltic area.

SalesGroup external sales increased by 14percent to SEK 8,270M (7,267), ofwhich new acquisitions contributedSEK 630M.

ResultsEarnings of the distribution opera-tions improved by 21 percent to SEK

359M (297) in 1997. The improve-ment is partly due to the fact that1996 operating income was chargedwith inventory losses.

Advanced IT SystemsThe backbone of a modern wholesalecompany is an advanced IT systemwhich is able to interlink the unitswithin a company but which is alsoable to communicate with suppliersand customers.

Prospects for 1998The positive trend in the Nordiccountries is expected to continueduring 1998. In Sweden, the exportindustry continues to operate with

high capacity utilization and contin-ued need for investment.

For the first time in many years,new constructions is expected to in-crease. The need for new housing –primarily in the Stockholm area andin the university cities – has steadilygrown. New production of housing inSweden is currently at a record lowlevel and although is now increasing,it is the refurbishment, redevelop-

ment and extension market which isdecisive for the total demand. In thissegment, no real changes are expectedcompared with 1997.

Although some slow-down hasbeen noted with regard to invest-ments in infrastructure, roads, rail-ways, bridges, etc., there is still highactivity in several areas, especially inthe Malmö region in connection withthe building of the Öresund Bridge.

As a whole, this means that bothAhlsell and Bröderna Edstrand canexpect improved volumes in 1998

The French market, whichstrengthened gradually during 1997,is expected to remain positive. TheBritish market, which has grown rap-idly in recent years, is also expected toremain strong. This means that

Ahlsell has suppliedsanitary productsto MarriottMoscow GrandHotel, one ofMoscow’s newestluxury hotels.

Stainless steelfrom BrödernaEdstrand is madeinto hard-wearingkitchen sinks.

Reynolds can expect 1998 to be aslightly better year than 1997.

The Finnish economy is also ex-pected to develop positively in 1998which means that the newly-acquiredcompany, Starckjohann, anticipatescontinued positive development in alldivisions.

Invoiced sales, SEK M,by quarter (Group external)

1997 1996

Q 1 1,728 1,862

Q 2 2,007 1,862

Q 3 2,092 1,728

Q 4 2,443 1,815

Total 8,270 7,267

32

3,34416.0

1644.864625.4

19

1,163

4,08419.6

1664.082020.2

42

1,682








Storage and Sale in Sweden, Denmark, Norway,Finland, Poland and Russia.

I

Ahlsell

In 1997, Ahlsell extended and strength-ened its market shares. A new profes-sional mart in Poland and a number ofstrategic acquisitions enabled the busi-ness area to strengthen its positions andgrow on an otherwise weak market.

The acquisition of Skoogs Elmeant that Ahlsell significantlystrengthened its position in electricalwholesale and became one ofSweden’s largest electrical wholesalecompanies.

Business developmentIn 1997, Ahlsell’s sales increased fromSEK 3,344M to SEK 4,084M. Earningstotalled SEK 166M (164).

The first quarter of 1997 wascharacterized by the same weakmarket as in the winter of 1996.Ahlsell was faced with falling demandin Sweden, in the electrical as wellas the heating & plumbing segments.

Compared with 1996, springinvolved a 10 percent reduction involume for Ahlsell heating & plumb-ing supplies. However, the totalSwedish market fell by 15 percentwhich meant that Ahlsell was able tostrengthen its position.

The second quarter started better.The market recovered and demandincreased. Ahlsell’s sales were on a parwith the previous year, and in June aclear improvement was noted.

This trend-break continued duringthe remainder of 1997 and sales ofheating & plumbing supplies im-proved in the second half. Sales of theelectrical range were on a par with theprevious year which meant an in-creased market share as the total marketfor both the electrical and the heating

& plumbing fields fell by 5–6 percent.Within heating & plumbing and

electrical wholesale, very small priceadjustments are currently being madeand the price scenario is considered tobe stable.

At the beginning of 1997, twoNorwegian companies, Hillco A/Sand Pe Fo A/S, were acquired. Hillcois a refrigeration wholesaler and theacquisition means a significantlyimproved market position. Pe Fo isan electrical wholesaler which con-centrates on the DIY market.

Through the acquisition of thelocal wholesalers, Tornab in Norr-botten and Värmekällan in Jämtland,Ahlsell’s position was strengthened in

Northern and Central Sweden.In February, Ahlsell opened its

first professional mart in the Polishcapital, Warsaw, and a few monthslater the electrical wholesaler, Elwar,Warsaw’s best-known wholesaler, withsales of around SEK 100M, was ac-quired. In addition to four locationsin the city, there is a sales office andwarehouse facilities in the adjacentcity, Lódz .

A merger process is underwayaimed at making Skoogs El andAhlsell into an even stronger com-pany. An organization based on sevenregions was immediately created, andsales management, control andadministration were coordinated. Allsupplier agreements were coordinatedand a plan for coordination of theproduct ranges was drawn up. Coor-dination of sales and warehousing willbe completed during 1998.

In October, Landol AB wasacquired, a company which special-izes in property maintenance on acontinuous basis which means a newmarket segment for Ahlsell.

At the beginning of 1998, theinvestment in the DIY market wassupplemented through the acquisi-tion of the Danish company, VVS-Trading A/S.

MarketAhlsell’s success is found in a combina-tion of a cost-efficient structure, good

Business Area President:Bengt Olsson

Strengthensits positiondespite a falling market

Continues the expansion around the Baltic

Ahsells centralwarehouse inHallsberg suppliesmore than 50,000items. The pictureshows the tallstorage portion.

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • A h l s e l l

Facts / Ahlsell

33

Kylma 33%

Danfoss 20%

Ahlsell 18%

Aka 16 %

Kylkomponenter 7%Other 6%

Dahl 39%

Ahlsell 35%

Onninen 8%

Lundagrossisten 4%

Alvesta VVS 4%Other 10%

Hagemeyer/ Asea Skandia 30%

Ahlsell 28%

Selga/Rexell 18%

Storel/Otra 14%

Nordisk Solar 5%Other 5%

businessmanship combined with aclose network of centrally-locatedprofessional marts which gives it theaccessibility demanded by customers.

Customer demand for increasedservice is met by, among other things,the Packed and Ready concept whichmeans that the customer reviews theproduct requirements with Ahlsell’srepresentative. This review leads to thecoordination of orders and deliveries.The products are delivered direct tothe location at precisely the time fixedby the customer. The products aredelivered in special packaging which isrecycled, there are positive effects onthe environment.

During 1997, the central ware-house in Hallsberg was extended to38,000 square meters to meet the in-creasing sales and significantly highervolume involved in the acquisitions ofSkoogs and Landol.

In addition, the central warehousewas ISO 9002 certified at the begin-ning of 1998.

OrganizationAhlsell’s operations are distributed on theHeating & Plumbing, Electrical, Refrig-

eration, International, GDS, Landol andIndustrial Supplies Divisions.

Sales are made via some eightyprofessional marts in around fiftylocations. The head office is located inHäggvik, north of Stockholm.

CustomersAhlsell’s main customers are contractors,industry, municipalities and electricityboards as well as property managers.

CompetitorsAhlsell has a leading position on theSwedish market for heating & plumb-ing and electrical products, see diagram.

The futureIn recent years, wholesale operationshave been internationalized, and inEurope restructuring is taking place,especially in the heating & plumbingmarket. In Sweden and the Nordiccountries, this process has progressedeven further, and Ahlsell strengthenedits position in 1997.

Some positive development of theSwedish building market is expectedduring 1998, especially in the largecities and university locations.

Ahlsell’s hub, thecentral wharehousein Hallsberg.

Ahlsell coordinatesthe deliveries sothat the productsare supplied to thelocation and at theprecise timedecided by thecustomer.

A h l s e l l • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

BusinessAs a wholesaler, Ahlsell will offer a functionallycorrect product range for contractors, industry,municipalities and retailers.Ahlsell will operate within the product seg-ments: heating & plumbing, supply & sewage,electrical, refrigeration and tools.Ahlsell will provide a high quality product rangefrom leading producers.

concept

The Swedish heating & plumbingsupplies market distributed by player

In total, the Swedish plumbing & heatingsupplies market is estimated to beworth SEK 6.4 billion.

The Swedish refrigeration marketdistributed by player

In total, the Swedish refrigeration marketis estimated to be worth SEK 500M.

The Swedish electrical marketdistributed by player

In total, the Swedish electrical marketis estimated to be worth SEK 7 billion.

In Ahlsell’s professional marts, customers make their own selections from among allthe articles on the shelves.

34

2,13410.4

653.0

37717.4

18

512

2,09310.0

984.6

33729.1

60

523








Storage and Sale in Sweden and Denmark.

B

BrödernaEdstrand pretreatment and

additionally refining

In BrödernaEdstrand’sservice center inNorrköping, sheetmetal is cut tocustomers’specifications.

Bröderna Edstrand’s strength on theSwedish market is due to the fact thatthe company is a nation-wide steelwholesaler with warehouses andsystems providing 24 hour service.This means that an order receivedbefore lunch is delivered at the cus-tomer’s site next morning. Fixedschedule truck systems, a broad andextensive product range as well asresources to pretreating steel for cus-tomers into ready-to-assemble compo-nents enables a high level of service.

For many years, BrödernaEdstrand has had well-establishedrelations with the most importantEuropean steel mills.

Business developmentBröderna Edstrand continued to im-prove, especially its capital efficiency.The cost side was also kept understrict control.

The invoicing value fell by 2 per-cent despite a 4 percent increase intonnage. Earnings were significantlyhigher than in previous years, SEK

98M (65), mainly because 1996 earn-ings were charged with significantwrite-downs in inventory values.

The business area enjoyed afavorable autumn with higher vol-umes than in 1996. The trend for thebuilding-related products remainedweak and sales of reinforcement prod-ucts fell by 14 percent which clearlyreflects the decline in new construc-tion of residential properties andreduced investments in infrastructure.Because of the forest industry’s lowinvestments during the year, sales ofstainless steel declined.

Sales of long products and hot rolledplate were at anticipated levels,whereas sales of special steel, pipes,and thin sheeting developed strongly.

Compared with 1996, the start of1997 showed a stabilization of steeland metal prices. Price increases in sev-eral product areas were implementedalthough with a considerably slowerimpact than the mills had announced.On the whole, an increasingly positiveprice scenario gradually developed asthe year progressed.

Success factorsBröderna Edstrand is a distributor,which from an ownership viewpoint

is independent of steel mills, and thecompany is capable of offering prod-ucts from the most important steelmills in Europe.

Bröderna Edstrand’s resources forpretreating and additionally refiningmaterials have become an increasinglycompetitive factor. Customers increas-ingly request these services, andBröderna Edstrand will continue theconcentration on increased pretreat-ment and a higher level of service.

The investment in a service centerfor special steels in Jönköping startedin 1996. Demand for made-to-measure products increased, and theplant was expanded by an additional3,000 square meters. In Jönköping, avery modern and efficient servicecenter has now been created for cut-ting special steel, tubes and precisionsteel pipes.

During the autumn, the Norr-köping plant was reconstructed, and anew 5,000 square meter building forstainless steel, aluminum and cold-rolled sheeting was built adjacent tothe other operations. The Norrköpinginvestment will continue in 1998with flame-cutting of heavy-dutysheeting, and machinery will be refur-bished and new machines added.After the flame-cutting plant has beencommissioned in March 1998, theproduction area will have doubledand production trebled.

Business Area President:Rolf Forssell

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • B r ö d e r n a E d s t r a n d

Concentrates increasingly on

of materials

Facts / Bröderna Edstrand

35

Edstrand’s customerstructure. In step withfalling investments inconstruction in Swe-den, the importanceof the manufacturingindustry increased.Large customer groups,in addition to theSwedish engineeringcompanies led by theexport industry, arenow the building in-dustry and retailers.

CompetitorsThe Swedish marketfor product groupsoffered by BrödernaEdstrand is alsoworked by distribu-tors which are di-rectly linked to steelmanufacturers, suchas Tibnor/SSAB andHeléns/Rautaruukki.

The futureFollowing a period ofrelative stagnation inmost segments of thesteel-intensive Euro-pean manufacturingindustry, clear signs

of an international recovery exist.However, the scenario varies in thecustomer stage and in Sweden onlythe export industry shows increasedgrowth. Companies in the buildingand construction industries are stillexperiencing a tough time, althougtsome improvment is expected for1998.

For Bröderna Edstrand, 1998 willinvolve increased focusing on costs,efficiency and optimization of inven-tory capital.

For a number of years, BrödernaEdstrand has been quality-certified inaccordance with ISO 9002. Extensivework is underway to certify opera-tions environmentally in accordancewith ISO 14000.

A comfortableoffice chair.The steel is suppliedby BrödernaEdstrand.

Swedish defenseforce commandossharpen their strik-ing power with thecombat Boat 90Hconstructed ofaluminum fromBröderna Edstrand.

B r ö d e r n a E d s t r a n d • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

BusinessBröderna Edstrand is an independentwholesaler with sales, stock-keeping anddistribution of steel, pipes, stainless steel andaluminum, primarily to the Swedish market.

concept

The Swedish wholesale market for steeland aluminum, distributed by player

Bröderna Edstrand plays an importantpart as an independent import alterna-tive among a number of large steelmill-linked wholesalers.

Tibnor 49%

Bröderna Edstrand 23%

Heléns 13%

Stena Stål 5%

Other 10%

Sales by product group

Bröderna Edstrand’s largest productgroup, commercial steel, consists of anumber of products: hot- and cold-rolledsheeting as well as beams, bar, profilesand reinforcement iron products.

Commercialsteel50%

Stainless steel 24%

Aluminum 12%

Pipes 9%Special steel 5%

In June 1997, Bröderna Edstrandopened a sales office in Copenhagen.Customers are found throughoutDenmark and deliveries are madefrom the warehouses in Malmö andGothenburg.

OrganizationOperations are distributed on five re-gions with warehouses in Malmö,Jönköping, Gothenburg, Stockholm/Norrköping and Sundsvall as well as areinforcement plant in Jularbo and asales office in Copenhagen. The headoffice with central functions is locatedin Malmö.

CustomersAt the beginning of the 1990s, achange took place in Bröderna

An important feature of outdoor life is the stormcooker. Bröderna Edstrand supplies the aluminum.

36

8294.1

30.4

1771.9

7

161

9634.6

161.7

1918.4

6

172








Storage and Sale in France, Great Britainand Germany

R

Reynolds

Reynolds supplies semi-manufactureproducts such as tubes, sheets andwire in copper, brass, aluminum andspecial steel from some twelve loca-tions in France, Germany and GreatBritain.

Business developmentAfter a brief period of weak develop-ment, Reynolds is now registering apositive trend on its major markets.

Sales increased by 16 percentfrom SEK 829M to SEK 963M. Earningsof the Reynolds Group improvedsignificantly to SEK 16M (3).

Volumes increased by 10 percent,mainly owing to an improved marketsituation as well as entry into newmarkets (both new products andfinishing operations).

At the beginning of 1997, theFrench and German markets contin-ued to be a disappointment. Duringthe second quarter, the market recov-ered and demand increased in Francewhile at the same time the Britishmarket remained strong.

Sales gradually improved in bothFrance and Germany and were sig-nificantly higher than during theweak autumn in the previous year. InGreat Britain, the satisfactory level of

demand continued until the year-end.In the fourth quarter, the fall of

over 30 percent of the copper price ledto losses due to lower inventory prices.

Following restructuring in Ger-many and cost reduction in France,Reynolds has achieved lower overallcosts in both countries.

The expansion in Britain in-creased costs but the earnings trendthere remained satisfactory and themarket position was strengthened.

In recent years, Reynolds’ share ofthe British market has increased. The

trend is expected to remain strongand generate even higher earnings fol-lowing the expansion which has takenplace, with a strengthening on thesales side and a new service center foraluminum with an improved capacityto respond to customers’ needs.

In France, the scenario was muchmore fragmented. The building mar-ket remained weak, whereas the ex-port industry accounted for increaseddemand.

The German building marketshowed signs of recovery after a cou-ple of weak years.

Success factorsIn common with the other wholesalersin Trelleborg’s distribution operations,Reynolds invests in solving the cus-tomer problems in an efficient mannerby developing more sophisticatedproducts and processing which, amongother things, means that the productsare better adapted in form and formatto customer needs.

During 1997, a new service centerwas opened in Cheltenham, GreatBritain. A large portion of sales isexpected to emanate from slitting andcutting of materials to meet customerspecifications.

Under theIntermétaux name,a wide range ofnon-ferrousproducts is sold tothe French market.

Business Area President:Gérard Lièvre

as a producer-independent distributor in France,Great Britain and Germany

Strengthens

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • R e y n o l d s

Facts / Reynolds

its positions

37

France65 %

GreatBritain 18%

Germany 15%

Other 2%

Reynolds has extensive experience inworking on competitive markets andhas acquired a well-established well-organized network among suppliersand customers.

OrganizationReynolds’ operations are known un-der various names in its respectivemarkets:

• France: Reynolds European andIntermétaux

• Germany: Metallhalbzeug-Handel and Edelstahl- undMetallhalbzeug-Vertrieb

• Great Britain: Reyton Metals.

Reynolds’ head office is located inParis. Profiles ready for

delivery.

Reynolds suppliestubes, wire andsheeting to thebuilding andengineering indus-tries in France,Great Britain andGermany.

CustomersReynolds’ customers cover a broadspectrum, with the majority from themanufacturing and building indus-tries in France, Great Britain andGermany.

CompetitorsReynolds, like Bröderna Edstrand inSweden, is an independent wholesalerof products from European manufac-turers which often have their owndistribution facilities as well. Themain competitors are found amongthe mills’ own wholesalers.

The futureThe market situation in France andGermany is expected to continue to

R e y n o l d s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

BusinessReynolds is a leading producer-independentdistributor of non-ferrous products, primarilyto the French, British and German markets.

concept


Great Britain accounts for the fastestmarket growth.

improve in 1998. The British marketshows signs of weakening, whichReynolds faces with an increased levelof service and new products, on theBritish as well as the French andGerman markets.

All in all, the assessment is that1998 should develop positively.

Reyton Metals has opened a new service center in Cheltenham.

38

Starkjohann’s 130 year history way up in theGulf of Finland with the arrival of a youngGerman named Peter Starckjohann.

In 1868, present-day Finland was part of theCzar’s Russia. The city of Viborg was a rapidly-growing industrial and trade town withimportant trade relations to both Helsinkiand St. Petersburg.

Peter Starckjohann arrived in Viborg in 1860and started working together with otherGermans on building the town’s gasworks.

When the gasworks was completed, PeterStarckjohann stayed, ready to start work asthe manager of an ironware store. In 1868, heopened his own business in the same sector.When Peter Starckjohann died in 1882, hisnephew, Julius Starckjohann, took over the helm.Julius, who had a flair for business, enlarged the

enterprise, and the ironware store was soon tobe the leading store in the region.

Business went well. Even during the First WorldWar and the subsequent depression the companygrew. In 1938, the company was a wholesaler toindustry and the retail trade and was trading withheating & plumbing supplies as well as sales toown stores. The most important products weremetals, coal, machinery, chemicals, tools andhousehold products.

The Second World War put an end to the devel-opments in Viborg. When the Soviet Uniondemanded new borders, Finland’s “Winter War”became a reality. The company moved under theleadership of Julius’ son Peter. At last a decisionwas made to establish company headquarters inLahti in Southern Finland, and in May 1950, aston-ished citizens of Lahti had the opportunity to visitthe country’s first self-service ironware store.

with German RootsHistory

S

Starck-johann

One of

Starckjohann Oyj has traditions dat-ing back to 1868 and has been listedon the Helsinki Stock Exchange since1989. The Group was hit very hardby the Finnish building crisis at thebeginning of the 1990s. That, com-bined with unsuccessful acquisitionsoutside the key business areas, led tofinancial reconstruction together withsome Finnish banks during autumn1993.

In recent years, Starckjohann hasenjoyed positive development and thereconstruction plan was completedduring 1997, five years earlier thanoriginally expected.

During late autumn, Trelleborgacquired shares equivalent to 53.7percent of votes and capital from theprevious principal owner, Merita Bank.

Business developmentSales of the Starckjohann Group dur-ing the 1997 reporting period wereSEK 5,297M, an increase of 17 percent.

MarketAll divisions register a positive markettrend. Thanks to increasing demandfrom the building and metal indus-tries, sales of hardware, building

materials and heating & plumbingsupplies trading increased. Steel andmetal trading in the StarckjohannSteel Division also registered positivedevelopment in 1997.

During the period 1995–1997,the building materials chain, Starkki,carried out an extensive refurbish-ment and expansion program. Com-bined with lower costs, this resultedin increased market shares. Starkkiinvests in continued growth on theFinnish market and is developing itsstore concept and increasing thenumber of stores.

Demand for pretreated materials isrising and in recent years the steelwholesaler Starckjohann Steel hasmade additional investments inpretreatment of commercial steel,pipes and sheet metal. Following theacquisition of the steel and metaloperations of the Finnish company,Oy Mercantile Ab in 1996, Starck-johann Steel extended its productrange and supply of pretreatmentservices.

Competition on the Finnish heat-ing & plumbing supplies marketremains hard despite increasingdemand. Suomen LVI-Tukku is meet-ing the situation through investmentsin central warehouses and branches.

Growth in the automobile tradecontinues and Starckjohann Auto’slargest automobile brand, Opel, offersa new model program which has beenpositively received by automobilebuyers.

During 1997, several Starck-johann stores and branches wererefurbished. In Villmanstrand, a storewas opened and in Tampere, a newautomobile dealership. The Starkkichain opened a store in the Helsinkiregion.

largest wholesalers, complements Ahlselland Bröderna Edstrand in Eastern Europe

Business Area President: Taisto Riski

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • S t a r c k j o h a n n

Finland’s

Starckjohann Steel is Finland’sthird largest steel wholesaler.

39

Other 4 %

Starkki 44 %

Starckjohann Steel 22 %

Suomen LVI-Tukku 18 %

Starckjohann Auto 12 %

The buildingindustry isaccelerating inFinland and therequirement forsteel and othermetal productswill increaseduring 1998.

S t a r c k j o h a n n • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

BusinessThe Starckjohann Group is a Finnish tradingcompany with broad operations organized infour product areas: Building Materials,Commercial Steel, Heating & Plumbing andAutomobile Sales. concept

CompetitorsStarckjohann’s divisions all have astrong position on their respectivemarket. Starkki is Finland’s secondlargest hardware and building materi-als supplier after Kesko Oy’s K-Rauta.Starckjohann Steel is Finland’s thirdlargest steel wholesaler after Asva Oyand Keskometalli Oy.

Suomen LVI-Tukku holds astrong position on the Finnish heat-ing & plumbing supplies market. Themain competitors are Onninen Oyand LVI-Dahl.

The futureThe positive trend in the Finnisheconomy is expected to continue dur-ing 1998. For Starckjohann this willmean rising demand, primarily in theform of increased construction whichshould provide for positive develop-ment.

Sales distributed by division

Starckjohann Steel’s pretreatmentcapacity also expanded.

The largest investment during1998 is the Starkki store which willbe built in Helsinki.

OrganizationThe Starckjohann Group consists offour divisions:

• Starkki. Finland’s second largestbuilding materials chain with 25sales outlets. The trend is increas-ingly towards a modern DIY chain.

• Starckjohann Steel is a steelwholesaler. The acquisition ofMercantile strengthened thedivision’s position, especially instainless steel.

• Suomen LVI-Tukku isStarckjohann’s heating &plumbing supplies wholesalerwith a network of collect stores.

• Starckjohann Auto is responsiblefor the Group’s automobile saleswith several automobile brands,including Opel, the best-sellingbrand in Finland during 1996and the second 1997.

Other operations consist of a smallnumber of companies with nicheoperations in wholesale trading.

CustomersThe majority of Starckjohann’s salesis made to the Finnish building andengineering industries. In contrast tothe Swedish building market, theFinnish building market increased atthe end of 1996 although housingconstruction remains at a very lowlevel. 1997 saw an increase in newconstruction with a focus on housingconstruction. The stores of theStarkki chain are directed at bothprivate and corporate customerswith their product range of buildingmaterials.

Customers in the metal andmechanical engineering industrieshave increasingly moved their pre-production to the pretreatmentcenters of the steel wholesalers whichmeans increased demand forStarckjohann Steel’s services.

Facts / Starckjohann 1997 1996




Warehouse facilities/sales in Finland, Estonia and Russia

Footnote: Starckjohann is included in the 1997 consolidated balance sheets,but not in operating income.

Starkki hasa nationwidechain of buildingmaterials stores.

All divisions reported a positive trendduring 1997. Starckjohann Steelaccounted for the largest increase,28 percent.

40 A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • A s s o c i a t e d c o m p a n i e s

Boliden

Boliden Limited was listed on theToronto Stock Exchange in Canada,(the world’s largest exchange for min-ing shares) on June 17, 1997, afterTrelleborg sold 55.1 percent of thecapital stock in the company.

Roots in BolidenBoliden was established in Swedenin the 1920’s, when the first golddeposit was discovered near the vil-lage of Boliden. The company rapidlybecame one of the leading metal andmineral companies in Sweden.

In 1987, Boliden became awholly-owned subsidiary ofTrelleborg AB and remained sountil it became exchange listedin 1997.

In connection with the list-ing, the company’s head officewas moved from Sweden to Canada.

Boliden’s main operations consistof the extraction, processing and saleof minerals and metals, especially basemetals such as, zinc, copper and lead,and precious metals such as gold andsilver. The company also manufac-

tures and sells copper tubing andbrass products.

Earnings 1997Net earnings for 1997 in USD morethan doubled in comparison to 1996.A stronger US dollar, higher zincprices and, in general, sound contri-butions by the various units were theprimary reasons for the rise in earn-ings. However, lower prices for almostall metals affected earnings during thefourth quarter.

Production records were set at allmines in Sweden during the year. TheAitik mine was the leader, with72,000 tons of copper. In December,the Los Frailes in Spain, achieved itsplanned production capacity of fourmillion tons annually.

WestminOn December 1, Boliden made a bidfor all the shares in Westmin Re-sources Limited, a Canadian basemetal producer with operations in theWestern Hemisphere, which will

Boliden’s Swedish mines have been complemented with low cost zinc and coppermines in North and Latin America through the acquisition of Westmin Resources.Pictured here is the open pit mine Aitik in Sweden.

Boliden Ltd

President: Anders Bülow

Exchange listed in Toronto and Montreal, Canada

Invoiced sales: SEK 9,183M (8,460)

Number ofemployees: 5,038 (4,777)

Boliden’s mining production1997 1996

Zinc, tons 129,761 142,498

Copper, tons 86,041 65,669

Lead, tons 99,320 97,346

Gold, ounces 164,445 154,995

Silver, ounces 8,084,000 7,701,000

Metal contents of concentrates from Boliden’s mines, including the50 percent share in the Saudi Arabian company SCPM.

serve to complement Boliden’s Euro-pean base-metal mines. Through theacquisition, Boliden will gain accessto low-cost production of both zincand copper. This will also provide thecompany with a platform for growthon the American Continent, whichwas one of the main objectives whenthe company was exchange listed inJune 1997.

International exploration invest-ment was made in Mexico during1997. Together with, among others,the Canadian company, Silver EagleResources Ltd and the Mexicancompany, Luismin, exploration forbase and precious metals was initiatedin the Mexican federal state ofSonora.

Trelleborg’s share as of December 31, 1997: 45 percent of sharecapital, 45 percent of voting rights. Trelleborg's holdings after thenew issue in Boliden Ltd (March 1998): 41.8 percent.

41

BPA

A s s o c i a t e d c o m p a n i e s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

Sorb Industri

Sorb Industri was formed in the late1980s by Boliden/Trelleborg. SorbIndustri’s original business conceptwas to develop competitive compa-nies into an industrial group based inthe Norrland region of Sweden. Inorder to further emphasize the indus-trial direction, the name of the com-pany was changed from SorbinvestAB to Sorb Industri AB in 1997.

Trelleborg is the largest ownerwith 95 percent of share capital. Theremaining shares are owned by themunicipality of Skellefteå and För-eningsSparbanken. An expressed aimof Trelleborg is, through a futurelisting of Sorb Industri, to achieve adistribution of ownership and accom-plish its original objective; to create anew industrial group.

Sorb Industri’s operations arebased on niche companies, the manu-facturing of components and systems,and timber processing.

Holmhed Systems and Fumexhave products which are linked to asafe and positive work environment.Holmhed Systems develops, manufac-

SORB INDUSTRI AB

President: Per Lidström

BPA AB (publ)

President: Johan Karlström

Exchange listed in Stockholm, Sweden

tures and markets remote controlrobots used in demolition work.Fumex has a product range includingspot extractors and peripheral equip-ment. In the manufacturing ofcomponents and systems, thelarger companies, LEABLövånger Elektronik AB andTexor, mainly have customersin the IT sector in regard toelectronics, and in the food andpharmaceutical sectors regard-

ing mechanics. SorbIndustri’s timber compa-nies, Wallmarks Såg andSvenska Träbroar, saw andprocess timber.

The work of improv-ing the structure of theSorb Industri Group con-tinued during the fiscalyear.

The investment levelwas normal and the com-pany’s financial positionwas further improved. Forcomparable units, invoic-ing increased by 25 per-

cent. Earnings after financial itemswere SEK 39M (28). Return on capitalemployed amounted to 22 percent(19).

BPA is the leading Scandinavian con-tracting company with operations inthe areas of heating & plumbing sup-plies and the electrical and ventilationsectors. Building on its contractingexpertise, the BPA Group has alsodeveloped extensive maintenance andmanagement operations with bothindustry and property owners ascustomers.

Earnings and operating develop-ment show that BPA’s strategy hasbeen correct. The company has posi-tioned itself in a market segment withcomparatively low risk and sound andstable growth opportunities.

With its knowledge, BPA willassist in ensuring that people – cus-tomers and their customers – will

Invoiced sales: SEK 524M (592)

Number ofemployees: 427 (539)

Invoiced sales: SEK 5,800M (5,433)

Number ofemployees: 6,300 (5,825)

BPA is the leading contractingcompany in Scandinavia.

have the best, and most efficientworking and living environments.The demand for good indoor envi-

anticipated over the next few yearsand as a result of this, increaseddemand for installation services.

The rapidly-emergingIT community is a strongdevelopment trend withdemand for new products.Data and telecom installa-tions are a multi-milliondollar market with astrong growth trend. Inaddition, there is a grow-ing market for the instal-lation of fire and securityalarms as well as emergency

medical alarms in housing for theelderly and in hazardous environments.

ronments means that it is of vitalimportance to begin renovating thelarge property-holdings which wereconstructed during the buildingboom of the 1960s and 1970s. Inrespect to this, major investments are

Robots from Holmhed Systems can be used in themost demanding environments as here in thedemolotion of industrial premises.

Trelleborg’s holdings as of December 31, 1997:

95 percent of share capital (95) and 90 percent of voting rights (90).

Trelleborg’s holdings as of December 31, 1997:29 percent of share capital (29) and 29 percent of voting rights (29).

Comfort

EnvironmentIn the Trelleborg Group, environmental issues arecentral. We continuously work towards the objectiveof improving our own environment based on our envi-ronmental policy, various environmental management

systems, and our own environment network. Tangibly,this has resulted in reduced emission levels, reducednoise levels, safer operations and increased recycling.Environmental work will continue to be of centralimportance.


Safety


Naturally, our products also contribute to improve-ments in working environments and the exterior envi-ronment. Here is a listing of some examples from ourown production: sound-absorbent products, landfill

sheeting, retreading materials, sealing strips and lowpressure tires for forestry and agriculture. Ahlsell hasestablished a system for the handling of environmen-tally-hazardous products. Florescent tubes and mercurylamps are returned in special containers.

44

The environment, health and

safety are important areas for the

Trelleborg Group. Environmental

issues form an integral part of the

business operations, as does the

ambition to improve environmen-

tal efforts. In the new organiza-

tion, environmental issues have

been prioritized and a new Group

function – Trelleborg Environmen-

tal Affairs – has been established.

The new Group function is respon-

sible for coordinating activities in

the environmental area and estab-

lishing a Group-wide environmen-

tal management system.

A Group-wide environmental man-agement system is being formulated.The system is based on the ISO14001 international standard, andEMAS (EU Eco Management andAudit Scheme) and comprises envi-ronmental, health and safety issues.

In several plants, work aimed atintroducing ISO 14001 has beensuccessful. The first plant to be certi-fied was part of Trelleborg EngineeredSystems and is located in Mjöndalenin Norway.

The driving forces within theGroup, and demands from customersand consumers to implement ISO14001, means that this work will beintensified. Internal seminars, etc., are

being introduced in order to speed upthe implementation process. TheTrelleborg Group now has a certifiedLead Environmental Auditor in linewith the requirements of ISO 14012.

Environmental auditsEnvironmental audits and periodicalinspections are being carried out atsome of the plants in the TrelleborgGroup. Environmental audits in con-nection with certification in accord-ance with ISO 14001 are carried outby accredited certification authorities.

Environmental audits in connec-tion with planned acquisitions (duediligence audits) are carried out regu-larly.

Environmental aspects andenvironmental targets

Operations within the TrelleborgGroup impact the environment indifferent ways. Important environ-mental aspects concern the completelife-cycle of the product. Productionmeans, for example:

that natural resources such asenergy and water are used in rawmaterial extraction,

that raw materials are used incombination with various chemi-cals during the production pro-cess which causes emissions intoair and water,

that the products are transported,

that the finished products are in-cluded in other products whichcan impact the environment,

that the products finally becomewaste.

Environmental aspects of specialinterest to the Trelleborg Group are,for example:

emissions into air (malodoroussubstances, curing fumes, dustand solvents),

the handling of hazardous sub-stances in the production process,

the pollution of soil and groundwater from our operations,

issues relating to waste in themanufacturing units and also inconnection with the distributionoperations,

the effect of transports on theenvironment,

work environment issues,

the characteristics of products andpackaging from an environmentaland health viewpoint.

Strategic activitiesDue to the broad product range andprocesses involved, it is currentlyimpossible to establish measurableenvironmental objectives for theentire Trelleborg Group. However,there are a number of strategic activi-ties which will be implemented overthe next few years:

Environmental managementsystems in accordance with ISO14001 or EMAS will be imple-mented in existing plants at thebeginning of the 21st century,

Knowledge and skills regardingthe development of polymermixes which are safe from ahealth and environmental view-point will increase. Work aimedat minimizing or completelyreplacing certain hazardous sub-stances in raw materials willtherefore be prioritized. An exam-ple of this is the project which isunderway whose objective isreducing the zinc oxide content insulfur-vulcanized and peroxide-vulcanized rubber.

Other projects which are carried outin network-form with other compa-nies concern process oils, nitroaminesand odors from the plants and their

environment:increased priority

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • E n v i r o n m e n t , h e a l t h a n d s a f e t y

Thanks to oil boomsfrom Trelleborg,environmentaldamages from oilspills can be limited.

The

45

In regard to environmental issues, we commit ourselves to the ob-jective of preserving a long-term, sustainable society.

Our objective is that the activities within the Trelleborg Group willnot damage the environment or harm people’s health. Environmentalaspects shall be integrated in the day-to-day business operations.

• We shall economize on energy, water and other naturalresources. The environmental aspects will be taken into accountwhen we choose raw materials, chemical products and distributionsystems.

• We shall minimize waste and emissions from our productionplants and our distribution operations.

• We shall have safe and sound work places and train our person-nel in order to ensure that they are able to carry out their work inthe best possible way.

• In our research and development operations, we shall strive forenvironmentally-sound technologies, products and packaging.

• We shall utilize the opportunity to make environmentaladaptations when we change processes, plants and products.

• We shall maintain sound emergency preparedness by

systematically evaluating the risk of accidents, fires and uncontrolledemissions.

• We shall inform customers, suppliers and contractors about ourenvironmental work, and in cooperation with them, strive to achievemutual improvements.

• We shall provide open and objective information about our

environmental work to our personnel, the general public, andauthorities.

• We shall comply with current environmental legislation and de-velop long-term plans relating to national and international legisla-tion in the environmental, health and safety areas.

• At the beginning of the 21st century, we shall comply with therequirements of ISO 14001 and/or EMAS in our existing productionplants. Work-tasks and responsibilities within the framework of theenvironmental management system will be made clear. Environmen-tal objectives and plans of action shall be established in every plant.

• We shall evaluate environmental performance by monitoringemissions and through frequent environmental audits. We will striveto continuously improve our environmental performance.

The Trelleborg Group’sEnvironmental policy

surroundings. Another importantissue is the minimalization of solventemissions. Chlorinated solvents havenow been almost completely elimi-nated but a considerable amount ofthe development work remains to bedone before completely solvent-free(water-based) systems can be utilized.Within the Trelleborg Group, thereare departments which have alreadyconverted to water-based methods forachieving adhesion between rubberand metal.

An important area for Trelleborgis to contribute to ensuring thatmaterials are re-used in new productsand, alternatively, that the energycontent in these is utilized. TheDeLink-method for recycling produc-tion waste has been the subject oflaboratory and pilot-scale studies.

Transport and packagingIn the distribution operations itbecomes increasingly important tomeet demands from customers forinformation regarding the environ-mental characteristics of a product.Other interesting issues are the envi-ronmental adaptation of transportsand systems for handling spent prod-ucts and packaging.

An important task for the Trelle-borg Group’s environmental functionis to create a structure for collectionof environmental data from theGroup’s plants all over the world.

During 1998, the Group’s envi-ronmental work will also be presentedin the house magazine, T-TIME.

E n v i r o n m e n t , h e a l t h a n d s a f e t y • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

An important areafor Trelleborginvolves ensuringthat rubber wasteis re-used in newproducts.

Trelleborg’s sealingstrips contribute toreducing the amountof energy needed forheating. In Swedenalone, these energysavings are equivalentto 300,000 tons ofheating oil(15 supertankers)during a five-yearperiod.

46

Rubber in the service ofthe environment

Rubber is a material which can beused in many areas. A commondenominator for many of the prod-ucts which the Trelleborg Groupmanufactures is that, in one way oranother, they are used to improvecomfort, safety and the environment.

Trelleborg Automotive contrib-utes to comfort and the work envi-ronment through anti-vibrationmountings for vehicles, machines andbuildings and through compositematerials for sound-proofing.

For forestry and agriculture,Trelleborg Wheel Systems has devel-oped wide tires, which as a result oftheir design can be driven using ex-tremely low air pressure. This resultsin reduced soil compacting, reducedland damage and ensures that rootsclose to the surface are not damaged.

The business area has developed asolid tire for industrial trucks which is

produced entirely from recycledmaterials. Trelleborg is Scandinavia’sleading supplier of materials used forretreading tires. By partly utilizingrecycled materials in new treads, uti-lizing softeners without the additionof highly-aromatic oils, reducingthe use of zinc-oxide and aging-protec-tion and by also developing vulcaniza-tion systems with a lower environmen-tal impact, Trelleborg is contributingto ensure that a large proportion of theapproximately 15,000 tons of tireswhich are retreaded in Sweden everyyear becomes increasingly environ-mentally adapted.

Trelleborg Engineered Systems hasdeveloped a special flame-proofproduct coating steel constructionsand used in the offshore industry. Inthe event of fire, the effects are de-layed so that personnel will have timeto evacuate, and so that emergency-actions can be implemented. Trelle-borg’s chemical-protection suits are

used by rescue personnel all over theworld. Proof of the high quality ofTrelleborg’s protective clothing is thatthe New York City Fire Department,which has very high quality and safetydemands, has chosen Trelleborg.

Saving energyIn the building and contracting sec-tor, Trelleborg Building Systems hasdeveloped several products whichcontribute to better energy economiz-ing, financial savings and improvedindoor climate in different ways.Possibly the best example is sealingstrips for windows and doors. Everyyear, Trelleborg manufactures stripswhich make it possible to save energyequivalent to 300,000 tons of heatingoil.

Sealing-sheet products and systemshave undergone intensive technologydevelopment. 25 years ago, three-layercardboard with a product-life of 15years was used.

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • E n v i r o n m e n t , h e a l t h a n d s a f e t y

A closed system means that environ-mental risks in the handling of differentchemicals at the mixing department isminimized.

environment:increased priority

The

47

Com

mitt

ed to environm

ental

care

a

nd

protectio

n

Later, during the 1970s, two layerscardboard was developed with a prod-uct-life of 25 years. During the1990s, high-quality one-layer tarpaper was introduced. This has anestimated lifetime of around 35 years.

These developments have meant asignificant resource savings in regardto the consumption of raw materialsand transport requirements. Trelle-borg has also produced various typesof rubber sheeting which, amongother things, are used as protectivelayers in landfills to prevent soil andground water pollution.

Environmentally-adapteddistribution operations

Within the Swedish business areas ofAhlsell and Bröderna Edstrand, sev-eral activities in the environmentalarea are in progress. Within theframework of the “Ahltväl” actionprogram, Ahlsell has implementedmeasures with environmental over-

tones. For example, lead-coveredcables and cables with plastic casingswhich contain halogens have beeneliminated from the product range.

Transport has been environmen-tally adapted in that Ahlsell, in coop-eration with a transport company, hascreated a groupage system. From thecentral warehouse in Hallsberg, acheck is made to ensure that truckswhich are not fully loaded aregrouped with products from otherlocations or other companies. Ahlsellhas chosen to cooperate with a trans-port company which has a well-defined environmental profile.

The “Packed & Ready” conceptmeans that the amount of packagingwaste is reduced at the customer level.All components for each individualwork location are packed in a specialcarton and delivered directly to thefloor on which they will be used. Later,when it is convenient, Ahlsell returnsand collects the special carton and other

E n v i r o n m e n t , h e a l t h a n d s a f e t y • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

packaging material and takes care of thewaste-handling. The cartons are thenre-used for the same purpose.

Ahlsell El provides paper tubesand systems for recycling of scrappedfluorescent tubes and halogen lampswhich contain the environmentally-hazardous element, mercury. During1997, approximately 400,000 lampswere recovered and handed overfor destruction at an approved plantin accordance with the so-called“Quicksafe method.”

Environmental managementsystems introduced

In Bröderna Edstrand, work isunderway regarding the introductionof environmental management sys-tems in accordance with ISO 14001.All regions have developed, or aredeveloping, an environmental review.The regions have a work-environmentgroup which documents the opera-tions in an annual environmentreport. In addition, the environmen-tal training of key personnel andothers in the work force is planned.

Current actions in the environ-mental area include: a 95 percentreduction in solvents emissions intothe air from painting, improvedsystems for handling of sludge frompainting, sorting at source of paper,plastic, wood and metal.

Landfill sheetingsaved the harvest.Spanish citrusgrowers built waterreservoirs withsheeting fromTrelleborg.

Many of Trelleborg’s products contribute to environmental protection. Pictured hereis a basin for spill water in Narbonne in France.

Sealing profiles areproduced in manyforms in order tobe adaptable to allapplication areas.Heating needs arereduced throughsealed windows anddoors.

48

Research

The combined resources and flexible R&D organization of the TrelleborgGroup has a strong orientation towards end-users’ needs for comfort,safety and environment.

and development

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • R e s e a r c h a n d d e v e l o p m e n t

President of the Trelleborg Group, Kjell Nilsson (right), shows a drawing of the futureTechnical Center. Thomas Johannesson, Rector of the Lund Institute of Technology,believes that the investment will give a real boost to the Group and to research inthe universities and colleges in the region.

Today, Trelleborg’sTechnical Center is alreadyan important resource forthe Group. After renovationand extension, the objec-tive is for the TechnicalCenter to become a meet-ing place for both internaland external developmentengineers and scientists.

At the end of 1997, theTrelleborg Group decidedto invest SEK 100M in anupgrading and moderniza-tion of the Group’s Tech-nical Center in Trelleborg.

The investment meansthat the Technical Centerwill be renovated and thatextensive technical equip-ment will be acquired.

The new TechnicalCenter will be operationalat the end of 1998.

“This will be the jewelin the crown of the Trelle-borg Group,” says Presidentand CEO Kjell Nilsson.

Technical Centerin Trelleborg

A modern Technical Centerwill mean a real boost forhighly-advanced basic research andspearheading-technical skills.

The choice of Trelleborg as thelocation for the center was due tothe excellent conditions which exist inthe region including the fact thatseveral large training and researchinstitutions are located in the Öresundarea, which together, make upEurope’s fifth largest academic center.

“We have chosen to locate theGroup’s Technical Center in Trelle-borg, since this region provides thepositive conditions for carry out ad-vanced research and development.”

It is our ambition that the Techni-cal Center will function as a naturalmeeting place for both internal and

external development engineers andscientists, as well as customers, suppliersand technology institutes and researchinstitutes.

There will be space in the newcenter for exhibitions, and demon-stration halls in which customers willbe able to study the development ofmaterials and products adapted totheir specific requirements.

Sounding board for new ideasEngineers who specialize in polymers,

logistics and chemistry are in highdemand and an investment like thiscould draw the best in the field,believes Thomas Johannesson, Rectorof the Lund Institute of Technology:

“This investment in knowledgewhich Trelleborg is making will bringtogether many expert men andwomen in one location. This is some-thing which will attract today’s civilengineers as they will be surroundedby colleagues who can act as a sound-ing board for new ideas.”

49R e s e a r c h a n d d e v e l o p m e n t • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

Trelleborg has a number of laboratories for testingvibration dampers and brake shims.

Trelleborg’s exten-sive knowledgewithin laminatetechnology – com-bining rubber with,for example, metal– is used for severalvehicular products.The photographshows details ofstrut mounts.

The cutting edge of researchAt the same rate that the TrelleborgGroup’s industrial operations areincreasingly developing customeradapted systems and not only poly-mer products▲, there is an increasedneed for the development of newtechniques and the need for newtechnology with which to developmaterials and material combinations.

Electroreology in carsThrough the Technical Center, Trelle-borg will participate in a number oflarge research products, both at thenational and international level.

A current research area is electro-and magnetoreology▲, where researchis carried out as to how electrical ormagnetic fields can affect a fluid’sviscosity or a material’s rigidity. Theworld’s largest car companies arefocusing attention on the electro-reology phenomenon, since an inter-esting application is vibration isolatorswhose damping can be controlledelectronically.

In cooperation with the RoyalInstitute of Technology in Stockholm,Trelleborg AB is investigating howelectro- and magnetoreology effectscan be used to create “smart” rubbermaterial with variable damping func-tions for sound and vibrations.

Hydraulic oils are replacedIn these systems, conventional hy-draulic oils are replaced with eitherelectro- or magnetoreology fluids bywhich the flow and shearing▲ char-acteristics can be drastically changed

with the help of electrical and mag-netic fields. These effects are revers-ible and can be developed in severalthousandths of a second.

With these systems, an enginemount can be made selectively stifferin certain operational relationships,for example, with occasional roadbumps or in the event of resonancedisturbances when starting.

Vibrations in connection withacceleration can be dampened at the

Together with theworld’s largestvehicle producers,a large portion ofdevelopment workis being focused onproblems withsound and othervibration distur-bances.

same time that a high degree of iso-lation is maintained in the event ofhigher operational frequency. Thesystem is referred to as intelligentsince sensors (level, speed, or accelera-tion indicators) placed in the vehiclereact and send signals to the fluidsso that vibrations can quickly bedampened.

The prototypes which have beendeveloped in Trelleborg’s laboratorieshave given promising results.

50

Trelleborg’s website,www.trelleborg.com, contains moreinformation regarding the campaigntheme: comfort, safety and the environ-ment.

T

possibility of adding communicationwith external parties.

The Group’s homepage was pre-sented in connection with the 1995Annual General Meeting. Throughthat, Trelleborg was among the firstindustrial companies in Sweden tomake use of the Internet in order tocommunicate with shareholders,customers, suppliers and other inter-ested parties. An extensive update waspresented in March 1998.

Internet technology is also usedfor internal communication withinthe Trelleborg Group, through a so-called intranet. In 1997, work was be-gun on linking the Group companiesand units in a world-wide networktogether for the exchange of elec-tronic information.

The Group-wide information net-work has been given the nameTrellNet, and will be comprised ofcommunications in the form ofe-mail, internal news and externalmonitoring, catalogues, manuals, andother Group-wide functions. Workon implementing TrellNet will beintensified during 1998.

IT securityIT security will always be a prioritizedarea since the information flow withinand between Group companies mustbe protected against unauthorizedaccess, loss or misrepresentation.

Safety and vulnerability analysesare carried out on a continuous basis,and the best available technology isused for securing the optimal level ofinformation security.

During 1997, an updated andstrengthened policy and guideline forinformation security was producedwhich applies to the entire TrelleborgGroup. The following items areincluded:

Analysis of probable business riskin the event of a system break-down, sabotage or other loss ofinformation as well as their finan-cial consequences,

Consequence review in regard tothe above,

Access control,

Physical security,

Logical security,

Security copying,

Virus protection,

Environment for computeroperations,

Contingency plans,

Training

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • I n f o r m a t i o n Te c h n o l o g y

Information Technologyin today’s world

With the assistance of an efficientand comprehensive communicationsnetwork, business-related systems,coordination and standardization ofinfrastructure and a positive interplaybetween computer technology per-sonnel and users and operating man-agement, the use of IT can become animportant competitive advantage.

Internet/intranetCommunications within the Trelle-borg Group are facilitated by the on-going work on building a commonnetwork in which there is also the

Information Technology consistsof business-related applicationswhich together, process, compileand distribute information withthe help of a well-defined com-bination of knowledge, software,hardware and communication.

ITInformation Technology

The need for fast communication andaccess to relevant information is vitalfor achieving the Trelleborg Group’sprofitability and growth target.

One means of achieving efficientcommunication is to use what isreferred to as Information Technology,IT.

Used correctly, IT can providestrategic advantages and strengthen acompany’s position in the market. ITis no longer exclusively the domain ofcomputer professionals but rather atool for all personnel in their variousroles.

51

One example of how the TrelleborgGroup makes use of the possibilitiesoffered by IT is Ahlsell’s communica-tion with its customers.

Electronic purchasingSince the early 1980s, Ahlsell hasoffered customers the possibility ofhandling contacts via electronic com-munication. Customers who buy inlarge volumes are offered their owncomputer line to Ahlsell’s inventorysystem which is open between 6 amand 12 pm every day.

The system, called Ahlex, hasmade it possible to place an order inthe morning and collect the productsat the nearest professional mart a fewhours later.

Now the company is taking thenext step towards electronic purchas-ing, this time via the Internet. Trad-ing via the Internet, abbreviated ase-purchasing, has been the subject ofsecurity discussions, etc., and it hastaken time to achieve success. How-ever, Ahlsell has gained experienceand acquired systems for securingefficient operation and purchasing.

The market research company, theGartner Group, predicts that between15 and 20 percent of all purchasingwill be made via the Internet by theyear 2000. Despite considerablegrowth, other analysts consider this acautious forecast.

E-purchasing via the Internet is anew marketing channel and couldlead to new markets and customers.With no boundaries, there is also thepossibility to expand internationallyat a very low cost in comparison totraditional marketing.

“When 1999 becomes the year 2000,computers will crash.” Recent warningshave been numerous and discussions re-garding the effects of the millenniumchangeover continue.

In the Trelleborg Group, extensivework has been carried out on analysingthe extent of information systems and“integrated systems“ which will not beable to cope with the change from 1999to the year 2000. Integrated systems canbe found in office, warehouse and plantenvironments as well as in the control-ling logic for machines and processors.Typically – because they are often inte-grated parts of a machine or piece ofequipment – they are more difficult todiscover for those who are not techni-cally inclined. Examples of such envi-ronments can be found in trucks, eleva-

Another important aspect ofe-purchasing is that it providescustomers with improved service.Comfort, in the form of convenienceand simplicity are key concepts. Inaddition, it is possible to shortenlead-times in the distribution chainwhich brings about lower costs.

The distance between producerand buyer is reduced along with thetime for transfer of capital, whichresults in improved cash flow.

Low contact costE-purchasing via the Internet meanslow contact costs for customers. Togain access to the Internet, a modernstandard computer is required with amodem and an Internet subscription.When the customer has this equip-ment, the contact cost is minimal. If aspecial product is requested, it is aseasily available as if it were a standardproduct.

Ahlsell’s homepage (www.ahlsell.se)on the Internet reaches a public ofapproximately 40 million and thisfigure is continuing to rise signi-ficantly.

tors, weight scales, process controlequipment, and laboratories.

The conclusions which are drawn,and the need for action (phasing-out,exchange outsourcing or renovation ofcomputers and systems), vary from com-pany to company. In the majority ofcompanies, actions are being taken inregard to this.

It is already apparent that the change-over to the year 2000 is one of the mostimportant issues at this time. The follow-ing is applicable for the ongoing work:

Every company has someone who isresponsible for organizing the workinvolved in “Year 2000”,Companies will be urged to maintainthis as an ongoing high priority. Themost important and critical systemsand projects will be prioritized,Companies will continually provideupdates as to the current status,

Companies have been asked to inves-tigate external relations, primarily thestatus of subcontractors,Resource needs, both internal and ex-ternal, will be identified and secured,Coordination of activities will take placewithin the respective business area,A knowledge database related to“Year 2000” will be introduced toprovide central access to methodsand check lists.

The aforementioned actions have beendeveloped in order to solve existingproblems. A special “Year 2000” policyhas been drawn up to ensure that newIT investments, business relations oracquisitions of companies have been ex-amined from a “Year 2000” perspective.

In order to internally ensure thatour companies will be “Year 2000” com-pliant, routines for certification havebeen developed.

I n f o r m a t i o n Te c h n o l o g y • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

– ExpressserviceAhlex

With Ahlex, Ahlsell’s customers havedirect contact with the centralwarehouse and can order goods between6 am and midnight.

Y 1999Y 2000

Comfort

Environment

Leonardo da Vinci (1452–1519) com-bined science and art. As early as the15th century, da Vinci developeddesigns for helicopters, the airplanesand the turbine wheel. His famousworks of art include the “Mona Lisa”and “The Last Supper”.


The H Tou

The campaign symbolof the new Trelleborg

Trelleborg is in the midst of an important expansion and development phase,both for the Group companies and their employees and owners. In order toconvey the image of today’s and tomorrow’s operations, a wide-spread cam-paign will be carried out during 1998.

How Trelleborg is perceived throughout the world, is in many respectsbased on history. The very extensive organization of the early 1990s has,through a comprehensive restructuring over the past few years, been concen-trated into today’s two strong business sectors.

A classical background has been chosen to act as the identifying symbol ofthe campaign: Leonardo da Vinci’s drawing of the “Vitruvian man”. By plac-ing modern man in da Vinci’s drawing, we convey the message of how theTrelleborg Group of today utilizes a long tradition of knowledge combinedwith innovative thinking.

Safety


umanch

54

Skills and

Competent and committed personnel are animportant prerequisite for a successful company

Personnel policyThe personnel policy is based on trustand confidence between the person-nel and management. All employeesmust be aware of the objectives whichhave been established for their ownoperations and understand the corre-lation between these objectives andthe results achieved. The basic per-sonnel policy view is reflected in aclearly-defined and simple organiza-tion. Short decision-making channelsmake it possible to expand workcontent and encourage personal re-sponsibility for achieving results.

LeadershipAll managers in the Group must beable to implement changes anddevelop their personnel. Leadershipwill be characterized by considerationfor personnel.

Responsibility and authority willbe extended asfar out into theorganization aspossible in orderto ensure thatthe full abilitiesand level of com-mitment of everyemployee can beutilized.

The most important task forevery manager is, based on Group-wide objectives, to formulate andcommunicate clear and easy-to-understand objectives for their opera-tions and to monitor and providefeedback. Objective orientation in-stead of detailed control and instruc-tions will be the motivating forcebehind the organization.

Equality workDifferences create dynamics. The ob-jective of the Trelleborg Group is to

increase diversity among its employ-ees in order to better utilize skills re-gardless of sex, ethnic origin, religion,age, etc.

The Trelleborg Group strives foran open and flexible environment inwhich the work is carried out in newforms and in which the line organiza-tion is supplemented by project andother types of networks.

A prerequisite for achieving thisobjective is easy-to-access, reliableand rapid information. Group-wideinternal media is comprised of news-letters and magazines, databases andTrellNet (intranet).

commitment

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • S k i l l s a n d c o m m i t m e n t

STORM

ExecutiveProgram

AcademyAcademy

”“A good manager inthe Trelleborg Group

has the ability tocommunicate, delegate and

provide support.”

Daniel Mncube, TrelleborgSouth Africa.

The Trelleborg Group’s expan-

sion requires a flexible and

skilled organization. Different

working methods, higher levels

of technology, broader work-

tasks, organizational changes,

etc., involve intensive restruc-

turing work. A prerequisite for

creating continued growth and

competitiveness in this situation

is to hire personnel with the

right skills and experience levels.

Motivated and knowledgeable person-nel are the Group’s most importantresource. The Trelleborg Group strivesfor a high level of professional exper-tise and farreaching del-egation of re-sponsibility andauthority, inc o m b i n a t i o nwith a fair andstimulating sal-ary system.

In a fast-growing global company, it is ex-pected that all personnel assume aleading role by virtue of their knowl-edge, experience or other personalqualities.

A prerequisite for this global team-work is communication between indi-viduals and units. To facilitate dailycontacts, an internal computer net-work, an intranet, is being developedin which employees will have theopportunity to exchange informationand cooperate across geographic andorganizational borders.

Business skills, alternating withproject work aimed at molding themanagers of today into the leaders oftomorrow, and creating networks andcommon values in a fast-growingorganization.

Trelleborg AcademyThe various training programs,courses and seminars that are a partof the industrial operations are collec-tively referred to as the TrelleborgAcademy.

In Trelleborg’s industrial opera-tions, an international managementsupply program called the STORMExecutive Program, has been inprogress since the spring of 1995. Theprogram consists of three week-longseminars in Inter-cultural leadership,Personal development and General

55

In 1997, the third series of seminarswas carried out and involved 20 par-ticipants from seven countries. A totalof 60 participants from 11 countrieshave taken part in the STORMExecutive Program since its inception.

The Group’s other training pro-grams are evaluated on the basis ofthe needs and conditions of each in-dividual. For the Group as a whole,the objective is to carry out trainingwhich is equivalent to three days peryear and employee.

In order to integrate new operationswith the Group’s existing operations, acomprehensive training program, called“Newcomer”, will be initiated in 1998.

Young Managers ProgramIn 1998, a program will be started forthe purpose of identifying the manag-ers of the future and ensuring thedemand for managers will be fulfilledin a strong expansion phase. Theobjective is also to maintain efficientpersonnel and to create career oppor-tunities within the Group.

S k i l l s a n d c o m m i t m e n t • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

YOUNG

ManagersProgram

Since the late 1980s, extensive traininghas been carried out in BrödernaEdstrand’s own school (the BE School).The management, led by the President,participate in the courses and form anatural link to the objectives andresources within the company. In1997, 250 employees were involved insome form of training at the BE School.

The Ahlsell School is followingthe plans and objectives of the BESchool. During the three years inwhich the school has existed, approxi-mately 1,000 people have beentrained in sales and quality controlwork. In addition, there is a specialmanagement training program withinthe company.

“Being a trainee is a wonderfulplatform in order to learn aboutthe company and gain an under-standing about what goes on atBröderna Edstrand,” says JensKarlsson, aged 26. “I am concen-trating on marketing and sales.”

Traineeat Bröderna Edstrand

A

TrelleborgEuropean Council

Trelleborg European Council (TEC)was established in 1996 for thepurpose of initiating a direct dialoguebetween the personnel in Trelleborg’sEuropean companies and Groupmanagement.

25 representatives from nineEuropean countries in which theGroup has production plants partici-pate in TEC.

The purpose of TEC is to encour-age everyone in the Trelleborg Groupto get involved with, and assumeresponsibility for, continuous im-provement work.

Participants in the program will con-sist of young managers (maximum 35years old), who are beginning theirmanagement careers.

Commercial business schoolsIn the distribution operations, anambitious program is underwaywhich is aimed at improving skillsand achieving a balance in the agestructure.

At Bröderna Edstrand, ten train-ees with university qualifications wereemployed in 1997. An additional 20young people were employed duringthe year.

Some of the younger employeeshave the opportunity to participate ina special training program called“Business 2000“.

ties. In addition, during a half-dayseminar, participants will be able topresent themselves to senior manage-ment and ask questions and makeproposals as to possible changes.

The quality of trainees educa-tion will partially be ensured in thatthe participants, at least once amonth, will submit a written reportas to what they have learned, theirimpressions, ideas, etc., which willbe sent to senior management, andpartly in that they will undergo aninterview after six months.

At Bröderna Edstrand, ten traineeswith university qualifications wereemployed in 1997.

For a year, they will be study-ing all aspects of the company. Theprogram involves knowledge con-cerning products, processes andcompany organization and culture.

One example of the course con-tent is the course “From order to de-livery”, including visits to BrödernaEdstrand’s plant in Malmö andmeeting with a number of managerswho will describe their responsibili-

56

Mike McGlynn, TrelleborgIndustrial Profiles UK,Great Britain.

Ed Melnyk, Trelleborg Goodall,Canada.

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • S k i l l s a n d c o m m i t m e n t

Jannike Linné, TrelleborgAutomotive, Sweden.

the Trelleborg Groupmany faces of

Ed Holzinger, Trelleborg Goodall, USA.

Ed Wojtkowicz,Trelleborg YSH, USA.

Simon Masuku,Trelleborg South Africa.

“It’s exciting when the only obstacle to a person’s developmentis his or her own imagination!”

“It’s good to interact with people fromdifferent parts of the world.”

“Investment in machinery for the factory isvital to stay ahead of the competition.”

Meet the

Paul Sprengel, TrelleborgIndustrie GmbH, Germany.

Takeo Takagi,Trelleborg Japan.

Hans Ulrich Kläy, TrelleborgGummi, Switzerland.

Gianfranco Lissoni,Trelleborg Industrie, Italy.

Patric Pieret, TrelleborgIndustrie, France.

Yvan de Bie, TrelleborgBergougnan, Belgium.

57S k i l l s a n d c o m m i t m e n t • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

Patti Sheehy, Trelleborg YSH, USA.

Simon Cartwright, Reyton Metals, Great Britain.

Håkan Olsson, Trelleborg WheelSystems, Sweden.

Colin Yee, TrelleborgSouth East Asia,Singapore.

“The best thing about the jobis the good camaraderie”

“The commitment to upgrade current technologicalcapabilities will allow me to utilize the expertise I havegained through my continuing education programs.”

“One of the biggest benefits is theopportunity to advance within theorganization”

Erik Leknes, TrelleborgViking, Norway.

Nelson Pacheco da FonsecaFilho, Trelleborg PAV, Brazil.

Gabor Merö, TrelleborgIndustri, Hungary.

At the end of 1997, the number of employees in theTrelleborg Group totalled 13,443, a decrease of 1,021from the previous year. The change is due to theexchange listing of Boliden.Footnote: The average number of employees has beencalculated as yearly workers in accordance with recommen-dations of the Swedish Accounting Standards Board.

58

Financial reporting

AdministrationReport

Following the vigorous restructur-

ing of recent years, the Trelleborg

Group is a well-structured indus-

trial and distribution group.

Boliden Ltd has been listed on the

Toronto and Montreal stock

exchanges since June 1997.

Eight business areasThe Trelleborg Group now consists ofeight business areas: Trelleborg Automo-tive, Trelleborg Wheel Systems, TrelleborgEngineered Systems, Trelleborg BuildingSystems, all involved in industrial opera-tions, and Ahlsell, Bröderna Edstrand,Reynolds and Starckjohann which com-prise the distribution operations.

During 1997, expansion continued inaccordance with the previously an-nounced strategy. The Group’s operationsare based on the demands which custom-ers place on the respective markets. Forthe industrial operations, this meanscontinued global expansion and closercooperation with customers in order todevelop the best possible products. In thedistribution operations, expansion is con-centrated in the Baltic area.

Continued expansion in 19981998 will also be characterized by contin-ued expansion, mainly through acquisi-tions within the industrial operations.The objective is to further strengthen theposition of the various units in the mar-ket and through that, increase margins.

In both the industrial and distribu-tion operations, part of the expansion willtake place through organic growth.

Group and Parent Company

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • F i n a n c i a l r e p o r t i n g

Modernization ofthe Technical Center

At the end of 1997, the Trelleborg Groupdecided to invest SEK 100M in upgrading andmodernizing of the Group’s Technical Develop-ment Center in Trelleborg. A modern TechnicalCenter will provide a firm foundation forhighly-advanced basic research and spearhead-technical expertise. The objective is that theTechnical Center will become a natural meetingplace for both internal and external develop-ment engineers and scientists, as well as custom-ers, suppliers, technical and research institutes.

Net income/lossThe year’s earnings after financial itemsamounted to SEK 2,550M (1,018), of which SEK

1,468M is attributable to the sale of 55.1 percentof Boliden Ltd. Excluding items affecting com-parability, net income/loss was SEK 1,241M

(1,018). Earnings for 1997 totalled SEK 2,038M.Liabilities increased by SEK 404M. The sale of

55.1 percent of the shares in Boliden Ltd gener-ated an inflow of SEK 4,357M, whereas acquisi-tions, net investments and change in workingcapital generated an outflow of SEK 4,761M.

Liquid funds totalled to SEK 3,573M, ofwhich SEK 2,413M refer to certificates of claimrelating to the sale of the shares in Boliden Ltd.

Board of DirectorsAt the Annual General Meeting on April 25,1997 Rolf Kjellman, Executive Member ofHenry and Gerda Dunker’s Funds and Founda-tion and Donation Fund Number 2, and Presi-dent of AB Hevea, Förvaltnings AB H.D. andHenry Dunker’s Förvaltnings AB, was appointedas a new Board Member, succeeding BertilBertilsson.

In August, Kerry Johansson (Member) andAnja Gustafsson (Deputy Member) became Em-ployee Representatives replacing Örjan Carlssonand Lilian Ringsand, respectively.

59

Fina

ncia

l rep

ortin

g

The Group’s unappropriated earnings, including profits from 1997, totalled SEK

6,116M. SEK 1M is required for appropriation to restricted reserves.The Parent Company’s unappropriated earnings comprise retained earnings from

the previous year of SEK 1,360,917K, together with net income for the year of SEK

892,049K, a total of SEK 2,252,966K.The Board of Directors and the President propose an ordinary dividend of SEK

3.50 (3.00) per share and class of share and a bonus dividend of SEK 1.50 (0) pershare and class of share or a total of SEK 586,708K. It is proposed that the remainingSEK 1,666,258K be carried forward.

During the year, the rules relating to Series C and D shares were deleted fromthe Articles of Association. As a result, there are now only two share classes: Series Ashares and Series B shares.

Proposeddisposition of unappropriated

F i n a n c i a l r e p o r t i n g • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

earnings

60

Financial reporting

SEK M Note 1997 1996

Invoiced sales 2 20,825 20,574

Cost of sales – 16,405 – 17,180

Gross income 4,420 3,394

Sales expenses – 2,422 – 1,052

Administrative expenses – 926 – 1,225

Research and development expenses – 134 – 197

Items affecting comparability 3 1,309 —

Other operating income 186 235

Other operating expenses – 143 – 380

Shares in results of associated companies 4 319 102

Operating income 5 2,609 877

Financial income and expenses 6 – 59 141

Earnings after financial items 2,550 1,018

Tax on the year’s earnings 7 – 510 – 16

Minority interest in the year’s earnings – 2 1

Net income 2,038 1,003

income statementConsolidated


61

Fina

ncia

l rep

ortin

g

Invoiced salesInvoiced sales for the Group totalled SEK

20,825M in 1997, an increase by SEK

251M. Excluding Boliden, invoicingamounted to SEK 16,804M compared withSEK 12,681M in 1996.

During the year, the industrial opera-tions increased their invoicing by 46percent, distributed over all businessareas. Trelleborg Automotive accountedfor the largest increase. In total, newly-acquired companies accounted forapproximately SEK 1,700M of the increase,but comparable units also raised theirinvoicing by approximately 9 percent.

The units in the distribution opera-tions increased their invoiced sales byapproximately 14 percent. Ahlsell im-proved its sales by 22 percent, mainly as aresult of the acquisition of SkoogsElektriska. Bröderna Edstrand’s sales fellslightly during the year. Increasedvolumes did not fully offset falling prices.In total, sales increased by approximatelySEK 630M with regard to the newly-acquired companies.

Of total Group sales, 59 percent (57),is from markets outside Sweden.

Operating incomeOperating income amounted to SEK

2,609M (877). Operating income for1997 also included items affecting com-parability of SEK 1,309M. This includes acapital gain of SEK 1,468M relating to thesale of 55.1 percent of the shares inBoliden Ltd, and provisions of SEK 159M

relating to restructuring costs within theGroup. Excluding items affecting compa-rability, operating income amounted toSEK 1,300M (877), an improvement of 48percent.

The industrial operations increasedtheir operating income to SEK 445M fromSEK 296M. The majority of the earningsimprovement was attributable to the

newly-acquired units, primarily withinTrelleborg Automotive. Exchange ratesalso had a positive effect on earnings.

The distribution operations improvedtheir operating income to SEK 359M

(297). The majority of the improve-ments was due to the fact that 1996operating income was charged withinventory losses, but volume increases inall units also had a positive effect on theresult.

Operating income in Boliden Ltdimproved to SEK 589M (441) despite thefact that the Trelleborg Group’s share inthe earnings of Boliden for the periodJuly–December 1997 amounted to 44.9percent. The earnings improvement wasdue to more favorable exchange rates,higher zinc prices and very positivecontributions by all units.

Other consolidated items were posi-tively affected by improved operatingincome in, among others, Sorb Industri,and by lower rental costs and improvedearnings in the associated company, BPA.

Net interest income and expenseamounted to SEK –59M (141). The changeis due to a higher net liability during theyear and to the fact that the certificatesof claim for Falconbridge came due inJuly 1996 and in January 1997.

Earnings after financial income andexpenses amounted to SEK 2,550M

(1,018). Excluding items affecting com-parability, earnings totalled SEK 1,241M

(1,018), an improvement of 22 percent.The year’s tax costs amounted to SEK

510M (16). Of the year’s total tax cost,SEK 168M is attributable to items affectingcomparability. Taxes paid totalled SEK

92M.Net income for the year was SEK

2,038M (1,003), equivalent to SEK 17.40per share. Excluding items affectingcomparability, earnings were SEK 7.65 pershare.

Comments on theConsolidated

income statement


0

4.0

8.0

12.0

1993 1994 1995 1996 1997

Operating income, excluding items affecting comparability

Return on operating capital employed, %

– 5.5

9.8

16.3

9.5

12.6

0

– 800

– 400

400

800

1,200

1,600 16.0

%SEK M2,000 20.0

– 4.0

– 8.0

1,2

21

1,8

10

877

1,3

00

– 902

Earnings and return on capital

0

5

10

15

20

25

1993 1994 1995 1996 1997

Sweden

Other Nordic countries

Other European countries

North America

Other markets

SEK M

Invoiced sales

0

5,000

10,000

15,000

20,000

25,000

1993 1994 1995 1996 1997– 4.0

– 3.0

– 2.0

– 1.0

0

1.0

2.0

3.0

4.0

5.0

6.0


Operating margin, %

SEK M %

– 3.1

3.6

5.7

3.8

4.7

21

,61

7

19

,13

5

21

,30

4

20

,57

4

20

,82

5

Invoiced sales and operating margin

62

Financial reporting

December 31, SEK M Note 1997 1996

Assets

Fixed assets:

Intangible assets 8, 9 1,719 523

Tangible assets 10, 11 3,868 5,791

Financial fixed assets 12–16 4,174 1,795

Total fixed assets 9,761 8,109

Current assets:

Inventories 17 3,595 3,126

Current receivables 18, 19 4,252 4,175

Short-term investments 20 2,589 2,952

Cash and bank 984 667

Total current assets 11,420 10,920

Total assets 21,181 19,029

Shareholders’ equity and liabilities

Shareholders’ equity

Restricted equity: 21

Capital stock 2,934 2,934

Restricted reserves 2,001 2,335

Total restricted equity 4,935 5,269

Non-restricted equity: 22

Non-restricted reserves 4,078 3,158

Net income 2,038 1,003

Total non-restricted equity 6,116 4,161

Total shareholders’ equity 11,051 9,430

Minority interest 342 12

Provisions:

Provision for pensions and similar 23 768 1,074

Provision for deferred tax 24 105 74

Other provisions 25 409 694

Total provisions 1,282 1,842

Long-term liabilities:

Interest-bearing long-term liabilities 26–29 4,021 3,597

Other long-term liabilities 63 117

Total long-term liabilities 4,084 3,714

Current liabilities:Interest-bearing current liabilities 30 272 59

Other current liabilities 31, 32 4,150 3,972

Total current liabilities 4,422 4,031

Total shareholders’ equity and liabilities 21,181 19,029

Contingent liabilities 33 329 261

Pledged assets 33 2,059 1,330

Consolidatedbalance sheet


63

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01993 1994 1995 1996 1997

Debt ratio, %

0.25

0.50

0.75

1.0

1.25

1.50

1.75

2.0

0.4

0.6

1.3

1.8

0.5

Debt ratio

Equity/assets ratio andshareholders’ equity

AssetsDuring the year, intangible fixed assetsincreased by SEK 1,196M to SEK 1,719M.The majority of this was goodwill whicharose in connection with acquisitions inboth the industrial and the distributionoperations.

Tangible assets decreased by SEK

1,923M to SEK 3,868M. This is mainlyexplained by the fact that Boliden is nolonger consolidated as a subsidiary(SEK –3,383M), and by tangible fixedassets in acquired units (SEK +1,761M).

Gross investments in tangible fixedassets amounted to SEK 963M, with SEK

347M distributed throughout industrialoperations, SEK 116M throughout distri-bution operations, SEK 437M withinmining operations (during the first sixmonths), and SEK 63M among otherinvestments.

At the beginning of the year, fixedassets amounted to SEK 4,174M. The bookvalue of Boliden Ltd and BPA is SEK

2,478M, and SEK 329M respectively. At thebeginning of the year, the market value ofthe holdings in Boliden Ltd and BPAamounted to SEK 2,847M and SEK 334M

respectively.During the year, inventories increased

by SEK 469M to SEK 3,595M. The acquiredunits increased inventories by SEK

1,486M. The fact that Boliden is nolonger consolidated as a subsidiary hasresulted in a decrease in inventories by

SEK 1,029M. For comparable units,inventories have more or less remainedunchanged.

At the beginning of the year, short-term investments amounted to SEK

2,589M, including certificates of claim fordivested shares in Boliden Ltd totallingSEK 2,413M.

Shareholders’ equity andliabilities

In 1997, shareholders’ equity increasedby SEK 1,621M to SEK 11,051M. Duringthe year, SEK 424M was distributed to theshareholders. Shareholders’ equity pershare totalled SEK 94.20.

The liability to minority shareholdersincreased to SEK 342M during the year.The majority of the increase was attribut-able to the acquisition of Starckjohann.

Provisions for restructuring measurestotalled SEK 346M. The amount includesprovisions made in connection withacquisitions.

The Group’s interest-bearing liabili-ties and provisions totalled SEK 5,062M.Excluding pension provision, liabilitiesamount to SEK 4,294M. Of these, SEK

3,232M have a maturity of five years ormore.

At the beginning of the year, theGroup’s total assets were SEK 21,181M.The equity/assets ratio increased by 4.2percentage points to 53.8 percent.

01993 1994 1995 1996 1997

Shareholders equity, SEK M

Balance sheet total, SEK M

Equity/assets ratio, %

,

5,000

10,000

15,000

20,000

25,000

30,000

0

5

10

15

20

25

30

35

40

45

50

55

60SEK M %

27.8

32.4

46.6 49.6 53.8

5,9

64

21

,48

3

6,4

70

9,0

59

9,4

30

11

,05

72

1,1

81

19

,02

9

19

,46

4

19

,98

7

Comments on theconsolidated

balance sheet

Capital structure

01993 1994 1995 1996 1997

Capital employed

Shareholders´equity

2,000

4,000

6,000

8,000

10,000

12,000

14,000SEK M

5,96

4

6,47

0

8,42

2

9,05

9

9,89

4

9,43

0

13,1

76

12,4

49

11,9

19

11,0

51


64

Financial reporting

Statement ofchanges in

financial position

SEK M 1997 1996

Earnings before tax 2,550 1,018Paid tax – 92 – 57

Reversed:

Depreciation 686 775

Shares in results of associated companies less dividend received – 313 – 53

Total funds provided internally 2,831 1,683

Investments:

Gross in machinery and plants 963 1,134

Divestment of machinery and plant – 64 – 187

Divestment of participations inassociated companies and other shares – 10 – 62

Total investments, net 889 885

Change in working capital:

Inventories 12 – 377

Operating receivables 592 – 254

Operating liabilities – 550 650

Total change in working capital 54 19

Other items:

Long-term non-interest-bearing receivables and liabilities 807 – 4

Translation differences 127 – 23

Change in minority interest – 330 – 10

Total other items 604 – 37

Total funds utilized 1,547 867

Acquisitions – 4,153 – 1,259

Divestments + 2,889 —

Total acquisitions/divestments – 1,264 – 1,259

Dividend – 424 – 658

Change in financial fixed assets/liabilities – 404 – 1,101

Specification of change in financial assets/liabilities:

Change in long-term investments – 27 + 282

Change in liquid funds – 46 – 2,041

Change in interest-bearing long-term liabilities and provisions – 118 + 457

Change in interest-bearing current liabilities – 213 +201

– 404 – 1,101


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0Outflow

Other

Change inoperating capital

Dividends

Gross investment

Acquisitions

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

Inflow

Dividends from associated companies

Earnings before depreciation

Sale of Boliden

01993 1994 1995 1996 1997

Excluding existing plants in acquired companies

200

400

600

800

1,000

1,200SEK M

620

650

1,1

29

1,1

34

963

1993 1994 1995 1996 1997– 10,000

– 8,000

– 6,000

– 4,000

– 2,000

0

2,000

SEK M

– 7,212

– 5,979

637

– 464– 868

The Group’s net of consolidated financial assets andliabilities was SEK –868M (–464) at year’s end.

During the year, operations generated a cash flow ofSEK 318M. Gross investments in tangible fixed assetstotalled SEK 963M.

The sale of 55.1 percent of the shares in Bolidengenerated SEK 4,357M. During the year, companies wereacquired which affected net liabilities by SEK –4,153M

with the industrial operations accounting for SEK –972M, the distribution operations accounting for SEK –2,716M, other units accounting for SEK –465M.

Operating capital increased by SEK 369M. The in-crease, as a result of acquisitions, was more or less offsetby the sale of the Boliden shares.

Liquid fundsThe Group’s liquid funds totalled SEK 3,573M (3,619)at year’s end. 1997 liquid funds included certificatesof claim amounting to SEK 2,413M relating to the saleof shares in Falconbridge Ltd. Payment for this claimwas received on January 31, 1997.

Long-term investmentsLong-term investments amounted to SEK 620M, of whichSEK 383M represent collateral for fulfilling commitmentsin accordance with lease contracts in connection withsale/leaseback transactions relating to plants.

LiabilitiesThe Group’s pension provisions decreased by SEK 306M

in 1996. Boliden’s pension provision for 1996 totalledSEK 408M. Therefore, the increase in pension provisionsin other units amounted to SEK 102M and were mainlyattributable to pension provisions in acquired units.

The Group’s liabilities to credit institutions increasedduring the year by SEK 644M to SEK 3,921M. In 1998,SEK 170M in payments becomes due.

In those units which were acquired in 1997, liabili-ties to credit institutions total SEK 930M.

Comments on thestatement ofchanges in

financial position

Change in net liability

Investments

Financial assets and liabilities

SEK M 1997 1996

Long-term investments 620 647

Short-term investments 2,589 2,952

Cash and bank deposits 984 667

To be deducted:

Interest-bearing provisions – 768 – 1,074

Interest-bearing long-term liabilities – 4,021 – 3,597

Interest-bearing short-term liabilities – 272 – 59

Net liabilities – 868 – 464


Financial net assets/liabilities

66

Financial reporting

Income statementParent Company

Income statement, SEK M Note 1997 1996

Administration expenses 34, 35 – 139 – 127

Items affecting comparability 36 – 71 – 308

Other operating income 62 50

Other operating expenses – 6 – 23

Operating income – 154 – 408

Financial income and expenses 37 770 1,148

Earnings after financial items 616 740

Appropriations 38 277 565

Earnings before tax 893 1,305

The year’s result 893 1,305

Statement of changes in financial position, SEK M 1997 1996

Earnings before tax 893 1,305

Reversed:

Dividend – 424 – 658

Depreciation 4 4

Foreign exchange reserves 68 —

Total funds provided internally 541 651

Investments:

Gross in machinery and plants 14 4

Net acquisition/sale of machinery and fixed assets – 7 —

Net acquisition/sale of shares 230 – 186

Total investments, net 237 – 182

Change in working capital

Inventories – 1 —

Operating receivables 3,090 379

Operating liabilities 290 – 295

Total change in working capital 3,379 84

Total funds utilized – 3,616 – 98

Change in financial fixed assets/liabilities – 3,075 + 749

Specification of change in financial fixed assets/liabilities:

Change in long-term investments 166 + 955

Change in liquid funds – 829 – 69

Change in interest-bearing long-term liabilities and provisions – 6,180 + 1,594

Change in interest-bearing current liabilities 3,768 – 1,731

– 3,075 + 749


Statement ofchanges in financial position

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Balance Sheet, December 31, SEK M Note 1997 1996

Assets

Fixed assets:

Tangible assets 39, 40 49 46

Financial fixed assets 41, 42 8,534 8,138

Total fixed assets 8,583 8,184

Current assets:

Inventories 43 1 2

Current receivables 44, 45 4,788 1,698

Short-term investments 46 293 1,431

Cash and bank 315 6

Total current assets 5,397 3,137

Total assets 13,980 11,321

Shareholders’ equity and liabilities

Shareholders’ equity

Restricted equity: 47

Capital stock 2,934 2,934

Restricted reserves 1,304 1,304

Total restricted equity 4,238 4,238

Non-restricted equity: 48

Profit brought forward 1,360 479

Net income 893 1,305

Total non-restricted equity 2,253 1,784

Total shareholders’ equity 6,491 6,022

Foreign exchange reserve 68 —

Provisions:

Provision for pensions and similar 49 208 210

Other provisions 50 14 16

Total provisions 222 226

Long-term liabilities:

Interest-bearing long-term liabilities 51–53 6,500 316

Total long-term liabilities 6,500 316

Current liabilities:

Interest-bearing current liabilities 54 434 4,202

Other current liabilities 55, 56 265 555

Total current liabilities 699 4,757

Total shareholders’ equity and liabilities 13,980 11,321

Contingent liabilities 57 837 4,512

Pledged assets 57 613 845

Balance sheetParent Company


68

Financial reporting

Accounting and

EU-adaptedAnnual Accounts

Effective 1997, the new EU-adaptedAnnual Accounts will be applicable. Thisprimarily means that the format of theIncome statement and Balance sheet hasbeen changed.

The Trelleborg Group’s Accountsinclude the Parent Company and allsubsidiaries and associated companies.Subsidiaries refer to companies in whichTrelleborg owns more than 50 percent ofthe voting rights in the company. Associ-ated companies refers to companies inwhich Trelleborg has long-term holdingswhich are equivalent to no less than 20percent and no more than 50 percent ofthe voting rights.

The Consolidated Accounts havebeen prepared in accordance with recom-mendations by the Swedish FinancialAccounting Standards Council which areessentially in accordance with IASC’srules for consolidated accounting.

Acquisition accounting has been ap-plied. Companies acquired during theyear have been included in the Consoli-dated Income Statement at values whichwere in line with values after the acquisi-tion. Companies which were sold duringthe year have been included in the con-solidated result up to the date of the sale.

Translation offoreign subsidiaries

The Trelleborg Group applies the so-called daily rate method for translatingincome statements and balance sheets offoreign subsidiaries. This means that allitems in the income statement are trans-lated at an average rate, whereas all assetsand liabilities in the subsidiaries are trans-lated at the balance sheet date rate.

The translation differences whicharise are partly due to the effect of thedifference between average income state-ment rates and rates prevailing on thebalance sheet date, and partly to the factthat net investments are translated at adifferent rate at the end of the year thanat the beginning of the year.

The translation differences are not trans-ferred to the Income Statement but areposted directly to shareholders’ equity.

Associated companiesHoldings in associated companies arereported in accordance with the equitymethod. In the Consolidated IncomeStatement, profit participation in associ-ated companies is shown as consolidatedearnings before taxes and minority inter-est adjusted for write-offs on, or disso-lutions of, any acquired overvalues or un-dervalues, respectively. The Group’s shareof the associated companies’ tax cost isincluded in the Group’s tax cost. Minor-ity interest in profit/loss of associatedcompanies is shown in the Group’s mi-nority interest.

Consolidated book value of the hold-ing in associated companies correspondsto the Group’s share in the shareholders’equity of the associated companies andany residual values of overvalues and un-dervalues which have arisen in theacquisition calculation.

TaxesLegislation in Sweden and certain othercountries provides companies with an op-portunity to defer tax payments throughappropriations to non-taxed reserves.

The Consolidated Income Statementand Balance Sheet are shown exclusive ofnon-taxed reserves. In the ConsolidatedAccounts, the non-taxed reserves aredivided into deferred tax and sharehold-ers’ equity. The deferred tax liability isentered at the actual tax rate in the coun-try of domicile of the respective Groupcompany. In the event of a change in thetax rate, the change in the tax liability isreported in the year’s results.

The Group also reports deferred tax onother differences between book and taxvalues on assets and liabilities. Deferred taxassets are reported only to the extent towhich they are likely to be utilized withinthe foreseeable future. When calculatingdeferred tax, the actual nominal tax rate inthe respective country has been applied.

Valuation principles


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Minority interestMinority interest in subsidiaries and asso-ciated companies, respectively, is reportedas a share of earnings after tax in theConsolidated Income Statement.

Receivables and liabilitiesin foreign currency

Receivables and liabilities in foreigncurrencies are translated at balance sheetdate rates. Unrealized exchange gains onlong-term receivables and liabilities areappropriated to a foreign exchange reserve.

In the event of hedging using forwardcontracts, the current rate is applied onthe date the hedge is made in the valua-tion of an underlying claim or liability.Where hedging refers to estimated futurecommercial flows and a receivable orliability has not yet arisen, the valuationof these contracts has not affected theaccounts.

The difference between the forwardrate and the current rate at the time thecontract is entered into is capitalized overthe term of the contract. Incomerecognition of hedging through forwardcontracts is made on the maturity of theunderlying transaction, or alternatively,upon liquidation.

Other forward contracts are valuedaccording to the same principles as receiva-bles and liabilities in foreign currency.Advances from customers or to suppliershave not been revalued, but are shown atthe rate applicable when the advance wasreceived or given.

The Parent Company has taken loans,or forward contracts, in foreign curren-cies to offset the main portion of netinvestments in foreign subsidiaries. Thesize of hedging varies from a maximum ofthe full value, including tax effects, downto the level at which the Group’s equity/assets ratio is kept intact even with fluc-tuations in exchange rates. Loans andcontracts are valued at the investmentrate in the Parent Company. In theConsolidated Balance Sheet, these have

been valued at the balance sheet date rate,in which exchange differences have beendirectly posted to shareholders’ equity tothe extent they correspond to a transla-tion difference posted there during theyear for each subsidiary.

Exchange differences relating tocurrent business operations have beencredited/debited to operating income,whereas exchange differences of a financialnature have been reported under financialincome and expenses.

Inventories and receivablesInventories are shown at the lowest ofacquisition cost in accordance with thefirst in/first out principle (FIFO) andactual value. Adequate depreciation forobsolescence has been made. Receivablesare reported at the amounts which areexpected to be realized.

Research and developmentThe majority of the costs for R&D ischarged immediately to operating costs asthey arise.

GoodwillGoodwill is written-off over economiclife. Goodwill, which arises in connectionwith acquisitions of long-term strategicvalue, is written-off over a maximumperiod of 20 years.

Tangible fixed assetsFixed assets are shown at their historicacquisition values less accumulated depre-ciation according to plan. Depreciationaccording to plan is based on historicacquisition costs of fixed assets.

Depreciation rates are calculated onthe estimated economic life. For machin-ery and equipment, depreciation rates ofbetween 5 and 33 percent are applied,and for buildings between 1.5 and 6 per-cent. For leasing assets, the annuitymodel is applied, with depreciation totheir estimated value at the end of thecontract period.

Accounting andValuation principles


70

Financial reporting

Note 1Employees and costs

Average number of employees1997 1996

Number NumberWomen Men Total Women Men Total

Sweden 1,298 3,146 4,444 1,025 3,317 4,342

Other Nordic countries 92 394 486 85 344 429

Other European countries 801 2,514 3,315 510 1,638 2,148

North America 507 1,479 1,986 117 624 741

Other markets 78 767 845 33 473 506

Total consolidatedunits 2,776 8,300 11,076 1,770 6,396 8,166

Companies which areno longer consolidated 285 2,164 2,449 570 4,350 4,920

Total 3,061 10,464 13,525 2,340 10,746 13,086

Wages, salaries, other remunerations and payroll overheads 1997 1996

Board and Other Total Board and Other TotalPresident employees wages President employees wages

SEK M incl. bonus incl. bonusand salaries and salaries

Sweden 31 1,075 1,106 22 907 929

Other Nordic Countries 5 120 125 5 99 104

Other European Countries 19 673 692 11 406 417

North America 5 398 403 196 196

Other markets 2 17 19 6 6

Total consolidatedunits 62 2,283 2,345 38 1,614 1,652

Companies which areno longer consolidated 8 595 603 15 1,190 1,205

Total 70 2,878 2,948 53 2,804 2,857

1997 1996Payroll Of which, Payroll

SEK M overheads pension costs overheads

Consolidatedunits 906 109 613

Companies which areno longer consolidated 202 405

During 1997, a remuneration of SEK 200K (200) was paid to the Chairman who isnot employed in the Group. The other eight Board Members elected by the AGM,who are not employees in the Group receive a remuneration totalling SEK 800K

(800) with SEK 100K distributed to each.The President and CEO received a salary, bonus payment and pension

benefits as well as other remuneration totalling SEK 6,113K (5,847). Of this, SEK

2,286K (1,909) represent pension benefits and SEK 1,089K (417) bonus paymentbased on return on shareholders’ equity. Pension costs for the Executive VicePresidents amount to SEK 396K (1,119).

In accordance with an agreement entered into, the President is entitled toretire at the age of 60 and his employment agreement has a term of notice on theside of the Company of 36 months. For some other senior executives there areagreements regarding a mutual right to early retirement at the age of 60 or 62.If such is the case, compensation of 65 or 70 percent of the ordinary salary is paiduntil the age of 65 when normal pension is paid in accordance with an ITP plan.For some persons in the Company Management, who are not covered by theEmployment Protection Act (EPA), extended periods of notice on the side ofthe Company are also applied, usually 6 or 12 months. In a few cases, the termof notice is 18 or 24 months. For these persons, there are customary pensioncommitments within the framework of a general pension plan.

A “Compensation Committee” chaired by the Chairman of the Board ofDirectors deals with issues relating to salary and terms of employment for thePresident and draws up guidelines for persons at the level immediately below him.


Note 2Sales

By geographic market:

SEK M 1997 1996

Sweden 7,488 6,998

Other Nordic countries 762 636

Other European countries 4,817 3,532

North America 3,169 1,249

Other markets 568 266

Total consolidated units 16,804 12,681

Companies which are no longer consolidated 4,021 7,893

Total sales 20,825 20,574

Sales* and operating income by business area:

1997 1996Sales Operating Sales Operating

SEK M income income

Trelleborg Automotive 2,120 207 1,005 71

Trelleborg Wheel Systems 1,774 100 1,462 99

Trelleborg Engineered Systems 1,973 70 1,470 44

Trelleborg Building Systems 895 112 678 77

Other 58 – 44 70 5

Industrial operations 6,820 445 4,685 296

Ahlsell 4,084 166 3,344 164

Bröderna Edstrand 2,093 98 2,134 65

Reynolds 963 16 829 3

Intermarket 1,130 85 960 62

Other — – 6 — 3

Distribution operations 8,270 359 7 267 297

Boliden (Jan–June 1997) 4,021 589 7,893 441

Other 1,714 – 93 729 – 157

Items affecting comparability — 1,309 — —

Total 20,825 2 ,609 20,574 877

* Group external sales.

Note 4Shares in results of associated companies

Earnings after Net earnings Dividendfinancial items received

SEK M 1997 1996 1997 1996 1997 1996

Boliden Ltd* 263 79 203 64 — 49Other associatedcompanies 56 23 32 22 6 —

Total 319 102 235 86 6 49

* 1996: shares in associated companies belonging to the mining operations.

Note 3Items affecting comparability

SEK M 1997

Capital gain on sale of 55.1 percent of the sharesin Boliden Ltd 1,468

Provisions for restructuring within the Group – 159

Total 1,309

Notes tothe Consolidated Accounts

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Note 5Depreciation according to plan of intangible and tangiblefixed assets

SEK M 1997 1996

Capitalized expenditure for research and developmentand similar work 1 0

Concessions, patents, licenses and brand-names 5 5

Rental rights and similar rights 1 —

Goodwill 67 39

Real estate 78 105

Machinery and other technical plant 415 460

Equipment, tools, installations 85 94

Development under ground (1997: Jan–June) 34 72

Total 686 775

Note 6Financial income and expenses

SEK M 1997 1996

Result of other securities and receivables which are fixed assets:

Interest 16 40

Exchange rate differences 16 – 8

Dividend and other financial income 10 4

Total 42 36

Other interest income and similar income statement items:

Interest 233 279

Exchange rate differences 137 – 7

Dividend and other financial income 4 – 10

Total 374 262

Interest expenses and similar income statement items:

Interest 355 196

Exchange rate differences 120 + 39

Total 475 157

Total financial income and expenses – 59 141

Note 7Tax on the year’s earnings

SEK M 1997 1996

The year’s tax expense:

Paid tax – 92 – 57

Deferred tax expense – 166 58

Tax on participations in associated companies – 84 – 17

Deferred tax expense relating to itemsaffecting comparability – 168 —

Total – 510 – 16

The tax authorities have queried previous years’ assessments of tax for the Parent Company and anumber of Swedish subsidiaries. Provisions have been made in respect of those cases which have beendeemed to carry a risk of increased taxation.

Note 8Intangible fixed assets

SEK M 1997 1996

Capitalized expenditure for research and developmentwork and similar work 19 7

Concessions, patents, licenses, brand-names andsimilar rights 26 61

Rental rights and similar rights 17 5

Goodwill 1,654 450

Advances relating to intangible fixed assets 3 —

Total 1,719 523

Note 9Intangible fixed assets

1997 Capitalized Concessions, Rental rights Goodwill Advances relating Totalexpenditure patents and and similar to intangible intangible

SEK M for R&D work licenses rights fixed assets fixed assets

Accumulated acquisition values:

On January 1 8 78 13 562 — 661

Acquisitions 441 6 7 1,423 3 1,880

Investments 2 10 1 — 0 13

Divestments and scrappings – 20 – 42 0 – 114 1 – 175

The year’s translation differences – 4 – 1 0 12 – 1 6

Closing accumulated acquisition values 427 51 21 1,883 3 2,385

Accumulated depreciation according to plan:

On January 1 – 1 – 17 – 8 – 112 — – 138

Acquisitions – 417 – 4 — – 69 — – 490

Divestments and scrappings 6 1 5 19 — 31

The year’s depreciation according to plan – 1 – 5 – 1 – 67 — – 74

The year’s translation differences 5 0 0 0 — 5

Closing accumulated depreciation – 408 – 25 – 4 – 229 — – 666

Residual valueaccording to plan on December 31 19 26 17 1,654 3 1,719



72

Financial reporting


Note 11Tangible assets

1997 Real estate Machinery and Equipment, Underground New construction Totalother technical tools and preparations in progress and tangiblefixed assets installations advances relating fixed

to tangible assetsSEK M fixed assets


On January 1 2,277 8,116 856 1,228 345 12,822

Acquisitions 1,419 815 165 — 29 2,428

Investments 65 437 94 155 212 963

Divestments and scrappings – 1,536 – 5,532 – 48 – 1,384 – 478 – 8,978

The year’s translation differences 19 60 36 1 3 119

Closing accumulated acquisition values 2,244 3,896 1,103 — 111 7,354


On January 1 – 788 – 5,456 – 474 – 306 – 2 – 7,026

Acquisitions – 286 – 333 – 91 — — – 710

Divestments and scrappings 600 3,934 5 340 — 4,879

The year’s depreciation according to plan – 78 – 415 – 85 – 34 — – 612

The year’s translation differences 0 – 31 – 17 — 0 – 48

Closing accumulated depreciation – 552 – 2,301 – 662 — – 2 – 3,517

Accumulated write-ups:

On January 1 — — — — — —

Acquisitions 54 — — — — 54

The year’s write-ups — 1 — — — 1

The year’s translation differences – 1 0 — — — – 1

Closing accumulated write-ups 53 1 — — — 54

Accumulated write-downs:

Acquisitions — – 5 — — — – 5

The year’s write-downs – 17 0 0 — – 1 – 18

Closing accumulated write-downs – 17 – 5 0 — – 1 – 23

Planned residual value according on December 31 1,728 1,591 441 — 108 3,868

Note 10Tangible assets

SEK M 1997 1996

Real estate 1,728 1,489

Machinery and other technical fixed assets 1,591 2,655

Equipment, tools and installations 441 382

Underground preparations — 922

New construction in progress and advances relating totangible assets 108 343

Total 3,868 5,791

Note 12Financial fixed assets

SEK M 1997 1996

Participation in associated companies 2,902 718

Other shares 53 35

Other long-term securities holdings 620 647

Other long-term receivables 38 66

Deferred tax liability 561 329

Total 4,174 1,795

Long-term investments amounting to SEK 383M form security for, among other things,fulfillment of obligations in accordance with lease contracts in connection with sale/lease-backtransactions relating to fixed assets, and for loan agreements entered into. The market value ofthe investments exceeds the book value.

The total tax assessment value for the Group’s Swedish real estate amounts to SEK 208M (1,342), of which for buildings SEK 166M (1,104). Companies included in theGroup rent real estate from renting companies. During 1997, rental charges amounted to SEK 76M (110) The remaining rental period is 15 years on average.


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Note 13The Trelleborg Group’s holding of shares and participations in Group Companies

Company Registration No Domicile/country Number Ownership, % Book value SEK K

Ahlsell AB 556054-9759 Sollentuna, Sweden 28,000 100 211,793Ahlsell Kulde A/S Norway 9,500 100 3,227Ahlsell Russ Stroj, ZAO Russia — 100 124Ahlsell Sp.z.o.o. Poland — 100 142Elwar Sp.z.o.o. Poland — 70 22,175Flex Scandinavia AB 556209-4085 Karlstad, Sweden 1,000 100 8,326J.W. Anderssons Maskin AB 556044-7814 Piteå, Sweden 450 100 11,040AB Landol 556053-4090 Gothenburg, Sweden 1,000 100 16,269Tornab AB 556208-0472 Luleå, Sweden 7,100 100 47,119

Bröderna Edstrand 556106-2174 Malmö, Sweden 20,000 100 190,015

Chemtrade Holding AG Switzerland 100 100 2,585BCT Chemtrade Corporation Switzerland 1,000 100 48,312

Horda AB 556379-6050 Värnamo, Sweden 4,382,190 100 278,459Horda Profil Fastighets AB 556071-2894 Värnamo, Sweden 10,000 100 33,600Trelleborg Automotive AB 556205-8577 Värnamo, Sweden 10,000 100 900Trelleborg Horda AB 556053-5832 Värnamo, Sweden 10,000 100 33,000

Oy Trelleborg Ab Finland 4,000 100 1Oy Ahlsell Ref Ab Finland 10,000 100 11,848Oy Trelleborg Building Systems Ab Finland 250 100 3,817

Trelleborg Canada BV The Netherlands 41 100 709,306Trelleborg International B.V. The Netherlands 2,000 100 139,456• Trelleborg International AB 556033-0754 Trelleborg, Sweden 1,500 100 2 766,798•• Trelleborg Bergougnan NV Belgium 732,999 99.99 198,798••• Trelleborg Lanka Ltd Sri Lanka 954,740 100 50,900••• Trelleborg NV-SA Belgium 815,499 100 173,473•• Trelleborg GmbH Germany — 100 272,157••• EMV Edelstahl- und Metallhalbzeug-

Vertrieb GmbH Germany 37,500 100 6,293•••• Metallhalbzeug-Handel GmbH Germany 4,999 100 15,317••• Trelleborg Industrie GmbH Germany — 100 4,908••• Vorwerk Rotatec Beteiligungs GmbH Germany — 100 2,199••• Vorwerk Rotatech GmbH & Co KG Germany — 100 141,551•• Trelltech AB 556012-9206 Trelleborg, Sweden 800,000 100 51,609••• Stifab Plåt AB 556037-3465 Skellefteå, Sweden 90,000 100 51,792••• Velox AB 556000-4110 Trelleborg, Sweden 1,000 100 145,000

Trelleborg Corporation USA 2,592 100 144,396IT Holding, Inc USA 1,000 100 236,799• Intertrade Holdings Inc USA 1,000 100 187,966• Sulex Inc USA 20,000 100 48,834Trelleborg Holding, Inc USA 100 100 285,208• Metech International, Inc USA 1,000 100 63,675Trelleborg Industries Inc USA 1,000 100 434,840• Goodall Rubber Company USA 718,935 100 125,329• Trelleborg Bergougnan, Inc USA 60,900 100 3,673• Trelleborg Monarch, Inc USA 1,000 100 43,572• Trelleborg Rubore, Inc USA 100 100 1,093• Trelleborg Viking, Inc USA 1,000 100 5,867• Trelleborg YSH, Inc USA 100,000 100 554,868•• Elastomeros Falcon SA de CV Mexico — 100 68,560Trelleborg International Inc USA 1,000 100 8

Trelleborg Fabrieken BV The Netherlands 80,000 100 1Chemtrade Storage Nederland B.V. The Netherlands 250 100 20,211Trelleborg Bakker B.V. The Netherlands 750 100 35,201• C.J.J. de Neijs B.V. Beleggings- en

Exploitaatiemaatschappij The Netherlands 141 100 31,298•• Trelleborg Velp B.V. The Netherlands 100 100 390Trelleborg B.V. The Netherlands 24,000 100 11,048

Trelleborg Fond AB 556153-9817 Trelleborg, Sweden 2,500 100 250

Trelleborg Holding AB 556212-8255 Stockholm, Sweden 1,000 100 1,791,860Gelia Industri AB 556188-7372 Grästorp, Sweden 3,000 100 32,000Skoogs AB 556033-1497 Malmö, Sweden 5,020,455 99.9 380,491• Skoogs Elektriska AB 556073-7115 Malmö, Sweden 600,000 100 121,000•• Hagelsnäs KB 969638-8413 Stockholm, Sweden — 100 0• Skoogs Elektrogrosshandel GmbH Germany — 100 176,820•• Schuster Elektrofachgrosshandel GmbH Germany — 100 17,392•• SHS Schuster Hehr Schewe Elektro-

fachgrosshandel GmbH Germany — 100 68,214Sorb Industri AB 556272-5282 Skellefteå, Sweden 512,660 95.35 115,440• Fumex AB 556190-5729 Skellefteå, Sweden 2,500 100 4,753• Gallac AB 556184-2518 Skellefteå, Sweden 6,000 100 5,000• Holmhed Systems AB 556115-6224 Skellefteå, Sweden 24,000 100 5,190• Lövånger Elektronik AB 556287-9743 Lövånger, Sweden 30,000 100 5,000


74

Financial reporting


Note 13The Trelleborg Group’s holding of shares and participations in Group Companies

Company Registration No Domicile/country Number Ownership, % Book value SEK K

• Norrmekanik i Skellefteå AB, Ingenjörsfirma 556283-4365 Skellefteå, Sweden 6.000 100 1,500•• KOMAB, Konstruktion och•• Marknadsföring i Skellefteå AB 556332-5256 Skellefteå, Sweden 1 00 100 50• Texor AB 556316-0703 Lycksele, Sweden 30.000 100 3,000• Wallmarks Såg AB 556089-8156 Skellefteå, Sweden 34.000 100 4,920•• Svenska Träbroar AB 556469-1292 Skellefteå, Sweden 2.750 100 597• Åsele Varmförzinkning AB 556280-6231 Åsele, Sweden 100.000 100 45,000Starckjohann Oyj Finland 69.718.714 53.7 960,411Trelleborg Europe B.V. The Netherlands 140 100 1,514,274• Trelleborg Finance B.V. The Netherlands 350,000 100 1,373,977•• Swedevelop Hospital AB 556107-6042 Trelleborg, Sweden 101,000 100 2,510,660Trelleborg Holding España, S.A. Spain 53,765,347 100 939,634• Trelleborg Automotive Iberia S.A. Spain 85,000 55 2,429• Trelleborg Ibercaucho S.A. Spain 790,000 100 161,492•• Elastómeros de Cantabria, S.A. Spain 84,003 70 1,305•• Elastómeros Internationales, S.A. de C.V. Mexico 1,464,513 100 3,142•• Ingenieria y Elastómeros, S.A. Spain 20,000 100 1,195• Trelleborg Insurance Ltd Luxemburg 50,000 100 4,437

Trelleborg Holding Danmark A/S Denmark 50,000 100 61,831Skaneks A/S Denmark 3,000 100 8,396Trelleborg Gummi A/S Denmark 1,500 100 10,261Trelleborg Hadsten A/S Denmark 12,000 100 14,573

Trelleborg Holding France SA France 1,424,290 100 118,888Reynolds European SAs France 249,994 100 182,646• Intermétaux SAs France 19,994 99.9 6,167Trelleborg Industrie SA France 1,265,773 100 137,225

Trelleborg Holding Italia S.p.a. Italy 200,000 100 272Trelleborg Holding Norge A/S Norway 10,000 100 1

Hillco Kulde A/S Norway 4,000 100 7,602Pe Fo A/S Norway 160 100 170Trelleborg Building Systems A/S Norway 50 100 8,710Trelleborg Industri A/S Norway 1 100 665Trelleborg Viking A/S Norway 27,000 100 103,984

Trelleborg Holdings (UK) Ltd Great Britain 20,000,000 100 113,656Chapman Industries plc Great Britain 13,057,563 100 9,914• Chapman Trading Ltd Great Britain 9,000 100 132Fillite (Runcorn) Ltd Great Britain 499,999 100 76,374Reyton Metals Ltd Great Britain 400,000 100 49,603Trelleborg Industries UK Ltd Great Britain 7,423,312 100 59,051

Trelleborg Industri AB 556129-7267 Trelleborg, Sweden 725,000 100 196,701MHT Takentreprenören i Malmö AB 556170-2340 Malmö, Sweden 1,000 100 0Trelleborg Byggsystem AB/TrelleborgBuilding Systems 556026-2148 Trelleborg, Sweden 12,000 100 7,723Trelleborg China Ltd China 900 90 873Trelleborg do Brasil Ltda Brazil — 100 34,776Trelleborg Gummi AG Switzerland 500 100 455Trelleborg Industri Hungary Tradingand Servicing Ltd Hungary — 100 794Trelleborg Industri O.O.O. (Ltd) Russia — 99.5 559,000Trelleborg Industries CS spol.s.r.o. The Czech Republic — 100 51Trelleborg Industries Polska Sp.z.o.o. Poland 30 100 963Trelleborg Japan K.K. Japan 90 90 593Trelleborg Monarch SA Belgium 4,249 99.99 922Trelleborg PAV Indústria e Comércio Ltda Brazil 900,000 60 30,659Trelleborg Rubore AB 556325-7442 Kalmar, Sweden 60,000 100 22,157Trelleborg Sigma AB 556048-3629 Örebro, Sweden 15,000 100 10,010Trelleborg South Africa (Proprietary) Ltd South Africa 350,000 70 2,261• Wheeltrade Africa Investments (Pty) Ltd South Africa 100 100 3,321Trelleborg South East Asia Pte Ltd Singapore 105,000 70 2,442• Trelleborg Malaysia Sdn Bhd Malaysia 1,000 100 5• Trelleborg Philippines Corp The Philippines 200,000 100 52• Trelleborg Thailand Ltd Thailand 1,500 75 932Trelleborg Truck & Train Components AB 556475-6087 Trelleborg, Sweden 1,000 100 120Trelleborg Tyres Tubes (Pvt) Ltd Sri Lanka 3,181,388 100 4,163Trelleborg Wheels AB 556056-2620 Sävsjö, Sweden 40,000 100 8,148Vorwerk & Son Asia (Pvt) Ltd Sri Lanka 5,692,334 100 10,692

Trelleborg Industrie S.p.A. 754372 Italy 200,000 100 625Trelleborg Kort AB 556119-8820 Trelleborg, Sweden 25,000 100 2,944Trellswitch Intressenter AB 556052-1485 Trelleborg, Sweden 4,500,000 100 512,807


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Note 15Other shares

1997, SEK M Other shares


On January 1 44

Acquisitions 22

Sales – 4

The year’s translation differences 0

Accumulated closing acquisition values 62

Accumulated write-downs:

On January 1 – 9

Closing accumulated write-downs – 9

Book value on December 31 53

Number of Nominal value, Book value, Book value,

shares/participation local currency local currency SEK M

Swedish companies 6

Bröderna A & O Johansen, Denmark 18 000 16

QuimiBol AG, Switzerland 1 000 50 % 120 USD 1

Scanchem 50 50 % 66 USD 1

Nordim A/S 5 000 25 % 500 DKK 0

Other foreign companies 29

Total foreign companies 47

Total 53

Note 14Shares and participation in associated companies

1997, SEK M Participation in associated companies


On January 1 415

Acquisitions 88

Reclassification 2,209

Closing accumulated acquisition values 2,712

Proportion of non-distributed equity:

On January 1 302

Reclassifications – 347

The year’s shares in results 235

Closing, non-distributed proportions of equity 190

Book value on December 31 2,902

Company Registration No Domicile Proportion Proportion Number of shares/ Book Marketof equity, % of votes, % participation value, SEK M value, SEK M

Directly-owned:

BPA AB 556056-7298 Stockholm 29.33 29.55 19,178,952 329 334

Indirectly-owned:

Boliden Ltd Toronto 44.9 44,739,999 2,478 2,847

Dawson Manufacturing Co 45 9,454 57

Shanghai Ibercaucho Rubber Co 50 32

Other 6

Total 2,902


76

Financial reporting

Note 21Restricted equity

SEK M 1997

Opening balance on January 1, 1997 5,269

Allocation to restricted reserves + 10

The year’s proportion of equity in associated companies + 129

Transfer between restricted and non-restricted equity – 299

The year’s translation difference – 174

Closing balance on December 31, 1997 4,935

On December 31, 1997, the capital stock of Trelleborg AB amounted to SEK

2,933,538,100, distributed on 117,341,524 shares, each with a nominal value of SEK 25.

Class of share Number of shares Percent Number of votes Percent

Series A 12,000,000 10.23 120,000,000 53.25

Series B 105,341,524 89.77 105,341,524 46.75

Total 117,341,524 100.00 225,341,524 100.00

Note 22Non-restricted equity

SEK M 1997


Allocation to restricted reserves – 10

Dividend – 424

Transfer, proportion of equity in associated companies – 129

Transfer between restricted and non-restricted equity + 299

Net earnings for the year 2,038

The year’s translation difference + 181


Note 23Provision for pensions, etc

SEK M 1997 1996

Provisions for PRI pensions 645 943

Provisons for other pensions 123 131

Total 768 1,074

Of which, credit-insured via FPG/PRI 675 983

Note 24Provisions for deferred tax

Provision for deferred tax refers to deferred tax portion in untaxed reserves, deferred taxliability which has been recorded with reference to surplus values in acquisition balancesas well as deferred tax liabilities which have arisen as a result of accrual differences.

Note 25Other provisions

SEK M 1997

Provisions for restructuring measures 346

Other provisions 63

Total 409

Note 16Deferred prepaid tax

Deferred prepaid tax has been recorded in connection with provisions and write-downsin acquisition balances. In addition, prepaid tax has been recorded with reference tounutilized losses carried forward to the extent that these are likely to be utilized withinthe foreseeable future.

Note 17Inventories

SEK M 1997 1996

Raw materials and supplies 585 618

Work in progress 403 685

Finished products and goods for resale 2,600 1,769

Construction work in progress 2 54

Advances to suppliers 5 —

Total 3,595 3,126

Note 18Current receivables

SEK M 1997 1996

Accounts receivable, trade 3,026 2,578

Bills receivable 129 112

Operating receivables 28 —

Prepaid tax 117 40

Other current receivables 322 631

Prepaid expenses and accrued income 630 814

Total 4,252 4,175

Note 19Prepaid expenses and accrued income

SEK M 1997

Interest 218

Rentals 55

Other 357

Total 630

Note 20Short-term investments

SEK M 1997 1996

Certificates of claim relating to Falconbridge Ltd — 2,442

Certificates of claim for sold Boliden shares 2,413 —

Investments in securities 176 510

Total 2,589 2,952



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Note 31Other current liabilities

SEK M 1997 1996

Advances from customers 39 90

Accounts payable – trade 2,352 2,162

Bills payable 70 101

Operating liability to associated companies 2 —

Tax liability 65 75

Other non-interest-bearing liabilities 477 452

Accrued expenses and prepaid income 1,145 1,092

Total 4,150 3,972

Note 32Accrued expenses and prepaid income

SEK M 1997

Interest 248

Rentals 71

Wages and salaries 232

Payroll overheads 107

Other 487

Total 1,145

Note 33Contingent liabilities and pledged assets

SEK M 1997 1996

Contingent liabilities:

Discounted bills — 1

Pension commitments 88 129

Guarantees and other contingent liabilities 241 131

Total 329 261

Pledged assets:

1997 1996

Liabilities to Accounts Other TotalSEK M credit institutions payable – trade

Real estate mortgages 461 7 — 468 125

Chattel mortgages 1,108 — — 1,108 495

Long-term investments 383 — — 383 615

Short-term investments — 1 — 1 —

Retention of title in

machinery — — 17 17 —

Shares 75 — — 75 37

Other 7 — — 7 58

Total 2,034 8 17 2,059 1,330

Note 26Interest-bearing long-term liabilities

SEK M 1997 1996

Bond loans 1 —

Liabilities to credit facilities 3,751 3,273

Bank overdraft facilities 83 51

Other interest-bearing liabilities 186 273

Total 4,021 3,597

Note 27Liabilities to credit institutions

SEK M 1997

Maturity date 1–5 years from balance sheet date 519

Maturity later than 5 years from balance sheet date 3,232

Total 3,751

Note 28Bank overdraft facilities

SEK M 1997

Granted credit limit 470

Of which, utilized 83

Unutilized portion 387

Note 29Other long-term liabilities

SEK M 1997

Maturity date 1–5 years from balance sheet date 186

Maturity later than 5 years from balance sheet date 0

Total 186

Note 30Interest-bearing current liabilities

SEK M 1997 1996

Liabilities to credit institutions 170 4

Other interest-bearing liabilities 102 55

Total 272 59



78

Financial reporting

Note 34Employees and costs

Average number of employees

1997 1996Number NumberWomen Men Total Women Men Total

Sweden 21 31 52 21 33 54

Wages, salaries, other remunerations and payroll overheads

1997 1996Board and Other Total Payroll Of which, Board and Other Total Payroll Of which,President employees wages and overheads pension President employees wages and overheads pension

SEK M salaries cost salaries cost

Sweden 7 25 32 15 5 7 23 30 14 4

Note 35Depreciation according to plan of tangible fixed assets

SEK M 1997 1996

Real estate 2 2


Total 4 4

Note 36Items affecting comparability

SEK M 1997 1996

Capital gains — 11

Capital losses:

– Sale of real estate – 71 – 259

– Divested units — – 60

Total – 71 – 308

Note 37Financial income and expenses

SEK M 1997 1996Result from participations in Group companies:Dividend 1,268 407Result on sales – 224 506

Total 1,044 913Result from participations in associated companies:Dividend 6 —Total 6 —

Result from other securities and receivables which are fixed assets:Interest income, Group companies 117 25Interest income, other 27 72Exchange rate differences 14 – 59

Dividend and other financial income 10 8Total 168 46Other financial income and similar profit items:Interest income, Group companies 141 61Interest income, other 34 577Exchange rate differences – 297 172

Dividend and other financial income 0 4Total – 122 814Interest expenses and similar profit items:Interest expenses, Group companies 139 192Interest expenses, other 67 333Exchange rate differences 120 100

Total 326 625Total financial income and expenses 770 1,148

Note 38Appropriations

SEK M 1997 1996

Group contributions, received 351 600

Group contributions, provided – 6 – 35

Appropriation to foreign exchange reserve – 68 —

Total 277 565

Note 39Tangible fixed assets

SEK M 1997 1996

Real estate 33 40


New construction in progress and advances relating to

tangible assets 2 —

Total 49 46

The Parent Company rents real estate from renting companies. During 1997, rental chargesamounted to SEK 1M (1). The remaining rental period is 18 years.


Notes tothe Accounts of the Parent Company

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Note 44Current receivablesSEK M 1997 1996

Non-financial receivables:

Accounts receivable – trade 0 0

Operating receivables, Group companies 7 30

Operating receivables, associated companies 0 —

Prepaid tax 5 5

Other current receivables 25 8

Prepaid expenses and accrued income 223 357

Total 260 400

Financial receivables:

Financial receivables, Group companies 4,528 1,298

Total current receivables 4,788 1,698

Note 45Prepaid expenses and accrued incomeSEK M 1997 1996

Interest 210 355

Rentals 0 0

Other 13 2

Total 223 357

Note 46Short-term investmentsSEK M 1997 1996

Certificates of claim relating to sale of Falconbridge Ltd — 1,254

Listed shares 2 1

Promissory note receivable 100 —

Other 191 176

Total 293 1,431

Note 41Financial fixed assetsSEK M 1997 1996

Participations in Group companies (Note 13 and Note 42) 4,372 4,145

Receivables from Group Companies 3,279 3,066

Participation in associated companies (Note 14) 298 291

Participation in other companies (Note 15) 17 21

Other long-term securities holdings 568 615

Total 8 534 8 138

Other long-term securities holdings:

Other long-term securities holdings consist of interest-bearing securities and receivables,intended for long-term holding. Of these, SEK 383M form security for, among otherthings, fulfillment of commitments in accordance with rental agreements in connectionwith sale/lease-back transactions relating to fixed assets, and for loan agreementsentered into. The market value on the investments exceeds book values.

Note 42Participations in Group companies

SEK M 1997


Additional:

New acquisition + 278

Increase in capital + 115

Deductible:

Divested shares – 166


See also Note 13.

Note 43Inventories

SEK M 1997 1996

Finished products and goods for resale 1 2

Note 40Tangible fixed assets

1997 Real estate Equipment, New construction Totaltools and in progress and tangibleinstallations advances relating to fixed

SEK M tangible fixed assets assets


On January 1 70 11 — 81

New acquisitions 4 8 — 12

Acquisitions by subsidiaries — 1 — 1

Divestments and scrappings – 28 – 2 — – 30

Reclassifications – 4 4 — 0

Advances paid out during the year — — 2 2

Closing accumulated acquisition values 42 22 2 66


On January 1 – 30 – 5 — – 35

Acquisitions by subsidiaries — – 1 — – 1

Divestments and scrappings 22 1 — 23

Reclassifications + 1 – 1 — 0

The year’s depreciation according to plan – 2 – 2 — – 4

Closing accumulated depreciation – 9 – 8 — – 17

Planned residual value on December 31 33 14 2 49

Tax assessment values, buildings 12

Tax assessment values, land 1

Notes to


the Accounts of the Parent Company

80

Financial reporting

Note 53Bank overdraft facilities

SEK M 1997

Granted credit limit 216

Of which, utilized 11

Unutilized portion 205

Note 54Interest-bearing current liabilities

SEK M 1997 1996

Other interest-bearing liabilities, Group companies 434 4,202

Note 55Other current liabilities

SEK M 1997 1996

Accounts payable – trade 8 8

Operating liabilities, Group companies 4 0

Operating liabilities, associated companies 0 —

Other non-interest-bearing liabilities 1 31

Accrued expenses and prepaid income 252 516

Total 265 555

Note 56Accrued expenses and prepaid income

SEK M 1997 1996

Interest 232 500

Wages and salaries 9 7

Payroll overheads 4 5

Other 7 4

Total 252 516

Note 57Contingent liabilities and pledged assets

SEK M 1997 1996

Contingent liabilities:

Pension commitments 4 4

Guarantees and other contingent liabilities 833 4,508

Total 837 4,512

Of which, for subsidiaries 719 4,453

Pledged assets:

Liabilities toSEK M credit institutions

Chattel mortgages 230 230

Long-term investments 383 615

Total 613 845

Note 47Restricted equity

SEK M 1997



On December 31, 1997, the capital stock of Trelleborg AB amounted to SEK

2,933,538,100, distributed on 117,341,524 shares, each with a nominal value of SEK 25.

Class of share Number of shares Percent Number of votes Percent

Series A 12,000,000 10.23 120,000,000 53.25Series B 105,341,524 89.77 105,341,524 46.75

Total 117,341,524 100.00 225,341,524 100.00

Note 48Non-restricted equity

SEK M 1997


Dividend – 424

Net earnings for the year 893


Note 49Provisions for pensions, etc

SEK M 1997 1996

Provisions for PRI pensions 196 197

Provisions for other pensions 12 13

Total 208 210

Of which, credit-insured via FPG/PRI 208 210

Note 50Other provisions

SEK M 1997 1996

Provisions for environmental commitments 14 16

Note 51Long-term interest-bearing liabilities

SEK M 1997 1996

Liabilities to credit institutions 2,930 —

Bank overdraft facilities 11 2

Other interest-bearing liabilities 3,559 314

Total 6,500 316

Note 52Liabilities to credit institutions

SEK M 1997 1996

Maturity date 1–5 years from balance sheet date — —

Maturity date later than 5 years from balance sheet date 2,930 —


Notes tothe Accounts of the Parent Company

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Rune AnderssonChairman of the Board

Lennart Nilsson Hans Cavalli-Björkman Sven Borelius Sven Olving

Erik Penser Didrik Normark Berthold Lindqvist Rolf Kjellman

Arne Nilsson Kim Davidsson Kerry Johansson Kjell NilssonPresident and CEO

The Auditors’ Report was submitted on March 16, 1998

Reidar Peters Thomas Thiel

Trelleborg in March 1998

To the Annual General Meeting of Trelleborg AB:We have audited the Annual Report, the consolidated financialstatements, the accounting records and the administration of theBoard of Directors and the President of Trelleborg AB for theyear 1997. These accounting records and the administration ofthe Company are the responsibility of the Board of Directorsand the President. Our responsibility is to express an opinion ofthe Annual Report, the consolidated financial statements andthe administration on the basis of our audit.

Our audit was carried out in accordance with generally-accepted auditing standards. This means that we have plannedand performed the audit to reasonably assure ourselves that theAnnual Report and the consolidated financial statements are freeof any material errors. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes an assessment of theaccounting principles used and their application by the Board ofDirectors and the President, as well as an evaluation of the over-all presentation of information in the Annual Report and theconsolidated financial statements. We have examined significantdecisions, measures taken and the circumstances of the Com-pany in order to determine the possible liability of any memberof the Board or the President for damages to the Company orwhether they have in some way acted in violation of the SwedishCompanies Act, the Annual Accounts Act, or the companies

articles of association. We believe that our audit has provided uswith a reasonable basis for our opinion as set forth below.

In our opinion, the Annual Report and the consolidated finan-cial statements have been prepared in accordance with theAnnual Accounts Act, and therefore we recommend:

– that the income statements and the balance sheets of theParent Company and the Group be adopted, and

– that the earnings of the Parent Company be dealt with inaccordance with the proposal in the Board of Directors’Report.

In our opinion, the members of the Board of Directors and thePresident have not committed any act or been guilty of any neg-ligence, which could give rise to any liability to the Company.We therefore recommend:

– that the Members of the Board of Directors and the Presi-dent be discharged from liability for the financial year.

Reidar Peters Thomas ThielAuthorized Public Accountant Authorized Public AccountantArthur Andersen AB KPMG Bohlins AB

Auditors’ report forTrelleborg AB


Registration number 556006-3421

82

Rune AnderssonChairman of the Board.Chairman of SSAB and SvedalaIndustri. Board member inHenry and Gerda Dunker’sFoundation and Donation Fundnumber 2.Holdings: 407,500 shares.(in associated company).Age 53. Elected 1983.

Lennart NilssonDeputy Chairman.Chairman of Celsius AB,the Association of SwedishEngineering Industries and LundUniversity. Deputy Chairmanof Cardo. Board Member of ABIndustrivärden, Gorthon Lines,Crafoordska Stiftelsen, Henryand Gerda Dunker’s Foundationand Donation Fund number 2and other companies.Holdings: 0 shares.Age 57. Elected 1985.

Hans Cavalli-BjörkmanBoard Member.Former President ofSkandinaviska Enskilda Banken.Chairman of Lindab, ElandersKommunikation, SydsvenskaHandelskammaren and othercompanies. Board Member ofHöganäs, Platzer bygg, GudmeRaaschou Bankaktieselskab,Salus Ansvar Holding and othercompanies.Holdings: 702 shares.Age 69. Elected 1970.

Sven BoreliusBoard Member.Former President and CEO ofEuroc. Board Member of Cardo,Scancem, Getinge Industrier,Scribona, Svedala Industri andSanitec Ltd Oy.Holdings: 4,000 shares.Age 70. Elected 1988.

Sven OlvingBoard Member.Former Vice Chancellor ofChalmers Institute of Technol-ogy. Board Member of Chalmersindustriteknik, Celsius AB andother companies.Holdings: 0 shares.Age 69. Elected 1988.

Erik PenserBoard Member.Chairman of Erik PenserFondkommission and Yggdrasil.Board Member of FörsäkringsAB Atlantica, Ideon, SandrewFilm and other companies.Holdings: 0 shares.Age 55. Elected 1988.

Kjell NilssonBoard Member.President and CEO of TrelleborgAB. Chairman of PEAB andSorb Industri. Deputy Chairmanof the Association of SwedishChemical Industries. BoardMember of Boliden Ltd and theFederation Swedish Industry.Holdings: 100,000 call options(in associated companies).Age 49. Elected 1990.

Didrik NormarkBoard Member.President and CEO of Elektro-koppargruppen.Chairman of Dahréntråd. BoardMember of Henry and GerdaDunker’s Foundation andDonation Fund Number 2 andGotthard Nilsson AB.Holdings: 1,000 shares.Age 61. Elected 1994.

Rolf KjellmanBoard Member.Executive Member of Henryand Gerda Dunker’s Foundationand Donation Fund Number 2.President of Henry DunkersFörvaltnings AB.Holdings: 100 shares.Age 58. Elected 1997.

Berthold LindqvistBoard Member.President of Gambro AB.Chairman of Munters AB, BoardMember of Gambro, Pharmacia& Upjohn, PLM and Securitas.Holdings: 1,000 shares.Age 59. Elected 1996.

Elected bythe Annual General Meeting

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • B o a r d o f D i r e c t o r s a n d A u d i t o r s

83

Hans PihlDeputy Auditor.Authorized Public Accountant,Arthur Andersen AB.Deputy Auditor since 1984.Holdings: 0Age 46.

Alf SvenssonDeputy Auditor.Authorized Public Accountant,KPMG Bohlins AB.Deputy Auditor since 1988.Holdings: 0Age 48.

Auditors

Thomas ThielAuditor.Authorized Public Accountant,KPMG Bohlins AB.Deputy Auditor 1983,Auditor since 1985.Holdings: 0Age 50.

Kerry JohanssonEmployee Representative.Elected by the Unions of theTrelleborg Group (LO).Holdings: 0 shares.Age 48. Elected 1997.

Reidar PetersAuditor.Authorized Public Accountant,Arthur Andersen AB.Deputy Auditor 1970,Auditor since 1977.Holdings: 0Age 58.

Lennart NordströmDeputy EmployeeRepresentative.Elected by the Unions of theTrelleborg Group (PTK).Holdings: 660 shares.Age 61. Elected 1990.

Arne NilssonEmployee Representative.Elected by the Unions of theTrelleborg Group (SIF).Holdings: 2,948 shares.(in own and spouse’s name).Age 65. Elected 1981.

Kim DavidssonEmployee Representative.Elected by the Unions of theTrelleborg Group (LO).Holdings: 122 shares.Age 51. Elected 1994.

Stig-Erik NyströmDeputy EmployeeRepresentative.Elected by the Unions of theTrelleborg Group (LO).Holdings: 110 shares.Age 51. Elected 1993.

Anja GustafssonDeputy EmployeeRepresentative.Elected by the Unions of theTrelleborg Group (PTK).Holdings: 1,085 shares.Age 53. Elected 1997.

the employeesElected by

B o a r d o f D i r e c t o r s a n d A u d i t o r s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

84

Groupmanagement

Note: The stated call options, issued by Dunker Funds and foundation (FörvaltningsAB H.D.) in April 1994, entitle the holder to buy the corresponding number ofSeries B shares during the period March 15–April 15, 1999, at a price of SEK 125.

Hans NybergSenior Vice President,Internal Auditing.Holdings: 9,923 shares and 2,000call options (in own and familymembers’ name).Age 55. Employed 1987.

Lars WallenbergSenior Vice President,General Counsel and CorporateSecretary.Holdings: 96 shares and 15,000call options.Age 46. Employed 1981.

Leif ÖbergSenior Vice President,Investor Relations andCorporate Communications.Holdings: 21,000 shares and10,000 call options.Age 51. Employed 1978.

Claes JörwallSenior Vice President,Taxes and Group Structures.Holdings: 473 shares (in own andfamily members’ name).Age 44. Employed 1988.Lars Olof Nilsson

Senior Vice President,Group Treasury.Holdings: 1,200 shares.Age 35. Employed 1988.

Gertrud AnderssonSenior Vice President,FinanceHoldings: 13,638 shares.Age 53. Employed 1963.

Kjell NilssonPresident andChief Executive Officer.Holdings: 100,000 call options(in associated companies).Age 49. Employed 1985.

Hans PoratExecutive Vice President, ChiefOperational Officer and Head ofindustrial operations.Holdings: 1,000 shares (inspouse’s name).Age 42. Employed 1997.

Björn OgardExecutive Vice Presidentand Head of distributionoperations.Holdings: 1,300 shares (in ownand family members’ name).Age 50. Employed 1996.

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • G r o u p m a n a g e m e n t

85Å r s r e d o v i s n i n g Tr e l l e b o r g 1 9 9 7

Trelleborg AB is a global

industrial and distribution group.

With a focus on comfort, safety

and the environment, we make

the job easier and more

convenient for our customers

and our customers’ customers.

Comfort Safety

Environment

86

GROUP CENTERTrelleborg AB (publ)P.O. Box 153SE-231 22 Trelleborg, SwedenStreet address:Henry Dunkers gata 2Phone: +46 410 670 00Fax: +46 410 427 63Internet: www.trelleborg.comE-mail: [email protected]

Trelleborg Treasury ABP.O. Box 7365SE-103 90 Stockholm, SwedenStreet address:Norrlandsgatan 20, 3 trPhone: +46 8 440 35 00Fax: +46 8 440 35 48

Trelleborg AutomotiveSE-231 81 Trelleborg, SwedenStreet address:Henry Dunkers gata 1Phone: +46 410 510 00Fax: +46 410 406 00

Trelleborg Wheel SystemsSE-231 81 Trelleborg, SwedenStreet address:Henry Dunkers gata 1Phone: +46 410 510 00Fax: +46 410 100 81

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • G r o u p a d d r e s s e s

Ahlsell ABSE-191 88 Sollentuna, SwedenStreet address: Bagarbyvägen 61Phone: +46 8 623 71 00Fax: +46 8 92 02 61Internet: www.ahlsell.seE-mail: [email protected]

Trelleborg Engineered SystemsSE-231 81 Trelleborg, SwedenStreet address:Henry Dunkers gata 1Phone: +46 410 510 00Fax: +46 410 71 15 21

Trelleborg Building SystemsSE-231 81 Trelleborg, SwedenStreet address:Henry Dunkers gata 1Phone: +46 410 510 00Fax: +46 410 121 19

Reynolds S.A.sImmeuble Lumière,17 rue des Deux GaresF-92565 Rueil MalmaisonFrancePhone: +33 1 47145 555Fax: +33 1 47145 515Internet: www.reynolds-european.frE-mail: [email protected]

Bröderna Edstrand ABP.O. Box 225SE-201 22 Malmö, SwedenStreet address: Spadegatan 1Phone: +46 40 38 40 00Fax: +46 40 38 41 63Internet: www.edstrand.seE-mail: [email protected]

Starckjohann OyjP.O. Box 54FIN-15101 LahtiFinlandStreet address: Helsingintie 50Phone: +358 3 811 911Fax: +358 3 811 9555

87

ASSOCIATED COMPANIESBoliden LimitedBCE PlaceP.O. Box 848181 Bay Street, Suite 1500Toronto, Ontario M5J 2T3CanadaPhone: +1 416 364 2727Fax: +1 416 364 5484Internet: www.bolidenltd.comE-mail: [email protected]

Sorb Industri ABTrädgårdsgatan 8SE-931 31 Skellefteå, SwedenPhone: +46 910 174 00Fax: +46 910 70 19 00Internet: www.sorb.seE-mail: [email protected]

BPA AB (publ)P.O. Box 885SE-161 24 Bromma, SwedenStreet address:Karlsbodavägen 20APhone: +46 8 799 85 00Fax: +46 8 799 85 16E-mail: [email protected]

G r o u p a d d r e s s e s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

Trelleborg Engineered Systems

Bröderna Edstrand

Trelleborg Building Systems

Trelleborg Wheel Systems

Ahlsell

Reynolds

Trelleborg Automotive Systems

Starckjohann

Head office

88

Comfort

Environment

Return on operating capitalPages 18, 30Operating income including minorityinterest divided by average total assets(calculated on balance brought forward ineach month) less shares, interest-bearinginvestments and non-interest bearingoperating liabilities.

YieldPage 91Dividend divided by market price of theSeries B share at the year-end.

Capital turnover ratepage 89Invoiced sales in relation to averagecapital employed.

NettingPage 12The net of intra-Group deposits andpayments are settled on fixed datesduring the year, instead of after everyindividual business transaction betweenthe companies.

Operating marginPages 18, 20, 22, 24, 26, 30, 32, 34, 36, 89Operating income excluding associatedcompanies and items affecting compara-bility in relation to invoiced sales.

P/E-ratioPage 91Market price of the Series B share at theyear-end divided by earnings per share.

Earnings after full taxper share, SEK

Page 89Earnings after financial income andexpenses less full tax (adjusted for tax-freedividends) in relation to average number ofoutstanding shares before and after itemsaffecting comparability, respectively.

Return ontotal capital employedPage 89Operating income in relation to averageshareholders’ equity, minority interest andfinancial net assets/liabilities.

Return on shareholders’ equityafter full taxPage 89Net income in relation to averageshareholders’ equity.

Debt/equity ratioPages 63, 89Current and long-term liabilities inrelation to shareholders’ equity plusminority interest.

Financialdefinitions

Equity/assets ratioPages 63, 89Shareholders’ equity plus minorityinterest in relation to total assets.

SwapPage 12Swap (of payment flows).

Profit marginPage 89Earnings after financial income andexpenses excluding items affectingcomparability in relation to invoiced sales.

Currencies Abbreviation

Swedish kronor SEKDanish kroner DKKNorwegian kroner NOKUS dollars USDCanadian dollars CADBritish pounds GBPFinnish markka FIMGerman marks DEMFrench francs FRFBelgian francs BEFDutch guilders NLGItalian lira ITLSpanish pesetas ESP

Technicalterms

BitumenPage 26Dark brown or black substance of highmolecular hydrocarbons, etc.Asphalt is an example of bitumen.

CenospheresPage 30Cenospheres are small (5–500 micro-meter) hollow granules with specificchemical properties which areprimarily used to cement oil-wells.

ElectroreologyPage 49Means that it is possible to alter theviscosity of a fluid with electrical fields.(Reology=the science of the deformationand floating properties of the substance).

Laminate/ -productsPages 17, 21Material consisting of several layers ofdifferent materials such as rubber, metal,glass-fiber and various adhesives.

LinksPage 21A package of slewing-brackets, strutsand bushings in the wheel suspensionof a passenger car.

OEM manufacturePages 19, 21Original Equipment Manufacturer.

PolymersPages 17, 49Chemical compound which consists ofmany identical and similar originalmolecules.Exists in rubber, plastics, paint, fiber, etc.

ShearingPage 49Deformation method which involveschanging the original right-angle in anobject

Super-calenderingPage 25A calender is a machine with a smallnumber of rolls (generally two) forcalendering fine paper.A super-calender has several rollson top of each other and the paperis gradually subjected to increasingpressure.

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • G l o s s a r i e s

89

Trelleborg Group (SEK M unless otherwise stated) 1997 1996 1995 1994 1993

Income and earnings:

Invoiced sales 20,825 20,574 21,304 19,135 21,617

Items affecting comparability 1,309 — 1,966 213 349

Operating income(including shares in results of associated companies) 2,609 877 3,776 1,434 – 553

Earnings after financial income and expenses 2,550 1,018 3,512 904 – 1,516

Taxes – 510 –16 – 639 – 238 + 390

Minority interest – 2 1 – 10 – 14 – 16

Net earnings for the year 2,038 1,003 2,863 652 – 1,142

Capital structure:

Fixed assets 9,761 8,109 9,076 11,931 12,879

Current assets 11,420 10,920 10,388 8,056 8,604

Assets 21,181 19,029 19,464 19,987 21,483

Shareholders’ equity 11,051 9,430 9,059 6,470 5,964

Minority interest 342 12 3 3 3

Provisions 1,282 1,842 1,107 1,125 1,263

Long-term liabilities 4,084 3,714 4,241 6,512 4,230

Current liabilities 4,422 4,031 5,054 5,877 10,023

Liabilities and shareholders’ equity 21,181 19,029 19,464 19,987 21,483

Key figures:

Equity/assets ratio, % ▲ 53.8 49.6 46.6 32.4 27.8

Debt ratio, times ▲ 0.4 0.5 0.6 1.3 1.8

Capital turnover rate, times ▲ 1.4 1.4 1.5 1.2 1.2

Operating margin, % ▲ 4.7 3.8 5.7 3.6 neg

Profit margin, % ▲ 6.0 4.9 7.3 3.6 neg

Return on total capital employed, % ▲ 25.5 9.6 36.2 11.2 neg

Return on shareholders’ equity after full tax, % ▲ 19.9 10.9 36.2 10.5 neg

Earnings per share after full tax, SEK ▲ 17.40 8.60 24.40 5.60 – 13.50

Ditto, excluding items affecting comparability 7.65 8.60 10.20 2.75 – 16.40

Other information:

Average number of employees 13,525 13,086 12,421 12,351 17,566

– of whom, abroad 7,512 5,605 5,530 5,055 6,548

Investments in plants

(excluding existing plants in acquired companies) 963 1,134 1,129 650 620

Financial net assets/liabilities – 868 – 464 + 637 – 5,979 – 7,212

Five-yearreview Safety

Financial definitions on page 88.

F i v e - y e a r r e v i e w • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

90

The Trelleborg Series B shares have beentraded on the Stockholm Stock Exchangesince 1964.

The capital stock of Trelleborg ABamounts to SEK 2,933,538,100 repre-sented by 117,341,524 shares, each witha nominal value of SEK 25. On May 30,1997, the Company’s former Series Cand Series D shares were converted intoSeries B and Series A shares, respectively,in accordance with a decision by theAGM. Series C and Series D shares wereissued in a new share issue in 1988 andcarried preferential rights to a higher divi-dend over ten years.

Following the conversion, there areonly two classes of shares: 12,000,000Series A shares and 105,341,524 Series Bshares with one vote each.

All the Series A shares carry ten voteseach and Series B shares one vote each.All the Series A shares are owned by theDunker funds and foundations.During the year, the bid rate of Trelleborg

Share capitaland ownership

Price trend of Trelleborg Series B shares on the Stockholm Stock Exchange 1993–1997

30

60

90

120

150

180

210

1993 1994 1995 1996 1997 1998

10000

20000

30000

40000

B-aktienGeneralindex

Omsatt antal aktier1000-tal (inkl. efteranm.)

approximately 600,600 shares (474,200)or SEK 75M (40). Purchases and sales byforeign investors resulted in a net exportof Trelleborg shares of SEK 126M duringthe period January–October, comparedwith SEK 187M for all of 1996.

The value of units in the Company-related savings plan, Trelleborg Allemans-fond, increased by 11 percent during1997 (32).

At the Annual General Meeting onApril 25, 1997, the Board of Directorswas granted continued authority up tothe next AGM to pass a resolutionregarding a new stock issue with pre-emption from the shareholders’ preferen-tial rights. An issue of this type will bedirected at the international capital mar-ket and total no more than 10 percent ofthe total outstanding number of shares atthe date of issue, and will be subject tothe same market terms which are appliedto similar issues.

Series B shares rose by 10 percent (28),whereas the “Veckans Affärer” 16 most-traded shares index rose by 26 percent(38) and the total index by 25 percent(38). Seen over a five-year period, 1993–1997, the price of the Series B shareincreased by an average of 16 percentannually, whereas the 16 most-tradedshares index rose by 25 percent on aver-age and the total index by 27 percent.

During 1997, approximately 149million Trelleborg shares (both Series Band Series C shares) were traded on theStockholm Stock Exchange comparedwith 119 million in the previous year,and was equivalent to 127 percent (101)of the total number of shares in the com-pany, at a value of SEK 17,823M (10,164).

In turn, this constituted 1.5 percent(1.2) of the total stockmarket trading. In1997, Trelleborg was the 18th most-tradedshare from a value viewpoint on theStockholm Stock Exchange (23rd).Average daily trading amounted to

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • S h a r e c a p i t a l a n d o w n e r s h i p

Series B shareThe “Affärsvärldens” General Index at the end of the month

Number of shares traded in each month000, incl post-reported transactions

90

91

Prices paid on the Stockholm Stock ExchangeTrelleborg B Low, SEK High, SEK

1993 35.10 86.00

1994 76.00 126.00

1995 69.00 121.50

1996 70.00 96.50

1997 89.00 142.00

Refers to highest and lowest price paid per month adjusted forissues and split.

Data per Series B share

1997 1996 1995 1994 1993

Earnings after full conversion

and full tax, SEK 17.40 8.60 24.40 5.60 – 13.50

Ditto, excluding items affecting

comparability 7.65 8.60 10.20 2.75 – 16.40

Dividend, SEK 3.50 1) 3.00 3.00 2) 1.00 —

Market price, December 31, SEK 100.00 90.50 70.50 108.50 79.50

Shareholders’ equity per share, SEK 94.20 80.40 77.20 55.20 50.80

Yield, % ▲ 3.5 3.3 7.1 3) 0.9 0

P/E ratio ▲ 13 4) 11 7 4) 19 neg

1) According to the Board of Directors’ proposal, excluding special dividend of SEK 1.502) Excluding special dividend of SEK 2.003) Including special dividend of SEK 2.004) Excluding items affecting comparability

Class of share Number of sharesPercent Number of votes Percent

Series A 12,000,000 10.23 120,000,000 53.25

Series B 105,341,524 89.77 105,341,524 46.75

Total 117,341,524 100.00 225,341,524 100.00

Distribution of shares, December 31, 1997At the 1997/1998 turn of year, the number of stockholdersamounted to 74,325 (72,709) of whom 47,708 (49,430) weredirectly registered and 26,617 (23,279) nominee-registered.

Number of Percent of Change, percentHolding shareholders total shares from Dec 30, 1996

1 – 1,000 67,466 14.17 + 0.37

1,001 – 5,000 5,710 10.98 + 0.02

5,001 – 50,000 993 11.31 + 0.47

50,001 – 156 63.54 – 0.86

Total 74,325 100.00

Average number of shares after full conversion:

1997 1996 1995 1994 1993

117,341,524 117,341,524 117,341,524 117,341,524 84,746,657

S h a r e c a p i t a l a n d o w n e r s h i p • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 91

92 A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • S h a r e c a p i t a l a n d o w n e r s h i p

Growth in capital stockImmediately before its introduction on the Stockholm StockExchange in 1964, Trelleborg had a capital stock of SEK 63M. In1966, a directed non-cash issue for SEK 2.6M was made on theacquisition of Ulvex AB. As a result of new stock issues in 1969(2:5) at a price of SEK 100 and 1976 (1:3 at SEK 110) the capitalstock was increased by SEK 26.2M and SEK 30.6M, respectively.In 1978, a directed non-cash issue for SEK 3.2M was made on theacquisition of Tekniska Gummifabriken Jakobsberg AB. There-after, stock issues have been made as shown in the following table.

Dividend policyAs previously stated, it is the opinion of the Board of Directorsthat the dividend should be equivalent to approximately one-third of net income in the long-term.

Beta valueThe beta value is a measurement of risk which shows a share’sprice fluctuation compared with the stockmarket as a whole.According to the Stockholm Stock Exchange’s measuring of roll-ing 48 months, the beta value of the Trelleborgs Series B shareamounts to 1.22 (1.22). This means that during 1997, the priceof the Trelleborg share fluctuated 22 percent more than the totalnumber of shares on the Stockholm Stock Exchange, measuredin a value-weighted index. The explanation value was 0.47(0.21) which means that 47 percent of the price development ofthe Trelleborg share is explained by the general market trend.

The largest shareholders in Trelleborg AB,December 31, 1997

The information is based, among other things on VPC’s officialregister of shareholders and nominees at December 31, 1997. Ofthe total number of shares, non-Swedish stockholders accountedfor 20.3 percent (23.6) at the 1997/1998 turn of year. The pro-portion of institutional ownership was 46.6 percent (40) inSweden and 19.7 percent (23) abroad or totally 66.3 percent (63).

Number Percent of PercentOwner of shares share capital of votes

Dunker funds and Foundation 12,186,000 10.39 53.34

S-E Banken’s unit trusts, etc 6,885,426 5.87 3.06

Försäkrings AB SPP Ömsesidigt 5,587,426 4.76 2.48

State Street Bank (USA) 5,105,559 4.35 2.27

Fourth AP fund 4,115,004 3.51 1.83

Boston Safe Deposit (USA) 3,518,742 3.00 1.56

Folksam Liv, etc 3,066,160 2.61 1.36

Skandia Försäkringar and unit trusts 2,980,831 2.54 1.32

Swiss Bank 2,242,116 1.91 0.99

Trygg-Hansa Försäkr. and unit trusts 2,195,570 1.87 0.97

Other 74,289 shareholders 69,458,690 59.19 30.82

Total 117,341,524 100.00 100.00

Increase in TotalYear Issues capital stock, SEK capital, SEK

1982 Directed new issue toAritmos and others at SEK 125 42,000,000 167,611,200

1984 Stock dividend 1:4, split 4:1 1) 41,902,800 209,514,000

1986 Directed new issue at SEK 95to acquire Sävsjö Fälgar AB 6,875,000 216,389,000

1986 Directed new issue at SEK 95to acquire Boliden shares 95,150,000 311,539,000

1987 Stock dividend 1:1 311,539,000 623,078,000

1987 Conversion ofsubordinated debentures 15,587,125 638,665,125

1988 New issue 1:5 of Series C andSeries D shares (bonus shares) 2) 127,733,025 766,398,150

1988 Directed new issue to acquireBoliden shares and convertibles 39,559,750 805,957,900

1988 Conversion ofsubordinated debentures 934,150 806,892,050

1989 Directed new issue to acquireBoliden convertibles 7,787,700 814,679,750

1989 Conversion ofsubordinated debentures 60,100 814,739,850

1989 Stock dividend 1:1 814,739,850 1,629,479,700

1989 Conversion ofsubordinated debentures 17,075 1,629,496,775



1992 New issue 1:5 at SEK 70 325,948 675 1,955,692,075

1993 New issue 1:2 at SEK 30 977,846 025 2,933,538,1001) 5 new shares, each with a nominal value of SEK 25 were received for every old share witha nominal value of SEK 100, of which 1 (one) through stock dividend and four through split.2) At SEK 200 (restricted shares) and SEK 260 (unrestricted shares), respectively.

Share capitaland ownership

92

93

Annual General Meeting April 24President’s Speech at theAnnual General Meeting April 24Interim Report January-March April 24Interim Report January-June August 21Interim Report January-September November 5PreliminaryAccounts Report 1998 February 1999Annual Report 1998 March 1999

Trelleborg Shareholder InformationTrelleborg AB regularly publishes information inSwedish and English about the Group’s develop-ment. The Annual Report and the Group’s in-house magazine, T-TIME, along with quarterlyreports, are distributed to all shareholders whohave notified the Company that they wish toreceive this information.

Trelleborg also offers services to shareholdersby telephone. Via a special telephone number:+46 8 678 21 00 or e-mail: [email protected],anyone interested will be provided with answersto questions, be able to order magazines, bro-chures, etc., or be put in touch with specialists ina specific area, etc.

On the Trelleborg Group’s web-site on theInternet, information can be found which is spe-cially directed to shareholders such as: currentfinancial information, Annual Reports from1976 onwards, the latest news releases, marketprices and the in-house magazine, T-TIME. A pres-entation of the Group’s eight business areas canalso be found here.

In addition, anyone who is interested can re-quest a CD-ROM disk with Trelleborg AB’s AnnualReports for the years 1976–1996.

Reports, Annual Reports, T-TIME, etc., are avail-able upon request from:

Trelleborg ABCorporate CommunicationsP.O. Box 153SE-231 22 Trelleborg, SwedenPhone: +46 410 670 00Fax: +46 410 427 63E-mail: [email protected]

Change of addressChanges of address relating to natural personswho are registered as residents in Sweden aremade automatically with the Swedish SecuritiesRegister Center, VPC. Special notification re-garding change of address need not be made tothe shareholders’ account-holdings institution(AI) or Trelleborg AB. The standard notificationof change of address which is made at any Swed-ish post office branch will suffice.

Please note that shareholders who have cho-sen not to have automatic address updating mustgive notification of their new address themselvesto AI. Shareholders whose shares are nominee-registered should notify their nominee as soon aspossible of change of name, address and accountnumber. A special form for notification is avail-able from the banks.

Other shareholders must give notification ofchange of address and changes of account num-bers to the Swedish Securities Center, VPC AB,P.O. Box 7822, SE-103 97 Stockholm, phone:+46 8 402 90 00. In corresponding with VPC,the shareholder number (personal ID number ororganization number) should be stated.

Shareholderinformation

1998/1999

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • S h a r e h o l d e r i n f o r m a t i o n 93

94

DividendThe Board of Directors and the Presidentpropose a dividend for the 1997 financialyear of SEK 3.50 per Series A and Series Bshare. In addition, a bonus dividend ofSEK 1.50 per Series of share is proposed.Wednesday April 29, 1998, is proposedas the record day. Should the AGMdecide in accordance with the proposal,the dividend will be remitted by VPC onor about Thursday May 7, 1998.

Authority for new share issueThe Board of Directors intends to pro-pose to the AGM that, as before, theBoard continues to be given authorityuntil the next AGM to pass a resolutionregarding new stock issues with pre-emp-tion from the shareholders’ preferentialrights. It is intended that one such issuewill be directed at the international capi-tal market and amount to no more than10 percent of the total outstandingnumber of shares on the date of issue,and be issued in accordance with stand-ard market terms.

Annual General

A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7 • A n n u a l Ge n e r a l M e e t i n g

NoticeThe Annual General Meeting of Trelle-borg AB, at which the shareholders’attendance is requested, will be held onFriday April 24, 1998 at 3pm in Söder-slättshallen in Trelleborg.

Annual General Meeting programVisitors to the AGM are also invited toparticipate in the following programs:12:00 Registration and lunch buffet.2:15 Entertainment until the opening

of the AGM.3:00 Start of AGM.

Notification of attendanceShareholders who wish to attend theAnnual General Meeting must be enteredin the share register kept by the SwedishSecurities Register Center (Värdepappers-centralen VPC AB) by April 14.

Shareholders whose shares are nomi-nee-registered must thus have their sharestemporarily registered in their own nameson that date. Such registration should berequested of the nominee a few days inadvance.

Notification of attendance at theAGM must be made not later than Tues-day April 21, 1998 at 3pm to:

Trelleborg ABLegal DepartmentP.O. Box 153SE-231 22 Trelleborg, SwedenPhone: +46 410 670 31, 670 32 or670 47 (direct line)Switchboard: +46 410 670 00Fax: +46 410 175 89E-mail: [email protected]

Meeting

95

This Annual Report is typeset in AGaramond and Gill Sans. Paper: cover 350g, text pages 115g. The paper meetsthe criteria for Nordic Environmental Marking. Production: Trelleborg AB. Graphic design: RHR Reklambyrå AB,Malmö. Photographers: Mårten Gullstrand, Ove Hallin, Claes Nyberg, Eva Rosth, Peter Schmidbauer, LarsStrandberg, and other. Repro and printing: Ruter Press, Laholm, April 1998.

P r o d u c t i o n f a c t s • A n n u a l R e p o r t Tr e l l e b o r g 1 9 9 7

Trelleborg AB (publ), P.O. Box 153, SE-231 22 Trelleborg, SwedenPhone: +46 410 670 00 • Fax: +46 410 427 63

E-mail: [email protected]: www.trelleborg.com

rsred. -97 del 1. trelleborgtrelleborg’s core operations if we look, then, at trelleborg’s core...

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