invitation to subscribe for shares in trelleborg abfile/trelleborg_eng.pdf · invitation to...

Invitation to subscribe for shares in Trelleborg AB


Joint Lead Managers

Co-Lead ManagerTrelleborg AB (publ), Box 153, SE-231 22 Trelleborg, Sweden

Tel: +46 410-670 00 www.trelleborg.com

Narva/B

örstryck

Important informationIn this prospectus “Trelleborg” or “Company” means, depending on the context, either Trelleborg AB or the group in which Trelleborg AB is the parent company. The “Group” means Trelleborg AB and its subsidiaries.

“Joint Lead Managers” refers to Handelsbanken Capital Markets, a business unit within Svenska Handelsbanken AB (“Handelsbanken Capital Markets”), Nordea Bank AB (“Nordea” or “Nordea Corporate Finance”) and SEB Enskilda, Skandinaviska En-skilda Banken AB (“SEB Enskilda”). “Co-Lead Manager” refers to DnB NOR Markets, a unit within DnB NOR Bank ASA (“DnB NOR Markets”). The Joint Lead Managers and the Co-Lead Managers are jointly referred to as the “Managers”.

“Euroclear Sweden” refers to Euroclear Sweden AB, formerly VPC AB. “NASDAQ OMX” refers to NASDAQ OMX Stockholm AB. “SEK” refers to Swedish crowns, “USD” refers to American dollars and “EUR” refers to Euro.

Information to investorsThis prospectus has been prepared in compliance with the standards and require-ments of the Swedish Financial Instruments Trading Act of 1991 (lagen (1991:980) om handel med finansiella instrument) (the “Trading Act”), Directive 2003/71/EC of the European Parliament and the Council (the “Prospectus Directive”) and the Com-mission Regulation (EC) No. 809/2004.

The prospectus has been approved and registered by the Swedish Financial Supervisory Authority (Finansinspektionen) (“SFSA”) pursuant to the provisions of Chapter 2, Sections 25 and 26 of the Trading Act. Approval and registration by SFSA do not imply that SFSA guarantees that the factual information provided in this prospectus is correct and complete.

The prospectus and the offering pursuant to the prospectus are governed by Swedish law. The courts of Sweden have exclusive jurisdiction to settle any dispute arising out of or in connection with this prospectus or the offering.

This prospectus has been prepared in Swedish and English language versions. In case of any inconsistency between the Swedish and the English versions of the prospectus, the Swedish version shall prevail.

None of the subscription rights, paid subscription shares (betalda tecknade aktier) (“BTAs”) or new shares have been or will be registered under the United States Securities Act of 1933 as currently in effect (the “Securities Act”) or under any other jurisdiction other than Sweden. None of the subscription rights, BTAs and new shares may, without such registration, be offered or transferred within the United States or to US persons (as defined in Regulation S under the Securities Act) except for pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Moreover, the offering in the prospectus is not directed to sharehol-ders domiciled in Canada, Australia, Hong Kong and Japan or in any other jurisdiction where participation would require additional prospectuses, registration or measures other than those pursuant to Swedish law. Accordingly, the prospectus may not be dist-ributed in any country where the distribution or the offering requires such measures or would conflict with regulations in such country or jurisdiction. Acquisition of subscription rights, BTAs or new shares in violation of the restrictions described above may be void.

In relation to member states of the European Economic Area (other than Sweden, Denmark, the United Kingdom and Ireland) which have implemented the Prospectus Directive, the offering pursuant to this prospectus can only be made where it does not give rise to a requirement to prepare a prospectus in such countries pursuant to Article 3 of the Prospectus Directive.

For more information regarding restrictions in relation to the offering in the pro-spectus, please see “Restrictions on Sale and Transfer etc”.

This prospectus has been furnished by Trelleborg based on their own informa-tion and sources Trelleborg believes to be reliable. No representation or warranty, expressed or implied, is made by the Managers as to the accuracy or completeness of any of the information set out in the prospectus and nothing in the prospectus is or shall be relied upon as a promise or representation, whether as to the past or the future, as the Managers has conducted no independent verification of the information.

Anyone making an investment decision must rely on its own assessment of Trelle borg and the offering under the prospectus, including the merits and risks in-volved, and investors must only rely on the information contained in the prospectus and any supplements to the prospectus. No person has been authorised to give any information or make any representations other than those contained in the prospectus and, if nevertheless given or made, such information or representations must not be relied upon as having been authorised by Trelleborg. The distribution of this prospectus does neither entail that the information contained therein is correct and up-to-date as per any other date than the date of this prospectus, nor that the affairs of the Company have remained unchanged since this date. In the event that the information contained in the prospectus is subject to any material change during the period starting with the publication and ending with the first trading day, such material change will be published in accordance with the provisions in the Trading Act (being the relevant legislation regarding the publication of supplements to prospectuses).

As a condition for exercising subscription rights or purchasing new shares pur-suant to the offering in the prospectus, each exercising holder or purchaser will be

deemed to have made, or, in some cases, be required to make, certain represen-tations and warranties, that will be relied upon by Trelleborg, the Managers and others. See “Restrictions on Sale and Transfer etc”. Trelleborg reserves the right, in its sole and absolute discretion, to reject any exercising of subscription rights or purchase of BTAs or new shares that it or its agents believe may give rise to a breach or violation of any law, rule or regulation.

In connection with the offering in the prospectus SEB Enskilda, or a represen-tative or affiliate of SEB Enskilda, (in such capacity, the “Stabilizing Manager”) may effect transactions which stabilize or maintain the market price of the shares, subscription rights, BTAs or new shares at levels which might not otherwise prevail. Such transactions may be effected on the exchange where the shares are listed, in the over-the-counter market or otherwise. The Stabilizing Manager is under no obligations to engage in any such stabilization measures, and such stabilization, if commenced, may be discontinued at any time without prior notice. Such stabilization measures may be carried out from the day of publication of this prospectus, up to and including 30 days following the subscription period, which is expected to expire on June 18, 2009. The Stabilization Manager may not stabilize (i) the subscription rights at a price exceeding SEK 15.75 per subscription right, equal to the theoretical value of a subscription right at the announcement of the subscription price or (ii) the shares, BTAs or new shares at a price exceeding SEK 27.75 per share, BTA or new share, equal to the sum of the subscription price and the theoretical value of a subscription right at the announcement of the subscription price (SEK 12.00 plus SEK 15.75). For a more detailed description of the stabilization activities, see “Restrictions on Sale and Transfer etc” / “Stabilization and Other Trading Activities”.

Forward-looking statements and market dataThe prospectus contains certain forward-looking statements that reflect Trelleborg’s current views with respect to future events and financial and operational performan-ce. The words “intend”, “estimate”, “expect”, “may”, “plan”, “anticipate” or similar expressions regarding indications or prognoses of future developments or trends, which are not statements based on historical facts, constitute forward-looking infor-mation. Although Trelleborg believes that these statements are based on reasonable assumptions and expectations, Trelleborg cannot give any assurances that such sta-tements will materialise. Because these forward-looking statements involve known and unknown risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statement.

Factors that could cause Trelleborg’s actual results of operations or performance to differ from the forward-looking statements include, but are not limited to, those described under “Risk Factors”. The forward-looking statements included in this prospectus speak only of the date of the prospectus. Trelleborg undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law. The prospectus contains market data and industry forecasts, including information related to the sizes of the markets in which the Group participates. The information has been extracted from a number of sources. Although Trelleborg regards these sources as reliable, the information contained in them has not been independently verified. In addition to the above, certain data in the prospectus is also derived from estimates made by Trelleborg.

Presentation of financial informationTrelleborg’s audited consolidated financial statements for 2006, 2007 and 2008, which have been prepared in accordance with International Financial Standards (“IFRS”) as enacted by the EU, are incorporated through reference and constitute a part of this prospectus. Certain financial and other information presented in this prospectus have been rounded off for the purpose of making this prospectus more easily accessible for the reader. The figures in certain columns thus do not cor-respond exactly with the declared total amount.

With the exception of the Company’s audited consolidated financial statements for 2006, 2007 and 2008, and the lucidly reviewed interim financial statement for the first quarter of 2009, no additional information within the prospectus has been reviewed or audited by the Company’s auditors.

TrelleborgHead officeTrelleborg ABJohan Kocksgatan 10Box 153SE-231 22 TrelleborgTelephone: +46 410 670 00

Financial advisorsJoint Lead Managers Handelsbanken Capital MarketsVisiting addressBlasieholmstorg 11-12Mailing addressSE-106 70 StockholmTelephone: +46 8 701 10 00

Nordea Corporate FinanceVisiting addressSmålandsgatan 17Mailing addressH115SE-105 71 Stockholm

SEB EnskildaVisiting addressKungsträdgårdsgatan 8Mailing addressSE-106 40 StockholmTelephone: +46 8 522 295 00

Co-Lead ManagerDnBNor MarketsVisiting addressStranden 22Mailing addressN-0021 Oslo Telephone: +47 2222 948880

Legal advisorsMannheimer Swartling AdvokatbyråVisiting addressSödergatan 22 Mailing addressBox 4291 SE-203 14 MalmöTelephone: +46 40 698 58 00

Account operatorEuroclear Sweden ABBox 7822SE-103 97 Stockholm

Addresses

1Invitation to subscribe for shares in Trelleborg AB

2 Summary 5 Risk factors 10 Invitation to subscribe for shares in Trelleborg AB 11 Background and reasons 12 Terms, conditions and instructions 15 How to proceed 16 Market overview 18 Description of operations 34 Financial information in summary 40 Commentary on financial development 45 Capitalization and other financial information 50 Board of Directors, Group Management and auditors 54 Corporate governance 58 Share capital and ownership structure 62 Articles of Association 64 Legal considerations and supplementary information 69 Interim report January–March 2009 91 Certain tax considerations in Sweden 93 Restrictions on sale and transfer etc. 96 Glossary 97 Addresses

ConTenTSThe rights issue in brief

Preferential rightFor every share of series A held in Trelleborg the holder is entitled to two (2) series A subscription rights1 and for every held share of series B the holder is entitled to two (2) series B subscription rights. One (1) series A or series B subscription right entitles the holder to subscribe for one (1) new share of the correspond-ing series (primary preferential right). Shares not subscribed for by primary preferential right shall be offered to all shareholders for subscription (subsidiary preferential right). Upon sale of the subscription right (the primary preferential right), the subsidiary preferential right is also passed on to the new holder. In addition to the above, investors are given the opportunity to subscribe for shares without preferential rights.

Subscription priceSEK 12 per share

Record date for participation in the rights issue April 28, 2009

Subscription periodApril 30–May 19, 2009

Trading in subscription rightsApril 30–May 14, 2009

Trading in paid subscribed shares (BTAs) April 30–May 27, 2009

Subscription by exercising subscription rights (primary preferen-tial right)Subscription takes place during the subscription period through simultaneous cash payment.

Subscription with subsidiary preferential right and without preferential rightRegistration for subscription with subsidiary preferential right or without preferential right shall be made to Handelsbanken Capital Markets not later than May 19, 2009 on a special application form that can be obtained from any branch of Handelsbanken or from www.handelsbanken.se/aktuellaerbjudanden or from www.trelleborg.com. Payment for allotted shares shall be made in cash in accordance with the instructions on the notice of allot-ment. Custody account holders with nominees shall instead regis-ter with and in accordance with instructions from the nominee.

MiscellaneousTickerShares of series B: TREL B

ISIN-codesShares of series B: SE0000114837 Series B subscription rights: SE0002863522Series B BTA: SE0002863530

Financial informationInterim report April-June 2009 July 24, 2009Interim report July-September 2009 October 29, 2009

1) All shares of series A are held by Dunker interests.

2 Invitation to subscribe for shares in Trelleborg AB

SuMMARy

This summary shall be regarded as an introduction to the prospectus. each decision to invest in the Trelleborg share shall be based on an assessment of the prospectus in its entirety. Investors that file a lawsuit in a court of law on account of information in the prospectus may be liable for costs in connection with translation of the prospectus. A person may be held liable for information included in or missing from the summary or a translation of the summary, only if the summary or the translation is misleading or incorrect in relation to the other parts of the prospectus.

The rights issue in briefWith the primary aim to strengthen Trelleborg’s financial position and to increase the ability of the Group to take advantage of the opportunities occurring in the current economic climate in order to strengthen its market positions, the Board of Directors of Trel-leborg resolved on March 22, 2009, subject to the approval by the Annual General Meeting, to increase the Group’s share capital by way of a rights issue. Such approval was given by the Annual General Meeting on April 23, 2009.

The rights issue resolution means that those who are registered as shareholders in Trelleborg on the record date, 28 April 2009, are entitled to subscribe for two (2) new shares of series A or B, respectively, for one (1) share in the Company of series A or B held, respectively (primary preferential right). Shares which are not subscribed for by primary preferential rights shall be offered to all shareholders for subscription (subsidiary preferential rights). If a subscription right (the primary preferential right) is sold the subsidi-ary preferential right is also passed on to the new owner. In addition to this, investors are given the opportunity to subscribe for shares without subscription rights.1 The rights issue, if fully subscribed for, will increase the Company’s share capital by SEK 361,429,044. The subscription price has been set at SEK 12 per share, which means that the Company will raise approximately SEK 2,169 M before issue costs. Subscription for shares with primary preferential rights shall be made through cash payment during the period from Thursday April 30, 2009 until Tuesday May 19, 2009. Application for subscription for shares on the basis of subsidiary preferential rights or without subscription rights shall be made on May 19, 2009 at the latest. Payment for allotted shares shall be made in cash in accordance with the instructions on the notice of allotment.

Several of Trelleborg’s largest shareholders support the rights is-sue and have made commitments to subscribe for their respective pro rata shares in the rights issue, corresponding to approximately 35 percent of the rights issue. These shareholders consist of Dun-ker interests2, AFA Försäkring3, Alecta, Unionen, Rune Andersson through companies and Sten K Johnson through company. In addition, Rune Andersson through companies, Donald Johansson with family and through companies and Sten K Johnson through company have undertaken to subscribe for additional shares in a total amount of SEK 523 M (equivalent to approximately 25 percent of the rights issue), increasing the total commitment of shareholders and other investors to approximately 60 percent of the rights issue. The remainder of the rights issue is, subject

to certain conditions, guaranteed to be subscribed for by the Managers (DnB NOR Markets, Handelsbanken Capital Markets, Nordea and SEB), whereby the rights issue as a whole is covered by subscription undertakings or guarantees. The subscription undertakings and guarantees are, however, not secured. Hence, there is a risk that one or a number of the shareholders, other investors or Managers are unable to meet their respective subscrip-tion undertakings or guarantees. For further information see “Risk Factors – Risks related to rights issue”.

In addition, a group of institutional shareholders, including among others Didner & Gerge Funds, Swedbank Robur and Odin Fund Management, collectively representing approximately 11 percent of the share capital and 6 percent of the votes, have expressed their support of the rights issue.

The members of the Board of Directors and Group Manage-ment in Trelleborg intend to subscribe for their respective pro rata shares in the rights issue.

Trelleborg in briefTrelleborg is a global engineering group whose leading positions are based on advanced polymer technology and in-depth applica-tions know-how. The Group develops high-performance solutions that seal, damp and protect in demanding industrial environ-ments. The Trelleborg Group had annual sales of approximately SEK 31 billion in 2008, with about 23,000 employees in 44 countries. The Trelleborg Group comprises four business areas: Trelleborg Engineered Systems, Trelleborg Automotive, Trelleborg Sealing Solutions and Trelleborg Wheel Systems.

Trelleborg Engineered Systems – Engineered solutions that fo-•cus on the sealing, protection and safety of investments, proc-esses and individuals in extremely demanding environmentsTrelleborg Automotive – Polymer-based components and sys-•tems used for noise and vibration damping for passenger cars and light and heavy trucks.Trelleborg Sealing Solutions – Precision seals for the industrial, •aerospace and automotive markets.Trelleborg Wheel Systems – Tires and complete wheel systems •for agricultural and forest machinery, forklift trucks and other materials-handling vehicles.

1) See further ”Terms, conditions and instructions”.2) Henry och Gerda Dunkers Donationsfond Nr 2, Henry och Gerda Dunkers Stiftelse, Henry

Dunkers Förvaltnings AB, Förvaltningsbolaget HD and Aktiebolaget Hevea.3) Excluding Kollektivavtalsstiftelsen Trygghetsfonden TSL, which is the owner of 183,245

shares of series B.


SuMMARy

MarketA considerable portion of Trelleborg’s operations, approximately 90 percent of the total sales in 2008, lies within what is referred to as the industrial rubber sector. Trelleborg is leader in this global market, which is estimated to generate sales of approximately SEK 700 billion annually1. The industrial rubber market comprises such product areas as antivibration, hoses and seals. The market is partly fragmented, although a gradual process of consolidation is under way. The market share of the ten largest companies has increased from approximately 15 percent to roughly 30 percent during the past five years.2

Industrial rubber is used in a variety of applications and prod-ucts that are used by a large number of client categories within different industrial segments. Trelleborg’s end customers are thus located within a number of industrial areas. Approximately one-third of the total sales in 2008 was derived from the automo-tive industry and approximately one-third from the niche areas agriculture, offshore oil/gas, infrastructure, transportation and aerospace. The remainder was derived from other industries.

Financial targetsTrelleborg evaluates its financial targets in connection to the an-nual strategy review which takes place during the third quarter. The Group’s current long-term financial targets are the following:

Growth: The overall goal is to create value for shareholders and other stakeholders through profitable growth. The target for the Group’s average sales growth is 8–10 percent annually over an economic cycle.

Return on captial employed: The target for return on capital employed is 15 percent over the long term before tax.

Return on shareholder’s equity: The target for return on shareholders’ equity is 15 percent after tax.

Debt/equity ratio: The target for the debt/equity ratio is that it shall be within the interval of 75–125 percent.

Operating cash-flow: Operating cash flow is the principal source of financing for achieving the growth target. The target for operating cash flow is set at 80–90 percent of underlying operat-ing profit (EBIT).

EBITDA-margin target: EBITDA margin of 12 percent or more (earnings before interest, taxes and depreciation/amortiza-tion in relation to net sales) supplements the return targets. The margin target remains, but considering the extremely weak eco-nomic conditions that currently prevail, the Group cannot expect that it will be fulfilled.

Risk factorsTrelleborg’s operations and ownership of shares in Trelleborg are associated with risks related to the economy’s effect on demand, competition and price pressure, supply and price variations of raw material and components, technology and market development, suppliers, customers, production, key personnel, acquisitions and integration, structural measures, legislation and regulation,

intellectual property rights, health, safety and the environment, authorities and control bodies, taxes, disputes and damage claims, existing financing, access to future financing, exposure to foreign-exchange fluctuations, changes in interest rates, financial credit risks, changes in value of fixed assets, share-related risks, owners with significant influence, non-secured subscription undertakings and terms of guarantee agreements. The above mentioned risks are merely a summary of the risks set out in the chapter “Risk factors” on p. 5. The omission or inclusion of a risk in this summary is not an indication of its importance.

Other informationBoard of Directors, Group Management and AuditorsThe Board of Directors comprises Anders Narvinger, Peter Nils-son, Heléne Bergquist, Staffan Bohman, Hans Biörck, Claes Lindqvist, Sören Mellstig, Mikael Nilsson, Alf Fredlund, Karin Linsjö and deputy member Birgitta Håkansson.

Group Management comprises Peter Nilsson, Bo Jacobsson, Lennart Johansson, Roger Johansson, Claus Barsøe, Maurizio Vis-chi, Peter Suter, Peter Svenburg, Claes Jörwall, Ulf Gradén, Sören Andersson and Viktoria Bergman.

Trelleborg’s auditors are PricewaterhouseCoopers AB with Göran Tidström as auditor in charge.

For more information on the members of the Board of Direc-tors, Group Management and the Company’s auditors see “Board of Directors, Group Management and Auditors” on p. 50.

Financial AdvisorsTrelleborg’s financial advisors in connection with the rights issue are Handelsbanken Capital Markets, Nordea Corporate Finance and SEB Enskilda as Joint Lead Managers and DnB NOR Mar-kets as Co-Lead Manager.

Major shareholders and transactions with closely related par-tiesTrelleborg’s largest shareholder as per 31 March 2009 was Dunker interests with an aggregate holding of 12,269,774 shares (9,500,000 shares of series A and 2,769,774 shares of series B), corresponding to 13.6 percent of the share capital and 55.6 percent of the votes. For further information, see “Share capital and ownership structure” on p. 58. For information regarding transactions with related parties, see “Legal considerations and supplementary information” on p. 64.

1) Source: Trelleborg. For further details see “Market share and industry data” on p. 17.2) Source: Rubber & Plastics News Jul 2008; Trelleborg.


SuMMARy

Trends and significant changes The significant downturn in the market during the fourth quarter of 2008 had a significant effect on Trelleborg’s sales and earnings. The downturn has continued during the first quarter of 2009, with significant volume declines, especially in the automotive sec-tor and in the industrial capital goods sector.

There are however a number of potentially mitigating factors present during 2009. Interest rate reductions and large scale pub-lic investment programmes are expected to have a positive impact during the year. On the cost side, the prices of many types of raw materials have declined significantly. The Group is also well posi-tioned within a number of sectors which are given priority as part of the public investment programmes, such as the infrastructure, transport, and energy sectors.

Group Jan–Mar

2009Jan–Mar

2008 2008 2007 2006 2005 2004

Net sales, SEK M 6,877 8,067 31,263 30,971 27,284 24,170 22,912

Operating profit, SEK M 46 574 374 1,707 1,507 1,779 1,891

Profit after tax, SEK M 65 309 –258 838 766 1,177 1,386

Earnings per share, SEK 0.70 3.35 –2.95 9.10 8.30 12.90 15.55

Net debt, SEK M 12,974 10,562 12,706 10,093 9,350 7,236 6,951

Shareholders' equity, SEK M 10,610 9,908 10,238 10,052 9,687 10,113 8,603

Debt/equity ratio, % 122 107 124 100 96 72 81

Return on shareholders’ equity, %, R12 neg. 9.1 neg. 8.4 7.6 12.5 17.2

Free cash flow, SEK M 26 –698 414 518 905 930 472

Dividend per share, SEK – – – 6.50 6.00 5.50 5.00

Average number of shares, million 90.4 90.4 90.4 90.4 90.4 90.2 88.3

Average number of employees* 21,106 26,330 24,347 25,158 22,506 21,694 21,675

Continuing operations, excluding items affecting compatibility

Operating profit, SEK M 63 622 1,798 2,274 1,820 1,729 1,778

Operating margin (ROS), % 0.9 7.7 5.7 7.3 6.7 7.3 7.9

Return on capital employed (ROCE), %, R12 5.6 11.4 8.4 11.5 9.9 10.7 11.3

Earnings per share, SEK 0.85 3.75 9.75 14.00 11.70 12.50 12.40

Operating cash flow, SEK M 478 –388 1,594 1,718 1,594 1,751 1,421

* For the periods January–March 2008 and 2009 insourced staff and temporary employees are included.

Altogether, the outlook for 2009 is exceptionally difficult to forecast, but on an overall basis a significantly lower demand is expected across the Company’s market during 2009, compared to 2008.

The Group’s cash flow is also expected to be negatively affected by capacity alignments and ongoing restructuring measures, as well as by the payment of a large share of the already set, and additionally expected, fines connected to ongoing competition investigations.

There has been no substantial change in Trelleborg’s financial position or market position since the interim report for the period January-March 2009 was published.

Financial development in briefBelow is a summary of Trelleborg’s financial development during the years 2006-2008 and the periods January–March 2008 and 2009.


RISk FACToRS

Trelleborg’s operations are affected by a number of factors which in some parts not at all and, in other parts, cannot completely be controlled by the Company. Below, factors deemed to be of particular significance to the future prospects of Trelleborg are de-scribed. The summary of risk factors below does not claim to be complete, nor are the risks ranked according to degree of importance. not all factors are described in detail, and accordingly, a complete evaluation containing all the information in this Prospec-tus as well as a general evaluation of external factors must be made.

Market risks and operational risksThe Group operates in a global market dependent on the general financial and political situation in the world as well as on circum-stances unique to a specific region or country.

The economy’s effect on demandTrelleborg’s business, financial position and earnings are affected by conditions in the global capital markets and the economy in general in Europe, the US and the rest of the world. The turmoil experienced in the global capital market began in the second half of 2007 and have since then continued, and substantially increased, during 2008 and 2009. Recently, concerns over the availability and cost of credit have contributed to increased volatility, negative devel-opment of the economy in general and negative future expectations for the economy and the global market. These factors, along with decreased confidence in the future among companies and consum-ers and increased unemployment, have precipitated the economic slowdown and recession in many countries.

Factors such as consumer spending, business investments, government spendings, the volatility and strength of the capital market and the inflation, all affect the business and economic en-vironment and, ultimately, the size and profitability of Trelleborg’s business. In an economic downturn – characterized by higher unemployment, lower income, lower corporate earnings, fewer business investments and lower consumer spending – Trelleborg’s business is adversely affected. Adverse changes in the economy affect the earnings negatively and may have a material adverse ef-fect on Trelleborg’s turnover, financial position and earnings.

Competition and price pressureTrelleborg’s business is conducted in competitive industries, which implies that increased competition may negatively affect the Group’s operations, financial position and earnings. For exam-ple, customers may prefer products competing with Trelleborg’s product range to a higher extent than before, and it cannot be excluded that more intensive competition may adversely affect Trelleborg’s current margins. Competition and price pressure are considered to be strongest in Trelleborg’s business area Trelleborg Automotive.

Supply and price variations of raw material and componentsRisks related to raw materials are linked to supply and the struc-turing of prices of raw materials necessary for the production.

Trelleborg purchases large volumes of, among other things, polymer material, additives and prefabricated metal components. The de-velopment on many raw material markets during recent years have resulted in higher purchase prices for raw materials that are impor-tant for Trelleborg. The price levels have historically had an impact on Trelleborg’s purchasing costs with a delay of approximately three to six months.

In the beginning of 2008, the prices for raw material remained high as a result of substantial global demand. The price levels cul-minated in mid-2008 to subsequently fall at an increasingly rapid rate towards the end of 2008. In general, prices for polymers are cyclical, while natural rubber prices are more volatile. Prices for most synthetic polymers are related to the balance between supply and demand and the price trend in nafta (refined oil products). The markets for synthetic products are often regional and can show differing trends due to volume imbalances. For example, Asia has demonstrated stronger growth, with the consequence that prices have been slightly higher than in Europe and the US.

Strategic and operational risksTrelleborg’s operations are dependent on a number of factors, which each may have a significant adverse effect on the Group’s financial position and earnings.

Technology and market developmentAs portions of Trelleborg’s operations are conducted in industries subject to price pressure and rapid technical and material develop-ments, the maintaining of Trelleborg’s current operations as well as its future development are to a certain extent dependent on the Group succeeding in developing new and successful products, applications and manufacturing processes. Research and devel-opment efforts are costly and it is not possible to guarantee that developed products, applications and manufacturing processes will be commercially successful.

SuppliersTrelleborg’s products consist of raw materials and components from many different suppliers. In order to be able to manufacture, sell and deliver products, Trelleborg is dependent on external sup-plies meeting agreed requirements with respect to, for example, quantity, quality and delivery time. Incorrect, delayed or missing deliveries from suppliers may in turn mean that Trelleborg’s deliveries are delayed or must be discontinued, become deficient


RISk FACToRS

or incorrect, which could result in reduced sales and which could have a negative impact on the Group’s earnings.

Even though it is Trelleborg’s opinion that the Group is not significantly dependent on any single supplier, adaptation costs and certain inefficiencies in the operations may occur if Trelleborg is forced to exchange a single supplier.

CustomersTrelleborg’s operations are conducted in a large number of geographical markets with many customer categories. One of the Group’s larger customer groups is the automotive industry with several customers competing between themselves. Within the business area Trelleborg Automotive, which has a more concentrated customer base than other business areas, Renault-Nissan and Ford comprise some of the Group’s largest individual customers. The current downturn and weak development of the automotive industry have already adversely affected several of the business area’s customers, for example GM and Chrysler. The downturn in the automotive industry also adversely affects Trel-leborg’s operations. This effect could be accentuated if any of its larger customers went bankrupt or commenced such process. This concentration of customers therefore entails risks for Trelleborg. Trelleborg is, however, not dependent on any single agreement with any of these customers. For additional information, see the chapter “Legal considerations and supplementary information”. If Trelleborg’s customers do not fulfill their obligations towards Trelleborg or drastically decreases the size of, or discountinues, its operations, the Group’s sales, financial position and earnings may be adversely affected.

ProductionTrelleborg’s production comprises a chain of processes, in which disruptions or disturbances in any part of the chain, for example break downs, labor disputes, terrorist activities or natural disasters, can have repercussions on Trelleborg’s ability to fulfill its obliga-tions towards its customers. Such disruptions or disturbances could therefore have a negative impact on the Group’s operations, financial position and earnings, particularly for production where the capacity utilization is high.

Key personnelThe ability to attract and retain qualified personnel and manage-ment is important. Key personnel have a significant impact on the future success of the Group. If key personnel leave Trelleborg or if Trelleborg is unable to attract qualified personnel, this may have a negative impact on the Group’s operations, financial position and earnings.

Acquisitions and integrationThe Group has an established acquisition strategy. A success-ful acquisition and integration process creates value. However, acquisitions and integration of new units always implies both risks and opportunities in that, for example, costs relating to an acquisi-tion are higher or lower than expected or that future earnings and synergies do not meet expectations.

Structural measuresTrelleborg works with various structural programs to strengthen the Group’s position and competitiveness through, for example, rationalization measures, restructurings, outsourcing and similar measures. However, there is always a risk that the measures taken will not generate the anticipated outcome.

Legal risksThrough its global operations, Trelleborg is affected by many laws, directives, regulations, agreements and guidelines including such relating to the environment, health and safety, trade restrictions, competition regulations and currency regulations.

Legislation and regulationWith an emphasis on the activities carried out at local or regional level and with group central support, Trelleborg continuously complies with the rules and regulations that apply in each market and works to adapt the Group to identified future changes in the area. However, changes in rules and regulations, custom regula-tions and other trade restrictions, price and currency controls and other governmental guidelines in the countries in which Trelleborg operates may limit, increase the cost or in other ways adversely affect the Group’s operations and future development.

Trelleborg’s strong position in various markets may entail that companies within the Group are considered dominant in one or several of these markets, which in turn may result in restrictions on Trelleborg’s ability to act freely in affected markets and its abil-ity to grow through acquisitions.

Companies within the Group are currently subject to competi-tion investigations in certain jurisdictions due to unfair price fix-ing with regard to marine fenders and certain types of marine oil hoses. In January 2009 the European Commission reached a deci-sion in its investigation of marine oil hoses, imposing fines on the Group amounting to EUR 24.5 M. Trelleborg has appealed the decision to the European Court of First Instance. Various inves-tigations and processes are currently conducted in the US in rela-tion to the above mentioned price-fixing agreements. Settlements have recently been made with the Department of Justice in the US meaning that two concerned subsidiaries of the Group shall pay a total fine of USD 11 M to the US authorities for their involve-ments in such unfair price-fixing agreements. The settlements will be formalized by a court of law. In addition, less extensive but similar investigations are conducted in Australia, Brazil and Korea. The Group has in its annual accounts for 2007 and 2008 charged a total of SEK 516 M against earnings in order to cover fines, dam-ages and other costs attributable to these circumstances. The assess-ment of the total cost is, however, somewhat uncertain with regards to the duration and outcome of ongoing processes. Therefore, it cannot be ruled out that the processes may mean that Trelleborg incurs additional costs, which may adversely affect the Group’s earnings. Furthermore, it cannot be ruled out that the Group may be subject to additional investigations and processes. For additional information regarding the investigations, see the chapter “Legal considerations and supplementary information”.


RISk FACToRS

Intellectual property rightsTrelleborg invests significantly in product development. To secure returns on these investments, companies within the Group actively claim their rights and monitor competitors’ activities closely. If required, the Group protects its intellectual property rights through legal action. However, it cannot be guaranteed that Trelleborg will be able to protect its granted patents, trademarks and other intellectual property rights or that tendered registration applications will be approved.

Furthermore, the sectors in which Trelleborg is active demon-strate, in several aspects, rapid technical development. This entails a risk of new technologies and products being developed that circumvent or replace Trelleborg’s intellectual property rights.

Trelleborg cannot guarantee that companies within the Group cannot be considered to infringe upon intellectual property rights of others. Disputes regarding infringement of intellectual prop-erty rights can, just like disputes in general, be costly and time consuming and, accordingly, may adversely affect the Group’s operations, financial position and earnings.

Health, safety and environmentIt is the opinion of Trelleborg, that its operations are conducted in all significant respects in compliance with applicable laws and regulations regarding health, safety and the environment. A number of companies within the Group conduct operations that are subject to permits or reporting obligations according to ap-plicable local environmental legislation. These operations are thus under the supervision of relevant authorities.

Changes in legislation and regulation by the authorities entailing stricter requirements and changes in terms relating to health, safety and the environment or a trend towards more stringent application of laws and regulations by the authorities may require further in-vestments and result in increased costs and other obligations for the companies within the Group that are subject to such regulations. Such changes may also prohibit or limit Trelleborg’s operations.

Trelleborg has extensive production operations in some 30 countries. It cannot be ruled out that liability in connection with damage to person or property and air, water, land and biological processes may have a negative impact on the Group’s operations, financial position and earnings.

Authorities and control bodiesParts of Trelleborg’s product range are covered by legislation stipulating, among other things, considerable assessments, quality assurance and documentation. It cannot be excluded that Trel-leborg’s future operations, financial position and earnings may be adversely affected by difficulties in complying with current regulations stipulated by authorities and control bodies or changes of such regulations.

Tax risksTrelleborg conducts its operations through companies in a large number of countries. The business, including transactions between Group companies, is conducted in accordance with Trel-leborg’s interpretation of prevailing tax legislation, tax agreements

and regulations in the various concerned countries and demands by relevant tax authorities. Trelleborg has obtained advice in these matters from independent tax advisors. However, it cannot be generally ruled out that Trelleborg’s interpretation of applicable laws, tax agreements and regulations or of the interpretation or administrative application by concerned authorities is not entirely correct, or that such rules will be subject to change, possibly with retroactive effect. Trelleborg’s tax situation may change through decisions by the relevant authorities which may have a negative impact on the Group’s financial position and earnings.

Disputes and damage claimsCompanies within the Group are occasionally involved in disputes in the ordinary course of business and risk, similar to other industrial companies, becoming subject to claims regard-ing, for example, contractual matters, product liability, alleged defects in delivery of goods and services, and patent rights. Such disputes and claims may prove time-consuming, disrupt normal operations, involve large amounts and result in significant costs, especially considering that, within some of the industries that Trelleborg is involved, far-reaching guarantees and other commit-ments are regularly required from suppliers. In addition, the out-come of complicated disputes may be difficult to foresee. Without any such conditions existing today, it cannot be ruled out that a disadvantageous outcome of a dispute may prove to have a mate-rial adverse effect on the Group’s turnover, financial position and earnings. For additional information on the disputes and other liability issues in which Trelleborg is currently involved, see the chapter “Legal considerations and supplementary information”.

Financial risksAs a net borrower and due to its substantial operations outside Sweden, the Group is exposed to various financial risks.

Existing financingTrelleborg has access to long-term financing for its operations and the Group’s financial position is strengthened by the rights issue. However, it cannot be ruled out that Trelleborg in the future may breach financial commitments in its credit and/or loan agreements due to, for example, the economy, volatility or disruption in the capital or credit markets, which may adversely affect the Group’s turnover, financial position and earnings.

Access to future financingEven though Trelleborg believes that the proceeds from the rights issue will strengthen the Group’s financial position and increase the financial flexibility of the Group, it cannot be ruled out that Trelleborg may have to obtain additional financing through, for example, taking up loans or issue new shares.

The availability of additional financing is dependent on a vari-ety of factors, such as market conditions, the general availability of credit, the overall availability of credit within the financial markets and Trelleborg’s credit rating and credit capacity. Furthermore, the availability of additional financing is dependent on custom-


RISk FACToRS

ers, suppliers or lenders not developing a negative perception of the Group’s long- or short-term financial prospects, which could occur if Trelleborg incurs large losses or if demand further declines due to the economic downturn. Also, Trelleborg’s access to financ-ing may be impaired if regulatory authorities take actions that may have a negative effect on Trelleborg. Moreover, it may prove impossible or difficult to obtain additional financing on favorable terms if Trelleborg’s internal sources of liquidity and available credit facilities are insufficient.

Disruptions, uncertainty or volatility in the capital and credit markets may also limit access to the capital required in order to operate the business. Market conditions on the capital and credit markets may also limit Trelleborg’s ability to repay maturing liabilities in a timely manner. Furthermore, such disruptions, un-certainties and volatility may limit Trelleborg’s access to capital. As such, Trelleborg may, for example, be forced to postpone raising of capital or to bear a higher cost of capital, which could decrease the Group’s profitability and significantly reduce its financial flexibility.

Foreign-exchange risksForeign-exchange risks refer to the risk of exchange-rate fluctua-tions having an adverse impact on the Group’s consolidated income statement, balance sheet and/or cash flows. Foreign-exchange exposure occurs in conjunction with goods and services being bought or sold in currencies other than the respective subsidiary’s local currency (transaction exposure) and during conversion of the balance sheets and income statements of foreign subsidiaries into SEK (translation exposure).

Trelleborg’s global operations give rise to extensive cash flows in foreign currency. The most important currencies in the Group’s cash flows are SEK, USD, EUR and GBP. The effects of exchange-rate movements have an impact on the Group’s earnings when the income statements of foreign subsidiaries are translated to SEK. Since the Group’s earnings to a large extent are generated outside Sweden, the impact of exchange-rate movements on the con-solidated income statement of the Group can be substantial. In connection with translation of the Group’s investments in foreign subsidiaries into SEK, there is a risk that changes in exchange rates will affect the Group’s consolidated balance sheet. For additional information on the hedging measures taken by Trelleborg in this regard, see the chapter “Capital structure and other financial information”. If Trelleborg’s hedging measures are not sufficient to minimize the effects of exchange-rate movements, this may have an adverse effect on Trelleborg’s sales, financial position and earnings.

Interest rate risksInterest rate risks refer to the risks of a negative impact of market interest rate movements on the Group’s cash flow and earnings. As most of the Group’s credits bear variable interest rates, the Group

focuses on interest rated cash flow risk. The impact on the Group’s net interest income/expense depends on fixed-interest terms for borrowing and investments. The Group seeks a balance between the estimated current cost of borrowing and the risk of sustaining a significant negative impact on earnings in the event of a sudden, major movement in interest rates, by implementing interest rate hedging when appropriate.

Even though Trelleborg’s exposures to interest rate changes and other interest risks are reduced to some extent by guidelines in the Group financial policy, it cannot be guaranteed that such guide-lines are efficient or sufficient in order for Trelleborg’s financial position and earnings to not be adversely affected. For additional information, see the chapter “Capital structure and other financial information”.

Financial credit risksFinancial credit risks are defined as the exposure to the default of financial counterparties with which the Group has invested cash, short-term bank investments or contracted financial instruments. If Trelleborg does not succeed with handling its credit risks, this may have a substantial adverse effect on Trelleborg’s sales, financial position and earnings.

Changes in value of fixed assetsTrelleborg has substantial fixed assets, of which goodwill represents the largest part. In the annual accounts of 2008 no write-down of goodwill was made. In the event that future tests regarding continu-ing changes in the value of tangible as well as intangible assets would lead to write-downs, this may have a substantial adverse effect on Trelleborg’s financial position and earnings.

Risks related to the rights issueShare-related risksRisk and risk-taking is an inevitable part of investing in shares. Since an investment in shares may fluctuate in value both upwards and downwards, it can never be guaranteed that an investor is able to regain the invested capital in full. The share price performance depends on a number of factors, some of which are company-specific and others that are related to the share market in general. It is impossible for a particular company to control all the factors that may have an impact on the share price of the company and, accordingly, all decisions to invest in shares should be preceded by a careful analysis.

Owners with significant influenceAt the time of this prospectus, the Dunker interests, mainly con-sisting of the two foundations the Henry and Gerda Dunker Do-nation Fund and the Henry and Gerda Dunker Foundation, hold 13.6 percent of Trelleborg’s shares, corresponding to 55.6 percent of the votes, and have undertaken to subscribe for shares in the rights issue equivalent to their pro rata share in Trelleborg. The


RISk FACToRS

Dunker interests can therefore, both before and after the rights issue, exercise a significant influence over the Company regarding matters that are subject to the shareholders’ approval.

Non-secured subscription undertakings and guarantees Several of Trelleborg’s largest shareholders and other investors have separately, not jointly, undertaken to subscribe for and guarantee a total of approximately 60 percent of the new shares. The remainder, approximately 40 percent, of the rights issue is, subject to certain conditions, guaranteed to be subscribed for by the Managers (DnB NOR Markets, Handels banken Capital Markets, Nordea and SEB). Said subscription undertakings and guarantees are, however, not secured. Therefore, there is a risk that one or a number of the share-holders, other investors or Managers are unable to meet their respec-tive subscription undertakings. If the above mentioned subscription

undertakings or guarantees are not met, this could have a negative effect on Trelleborg’s ability to obtain an amount of approximately SEK 2.2 billion before transaction costs through the rights issue.

Terms of the underwriting agreementPursuant to the underwriting agreement entered into between the Company and the Managers, the Managers have the right to ter-minate the agreement upon breach of the guarantees provided by Trelleborg and the occurrence of certain adverse events that affect the conditions (financial or otherwise) or prospects of Trelleborg or on the financial markets in general. It cannot be ruled out that such an event will occur, which could have a negative impact on Trelleborg’s ability to fulfill the rights issue. For additional infor-mation, see the chapter “Legal considerations and supplementary information”.


InvITATIon To SuBSCRIBe FoR SHAReS In TReLLeBoRG AB

With the main purpose of strengthening Trelleborg’s financial position and to increase the ability of the Group to take advantage of the opportunities occurring in the current economic climate in order to strengthen its market positions, the Board of Directors of Trelleborg resolved on March 22, 2009, subject to the approval by the Annual General Meeting, to increase the Group’s share capital by way of a rights issue. Such approval was given by the Annual General Meeting on April 23, 20091.

The rights issue, if fully subscribed for, will increase the Company’s share capital by SEK 361,429,044, through a rights issue of 180,714,522 shares, of which 19,000,000 shares of series A and 161,714,522 shares of series B. The Company’s shareholders have preferential rights to subscribe for new shares in Trelleborg in relation to the number of shares the already hold in the Company.

The record date for determining which shareholders are entitled to subscribe for new shares is Tuesday April 28, 2009. Subscription shall take place during the period from and including Thursday April 30, 2009 up to and including Tuesday May 19, 2009, or such later date as decided by the Board of Directors.

The rights issue resolution entitles shareholders to subscribe for two (2) new shares of series A or B, respectively, for one (1) existing share of series A or B held, respectively (primary preferential right). Shares which are not subscribed for with primary preferential right shall be offered to all shareholders for subscription (subsidiary preferential right).2 If a subscription right (the primary preferential right) is sold the subsidiary preferential right is passed on to the new owner. The subscription price has been set at SEK 12 per share, which means that the Company will raise approximately SEK 2,169 M.3 The newly issued shares will carry the same rights as the existing shares of the same series. In addition, investors are offered the possibility to subscribe for shares without preferential rights.

Subscription undertakings and underwriting guarantees4 Several of Trelleborg’s largest shareholders support the rights issue and have made commitments to subscribe for their respective pro

rata shares in the rights issue, corresponding to approximately 35 percent of the rights issue. These shareholders consist of Dunker inter-ests, AFA Försäkring5, Alecta, Unionen, Rune Andersson through companies and Sten K Johnson through company. In addition, Rune Andersson6 through companies, Donald Johansson with family6 and through companies and Sten K Johnson7 through company have undertaken to subscribe for additional shares in a total amount of SEK 523 M (equivalent to approximately 25 percent of the rights is-sue), increasing the total commitment of shareholders and other investors to approximately 60 percent of the rights issue. The remainder of the rights issue is, subject to certain conditions, guaranteed to be subscribed for by the Managers (DnB NOR Markets, Handelsbank-en Capital Markets, Nordea and SEB), whereby the rights issue as a whole is covered by subscription undertakings or guarantees8.

In addition, a group of institutional shareholders, including among others Didner & Gerge Funds, Swedbank Robur and Odin Fund Management, collectively representing approximately 11 percent of the share capital and 6 percent of the votes, have expressed their support of the rights issue.

The members of the Board of Directors and Group management in Trelleborg intend to subscribe for their respective pro rata shares in the rights issue.

The shareholders of Trelleborg are hereby invited to, with preferential rights, subscribe for new shares in Trelleborg in accordance with the terms and conditions outlined in this prospectus.

Trelleborg April 24, 2009

Trelleborg AB (publ)The Board of Directors

1) In accordance with the proposal by the Board of Directors, with the purpose to render possible and facilitate the rights issue, the Annual General Meeting on April 23, 2009 also resolved to reduce the Company’s share capital by SEK 2,078,217,003, without redemption of shares, changing the shares’ quota value from SEK 25 to SEK 2. The Annual General Meeting also resolved on a bonus issue of SEK 2,078,217,003, as a measure to ensure that neither the Company’s restricted equity, nor its share capital, will be reduced. For further information on the Annual General Meeting’s resolutions, see ”Reduction of the Share Capital and Amendments to the Articles of Association” on p. 58.

2) For further information, please see ”Terms, conditions and instructions”, p. 12 onwards.3) From the proceeds of the rights issue of approximately SEK 2,169 M, deductions for costs related to remuneration to the issuing department, the underwriters and other transaction

costs in connection with the rights issue (issue costs) are estimated to amount to approximately SEK 95 M of which approximatly SEK 52 M corresponds to underwriting fees. Net of issue costs, the Company is estimated to raise approximately SEK 2,074 M.

4) For further information, see “Legal considerations and supplementary information”.5) Excluding Kollektivavtalsstiftelsen Trygghetsfonden TSL, which is the owner of 183,245 shares of series B.6) Rune Andersson’s and Donald Johansson’s (with family) subscription commitment amounts to SEK 450 M and is made up of commitments from Milano i Malmö HB (controlled by Rune

Andersson, org nr 969685-8290) of SEK 150 M, Suollovaara Invest AB (controlled by Donald Johansson with family, org nr 556584-2506) of SEK 150 M and Älvsbyhus i Bjärnum AB (jointly controlled by Rune Andersson and Donald Johansson with family, org nr 556368-2813) of SEK 150 M.

7) Sten K Johnson’s subscription commitment, which is made through Tibia Konsult AB (org nr 556154-8008), amounts to SEK 73 M. 8) The subscription undertakings and guarantees are, however, not secured. See further under the heading “Risks related to the rights issue” in the section ”Risk Factors”.


BACkGRounD AnD ReASonS

During recent years Trelleborg has worked actively to position itself within attractive market segments and has conducted several ac-tion programs. Through these initiatives Trelleborg expects to further improve its market positions and strengthen profitability going forward.

The significant downturn in the global economy since the fall of 2008 has however resulted in an increased uncertain outlook and has substantially changed the short-term market conditions for the Group. During the first quarter of 2009, Trelleborg’s sales declined by 15 percent compared to the same period last year, even though the weak Swedish Krona affected sales positively.

Due to the market development, the Board of Directors in Trelleborg, on March 22, 2009, resolved to raise approximately SEK 2.2 billion, before issue costs, through a rights issue of shares of series A and series B. The decision by the Board of Directors in Trelleborg was approved by the Annual General Meeting on April 23, 2009.

The rights issue proceeds will be used to strengthen the Group’s financial position, whereby the proceeds will be used to lower the Group’s indebtedness and decrease the liquidity risk. In addition the proceeds will strengthen Trelleborg’s financial position and increase the ability of the Group to take advantage of the opportunities occurring in the current economic climate in order to strengthen its market positions.

Trelleborg has a financial target of maintaining a net debt corresponding to 75–125 percent of shareholders’ equity. On March 31, 2009 the net debt to equity ratio was 122 percent. Given the current market conditions, the Board of Directors in Trelleborg believes that a strengthening of the capital base substantially improves the ability to maintain the net debt to equity ratio within the stated range and ensures that the Group will have satisfactory financial flexibility going forward. The rights issue will strengthen the balance sheet so that the net debt to equity ratio would, all other things equal, have been 86 percent, if the rights issue had been completed on March 31, 2009 (given full subscription in the rights issue and after issue costs).

In other respects, the Board of Directors refers to the information in this prospectus, which it has prepared on account of the rights issue at hand.

The Board of Directors is responsible for the content of this prospectus. The Board of Directors hereby provides an assurance that all reasonable care has been taken to ensure that the information contained in this prospectus is, as far as the Board of Directors knows, true and that nothing has been omitted that could affect its meaning.

Trelleborg April 24, 2009

Trelleborg AB (publ)The Board of Directors


TeRMS, ConDITIonS AnD InSTRuCTIonS

Preferential right and subscription rightsThose persons who, on the record date of April 28, 2009 are registered as Trelleborg shareholders have a preferential right to subscribe for new shares of the same series in proportion to the number of shares already held (primary preferential right). Shares that are not subscribed for under primary preferential right shall, regardless of share series, be offered to all other shareholders for subscription (subsidiary preferential right).

Persons who are registered as shareholders in Trelleborg on the record date will therefore receive two (2) series A subscription rights for every share of series A held in Trelleborg and two (2) series B subscription rights for every share of series B held in Trel-leborg. The subscription rights entitle the holder to, with primary preferential right, subscribe for shares, wherein one (1) series A and series B subscription right carry an entitlement to subscribe for one (1) new share of series A and series B, respectively. On sale of the subscription right (the primary preferential right), the subsidiary preferential right also passes to the new holder.

Subscription priceThe new shares in Trelleborg will be issued at a price of SEK 12 per share. No commission will be charged.

Record dateThe record date at Euroclear Sweden for determination of which persons are entitled to receive subscription rights in the rights issue is April 28, 2009. Trelleborg shares will be traded exclusive of the right to participate in the rights issue commencing on April 24, 2009. The final day for trading inclusive of the right to partici-pate was April 23, 2009.

Issue statements to directly registered shareholdersA prospectus and a pre-printed issue statement with attached bank giro form will be sent to directly registered shareholders and representatives of shareholders, who, on the record date, are registered in the share register maintained by Euroclear Sweden on Trelleborg’s behalf. The issue statement includes, for example, the number of subscription rights received and the full number of shares that may be subscribed for. No securities notification (Sw: VP-avi) will be sent out regarding the registration of sub-scription rights on securities accounts.

Those who are included in the special list of pledge holders and trustees that is maintained in connection with the share regis-ter will not receive any issue statement, however, they will be informed separately.

Nominee-registered shareholdingsShareholders whose holdings are nominee-registered at a bank or other nominee will not receive an issue statement.

Subscription and payment for shares subscibed for by primary as well as subsidiary preferential right should instead be made to the respective nominee and in accordance with instructions from this, or if the holding is registered with several nominees, from each of these.

Trading in subscription rightsTrading in subscription rights of series B will be conducted at NASDAQ OMX during the period from and including April 30 up to and including May 14, 2009. Handelsbanken Capital Mar-kets and other securities institutions in possession of the required licences will provide brokerage services in connection with the purchase and sale of subscription rights. The ISIN-code for the subscription rights of series B is SE0002863522.

Subscription pursuant to primary preferential rightSubscription will take place during the period from and includ-ing April 30 up to and including May 19, 2009. On expiry of the subscription period, unexercised subscription rights will expire and will be deleted from the securities accounts without notifica-tion from Euroclear Sweden.

In order not to lose out on the value of subscription rights received, a shareholder must either:•Exercisethesubscriptionrightsreceived,andsubscribefornew

shares no later than on the last day of the subscription period; or• sellsubscriptionrightsreceivedbutnotexercisednolaterthan

on May 14, 2009.

The Board of Directors in Trelleborg is entitled to extend the subscription period. Subscription for new shares on the basis of subscription rights is irrevocable and a shareholder may not cancel or modify a subscription for new shares.



Shareholders resident in certain unauthorized jurisdictionsThe allotment of subscription rights and the issuance of new shares by exercise of subscription rights to persons who are resi-dent in countries other than Sweden, may be affected by securities legislation in such countries. See “Restrictions on sale and transfer etc”, on p. 93. Consequently, subject to certain exceptions, share-holders whose shares in Trelleborg are registered directly in a secu-rities account and whose registered address is in Australia, Hong Kong, Japan, Canada or the US will not receive this prospectus. Nor will they receive any subscription rights on their respective securities accounts. The subscription rights that otherwise would have been delivered to such shareholders will be sold and the sales proceeds, less a deduction for costs, will be paid to such sharehold-ers. Amounts of less than SEK 100 will not be paid out.

Custody account holders represented by a nominee should follow the instructions from the nominee, or if applicable, the nominees.

Directly registered shareholders resident in Sweden and eligible for subscription rightsSubscription for new shares on the basis of subscription rights will be effected via payment in cash, either by use of the pre-printed bank giro form or a special application form with simultaneous payment in accordance with one of the options below:

The bank giro form• is used if all subscription rights designated as “evenly subscribable“ in the issue statement from Euroclear Sweden are to be exercised. The application form• is used if subscription rights have been purchased or transferred from another securities account or if, for some other reason, the number of subscription rights to be exercised for subscription differs from the number on the pre-printed issue statement. Application forms may be obtained from any Handelsbanken branch in Sweden.

Directly registered shareholders not resident in Sweden but eligible for subscription rightsShareholders eligible for subscription rights who are not resident in Sweden and who cannot use the pre-printed bank giro form must use the application form sent out in order to subscribe for shares. On submission of the form to the address indicated below, payment must be made in SEK to the Swedish bank account indicated below.

Handelsbanken Capital MarketsIssue DepartmentSE-106 70 Stockholm, SwedenSWIFT: HANDSESSBank account number: 6028-679 037 322IBAN: SE96 6000 0000 0006 7903 7322

On payment, the subscriber’s name and address and the securities account number (Sw: VP-konto) must be quoted. The application

form and payment must be received by Handelsbanken Capital Markets no later than May 19, 2009. Application forms are avail-able at Handelsbanken’s website at www.handelsbanken.se/aktuel-laerbjudanden and Trelleborg’s website at www.trelleborg.com.

Paid subscribed shares (BTAs)A few days after payment and subscription, Euroclear Sweden will send a securities notification confirming that the paid subscribed shares (Sw: betalda tecknade aktier, ‘BTA’) have been registered on the securities account. The newly subscribed shares are entered as paid subscribed shares (BTAs) on the securities account until such time as the issue has been registered with the Swedish Companies Registration Office. It is expected that shares subscribed for with preferential right through payment will be registered on or around May 28, 2009. After that, paid subscribed shares (BTAs) will be re-registered as ordinary shares, on or around June 1, 2009. No securities notification will be issued in connection with this re-classification. Custody account holders represented by a nominee will receive BTA and information according to each respective nominee’s procedures.

Trading in paid subscribed shares (BTAs)Trading in paid subscribed shares (BTAs) on NASDAQ OMX is expected to take place during the period from and including April 30 up to and including May 27, 2009. Handelsbanken Capital Markets and other securities institutions will provide brokerage services in connection with the purchase and sale of paid sub-scribed shares (BTAs). The ISIN-code for paid subscribed shares (BTAs) of series B is SE0002863530.

Listing of new shares The Company will apply for listing of new shares of series B on NASDAQ OMX in connection with the implementation of the rights issue. Registration with the Swedish Companies Regis-tration Office of the new shares subscribed for on the basis of subscription rights is expected to take place around May 28, 2009. Trading in new shares of series B is expected to start around May 29, 2009, subject to registration. The new shares of series B sub-scribed for without the support of subscription rights are expected to be registered with Swedish Companies Registration Office around June 4, 2009 and trading is expected to start around June 5, 2009.

Subscription for shares on the basis of subsidiary preferential right as well as allotmentApplication for subscription for shares on the basis of sub-sidiary preferential right must be made on a special applica-tion form. More than one application form may be submitted, although only the most recently dated form will be consid-ered. Application forms are available at all Handelsbanken branches in Sweden, as well as from Handelsbanken’s website at www.handelsbanken.se/aktuellaerbjudanden and Trelleborg’s



website at www.trelleborg.com. Completed forms may be sent to Handelsbanken Capital Markets, Issue Department, SE-106 70 Stockholm, Sweden, or may be handed in at any branch of Handelsbanken in Sweden. Application forms must be received by Handelsbanken Capital Markets no later than on May 19, 2009. The Board of Directors in Trelleborg is entitled to extend the subscription period.

Custody account holders represented by a nominee who wish to subscribe for shares on the basis of subsidiary preferential right should not register according to the instructions in the above section but must register for subscription to and in accordance with instructions from the nominee, or nominees, who will also handle notification regarding allotment as well as other questions.

If the number of shares offered in this manner is insufficient for subscription, based on subsidiary preferential rights, the shares shall be distributed among the subscribers in proportion to the number of shares subscribed for subject to primary preferential right and, to the extent that this is not possible, by lottery.

As confirmation of the allotment of the shares subscribed for on the basis of subsidiary preferential right, a settlement note will be issued to the subscriber or to the nominee. Shares subscribed for and allotted must be paid for in cash no later than three business days after the notice of allotment has been issued to the subscriber or to the nominee. Newly issued shares subscribed for on the basis of subsidiary preferential right will be delivered as soon as the required registration has taken place at the Swedish Companies Registration Office. This is expected to take place on or around June 4, 2009. A securities notification will be sent to the directly registered shareholders or nominees as confirmation that the shares have been registered on the securities account.

Subscription for shares without preferential right, and allotmentApplication for subscription for shares without preferen-tial right must be made on a special application form. More than one application form may be submitted, although only the most recently dated form will be considered. Ap-plication forms are available at all Handelsbanken branches in Sweden, as well as from Handelsbanken’s website at www.handelsbanken.se/aktuellaerbjudanden and Trelleborg’s website at www.trelleborg.com. Completed forms may be sent to Handelsbanken Capital Markets, Issue Department, SE-106 70 Stockholm, Sweden, or may be handed in at any branch of Handelsbanken in Sweden. Application forms must be received by Handelsbanken Capital Markets no later than on May 19, 2009.

1) Please see notes 6 and 7 on p. 10.

The Board of Directors in Trelleborg is entitled to extend the subscription period.

Shares not subscribed for by the exercise of primary or subsidi-ary preferential right will be distributed in the following order to subscribers that have subscribed without preferential right;

(1) certain underwriters1 in relation to their underwriting com-mitments,(2) other subscribers who may reasonably be approved by Trelleborg in consultation with the Joint Lead Managers in pro-portion to the number of subscribed shares, and(3) a guarantee consortium consisting of DnB NOR Markets, Handelsbanken Capital Markets, Nordea and SEB in proportion to their respective guarantee commitments.

As confirmation of the allotment of shares subscribed for without preferential right, a settlement note will be sent to the subscriber. Shares subscribed for and allotted must be paid for in cash no later than three business days after notice of allotment has been sent to the subscriber. Newly issued shares will be delivered as soon as the required registration has taken place at the Swedish Companies Registration Office. This is expected to take place on or around June 4, 2009. A securities notification will be sent to the directly registered shareholders or nominees as confirmation that the shares have been registered on the securities account.

Right to dividendsThe new shares will carry right to dividends commencing from the first record date for dividends occurring after the rights issue has been registered at the Swedish Companies Registration Office.

Announcement of subscription take-up in the rights issueThe subscription take-up in Trelleborg’s rights issue will be an-nounced through a press release from the Company on or around May 22, 2009.

Other informationThe Company is not entitled to discontinue the rights issue. In the event that too large an amount of money is paid by a subscrib-er, Trelleborg will arrange for the excess amount to be refunded.

An incomplete or incorrectly completed application forms may be rejected. Furthermore, if the subscription payment is made late or is insufficient, the subscription application may be rejected. In such a case, the subscription payment will be refunded.


Terms and conditions For each Trelleborg share of series B, you will receive two (2) subscription rights of series B. One (1) subscription right of series B provides an entitlement to subscribe for one (1) new share of series B in Trelleborg.

Subscription price SEK 12 per share

Record date for participation in the rights issue April 28, 2009

Subscription period April 30 – May 19, 2009

Trading in subscription rights April 30 – May 14, 2009

1. You will be allotted subscription rights

For each share of series B in Trelleborg you hold on April 28, 2009… …you will receive two (2) subscription rights

2. How to exercise your subscription rights

One (1) subscription right + SEK 12 ➔ one (1) new share of series B in Trelleborg

If you have a securities account

If you have a custody account

If your Trelleborg shares are held in a securities account at Euroclear Swe-den, the issue statement from Euro-clear Sweden will show the number of subscription rights you will receive.

If you will exercise all subscription rights use the pre-printed bank giro form from Euroclear Sweden.

Pay at any bank so that the payment is received by Handelsbanken Capi-tal Markets no later than May 19, 2009

If you have purchased, sold or trans-ferred subscription rights to/from your securities account, use the special sub-scription form available from branches of Handelsbanken in Sweden, or from Handelsbanken’s website at www.han-delsbanken.se/aktuellaerbjudanden and Trelleborg’s website at www.trelleborg.com.

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➔If your Trelleborg shares are held in a custody account at a bank or other securities institution, your nominee will inform you of the number of subscription rights that you have received.

Follow the instructions you receive from your nominee.

Share

Subscrip-tion right

Subscrip-tion rights

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How To PRoCeeD

Below instructions apply to subscription of shares on the basis of primary preferential right.For application to subscribe for shares based on subsidiary preferential right, see p.13 and 14.


MARkeT oveRvIew

Trelleborg offers high-tech solutions based on polymer technology that meet three primary customer needs: to seal, damp and protect to secure invest-ments, processes and people in demanding industrial environments. These are vital functions for customers within selected segments of the global markets for aerospace, agricultural, transportation, automotive, offshore oil/gas, infrastructure/construction and general industry sectors.

Industrial rubber marketA considerable portion of Trelleborg’s sales, approximately 90 percent in 2008, lies within what is referred to as the industrial rubber market. Trelleborg is leader in this global market, which is estimated to generate sales of approximately SEK 700 billion annually1. The industrial rubber market comprises such product areas as antivibration, hoses and seals. The market is partly frag-mented, although a gradual process of consolidation is underway. The market share of the ten largest companies has increased from approximately 15 percent to roughly 30 percent in the past five years (see table in section “Competitors”).2 Trelleborg takes an active role in this process.

Trelleborg’s marketsIndustrial rubber is used in a variety of applications and prod-ucts that are used by a large number of client categories within different industrial segments. Trelleborg’s end customers are thus located within a number of industrial areas. Approximately one-third of the total sales in 2008 was derived from the automotive industry and one-third from the niche areas: Agriculture, offshore oil/gas, infrastructure, transportation and aerospace. The remain-der was derived from other industries.

CompetitorsNo other global company has a completely overlapping business profile to Trelleborg. There are however several companies that compete in different areas of Trelleborg’s product categories (a more detailed description of competitors within each business area can be found in the section “Description of operations”).

In 2008, Trelleborg was ranked as the world’s largest company within the global market for industrial rubber. The 10 largest companies in the market are listed below.2

Top 10 global industrial rubber suppliers Country

% of sales within industrial rubber

1. Trelleborg Sweden 90

2. Continental Germany 16

3. Hutchinson France 90

4. Bridgestone Japan 12

5. Freudenberg Germany 46

6. Cooper-Standard USA 100

7. Tomkins UK 45

8. Tokai Rubber Japan 95

9. Parker Hannifin US 21

10. NOK Japan 50

General industries, 32%

Automotive, 31%

Offshore oil/gas, 9%

Agriculture, 9%

Infrastructure, 9%

Transportation, 7%

Aerospace, 3%

Trelleborg’s net sales 2008 divided into end customers categories

Top 1–10 largest companies, 30%

Market share

Top 11–50 largest companies, 30%

Other companies, 40%

The global industrial rubber market2

1) Source: Trelleborg. For further details see “Market share and industry data” on p. 17.2) Source: Rubber & Plastics News Jul 2008; Trelleborg.


MARkeT oveRvIew

Key facts rubberRubber is a group of polymeric organic materials with unique elastic features. Commonly referred to are: natural rubber, derived from the sap of the plant Hevea Brasiliensis, synthetic rubber, artificially created or Latex, a diluted form of natural rubber. The different variations of rubber are used within different industrial areas. It is typically the hardness of the rubber, measured in IRHD (International Rubber Hardness Degrees), that is relevant.

The majority of rubber companies today started out by producing tires. During the years a concentration on one of the following areas has occurred:

Industrial rubber – Comprises rubber to antivibration, hoses and seals within the industrial market.

Tires – Production of tires to the automotive industry.

Latex – Includes several areas of usage, for example clothing and paint.

Continental is through its subsidiary Contitech one of the largest participants on the global industrial rubber market. Contitech is an autonomous part of the Continental group and is specialized on rubber and plastic material technology. Contitech contributed to approximately 12 percent of Continental’s total sales in 2008. Contitech is partly focused on the automotive industry and is comparable in size (total sales and number of employees) to Trel-leborg.1

Hutchinson is comparable in size to Trelleborg as well, both in regards to total sales and number of employees. As is the case for Trelleborg, a considerable portion of the total sales is gener-ated within the industrial rubber market. The company is to a larger extent than Trelleborg focused on the automotive market (approximately 60 percent of the company’s sales in 2007). In addition, approximately 15 percent of the company’s sales in 2007 was made up of consumer products.2

Bridgestone’s operations primarily consist of production and sale of tires. Approximately 12 percent of the company’s total sales are derived from industrial rubber.3

Market share and industry dataThis prospectus contains historical financial data and informa-tion about markets and industry sectors. The data concerning markets and industry sectors presented herein has been compiled from external sources, using methods which Trelleborg consid-ers adequate in order to ensure that the information is presented correctly. However, the information has not been independently verified and Trelleborg can thus not guarantee that the informa-tion is correct or complete. The data concerning markets and industry sectors is inherently uncertain and does not necessarily reflect the actual market conditions. Potential investors should thus be aware that the market and industry sector data contained in this prospectus does not constitute reliable indicators regarding the past or future performance of Trelleborg.

This prospectus also contains information about the mar-kets in which Trelleborg operates and its competitive position

within those markets, based on Trelleborg’s own assessment. The information includes, among other things, market size and market share for each of the countries and regions where Trelleborg operates. Trelleborg is not aware of any exhaustive industry or market report that covers or addresses the markets in which it operates. Trelleborg’s assements on the size of the market and market shares are, inter alia, based on public information from other market participants, as well as on other information that Trelleborg recieves from for example customers and suppliers. Trelleborg considers that the information regarding market size and market share contained in this prospectus is fair and accurate and fairly reflects the competitive situation within such markets. However, these assessments and other market information have not been verified by an independent expert or a third party and Trelleborg can thus not guarantee that a third party would reach the same results.

1) Source: Contitech’s website; Rubber & Plastics News Jul 2008; Trelleborg.2) Source: Hutchinson’s website; Rubber & Plastics News Jul 2008; Trelleborg.3) Source: Bridgestone’s website; Rubber & Plastics News Jul 2008; Trelleborg.


DeSCRIPTIon oF oPeRATIonS

Trelleborg Engineered Systems – Engineered solutions that fo-cus on the sealing, protection and safety of investments, processes and individuals in extremely demanding environments.

Trelleborg Automotive – Polymer-based components and sys-tems used for noise and vibration damping for passenger cars and light and heavy trucks.

Trelleborg Sealing Solutions – Precision seals for the industrial, aerospace and automotive markets.

Trelleborg Wheel Systems – Tires and complete wheel systems for agricultural and forest machinery, forklift trucks and other materials-handling vehicles.

Trelleborg’s operations in the worldTrelleborg has operations in 44 countries, market offices in 36 countries, production sites in 28 countries and developments units in 18 countries.

Trelleborg’s largest geographical market is currently Europe. During 2008, 67 percent of the Group’s total sales was derived from this market. 23 percent of the sales was derived from North- and South America and 10 percent from Asia and other markets.

Geographically, Trelleborg is expanding in Asia, Latin America and Central- and Eastern Europe through increased presence and development of the markets through proprietary product and system development.

Trelleborg is a global engineering group whose leading positions are based on advanced polymer technology and in-depth applications know-how. The Group develops high-performance solutions that seal, damp and protect in demand-ing industrial environments. The Group had annual sales of approximately Sek 31 billion in 2008, with about 23,000 employees in 44 countries. The Trelleborg Group comprises four business areas: Trelleborg engineered Systems, Trelleborg Automotive, Trelleborg Sealing Solutions and Trelleborg wheel Systems.

Trelleborg Engineered Systems, 39%

Trelleborg Automotive, 30%

Trelleborg Sealing Solutions, 19%

Trelleborg Wheel Systems, 12%

Net sales 2008, per business area

Europe, 67%

North and South America, 23%

Asia and other markets, 10%

Net sales 2008, per geography

Stategically correctDifferentation possibilityLeading positionsSustainable growthFavorable profitability

New segmentsAnalyze markets

Exit

Choose

DevelopSegments

Defineopportunities

Portfolio management for sustainable leading positionsTrelleborg strives to achieve leading positions in its carefully select-ed segments in global and regional markets. The Group’s market positions and product portfolio are continuously evaluated.

Trelleborg selects and focuses on segments in which the Group can attain leading positions and which offer long-term growth in value. At the same time, Trelleborg identifies and withdraws from areas and segments that are less attractive. In this manner, resources are continuously made available to be steered toward the Group’s selected areas. Organic growth is underpinned by focused growth initiatives. Activities are conducted in all business areas within the framework of Global Growth Initiatives, which systematically drive growth in prioritized areas.



Business concept, goals and strategies

VISIONWe shall be the customers’ first choice in our selected market segments, creating value trough high-performance solutions.

BUSINESS CONCEPTWe seal, damp and protect in demanding industrial environments throughout the world. Our customers can rely on engineered solu-tions based on leading polymer technology and unique applications know-how

LEADESHIPWe create a high-performance culture in a global environment through shared values and target-oriented leadership. Leadership is the link between strategy and action and ensures that we make use of the strength of the organization, drive developments in the right direction, ensure that action is taken and correctly allocate our resources.

ACTIONTo ensure that the strategies are implemented, ongoing activities are defined that are continously followed up. These can take form of, for example, growth initiatives, portfolio development, operational efficiency, talent management and innovative initiatives.

STATEGIESLeading positions in selected segmentsWe develop leading positions in selected seg-ments through differentation. With our focus on excellence, growth and innovation, we are committed to solving our customer needs.

• Excellence We achive operational, commercial and

financial excellence through continuous improvements.

• Growth We create sustainable and profitable

growth, both organically and driven by acquisitions, in selceted market segments.

• Innovation We create customer value

by applying proactive and innovative thinking in every-thing we do.

VALUES, CODE OF CONDUCT AND CORPORATE GOVERNANCEValues, code of conduct and corporate governance provide a frame-work for our operations and create a stable, responsible and sustain-able Group that benefits all of Trelleborg Group’s stakeholders.

Business concept

Strategies

Leading positions in selected segments

GrowthExcellence

Leadership

Activities

Values, code of conduct and corporate governance



Financial targets Trelleborg evaluates its financial targets in connection to the an-nual strategy review which takes place during the third quarter. The Group’s current long-term financial targets are the following:

Financial targets Comment

Growth: 8–10 percent

The overall goal is to create value for shareholders and other stakeholders through profitable growth. The target for the Group’s average sales growth is 8–10 percent annually over an economic cycle.

Growth shall be achieved through a combination of organic growth and acquisitions of new and complementary operations. Organic growth will be achieved through, for example, proprietary product development and penetration of new geographic markets.

Return on captial employed1: 15 percent

The target for return on capital employed is 15 percent over the long term before tax.

This has been deemed a reasonable level over an economic cycle since the bulk of the fixed assets are a mix of older assets with lower carrying values and assets that have been acquired at market value in recent years.

Return on shareholder’s equity1: 15 percent

The target for return on shareholders’ equity is 15 percent after tax.

This is a reasonable target in view of the targets established for return on capital employed and the capital structure. Key factors contributing to an ongoing positive trend include improvement in return on capital employed and an optimal capital structure.

Debt/equity ratio: 75–125 percent

The target for the debt/equity ratio is that it shall be within the interval of 75–125 percent.

The target for Trelleborg’s capital structure is set to achieve an optimized balance between risk and return. Accordingly, the Group has deter-mined that a debt/equity ratio within the interval of 75–125 percent is reasonable considering sensitivity to fluctuations in the business cycle and to favorable cash-generating capacity.

Operating cash-flow1: 80–90 percent of operating profit

Operating cash flow is the principal source of financing for achieving the growth target. The target for operating cash flow is set at 80–90 percent of underlying operating profit (EBIT).

To achieve the target, Trelleborg works continuously with a number of capital-rationalization projects, which, among other benefits, enable attractive financing solutions for suppliers.

EBITDA-margin target1: 12 percent or above

EBITDA margin (earnings before interest, taxes and depre-ciation/amortization in relation to net sales) supplements the return targets. The margin target remains, but consider-ing the extremely weak economic conditions that currently prevail, the Group cannot expect that it will be fulfilled.

The target shall be realized through volume growth and measures to enhance the company’s structure and efficiency. Trelleborg’s strategy to actively advance toward profitable segments is also expected to contrib-ute to improved margins.

1) For continuing operations, excluding items affecting comparability.



Competitive advantagesCompared to many of its smaller competitors, Trelleborg has an advantage from its wide geographical presence, both on a global as well as regional level. Trelleborg has a more extensive application know-how and greater ability to offer its customers assistance with product development compared to many of its competitors. The

size of the Group and its product portfolio also creates the posibil-ity for an efficient utilization of the production capacity. Trel-leborg is relatively well diversified in regards to exposure towards different client segments, for example with a lower share of sales to the automotive industry than several of the main competitors.

Four business areas Leading market positions1

= ranked 1–3

EU NAFTA* Global

Industrials hoses • •Ditching hoses • • •Oil hoses •Rubber sheetings • •Industrial vibration damping • • •Polymer coated fabrics • • •Printing blankets • • •Industrial profiles • • •Pipe seals •Tunel seals • •Marine fender systems • • •Polymer Solution for oil/gas • • •

EU NAFTA* Global

Antivibration solutions for the automotive industry • • •Brake shims • • •Vehicle boots • • •Engine-cooling hoses •

EU NAFTA* Global

Precision seals for the aerospace industry • • •Precision seals for the automotive industry • • •Precision seals for industrial applications • •

EU NAFTA* Global

Agriculture tires • •Forest tires • •Solid industrial tires • • •

* North America Free Trade Agreement; USA, Canada and Mexico

•

Trelleborg Engineered Systems

Engineered solutions that focus on the sealing, protection and safety of investments, processes and individuals in extremely de-manding environments.

Trelleborg Automotive

Polymer based components and systems used for noise and vibra-tion damping for passanger cars and light and heavy trucks.

Trelleborg Sealing Solutions

Precision seals for the indus-trial aerospace and automotive markets.

Trelleborg Wheel Systems

Tires and complete wheel systems for agricultural and forest ma-chinery, forklift trucks and other materials handling vehicles.

1) Source: Trelleborg. For further details see “Market share and industry data” on p. 17.



Trelleborg Engineered Systems is a leading global supplier of engi-neered solutions that focuses on the sealing, protection and safety of investments, processes and individuals in extremely demanding environments.

Operations are conducted within four business segments:• Industry• InfrastructureConstruction•Offshore•Building

Industry, 40%

Offshore, 23%

Building, 19%

Infrastructure Construction, 18%

Net sales 2008 per business segment

Europe, 66%


Asia, 8%

Other, 4%


Business segments1

IndustryDescription: Precision components and systems in polymer materials, such as hoses, elastomer laminates and polymer-coated fabrics. Other special products include molded components for many different industry segments, printing blankets for the graph-ics industry, and industrial antivibration applications.Market position: World leading in polymer-coated fabrics and printing blankets. Market leading in Europe within industrial hose systems and industrial antivibration products.Principal competitors: Continental/Contitech, Semperit, IVG, Bridgestone, Flint/Day and Hutchinson.

Infrastructure Construction Description: Specialized solutions for infrastructure projects, for example, fender systems for harbors, tunnel seals, dredging systems, pipe seals, acoustic and vibration-damping solutions for railways, bridges and buildings.Market position: World leading within marine fender systems, tunnel seals and dredging systems. In certain geographic markets, the business segment also has a leading position within bridge

Key factsBusiness Area President: Lennart Johansson

Head office: Trelleborg, Sweden

Production units: Australia, China, Czech Republic, Denmark, Esto-nia, Finland, France, Germany, Italy, Lithuania, the Netherlands, Norway, Poland, Singapore, Spain, Sweden, the UK and the US.

Exemples of brands: Elastopipe, Trelline, Vulcan, Dipro, ETM, Mataki, Phønix Tag (license dependent), Trebolit, Uraduct and Värnamo

Key customers: Companies within infrastructure, offshore oil/gas, food, chemicals, the graphic industry, the transport industry, major distributors of industrial commodities, window manufacturers and companies within the construction industry.

Strategic prioritiesContinued active portfolio management – investments in attrac-•tive segments, exit segments with low potential.

Strengthened presence in Asia and Latin America, as well as •acquisitions supporting expansion in key markets.

Improved overall cost structure through efficiency enhance-•ments, outsourcing and manufacturing in low-cost countries.

Recruit, develop and retain talented individuals.•

TReLLeBoRG enGIneeReD SySTeMS

bearings and bridge expansion joints. Market leader in pipe seals in Europe.Principal competitors: Yokohama, Continental/Contitech and Bridgestone.

OffshoreDescription: Niche-oriented products for offshore oil and gas extraction.Market position: World leading in a number of niches within offshore oil and gas extraction, primarily subsea.Principal competitors: Cuming Corp, Continental/Contitech and Balmoral Offshore Engineering.

BuildingDescription: Polymer and bitumen-based construction prod-ucts for sealing and waterproofing applications for industry and consumers.Market position: Market leader in Northern Europe.Principal competitors: Semperit, Icopal, Schlegel and Stomil Sanok.

1) Information regarding market positions based on Trelleborg’s assessment. For further details see “Market share and industry data” on p. 17.



1) Trelleborg carried out minor changes in the operating structure during the first quarter of 2009. The change has affected reporting by business area for the first quarter of 2008 whereby certain operations with group external sales for 2008 of SEK 16 M has been transferred from Trelleborg Engineered Systems to Trelleborg Automotive (SEK 13 M) and to Trelleborg Seal-ing Solutions (SEK 3 M). The effect on earnings is marginal.

Trelleborg Engineered Systems – Key ratiosJan–Mar

2009Jan–Mar

2008 2008 2007 2006

Net sales, SEK M 2,862 2,856 12,378 11,745 9,310

Share of Group net sales, % 41.4 35.1 39.2 37.7 34.3

EBITDA, SEK M (excluding items affecting comparability) 210 338 1,429 1,464 1,041

EBITDA-margin, % 7.2 11.7 11.3 12.4 11.1

Operating profit, excluding items affecting comparability, SEK M 117 266 1,087 1,168 805

Operating profit, including items affecting comparability, SEK M 112 244 1,008 1,079 769

Operating margin (ROS), % (excluding items affecting comparability) 4.0 9.2 8.6 9.9 8.6

Capital employed, SEK M 7,866 6,351 7,846 6,201 5,920

Return on capital employed (ROCE), % (excluding items affecting comparability), R12 12.6 18.3 15.5 18.6 16.7

Capital expenditures, SEK M 80 108 564 432 271

Operating cash flow, SEK M 285 –82 802 1,071 815

Operating cash flow/operating profit, % (excluding items affecting comparability) 244 neg. 74 92 101

TrendsThe market for the Industry segment is mature, with a growth that is in line with industry production. The European industry structure is fragmented, but consolidation is underway, and Trel-leborg, as a leading player in Europe, is taking an active part, for example, within polymer-coated fabrics. For the project-oriented Infrastructure Construction segment, investments are increasing in many parts of the world. Urbanization, among other factors, is driving demand for such structures as bridges and tunnels. Modern high-speed trains require a greater degree of damping. The demand for fender systems is increasing in pace with the rising number of large international freight vessels requiring new harbors. The market for Offshore is also project-oriented and is influenced by developments in the offshore industry. Increased ocean-based oil and gas extraction in several geographic markets benefits this business segment. Within the Building segment, the market is becoming increasingly international, at the same time

as the demands for local presence and rapid deliveries are essential to achieve leading positions. A stronger focus on energy efficiency provides the conditions for advanced sealing profile solutions, both within the construction industry and in the consumer market.

Market DevelopmentDemand in the business area’s main markets remained highly vari-able. A substantial decline occurred within industrial segments, while demand in project-related operations, offshore oil/gas and infrastructure construction remained stable.

Financial overview1 Below is a summary of the financial development within Trelleborg Engineered Systems during the years 2006–2008 and the periods January–March 2008 and 2009.



Trelleborg Automotive is a world leader in the development and production of polymer-based components and systems used for noise and vibration damping in passenger cars and light and heavy trucks.

Operations are conducted within five business segments:•AntivibrationSolutions•DampingSolutions• Insulation&AppliedSolutions•FluidSolutions•GasSprings

Antivibration Solution, 62%

Fluid Solution, 18%

Insulation & Applied Solution, 12%

Damping Solution, 7%

Gas Springs, 1%


Europe, 66%


Asia, 7%


Business segments1

Antivibration SolutionsDescription: Noise and vibration damping solutions for all vehi-cle segments.Market position: World leader within systems for light vehicles.Principal competitors: ZF Boge, Vibracoustic/Freudenberg, Paulstra/Hutchinson, Continental/ Contitech, Cooper Standard, Tokai and Bridgestone.

Damping SolutionsDescription: Brake shims and Applied Damping Materials (ADM).Market position: World leader.Principal competitors: Wolverine and MSC.

Insulation & Applied SolutionsDescription: Polymer boots for drive shafts and steering applica-tions as well as other customized products.

Key factsBusiness Area President: Roger Johansson

Head office: Trelleborg, Sweden

Production units: Brazil, China, Czech Republic, France, Germany, India, Italy, Mexico, Poland, Romania, Slovakia, South Korea, Spain, Sweden, Turkey and the US.

Key customers: Audi, Benteler, BMW, Chrysler, Daimler, Delphi, Federal Mogul, Fiat, Ford Group, GKN, GM, Hyundai, PSA, Renault Nissan Group, Tata Group, Tenneco Monroe, Toyota, VW and ZF Lemförder

Strategic priorities:Restore profitability in long-term attractive segments through a •focused action program.

Clear positioning of Trelleborg Automotive as an innovative sup-•plier of comprehensive and global solutions.

Proactively capitalize on the market opportunities that arise in •the current restructuring of the global automotive industry.

Selectively follow existing customers when they establish opera-•tions in emerging markets.

Optimization of global production and excellence in production •processes, including enhanced utilization of synergies across the business area.


TReLLeBoRG AuToMoTIve

Market position: World leader within polymer boots for drive shafts and steering applications.Principal competitors: ABC, Keeper and Parker Hannifin.

Fluid SolutionsDescription: Engine-cooling and air supply solutions.Market position: Leading position in Europe.Principal competitors: Hutchinson, Continental/Contitech, Avon Automotive and Teklas.

Gas SpringsDescription: Spring-based door-opening and closing solutions.Market position: Niche player on the European market.Principal competitors: Stabilus and Suspa.




1) Source: JD Power; Trelleborg.2) Trelleborg carried out minor changes in the operating structure during the first quarter of 2009. The change has affected reporting by business area for the first quarter of 2008 whereby

certain operations with group external sales for 2008 of SEK 16 M has been transferred from Trelleborg Engineered Systems to Trelleborg Automotive (SEK 13 M) and to Trelleborg Seal-ing Solutions (SEK 3 M). The effect on earnings is marginal.

TrendsThe market for light vehicles experienced a drastic decline during the second half of 2008, and this trend has continued in 2009. The traditional markets in Europe and North America were particularly weak. Automotive manufacturers continue to move production from west to east. Global platforms and standard architectures continue to guide development. This results in manufacturers applying the same type of suspension, steering and drive shafts, brake systems and engine models in a number of models, which enhances efficiency and reduces costs. This also leads to greater flexibility and cuts time to market. For subcontrac-tors, this implies a demand for global presence. Intensified com-petition, and increases in prices for materials and energy, result in cost pressure remaining high. Trelleborg is tackling this via the optimization of global production, development of research and development in emerging markets, a stronger focus on portfolio management and the development of synergies amongst the units, excellence in production and globally consistent service levels.

Market DevelopmentCar production in North America declined by approxima tely 53 percent in the first quarter of 2009 compared with the same period in 2008. Car production was down 40 percent in Western Europe and 42 percent in Eastern Europe. Car production in Asia (excluding Japan) declined by 24 percent.1 On April 23, 2009, GM announced plans for substantially reduced production on the North American market in the second and third quarter of 2009. GM is, directly and indirectly, an important customer to Trel-leborg Automotive and the announced plans from GM may have certain negative impact on the business area’s results.

Financial overview2

Below is a summary of the financial development within Trel-leborg Automotive during the years 2006–2008 and the periods January–March 2008 and 2009.

Trelleborg Automotive – Key ratiosJan–Mar

2009Jan–Mar

2008 2008 2007 2006

Net sales, SEK M 1,826 2,726 9,461 10,299 9,327


EBITDA, SEK M (excluding items affecting comparability) –67 138 57 634 616

EBITDA-margin, % neg. 5.1 0.7 6.1 6.4

Operating profit, excluding items affecting comparability, SEK M –175 33 –381 203 219

Operating profit, including items affecting comparability, SEK M –183 8 –1,249 –179 –61

Operating margin (ROS), % (excluding items affecting comparability) neg. 1.3 neg. 1.9 2.2


Return on capital employed (ROCE), % (excluding items affecting comparability), R12 neg. 3.5 neg. 3.9 4.1


Operating cash flow, SEK M –17 –325 53 124 132

Operating cash flow/operating profit, % (excluding items affecting comparability) neg. neg. neg. 61 60



Trelleborg Sealing Solutions is a leading global supplier of preci-sion seals for the industrial, aerospace and automotive markets.

Operations are conducted within three business segments:• IndustrialApplications•Automotive•Aerospace

Industrial Applications, 71%

Automotive, 16%

Aerospace, 13%


Europe, 71%


Asia, 8%


Business segments1

Industrial ApplicationsDescription: Advanced sealing solutions in specialty materials designed for a range of industrial applications. The largest product groups are O-rings, rotary seals and hydraulic seals.Market position: World leader in specific niches.Principal competitors: Freudenberg, NOK and Parker Hannifin.

AerospaceDescription: Safety-critical aircraft seals that are used in virtu-ally all major commercial and military aircraft programs. Key application areas are engines, flight control actuators, landing gear, airframes, wheels and brakes.Market position: World leader.Principal competitors: Parker Hannifin, Greene Tweed and Hutchinson.

Key facts

Business Area President: Claus Barsøe

Head office: Copenhagen, Denmark

Production units: Brazil, China, Denmark, France, India, Italy, Japan, Malta, Mexico, Poland, Sweden, the UK and the US.

Market offices: Austria, Belgium, Brazil, Bulgaria, Canada, China, Croatia, Czech Republic, Denmark, Finland, France, Germany, Hong Kong, Hungary, India, Italy, Japan, Malaysia, Mexico, the Nether-lands, Norway, Poland, Russia, Singapore, Slovakia, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, the UK and the US.

Examples of brands: Busak+Shamban, American Variseal, For-sheda, GNL, Orkot, Palmer Chenard, Polypac, Nordex, SF Medical, Shamban, Skega, Stefa and Wills

Key customers: ABB, BOC Edwards, Bosch, Caterpillar, GEA Group, Honda, Husky, Liebherr, Rolls Royce, Scania, Siemens, Spirit Aer-osystems, Visteon, Volvo and ZF Group

Strategic priorities:Consolidate and develop leading positions in Europe, and ex-•pand in North and South America, Asia and Eastern Europe.

Further develop existing concepts and rapidly develop new busi-•nesses through organic growth and strategic acquisitions, for example, within new energy sources and pharmaceuticals.

Offer the market’s best service of high quality to prioritized •customers through a broad product range, service and innova-tive solutions.


Adjust production capacity and further improve efficiency.•

TReLLeBoRG SeALInG SoLuTIonS

AutomotiveDescription: Advanced and often safetycritical seals, mainly for fuel systems, steering, air conditioning and exhaust systems.Market position: Leader in specific niches requiring high-quality seals.Principal competitors: Freudenberg, NOK and Federal Mogul.




1) Trelleborg carried out minor changes in the operating structure during the first quarter of 2009. The change has affected reporting by business area for the first quarter of 2008 whereby certain operations with group external sales for 2008 of SEK 16 M has been transferred from Trelleborg Engineered Systems to Trelleborg Automotive (SEK 13 M) and to Trelleborg Sealing Solutions (SEK 3 M). The effect on earnings is marginal.

TrendsSealing solutions often have safety-critical functions, and such factors as technical development, environmental legislation and standardization gradually increase the demands on these systems. This relates to such applications as landing gear, vehicle fuel systems, medical equipment and hydraulics and pneumatics. Seals must be able to cope with extreme temperatures, pressures and friction, and withstand aggressive media. They must also be durable and completely reliable. Combined, these trends result in growth for companies that are technology leaders and increased industry consolidation.

The market for industrial seals tends to follow the levels of industrial production and growth in the market for durable goods. In Europe and North America, the market totals about SEK 18 billion per year. The market for polymer aircraft seals is driven by the trends in commercial and military aviation, and amounts to approximately SEK 3 billion per year in Europe and the US. The

global market for polymer vehicle seals amounts to about SEK 30 billion per year. The market for sealing solutions is influenced by increasing demands imposed by customers in terms of service levels and technology. They demand complex solutions, expect the same level of service throughout the world and endeavor to reduce their number of suppliers. This provides opportunities for global groups such as Trelleborg.

Market developmentThe market conditions in most of the business area’s end markets continued to weaken during the quarter, particularly in the indus-trial and automotive sectors.

Financial overview1 Below is a summary of the financial development within Trel-leborg Sealing Solutions during the years 2006–2008 and the periods January–March 2008 and 2009.

Trelleborg Sealing Solutions – Key ratiosJan–Mar

2009Jan–Mar

2008 2008 2007 2006

Net sales, SEK M 1,276 1,587 6,022 5,844 5,389


EBITDA, SEK M (excluding items affecting comparability) 98 295 1,079 1,019 897

EBITDA-margin, % 7.7 18.6 17.9 17.4 16.6

Operating profit, excluding items affecting comparability, SEK M 41 249 888 839 726

Operating profit, including items affecting comparability, SEK M 39 249 856 839 726





Operating cash flow, SEK M 122 124 921 751 794

Operating cash flow/operating profit, % (excluding items affecting comparability) 298 50 104 90 109



Trelleborg Wheel Systems is a leading global supplier of tires and complete wheel systems for farm and forest machinery, forklift trucks and other materials-handling vehicles.

Operations are conducted within two business segments:•Agricultural&ForestTires• IndustrialTires

Agricultural & Forest Tires, 64%

Industrial Tires, 36%


Europe, 73%


Asia, 2%

Other, 4%


Business segments1

Agricultural & Forest TiresDescription: Tires and wheel systems for tractors and other vehicles used in agriculture and forestry. The business area is a leader in the segment for extra-large tires, in which Trelleborg has a broad range.Market position: Leader in the agricultural market in Europe. Global market leader within forest tires.Principal competitors: Michelin, Goodyear/Titan, Mitas, Fire-stone/Bridgestone and Nokian Tyres.

Key factsBusiness Area President: Maurizio Vischi

Head office: Tivoli, Italy

Production units: Denmark, Italy, Latvia, Sri Lanka, Sweden and the US.

Market offices: Africa, Asia, Australia, Europe, the Middle East and North and South America.

Examples of brands: Agricultural & Forest Tires: Trelleborg and Pirelli (license). Industrial Tires: Trelleborg, Bergougnan, Rota, Mastersolid and Orca

Key customers:Agricultural & Forest Tires: Manufacturers of agricultural and •forest machinery, tire and machinery sales companies and end customers.

Industrial Tires: Original equipment manufacturers of forklift •trucks, transport companies, authorities and organizations that are responsible for infrastructure.

Strategic priorities:Consolidation of the strong position held in Agricultural & Forest •Tires through further development of the customer offering.

Capitalize on implemented structural measures to proactively •expand in attractive segments and markets.

Consolidation of industrial tire production from the US to Sri •Lanka and rims from Denmark to Latvia.

Maintain strong positions among OEM customers and further •development of aftermarket customers through continued focused and customer-centric innovation.

Continued effective and successful change of brand from Pirelli •to Trelleborg.


TReLLeBoRG wHeeL SySTeMS

Industrial TiresDescription: Wheels and complete wheel systems for materials-handling vehicles used at such facilities as airports, ports and warehouses, including forklift trucks and other highly utilized and high-load materials-handling vehicles.Market position: World leader in solid industrial tires.Principal competitors: Solideal, Continental, MITL, Aichi and Watts.




TrendsAlthough the European agricultural and forestry markets are ma-ture, demand for efficient equipment, vehicles and large and high-grade tires is increasing in parallel with demands for cost-effective production. The trend is for agricultural operations to merge, become more industrialized, and form larger farms using bigger tractors and, consequently, larger tires. In Europe, it is essential to also take into account how well the tires function on country roads at high speeds, which is necessary when users move between different workplaces.

The market for the agricultural and forest sectors is divided into radial and cross-ply tires. Radial tires are different from cross-ply tires in that the cords are at a 90 degree angle against the direction of travel, compared to cross-ply ties where the cord is diagonal against the direction of travel (approximately 60 degrees). The principal area of growth is radial tires, a segment in which Trelleborg has been a pioneer. The proportion of radial rear tires in Europe is now approximately 70 percent, with an increasing market for larger dimensions, in which Trelleborg holds a strong position. However, the market for cross-ply tires is diminishing annually.

The market for industrial tires is mature and developing in line with the general industrial trend. Price is becoming an increas-ingly important competitive factor. Companies’ efforts to reduce the amount of tied-up capital are driving the trend to rationalize inventories, which makes the efficient handling of materials ever more important. This is creating a long-term growing demand for industrial tires for various materials-handling machines.

Market developmentIn general, a substantial slowdown occurred in the agricultural sector. Nonetheless, the positive trend for high-performance agricultural tires continued during the first quarter of 2009, which benefited Trelleborg as the Group’s products are well-positioned in this area. Global demand for industrial tires continued to decline sharply as a result of the weaker industrial economy.

Financial overviewBelow is a summary of the financial development within Trelle-borg Wheel Systems during the years 2006–2008 and the periods January–March 2008 and 2009.

Trelleborg Wheel Systems – Key ratiosJan–Mar

2009Jan–Mar

2008 2008 2007 2006

Net sales, SEK M 950 962 3,708 3,248 3,145


EBITDA, SEK M (excluding items affecting comparability) 128 133 453 374 334

EBITDA-margin, % 13.5 13.9 12.2 11.5 10.6

Operating profit, excluding items affecting comparability, SEK M 102 109 363 288 243

Operating profit, including items affecting comparability, SEK M 100 108 348 261 222





Operating cash flow, SEK M 122 –34 129 146 153

Operating cash flow/operating profit, % (excluding items affecting comparability) 120 neg. 36 51 63


Acquisitions The table below summarizes the acquisitions that Trelleborg has completed during the years 2006–2008. The acquisition process in Trelleborg is conducted through close cooperation between the business areas, which often individually identify potential acquisi-tion targets, and central functions on Group level.

Acquisitions 2006–2008

Completion date Company Country Product area

Sales, full-year prior to acquisition,

SEK MNumber of employees

2008

Dec 18 Shanghai Reeves China Printing blankets for the graphics industry

60 100

Nov 11 Unit from Ruukki (Steel surface treatment) Sweden Brake shims - 35

Jul 16 PressoNova Sweden Brake shims 35 30

Jun 3 MacDermid Offset Printing Blankets US Printing blankets for the graphics industry

540 400

May 16 Officine Meccaniche GNL Italy Mechanical slide-ring seals 90 60

May 13 NPC US Pipe seals 110 100

Apr 10 Trelleborg Sealing Solutions India India Seals 80 120

Mar 26 Hetag Takdækning Denmark Roofing contractors 300 125

2007

Nov 15 Sealing Solutions US Precision seals 100 40

Oct 29 Solid Service Group Australia Special tires 65 40

Jul 12 AFM US Precision seals 85 45

Jun 1 Hydro-Components Research & Dev. US Precision seals 50 80

Mar 1 Gummiteknik GTM Sweden Advanced rubber components 35 30

Jan 4 Epros och Epros International Germany and UK After-market for pipe systems 90 30

2006

Nov 6 Hunter Diving UK Protective products 10 -

Nov 6 Hetag Tagmaterialer Denmark Construction/roofing materials 100 20

Oct 31 Reeves Brothers. US/Italy/China Industry/offset printing blankets 1,400 1,000

Aug 15 Mehren Rubber Norway Offshore 65 30

Aug 2 Kawneer Rubber and Plastics US Construction/industrial profiles 90 40

Jul 31 UAB Trella Lithuania Protective products 20 60

Jun 30 Mar-Con Finland Polymer components 120 90

Mar 31 Harbour & Marine Engineering Australia Infrastructure 80 50

Feb 6 EPG US Construction/industrial profiles 170 140

Jan 20 CRP Group UK/US Offshore 1,000 500

Jan 3 Elastomer Czech Republic Mixing 75 40



Organization and employeesOperational structureTrelleborg’s operation is organized into four business areas. These comprise of 20 business units that cover about 40 product areas. The President and CEO leads the work of the Group Manage-ment and renders decisions in consultation with other members of the management team, which consists of the heads of the business areas and staff functions. At the end of 2008, Group Management consisted of 12 persons.

EmployeesTrelleborg has operations in 44 countries. About 90 percent of the employees work outside Sweden. The average number of employees declined during the year to 24,347 (25,158), of which 26 percent (26) were women. The number of employees at year-end 2008, including insourced staff and temporary employees, amounted to 23,202, (25,869). Salaries and other benefits amounted to SEK 6,437 M (6,662). Personnel turnover (not taking terminations and retirements into consideration) varies among countries and facili-ties, and often reflects the local labor situation. Personnel turnover was 8 percent during 2008 (9.5). The majority of the units indicate a personnel turnover below 5 percent.

Executive VicePresident and CFO

TrelleborgEngineered Systems

Businessunits

Productareas

Productareas

Productareas

Productareas

TrelleborgAutomotive

Businessunits

TrelleborgSealing Solutions

Businessunits

TrelleborgWheel Systems

Businessunits

Other Group staff functions

PRESIDENT AND CEO

Employees per geography 2008 Women Men Total

Sweden 725 1,518 2,243

France 711 2,139 2,850

Italy 280 1,248 1,528

Poland 537 748 1,285

Spain 270 1,032 1,302

UK 373 1,414 1,787

Germany 343 923 1,266

Rest of Europe 1,076 2,545 3,621

Total Europe 4,315 11,567 15,882

US 1,075 2,426 3,501

Brazil 102 963 1,065

Other markets 287 326 613

Total North and South America 1,464 3,715 5,179

China 277 826 1,103

Sri Lanka 33 729 762

Other markets 205 1,216 1,421

Total Asia and other markets 515 2,771 3,286

Sum 6,294 18,053 24,347

The proportion of women in executive management was 8 percent and 14 percent on the Board of Directors.



Corporate responsibilityThrough Trelleborg’s business concept – polymer solutions that seal, damp and protect – the operations make a positive and inno-vative contribution in many ways through products and solutions for the development of society in the environment, health and safety areas. Trelleborg’s solutions provide protection for both the environment and people.

Trelleborg’s annual reporting on these corporate responsibility issues takes place in accordance with the most established inter-national guidelines in the area: the Global Reporting Initiative guidelines.

Since 2007, Trelleborg has participated in the UN Global Compact network, an initiative for responsible business practices, focusing on the environment, working conditions, human rights and anti-corruption.

Trelleborg’s Code of Conduct is the company’s central policy in the areas of the environment, work environment and ethics. The Code applies to all employees without exception, and is based on internationally recognized guidelines, such as the UN conven-tions on human rights, the ILO’s conventions, the OECD’s guidelines and the UN Global Compact.

Training in the Code of Conduct is mandatory for all employ-ees, and self-evaluation based on the guidelines is the basis for our work with CR issues (see figure below). Within certain areas of the

Systematic corporate responsibility work in TrelleborgInternally

Governance and reporting

Workplace andenviroment Issues

Marketplace issuesSociety and comunity issues

CR websiteCR Report

Annual report

Financial performanceEnviromental performance

Social performance

Code of conduct CR Reporting

GRI’s guidelines

Policies

UN human rightsILO conventionsOECD guidlines

UN Global compact

Self-evaluation

Externalaudits

Internationalguidelines

Externally

Code, self-evaluation is reinforced by external audits, such as ISO 14001 environmental audits.

The Group has a whistle-blower policy, which means that eve-ry employee has the right to report suspicions of serious breaches of laws or regulations without any repercussions whatsoever.

Environmental responsibilityDirect responsibility for issues relating to the environment, health and safety rests with each facility. Every plant has an environmen-tal coordinator and a person responsible for health and safety. The central Group function, Environment, which is a part of the Group Legal Department, is responsible for control and coordina-tion of environmental issues based on the Group’s environmental policy and the central environmental objectives. The Group’s Environment Forum, a group that meets four times a year and consists of environmental managers from the four business areas, functions as an aid to the central Environment Group function. At Board of Directors level, it is the Audit Committee that has the task of monitoring follow-up and reporting of issues within the framework of Corporate Responsibility. CR reporting is managed by a group comprising representatives from the Group Corporate Communications, Legal Department, Environment, HR and Purchasing staff functions. The Corporate Communications staff function is responsible for coordinating the reporting.



History

1905Trelleborgs Gummifabriks AB is formed by Henry Dunker. The company rap-idly becomes Scandinavia’s leading rubber-production company, with bicycle and car tires, industrial rubber goods and raincoats as its principal products.

1950Internationalization begins.

1962Henry Dunker dies at age 92, leaving his fortune to a number of funds and foundations, which today control the majority of the voting rights in the company.

1964Trelleborg is listed on the Stockholm Stock Exchange.

1975The manufacturing of passenger car and truck tires is discontinued. The reasons for the close down are the costly transition to radial tires, extreme global overproduction and intense price pressure.

1977The Company’s name is shortened to Trelleborg AB.

1980sTrelleborg expands within for example mining and trading, areas that were subsequently discontinued.

1994The brand is complemented with three open triangles, which symbol-ized the expansive development within the Group. Today, they are also a reminder of the Group’s four basic values: customer focus, performance, innovation and responsibility.

1995Divestment of last shares in Munksjö and Falconbridge and the remaining operations are concentrated to a number of core areas.

1998Acquisition of Pirelli Agri.

2000New strategic focus – The Group is organized into three sectors: Indus-trial, Distribution and Miscellaneous. The greater part of the Miscel-laneous sector and 51 percent of the Distribution sector are divested. The operation focuses on the Industrial sector, which expands through acquisitions. At the end of 2000, the Group has sales of SEK 13.7 billion and some 12,400 employees.

2003Acquisition of Smiths Group Plc’s polymer-based precision seals busi-ness, which formed the Trelleborg Sealing Solutions business area.

2005Trelleborg AB celevrates 100 years. The remainder of the Distribution sector is divested.

2006Acquisitions of CRP and Reeves.



FInAnCIAL InFoRMATIon In SuMMARy

Financial overview for the full years 2004–2008 and the periods January–March 2008 and 2009Trelleborg’s financial statements for the last three fiscal years are incorporated into the prospectus by reference. All financial reports are available at Trelleborg’s website www.trelleborg.com. The reports can also be ordered through Trelleborg’s communication depart-ment, e-mail: [email protected] or phone: +46 410 670 00.

Trelleborg’s annual reports for 2004, 2005, 2006, 2007 and 2008 have been audited by Göran Tidström as auditor in charge and Olov Karlsson as co-signing auditor, of Pricewaterhouse-

Coopers. The auditor’s reports for 2004, 2005, 2006, 2007, and 2008 have, respectively, been incorporated into each year’s annual report. The auditor’s reports follow a standardised formula and are all unqualified.

Trelleborg’s interim report as of March 31, 2009 has been reviewed and follows a standardised formula and is unqualified.

In addition to the audit of the annual reports and the review of the interim report that are included in the historical financial information, Trelleborg’s auditor has not reviewed any other parts of this prospectus.

Income statements (SEK M)Jan–Mar

2009Jan–Mar

2008 2008 2007 2006 2005 2004

Continuing operations

Net sales 6,877 8,067 31,263 30,810 26,875 23,307 22,136

Cost of goods sold –5,375 –6,023 –23,603 –23,151 –20,186 –17,077 –16,494

Gross profit 1,502 2,044 7,660 7,659 6,689 6,230 5,642

Selling expenses –632 –598 –2,437 –2,244 –2,062 –1,896 –1,847

Administrative expenses –675 –740 –2,982 –3,002 –2,625 –2,422 –2,351

Research & development costs –167 –150 –603 –550 –496 –466 –480

Other operating income/expenses 15 17 –1,282 –159 –45 250 217

Share of profit or loss in associated companies 3 1 18 12 22 33 37

Operating profit 46 574 374 1,716 1,483 1,729 1,218

Financial income and expenses –139 –132 –540 –439 –313 –208 –283

Profit before tax –93 442 –166 1,277 1,170 1,521 935

Tax 158 –133 –92 –430 –402 –378 –222

Net profit 65 309 –258 847 768 1,143 713

Discontinued operations

Net sales – – – 161 409 863 776

Operating profit – – – –9 24 50 673

Profit before tax – – – –9 23 46 669

Net profit – – – –9 –2 34 673

Total net sales 6,877 8,067 31,263 30,971 27,284 24,170 22,912

Total operating profit 46 574 374 1,707 1,507 1,779 1,891

Total profit before tax –93 442 –166 1,268 1,193 1,567 1,604

Total net profit 65 309 –258 838 766 1,177 1,386

- of which attributable to parent company’s shareholders 65 305 –267 821 751 1,161 1,372

- of which attributable to minority interest 0 4 9 17 15 16 14



Balance sheets (SEK M)March 31,

2009March 31,

2008 2008 2007 2006 2005 2004

Assets

Property, plant and equipment 7,246 6,185 7,137 6,293 6,008 5,667 5,399

Intangible assets 12,102 9,805 11,833 10,098 9,535 8,208 7,180

Financial assets 1,798 876 1,586 967 1,025 936 873

Total non-current assets 21,146 16,866 20,556 17,358 16,568 14,811 13,452

Inventories 4,598 4,064 4,775 4,012 3,604 3,275 2,826

Current operating receivables 6,987 7,978 7,505 7,339 6,681 6,118 5,366

Current interest bearing receivables 152 130 178 95 88 93 33

Cash and cash equivalents 501 483 749 530 616 663 475

Total current assets 12,238 12,655 13,207 11,976 10,989 10,149 8,700

Total assets 33,384 29,521 33,763 29,334 27,557 24,960 22,152

Equity and liabilities

Shareholders’ equity, excluding minority share 10,527 9,797 10,153 9,932 9,580 10,041 8,475

Minority share 83 111 85 120 107 72 128

Total equity 10,610 9,908 10,238 10,052 9,687 10,113 8,603

Non-current interest bearing liabilities 10,897 7,883 10,834 7,276 6,859 5,891 7,150

Other non-current liabilities 1,859 1,508 1,977 1,598 1,521 1,276 1,197

Interest bearing current liabilities 2,738 3,296 2,805 3,446 3,225 2,106 310

Accounts payable and other operating liabilities 7,280 6,926 7,909 6,962 6,265 5,574 4,892

Total liabilities 22,774 19,613 23,525 19,282 17,870 14,847 13,549

Total equity and liabilities 33,384 29,521 33,763 29,334 27,557 24,960 22,152

Cash flow statements (SEK M)Jan–Mar

2009Jan–Mar

2008 2008 2007 2006 2005 2004

Operating cash flow 478 –388 1,594 1,718 1,594 1,751 1,421

Restructuring measures in acquired units – – – – – –63 –248

Utilization of restructuring reserves –112 –70 –447 –325 –124 –107 –30

Dividend paid to minority shareholders – – –3 –3 – –1 –2

Financial items –332 –154 –328 –426 –245 –257 –290

Tax paid –8 –86 –402 –446 –320 –393 –379

Free cash flow 26 –698 414 518 905 930 472

Acquisitions –21 –38 –802 –616 –3,095 –368 –346

Divestments – – –2 127 188 20 1,161

Dividend paid to shareholders – – –587 –542 –497 –452 –396

Exercise of share warrants and call options – – – – – 78 168

Net cash flow 5 –736 –977 –513 –2,499 208 1,059



Group key figures (SEK M unless otherwise stated)Jan–Mar

2009Jan–Mar

2008 2008 2007 2006 2005 2004

Shareholders’ equity 10,610 9,908 10,238 10,052 9,687 10,113 8,603

Capital employed, closing balance 22,480 20,288 22,238 19,853 18,818 16,922 15,112

Net debt 12,974 10,562 12,706 10,093 9,350 7,236 6,951

Total assets 33,384 29,521 33,763 29,334 27,557 24,960 22,152

Equity/assets ratio, % 32 34 30 34 35 41 39

Debt/equity ratio, % 122 107 124 100 96 72 81

Capital turnover rate, multiple 1.3 1.5 1.5 1.6 1.5 1.5 1.4

Investments in property, plant and equipment 219 302 1,367 1,215 980 689 841

Investments in intangible assets 20 22 159 121 132 184 170

Acquisitions 21 38 802 616 3,095 368 346

Return on shareholders’ equity, %, R12 neg. 9.1 neg. 8.4 7.6 12.5 17.2

Earnings per share, SEK 0.70 3.35 –2.95 9.10 8.30 12.90 15.55

Free cash flow 26 –698 414 518 905 930 472

Free cash flow per share, SEK 0.30 –7.70 4.60 5.75 10.00 10.30 5.35

Shareholders’ equity per share, SEK 116.50 108.40 112.35 109.90 106.00 111.15 94.45

Dividend per share, SEK – – – 6.50 6.00 5.50 5.00

Average number of shares, million 90.4 90.4 90.4 90.4 90.4 90.2 88.3


- of which, outside Sweden* 19,310 24,037 22,104 22,836 20,268 19,243 19,117

Key figures continuing operations, excluding items affect-ing comparability (SEK M unless otherwise stated)

Jan–Mar 2009

Jan–Mar 2008 2008 2007 2006 2005 2004

EBITDA 349 871 2,868 3,276 2,726 2,560 2,600

EBITDA-margin, % 5.0 10.8 9.1 10.6 10.1 10.8 11.6

Operating profit (EBIT) 63 622 1,798 2,274 1,820 1,729 1,778

Operating margin (ROS), % 0.9 7.7 5.7 7.3 6.7 7.3 7.9

Profit before tax –76 490 1,258 1,836 1,507 1,521 1,495

Net profit 78 343 889 1,282 1,072 1,143 1,105

Return on capital employed (ROCE), %, R12 5.6 11.4 8.4 11.5 9.9 10.7 11.3

Return on shareholders’ equity, %, R12 6.0 12.6 8.8 13.0 10.8 12.2 13.9

Earnings per share, SEK 0.85 3.75 9.75 14.00 11.70 12.50 12.40

Operating cash flow 478 –388 1,594 1,718 1,594 1,751 1,421

Operating cash flow per share, SEK, R12 27.25 14.70 17.65 19.00 17.65 19.45 16.10

Operating cash flow/operating profit, %, R12 199 58 89 76 88 102 84


* For the period January–March 2008 and 2009, insourced and temporary staff is included as well.



Financial information per business area1

Net sales (SEK M)Jan–Mar

2009Jan–Mar

2008 2008 2007 2006


Trelleborg Engineered Systems 2,862 2,856 12,378 11,745 9,310

Trelleborg Automotive 1,826 2,726 9,461 10,299 9,327

Trelleborg Sealing Solutions 1,276 1,587 6,022 5,844 5,389

Trelleborg Wheel Systems 950 962 3,708 3,248 3,145

Elimination -37 –64 –306 –326 –296

Total 6,877 8,067 31,263 30,810 26,875

EBITDA (SEK M)Jan–Mar

2009Jan–Mar

2008 2008 2007 2006

Continuing operations, excluding items affecting comparability

Trelleborg Engineered Systems 210 338 1,429 1,464 1,041

Trelleborg Automotive –67 138 57 634 616

Trelleborg Sealing Solutions 98 295 1,079 1,019 897

Trelleborg Wheel Systems 128 133 453 374 334

Other companies –3 –2 –8 –6 –8

Group items –17 –31 –142 –209 –154

Total, excluding items affecting comparability 349 871 2,868 3,276 2,726

Items affecting comparability

Trelleborg Engineered Systems 0 –19 –63 –86 –31

Trelleborg Automotive –8 –25 –482 –315 –51

Trelleborg Sealing Solutions –1 – –26 – –

Trelleborg Wheel Systems –2 –1 –15 –27 –17

Property sale – – – 26 –

Legal non-recurring costs – – –430 –86 –

Total, including items affecting comparability 338 826 1,852 2,788 2,627

Operating profit (SEK M)Jan–Mar

2009Jan–Mar

2008 2008 2007 2006

Continuing operations, excluding items affecting comparability

Trelleborg Engineered Systems 117 266 1,087 1,168 805

Trelleborg Automotive –175 33 –381 203 219

Trelleborg Sealing Solutions 41 249 888 839 726


Other companies –3 –3 –9 –8 –15

Group items –19 –32 –150 –216 –158

Total, excluding items affecting comparability 63 622 1,798 2,274 1,820


Trelleborg Engineered Systems –5 –22 –79 –89 –36

Trelleborg Automotive –8 –25 –868 –382 –280

Trelleborg Sealing Solutions –2 – -32 – –

Trelleborg Wheel Systems –2 –1 –15 –27 –21

Property sale – – – 26 –

Legal non-current costs – – –430 –86 –

Total, including items affecting comparability 46 574 374 1,716 1,483

1) Trelleborg carried out minor changes in the operating structure during the first quarter of 2009. The change has affected reporting by business area for the first quarter of 2008 whereby certain operations with group external sales for 2008 of SEK 16 M has been transferred from Trelleborg Engineered Systems to Trelleborg Automotive (SEK 13 M) and to Trelleborg Seal-ing Solutions (SEK 3 M). The effect on earnings is marginal.



Capital employed (SEK M)March 31

2009March 31

2008 2008 2007 2006




Trelleborg Sealing Solutions 8,118 6,916 8,037 6,975 6,374

Trelleborg Wheel Systems 2,182 1,764 2,145 1,679 1,418

Other companies 21 16 19 20 129

Group items 4 51 -3 43 19

Provisions for restructuring measures –790 –217 –883 –254 –95

Total 22,480 20,288 22,238 19,855 18,733



DeFInITIonS

Group key figures

Return on shareholders’ equityProfit for the period, attributable to equity holders of the Company as a percentage of average shareholders’ equity, excluding minority interests.

Net debtInterest bearing liabilities less interest bearing assets and cash and cash equivalents.

Shareholders’ equity per shareShareholders’ equity excluding minority interests divided by the average number of shares outstanding.

Free cash flowOperating cash flow and cash flow from financial items and tax and the effect of restructuring measures on cash flow.

Free cash flow per shareFree cash flow divided by the average number of shares outstanding.

Capital turnover rateNet sales as a percentage of average capital employed.

Average number of employeesIncluding temporary employees. For periods January-March 2008 and 2009 also including average number of insourced staff.

Debt/equity ratioNet debt divided by total equity.

Equity/assets ratioTotal equity divided by total assets.

Capital employedTotal assets less interest bearing financial assets and cash and cash equivalents and non-interest bearing operating liabilities (including pen-sion liabilities) and excluding tax assets and tax liabilities.

Earnings per shareProfit for the period, attributable to equity holders of the Company divided by the average number of shares outstanding.

Key figures continuing operations, excluding items affecting comparability

Return on shareholder’s equityProfit for the period after tax, attributable to equity holders of the Com-pany excluding items affecting comparability net after tax, as a percent-age of average shareholders’ equity, excluding minority interests.

Return on capital employed (ROCE)EBIT divided by the average capital employed.

Operating profit (EBIT)Operating profit according to the income statement, excluding items af-fecting comparability.

EBITDAOperating profit before depreciation of tangible and intangible assets and excluding items affecting comparability.

EBITDA-marginEBITDA excluding profit from participation in associated companies as a percentage of net sales.

Operating cash flowEBITDA excluding undistributed participation in the earnings of associat-ed companies, investments and changes in working capital but excluding cash flow pertaining to restructuring.

Operating cash flow/operating profitOperating cash flow as a percentage of operating profit, excluding items affecting comparability.

Operating cash flow per shareOperating cash flow divided by the average number of shares outstand-ing.

Operating margin (ROS – Return on sales)Operating profit excluding participation in the earnings of associated com-panies and items affecting comparability as a percentage of net sales.

Earnings per shareProfit for the period, attributable to equity holders of the Company, exclud-ing items affecting comparability net after tax, divided by the average number of shares outstanding.

R12 refers to key figures calculated on a 12 month rolling basis.


First quarter of 2009 in comparison with the same period 2008The numbers within parenthesis represent the corresponding period the previous year.

EarningsNet salesTrelleborg’s net sales for the first quarter of 2009 amounted to SEK 6,877 M (8,067), down 15 percent. Organic sales declined by 27 percent. Based on comparable exchange rates, the total decline in sales amounted to 25 percent. Demand continued to weaken, particularly in the automotive sector and in the industrial capital goods sector.

Organic sales for Trelleborg Engineered Systems fell 17 percent during the quarter. Sales in the infrastructure construction and off-shore segments were in line with the year-earlier period. Including exchange-rate effects, sales were in line with the preceding year.

In Trelleborg Automotive, organic sales fell 41 percent due to a continued sharp decline in global demand, accentuated by invento-ry reductions by several manufacturers in the automotive industry. Including exchange-rate effects, sales declined by 33 percent.

Organic sales for Trelleborg Sealing Solutions during the quarter fell 32 percent as a result of continued lower demand for industrial capital goods in Europe as well as the global automotive industry. Including exchange-rate effects, sales declined by 20 percent.

In Trelleborg Wheel Systems, a 14-percent decline in organic sales was reported during the quarter. Sales of agricultural tires var-ied among the different sub-segments, but remained strong within high-performance agricultural tires. Sales of industrial tires declined sharply. Including exchange-rate effects, total sales fell by 1 percent.

Consolidated earningsOperating profit during the first quarter totaled SEK 46 M (574). Operating profit was impacted negatively by a sharp decline in volumes and the fact that it was not possible to reduce fixed costs in pace with the rapid decline in volumes. Earnings were also af-fected by costs for capacity adjustments and personnel reductions totaling approximately SEK 50 M. Items affecting comparabil-ity amounted to an expense of SEK 17 M (for a more detailed description of items affecting comparability see page 49).Exchange-rate fluctuations arising in the translation of the earn-ings of foreign Group companies had a positive impact of SEK 8 M on earnings, compared with the same period in 2008.

A net financial expense of SEK 139 M (expense: 132) was recognized, corresponding to an average interest rate of 4.3 per-cent (5.0). Loss before tax amounted to SEK 93 M (profit: 442). Net profit was SEK 65 M (309). The Group’s tax expense was impacted positively by the capitalization of losses carried forward in Germany and the UK totaling SEK 123 M and the success-ful resolution of a tax dispute in Sweden totaling SEK 18 M. Excluding these items, the tax rate amounted to 18 percent (30). Earnings per share totaled SEK 0.70 (3.35).

Operating profitOperating profit, excluding items affecting comparability, amount-ed to SEK 63 M (622). Operating profit was impacted negatively by a sharp decline in volumes and the fact that it was not possible to reduce fixed costs in pace with the rapid decline in volumes. Earnings were also affected by costs for capacity adjustments and personnel reductions totaling approximately SEK 50 M. For a more detailed description of operating profit per business area, see the interim report for the period January-March 2009, page 10–13 (page 78–81 in this prospectus)

Adjustments made to prices of raw materials gradually impact Trelleborg with a time lag of three to six months. Due to the sharp decline in volumes, which resulted in low inventory turnover, falling raw material prices had only a marginal impact during the first quarter of 2009. Exchange-rate fluctuations arising in the translation of the earnings of foreign Group companies and from transaction flows had a marginal impact on the Group’s earnings.

The operating margin was 0.9 percent (7.7). Operating profit before depreciation (EBITDA) amounted to SEK 349 M (871). The EBITDA margin for the quarter was 5.0 percent (10.8).

The Group recognized a loss before tax of SEK 76 M (profit: 490) and net profit amounted to SEK 78 M (343). Earnings per share totaled SEK 0.85 (3.75).

Balance sheetThe Group’s total assets amounted to SEK 33,384 M (29,521) as of March 31, 2009, an increase of SEK 3,863 M, or 13 percent compared to the same period in 2008.

Working capital decreased during the first quarter of 2009, partly as a result of declining volumes and effective control over inventory levels. Gross investments for the first quarter of 2009 totaled SEK 239 M (324), of which SEK 20 M in intangible assets and SEK 219 M in property, plant and equipment. The invest-ments declined mainly due to deferred investments. Depreciation and amortization for the period amounted to SEK 287 M (249). Return on capital employed during the most recent 12-month period was negative (9.3 percent). For continuing operations, excluding items affecting comparability, ROCE declined to 5.6 percent (11.4). Total equity increased during the year by SEK 372 M to a closing balance of SEK 10,610 M, mainly due to a positive translation difference.

Net debt rose by SEK 268 M during the period to SEK 12,974 M, an increase primarily attributable to exchange-rate differences. The debt/equity ratio improved to 122 percent, compared with 124 percent on December 31, 2008. The impact of the exchange-rate effect on net loans was offset by a positive translation dif-ference on shareholders’ equity. Trelleborg has long-term basic financing, via a syndicated loan, that extends into 2012. Long-term credit facilities, including other long-term loans, amounted to approximately SEK 16,600 M at the end of the quarter. The unutilized portion amounted to approximately SEK 5,800 M. Short-term financing totaled about SEK 2,700 M. The equity/as-sets ratio was 32 percent (34).

CoMMenTARy on FInAnCIAL DeveLoPMenT



Cash flowThe operating cash flow increased compared with the preceding year and amounted to SEK 478 M (neg: 388) in the first quarter. The improvement in cash flow was mainly due to a reduction in working capital, partly as a result of declining volumes and ef-fective control over inventory levels, and lower investments. Free cash flow amounted to SEK 26 M (neg: 698). Free cash flow was impacted by the positive operating cash-flow trend, which was off-set by the utilization of restructuring provisions amounting to an expense of SEK 112 M (expense: 70), taxes to an expense of SEK 8 M (expense: 86) and financial items amounting to an expense of SEK 332 M (expense: 154). Tax items were impacted positively by such factors as the successful resolution of a tax dispute. Financial items were affected adversely by the accrual difference between interest received and interest paid in connection with interest-rate swaps totaling negative SEK 168 M. Total net cash flow for the first quarter of 2009 amounted to SEK 5 M (–736).

2008 in comparison with 2007The numbers within parenthesis represent the corresponding period the previous year.

EarningsNet salesMarket conditions were extremely varied in 2008, with a favour-able trend in most of the Group’s market segments during the first half of the year. The financial turbulence that prevailed towards the end of 2008 impacted many areas, resulting in a decrease in the Group’s net sales, particularly within automotive-related segments, where the decline was dramatic. This led to a decline in earnings as well. However, within such segments as the Aviation Industry, Offshore Oil and Gas, Infrastructure and Agriculture, the market trend remained favourable. Sales increased for all business areas except for Trelleborg Automotive. For the full year 2008, the Trelleborg Group’s net sales amounted to SEK 31,263 M (30,971), an increase of 1 percent compared with 2007. Organic sales declined by 1 percent. The increase in sales for com-parable exchange rates amounted to 1 percent. To meet an increas-ing demand within selected segments, a number of investments in new facilities were made during 2008, including within such selected segments as Offshore and Agriculture and in such geo-graphical markets as China, Sri Lanka, Turkey, the US, Italy and Sweden. The Trelleborg Group’s strategy is to expand in attrac-tive segments, with favourable growth and profitability potential, and in which the three primary customer needs of sealing, noise dampening and protection play a main role. This strategy led to a number of acquisitions during 2008, with combined annual sales of approximately SEK 1,215 M and 970 employees.

In 2008, Trelleborg Engineered Systems experienced an organ-ic growth of 3 percent. Demand varied greatly within the business area’s various market segments. Within the industrial segments and construction related operations, especially towards the end of 2008, the trend was weak, while demand remained favourable

within project-oriented segments, particularly in Offshore Oil and Gas and Infrastructure.

For Trelleborg Automotive, organic sales decreased by nearly 9 percent during the full-year 2008 compared with 2007. The decline was attributable to a significant decrease in demand, primarily in North America and Western Europe, and to extensive capacity reductions and personnel cutbacks.

During the first half of 2008, the trend for Trelleborg Sealing Solutions was very positive, with favourable organic growth in prioritized industrial segments. Towards the end of 2008, demand declined substantially, particularly within automotive-related operations. As a result, the business area reported no organic growth in 2008. Demand in the Aerospace segment remained very favourable, and the trend in such segments as alternative energy sources and life science was also positive.

Trelleborg Wheel Systems increased its total sales in 2008 and achieved an organic growth of nearly 11 percent. The positive global trend for larger agricultural tires was strong throughout the year, benefiting Trelleborg, whose products are well positioned in this area. Growth in the industrial tires segment also increased somewhat during 2008, but with a clear decline in demand during the fourth quarter 2008.

Net sales per marketEurope remained the Trelleborg Group’s most important market, with a 67 percent share of total sales in 2008. However, during the year, the Group further strengthened its presence in the emerging markets. Sales in Europe and North and South America remained at the same level as in 2007, while sales growth in Asia and the rest of the world amounted to 11 percent. Trelleborg continued to invest in new growth markets. To meet rising demand in Asia, Trelleborg Engineered Systems constructed a new facility in Wuxi, China, which was inaugurated in April 2008. To strengthen its position in the growing Asian graphics market, the business area also acquired the remaining shares in Shanghai Reeves and thereby became the sole owner of the company. Within the framework of its joint venture, Trelleborg Kunhwa, Korea, Trelleborg Automo-tive opened a smaller unit in Zhangjiagang, China, to manu-facture vehicle boots for Korean customers in China. Within Trelleborg Sealing Solutions, production was moved from Canada to Brazil and Mexico, and the business area acquired the remain-ing minority shares in an Indian sealing operations firm. Sales in markets outside Western Europe, North America, Japan and Oceania rose by 14 percent during the year.

Consolidated earningsConsolidated operating profit totalled SEK 374 M (1,707) in 2008. The Group’s financial income and expenses amounted to a net expense of SEK –540 M (–439), corresponding to an average interest rate of 4.75 percent (4.40). The tax expense for 2008 totalled SEK 92 M (430). For continuing operations excluding items affecting comparability, the tax rate was 29 percent (30). The overall tax expense was impacted by the tax effect of items



affecting comparability. The net loss was SEK –258 M (838) and earnings per share amounted to SEK –2.95 (9.10). Operating profit was adversely impacted by restructuring costs and impair-ment losses attributable to the action program in the amount of SEK –994 M (–498) before tax. Non-recurring costs relating to the ongoing competition investigations related to specific types of marine fenders and marine oil hoses, had a negative impact on operating profit of SEK –430 M. The items affecting comparabil-ity, which were charged to the operating profit in 2008 at a total amount of SEK 1,424 M (558) before tax and SEK 1,148 M (435) after tax, were excluded in the statement of the Group’s operating key figures (for a more detailed description of items affecting comparability, see p. 49). Exchange rate fluctuations in connection with the translation of earnings of foreign subsidiaries had a negative impact on operating profit at an amount of ap-proximately SEK 69 M compared with the preceding year.

Operating profitFor continuing operations excluding items affecting comparabil-ity, operating profit in 2008 amounted to SEK 1,798 M (2,274). Exchange rate fluctuations in connection with the translation of earnings of foreign subsidiaries affected operating profit negatively by approximately SEK 40 M compared with 2007. Trelleborg Sealing Solutions and Trelleborg Wheel Systems increased their operating profit compared with 2007, while the operating profit for Engineered Systems declined somewhat. Profit for Trelleborg Automotive remained negatively affected by the sharp decline in the automotive industry. The EBITDA-margin amounted to 9.1 percent (10.6) and the operating margin was 5.7 percent (7.3). The operating margin improved compared with the preced-ing year for Trelleborg Sealing Solutions and Trelleborg Wheel Systems, primarily as a result of an improved product mix and continued prioritization of attractive segments. The profit margin for Trelleborg Engineered Systems decreased in 2008, mainly as a result of a decreased demand in certain segments and to produc-tion disruptions in the Offshore Oil and Gas segment, which impacted the 2008 operating profit by approximately SEK 110 M. Trelleborg Automotive reported a negative operating margin as a result of the clear decline in the automotive industry. Overall within the Group, expenses totalling approximately SEK 200 M were charged for adjustments to capacity and redundancies of which the majority were within Trelleborg Automotive. Costs for development, including capitalization of SEK 55 M (81), amounted to SEK 513 M (520) during 2008. Depreciation and impairment losses of capitalized expenses for development amounted to SEK 118 M (94) in 2008.

Balance sheetThe Group’s total assets amounted to SEK 33,763 M (29,334) at the end of 2008, an increase of SEK 4,429 M, or 15 percent

The decreased level of capital tied-up in working capital was primarily attributable to an increase in operating liabilities and a decrease in operating receivables, which was offset somewhat by

an increase in inventories. Exchange rate differences increased the value of non-current assets by SEK 1,969 M. Gross investments for 2008 totalled SEK 1,526 M (1,336), of which SEK 159 M in intangible assets and SEK 1,367 M in property, plant and equipment. Depreciation and amortization for the year amounted to SEK 1,054 M (992). Impairment losses totalled SEK 424 M (87), of which SEK 408 M was related to the Group’s ongoing action programs (see p. 49 for a description of these programs). Return on capital employed (ROCE) for the Group decreased to 1.8 percent (8.7). For continuing operations, excluding items affecting comparability, ROCE declined to 8.4 percent (11.5). Total equity increased during the year by SEK 186 M to a closing balance of SEK 10,238 M (10,052). Net exchange rate differences amounted to SEK 1,183 M, including exchange rate differences (net after tax) on hedging instruments. Total dividend paid in 2008 amounted to SEK 590 M (545) of which SEK 3 M (3) was distributed to minority shareholders.

The net debt increased during 2008 to SEK 12,706 M (10,093). The purchase consideration for acquisitions made during the year totalled SEK 802 M, including acquisition costs. Exchange rate differences increased net debt by SEK 1,636 M. Trelleborg has long term based financing stretching into 2012 through a syndicated loan. Long term credit facilities and other long term loans amounted to approximately SEK 16,300 M at the end of 2008. At December 31, 2008 the unutilized portion was approximately SEK 5,500 M. The short term financing amounted to approximately SEK 2,800 M. The debt to equity ratio at year end was 124 percent (100). The equity to assets ratio was 30 percent (34). At the end of the period, equity per share totalled SEK 112 (110). Return on equity was negative (8.4 percent). For continuing operations excluding items affecting comparability, return on equity declined to 8.8 percent (13.0).

Cash flow The Group’s operating cash flow in 2008 amounted to SEK 1,594 M (1,718). The decrease compared with 2007 was mainly attributable to the decline in the earnings trend and a higher level of investment than in the previous year. Enhanced efficiency in the handling of operating capital and a lower sales rate in the fourth quarter impacted the operating cash flow trend positively, largely offsetting the decline in earnings. The investment level amounted to SEK 1,526 M (1,333) excluding divested units, representing 4.9 percent (4.3) of net sales. Operating cash flow amounted to 89 percent of operating profit excluding items af-fecting comparability. After deductions for payments pertaining to restructuring measures, dividends to minority shareholders, financial payments and taxes paid, free cash flow amounted to SEK 414 M (518), corresponding to SEK 4.60 per share (5.75). Acquisitions carried out in 2008 were charged to cash flow in the amount of SEK 802 M (616). The total dividend paid to shareholders in 2008 amounted to SEK 587 M, corresponding to 142 percent of free cash flow for 2008. Total net cash flow in 2008 amounted to SEK –977 M (–513).



2007 in comparison with 2006The numbers within parenthesis represent the corresponding period the previous year.

EarningsNet salesMarket conditions during 2007 remained favourable in several of Trelleborg’s prioritized market segments, particularly in such areas as Aerospace, Infrastructure, Offshore Oil and Gas Industry and General Industry. Sales increased in all business areas. In 2007, the Group’s net sales rose by 14 percent to SEK 30,971 M (27,284). For comparable units/exchange rates, the increase was 16 percent. To meet increased demand in selected segments, Trelleborg made a number of investments in new facilities during 2007. Acquisi-tions during the year provided combined annual sales of about SEK 425 M and 265 employees.

In 2007, Trelleborg Engineered Systems recorded strong organic growth of 9 percent. The project-oriented Infrastructure Construction and Offshore segments reported a highly favour-able trend. Demand in the Building segment in the Scandinavian market remained strong. A broadening of the range to satisfy cus-tomer demand for complete solutions also had a positive impact on growth.

For Trelleborg Automotive, there was a relatively strong increase in volumes, with an organic growth of 12 percent. The sales trend was good in antivibration operations, with favourable growth in all markets. The sales improvement was a result of in-creased market shares and strong growth in underlying markets in Central Europe and Asia, where Trelleborg had already expanded its presence.

The market conditions for Trelleborg Sealing Solutions were favourable in prioritized industrial segments during 2007. Or-ganic growth was 9 percent and the order intake in the Industrial Applications and Aerospace segments was highly favourable. Sales to the Automotive sector also increased slightly, with the focus on more safety-critical and technology-intensive products resulting in improved positioning.

Trelleborg Wheel Systems increased its total sales during 2007. This was achieved despite the conscious decision to discontinue sales of coated fabrics. Both business segments, Agriculture & For-est Tires and Industrial Tires, recorded favourable growth, mainly due to the business area’s successful product mix strategy. Organic growth totalled 6 percent.

Net sales per marketDuring 2007 Europe remained the most important market for the Trelleborg Group. However, the Group further strengthened its presence in growth markets during the year. Sales growth was 11 percent in Europe, 22 percent in North and South America and 30 percent in Asia and the rest of the world. Examples of investments conducted include Trelleborg Engineered Systems’ establishment of units in China to follow its customers’ expan-sion. This was also the case for the new Trelleborg Automotive unit in Dej, Romania. Another example is the acquisition of the industrial tire manufacturer Solid Service Group, which enabled

Trelleborg Wheel Systems to expand in Australia. Sales in growth markets increased by 28 percent during the year.

Consolidated earningsConsolidated operating profit totalled SEK 1,707 M (1,507) in 2007. The Group’s financial income and expenses amounted to a net expense of SEK –439 M (–314), representing 4.4 percent (3.6) of average net debt during the year. The tax expense for 2007 totalled SEK 430 M (427). The average tax rate was 34 percent.

Net profit totalled SEK 838 M (766) and earnings per share amounted to SEK 9.10 (8.30). Operating profit was adversely im-pacted by restructuring costs and impairment losses attributable to the action program in the amount of SEK –498 M (–337) before tax. Non-recurring costs relating to the ongoing competition investigation of subsidiaries had a negative impact on operating profit of SEK 86 M. A capital gain recognized in the first quarter attributable to the sale of a property in Hammarbyhamnen, Stock-holm, impacted operating profit positively in the amount of SEK 26 M before tax. These items affecting comparability, which were charged to operating profit in the total amount of SEK 558 M (337) before tax and SEK 435 M (304) after tax, were excluded in the statement of the Group’s operating key figures.

Operating profitOperating profit for 2007 totalled SEK 2,274 M (1,820) for continuing operations, excluding items affecting comparability. Exchange rate fluctuations in connection with the translation of earnings of foreign subsidiaries affected the operating profit nega-tively by approximately SEK 48 M compared with the preceding year. The operating profit improved for three of the four business areas, mainly due to such developments as favourable volumes and a focus on profitable segments. Trelleborg Automotive reported slightly poorer earnings compared with the preceding year, mainly as a result of certain efficiency problems in parts of the operation and higher raw material costs. The Group’s EBITDA-margin amounted to 10.6 percent (10.1) and the operating margin totalled 7.3 percent (6.7). The operating margin improved com-pared with the preceding year for Trelleborg Engineered Systems, Trelleborg Sealing Solutions and Trelleborg Wheel Systems and this is primarily attributable to an improved product mix, continued prioritization towards attractive segments and posi-tive development in completed acquisitions as well as efficiency enhancements. Trelleborg Automotive reported a lower operating margin. Costs for research and development, including capitaliza-tion of SEK 81 M (104), amounted to SEK 520 M (522) during the year. Depreciation and impairment loss of capitalized expenses for research and development in 2007, amounted to SEK 94 M (57) in 2007.

Balance sheetThe Group’s total assets amounted to SEK 29,334 M (27,557) at the end of 2007, an increase of SEK 1,777 M, or 6.4 percent.

The increased level of tied-up capital in working capital was primarily attributable to a rise in inventories and operating receivables, which was offset somewhat by increased operating

InvITATIon To SuBSCRIBe FoR SHAReS In TReLLeBoRG AB (PuBL)


liabilities. In addition to exchange rate effects, the increase in non-current assets was a combination of gross investments for the year totalling SEK 1,336 M (1,112), of which SEK 121 M was in-tangible assets, SEK 1,215 M was property, plant and equipment and depreciation for the year amounted to SEK 992 M (917). Total impairment losses in 2007 amounted to SEK 87 M (238), of which SEK 70 M was related to the Group’s ongoing restructuring program. Return on capital employed (ROCE) for the Group in-creased to 8.7 percent (8.1). For continuing operations, excluding items affecting comparability, ROCE rose to 11.5 percent (9.9). Total equity increased during the year by SEK 365 M to a closing balance of SEK 10,052 M (9,687). Exchange rate differences amounted to a profit of SEK 84 M, including exchange rate differ-ences (net after tax) on hedging instruments. Total dividend paid in 2007 amounted to SEK 545 M (498).

Net debtThe net debt increased during 2007 to SEK 10,093 M (9,350). The purchase consideration for acquisitions made during 2007 totalled SEK 616 M, including acquisition costs. Exchange rate differences increased net debt by SEK 232 M. The Group’s granted long term credit facilities amounted to SEK 12,947 M at the 2007 year-end. The debt to equity ratio at the end of 2007 was 100 percent (96). The equity to assets ratio was 34 percent (35). At the end of the period, shareholders’ equity per share amounted to SEK 110 (106). Return on shareholders’ equity amounted to 8.4 percent (7.6). For continuing operations, excluding items af-fecting comparability, return on shareholders’ equity rose to 13.0 percent (10.8).

Cash flowThe Group’s operating cash flow during 2007 amounted to SEK 1,718 M (1,594). The improvement compared with 2006 was mainly associated with the favourable earnings trend in three of four business areas. The increase in the level of tied-up capital in working capital impacted the operating cash flow as a result of the good sales growth. The capital expenditure level excluding divested entities amounted to SEK 1,333 M (1,107), representing 4.3 percent (4.1) of sales. The cash flow amounted to 76 percent of operating profit, excluding items affecting comparability. After deductions for payments made relating to restructuring measures, dividend to minority shareholders, financial payments and taxes paid, free cash flow amounted to SEK 518 M (905), correspond-ing to SEK 5.75 per share (10.00). Acquisitions during the year were charged to cash flow in the amount of SEK 616 M. Discon-tinued operations generated a positive cash flow totalling SEK 127 M, attributable to the sale of a property in Hammarbyham-nen, Sweden, and the divestment of the vehicle component plant in Coventry, in the UK. Total dividend paid to shareholders in 2007 amounted to SEK 542 M, corresponding to 105 percent of free cash flow in 2007. Total net cash flow in 2007 amounted to SEK –513 M (–2,499).


Capitalization and other finanCial information

1) Converted into SEK using the exchange rate 10.9858, as of March 31, 2009.2) Converted into SEK using the exchange rate 8.2863, as of March 31, 2009.

Shareholders’ equity and liabilitiesTrelleborg’s capitalization as of March 31, 2009 is presented below.

SEK MMarch 31,

2009

Total current interest bearing debt 2,738

Guaranteed 0

Secured 0

Unguaranteed/unsecured 2,738

Total non-current interest bearing debt 10,897

Guaranteed 0

Secured 0

Unguaranteed/unsecured 10,897

Total equity 10,610

Share capital 2,259

Other capital provided 226

Other reserves 1,343

Profit brought forward 6,699

Minority interest 83

Net financial indebtednessTrelleborg’s net financial indebtedness as of March 31, 2009 is presented below.

SEK MMarch 31,

2009

(A) Cash 501

(B) Cash equivalents 0

(C) Trading securities 0

(D) Liquidity (A)+(B)+(C) 501

(E) Current financial receivables 152

(F) Current bank debt 1,181

(G) Current portion of non-current debt 600

(H) Other current financial debt 957

(I) Current financial debt (F)+(G)+(H) 2,738

(J) Net current financial indebtedness (I)-(E)-(D) 2,085

(K) Non-current financial receivables 8

(L) Non-current bank debt 9,540

(M) Bond issue 1,349

(N) Other non-current loans 8

(O) Non-current financial debt (L)+(M)+(N) 10,897

(P) Non-current financial indebtedness (O)-(K) 10,889

(Q) Net financial indebtedness (J)+(P) 12,974

Trelleborg has long term based financing that stretches into 2012 through a syndicated loan, consisting of two tranches; EUR 750 M (SEK 8,239 M1) and USD 600 M (SEK 4,972 M2), of which SEK 7,460 M was utilized and SEK 5,751 M was unutilized as of March 31, 2009. Further, Trelleborg had fully utilized long term committed and confirmed bilateral credit lines amounting to SEK 1,379 M. The reminder of Trelleborg’s long term debt consisted, as of March 31, 2009, of SEK 709 M bilateral bank debt and other non-current debt, and SEK 1,349 M in issued bonds.

As of March 31, 2009 Trelleborg’s current financial debt amounted to SEK 2,738 M, mainly consisting of current bilateral bank debt, commercial paper and the current portion of long term debt. These short term maturities are supported by long term committed and confirmed credit lines in the form of the unused portion of the Group’s syndicated loan.

As of March 31, 2009 Trelleborg’s financial net debt amounted to SEK 12,974 M and the debt to equity ratio amounted to 122 percent.

Trelleborg’s debt financing terms and conditions will not change as long as the net debt to equity ratio is 150 percent or lower. The basis for calculation differs from the net debt to equity ratio pub-lished in the Company’s interim reports as net pension liabilities are included in the net debt calculations in the debt financing terms. As of March 31, 2009 the net debt to equity ratio, according to the debt financing terms, was 130 percent. Adjusted for the proceeds from the rights issue of SEK 2.2 billion, the net debt to equity ratio according to the financing terms, as of March 31, 2009 would have amounted to 92 percent provided that the proceeds from the rights issue had been rendered at March 31, 2009 (given full subscription of the right issue and after issue costs).

For further information regarding the Group’s financial debt, see note 27 and p. 80–82 in the 2008 annual report as well as on p. 64 in this prospectus.

Cost structure Sales weakened significantly during the fourth quarter of 2008. The decrease in sales has continued during the first quarter of 2009. Significant measures have been taken to adapt the cost and capac-ity levels to a lower sales level. The chart below illustrates the cost distribution in Trelleborg during 2008.

Costs for raw materials and other costs of goods sold, 58%

Remuneration to employees, 26%

Depreciation/amortization and impairment losses, 5%

Other external costs, 8%

Other operating income/expenses, 3%

Costs in the income statement 2008



Description of working capital and capital needs

Working capital (SEK M)March 31,

2009March 31,

2008 2008 2007 2006

Jan-Mar 2009

Jan-Mar 2008

2008 2007 2006

Inventories 4,598 4,064 4,775 4,012 3,604

Accounts receivable 5,149 6,080 5,471 5,703 5,327

Other operating receivables

1,201 1,193 1,325 1,128 1,009

Accounts payable –3,237 –3,560 –3,586 –3,745 –3,480

Other operating liabilities –4,670 –3,546 –4,813 –3,711 –3,282

Net working capital 3,041 4,231 3,172 3,387 3,178

The net working capital has decreased by SEK 131 M during the first quarter of 2009 compared to the end of 2008. The develop-ment reflects the effect of the lower sales volumes during the latter part of 2008 and the first quarter of 2009. Normally Trelleborg experiences seasonal fluctuation in sales to some extent, as sales tend to be slightly higher during the first half of the year.

Considering the current credit lines, Trelleborg considers the Group’s resources to be sufficient to manage the working capital need to an extent that the payment undertakings for the forthcom-ing twelve months can be fulfilled. Thus, Trelleborg considers the working capital to be sufficent for the forthcoming twelve months.

Research and developmentTrelleborg allocates considerable resources to maintain its leading position within research and development. The work is performed at three levels: • The first level comprises fundamental physical and chemical

materials know-how concerning polymers and other materials. • The second level involves applications expertise within the

Group’s global market segments.• The third level is the specific design of products and solutions.

Development takes place in some 40 development units through-out the world. The Group’s research and development costs during the full years 2006–2008 and the periods January-March 2008 and 2009 are presented in the table below.

Research and develop-ment, expenses (SEK M)

Jan–Mar 2009

Jan–Mar 2008 2008 2007 2006

Charged costs, excluding amortization 144 130 458 439 418

Capitalized 11 15 55 81 104

Total 155 145 513 520 522

Investments The table below summarizes Trelleborg’s investments during the full years 2006–2008 and for the periods January–March 2008 and 2009. The largest share of the investments has taken place within

Trelleborg Engineered Systems and Trelleborg Automotive. The primary geographical markets invested in are Europe, North and South America, and Asia.

Large investments within Trelleborg Engineered Systems during recent years have, among other, included an expansion of the capacity within Offshore in both Europe and in North America.

The purpose of the investments within Trelleborg Automotive has mainly been to expand capacity in growth markets and to adapt production to existing and future orders within Antivibration Solu-tions and Damping Solutions.

The investments within Trelleborg Sealing Solutions have, among other, included capacity expansion in China, India and Brazil.

Trelleborg Wheel Systems has during recent years invested in capacity expansion in Sri Lanka and Lithuania in order to be able to move factories and has also expanded the capacity within Agricul-tural Tires in Italy.

Gross investments (SEK M)1

Jan–Mar 2009

Jan–Mar 2008 2008 2007 2006


Trelleborg Engineered Systems 80 108 564 432 271

Trelleborg Automotive 101 131 462 441 490



Group items 0 7 11 50 9

Total 239 324 1,526 1,333 1,107

Ongoing investments primarily consist of replacement investments in existing units and in existing markets, with the exception of the finalization of a capacity expansion in Trelleborg Engineered Systems where the capacity within Offshore is increased in France, as well as capacity expansion within Infrastructure Construction in China. Within Trelleborg Wheel Systems, the capacity expansion within In-dustrial Tires in Sri Lanka is nearing completion. These investments have all been financed through the use of existing credit facilities.

The investment level was lower during the first quarter of 2009, compared with the same period previous year, and the level is, during the full year of 2009, expected to remain at a lower level on an annual basis compared to 2008 and 2007. The investments are primarily expected to take place in the form of replacement invest-ments of existing units and on existing markets and are intended to be financed within the framework of existing credit facilities.

Intangible assets The Group’s total intangible assets amounted to SEK 12,102 M as of March 31, 2009 of which goodwill amounted to SEK 11,182 M. GoodwillGoodwill and other assets are annually tested for impairment or more frequently if there are indications of a decline in value. The

1) Gross investments are presented in the table according to the new operating structure for the periods January-March in 2008 and 2009. For the full years 2006, 2007 and 2008 gross investments are presented according to the operating structure in effect at the date of the respective report. For a more detailed explanation regarding the differences between the new and the old operating structure, see p. 37.



testing is based on defined cash-generating units coinciding with the business areas applied in the segment reporting. The goodwill is divided per business area according to the table below.

Goodwill1 March

31, 2009March

31, 2008 2008 2007 2006



Trelleborg Sealing Solu-tions 5,795 4,796 5,698 4,923 4,525


Total 11,182 9,111 10,901 9,381 8,968

During 2008, total impairment losses on intangible assets and capitalized expenditure for development of SEK 386 M were recog-nized within the Trelleborg Automotive business area.

Property, plant and equipment Property, plant and equipment primarily encompasses factories and office buildings. For information on pledges related to these assets, see note 34 in Trelleborg’s 2008 annual report. For additional information regarding Trelleborg’s property, plant and equipment, see note 14 in Trelleborg’s 2008 annual report.

Dividend policy The Group’s dividend policy is that, over the long term, the divi-dend should amount to between 30 and 50 percent of net profit for the year. Adaptation is made to the Group’s result, financial position and future development possibilities.

Trends and significant changes The significant downturn in the market during the fourth quarter of 2008 had a significant effect on Trelleborg’s sales and earnings. The downturn has continued during the first quarter of 2009, with significant volume declines, especially in the automotive sector and in the industrial capital goods sector.

There are however a number of potentially mitigating factors present during 2009. Interest rate reductions and large scale public investment programmes are expected to have a positive impact during the year. On the cost side, the prices of many types of raw materials have declined significantly. The Group is also well posi-tioned within a number of sectors which are given priority as part of the public investment programmes, such as the infrastructure, transport, and energy sectors.

Altogether, the outlook for 2009 is exceptionally difficult to fore-cast, but on an overall basis a significantly lower demand is expected across the Company’s market during 2009, compared to 2008.

The Group’s cash flow in 2009 is also expected to be negatively affected by capacity alignments and ongoing restructuring mea-sures, as well as by the payment of a large share of the already set,

and additionally expected, fines connected to ongoing competition investigations.

There has been no substantial change in Trelleborg’s financial position or market position since the interim report for the period January-March 2009 was announced.

Financial exposure and risk management The situation described below was applicable at the specified point in time and may vary in the future depending on, among other, price development, exchange rate movements, indebtedness, inter-est rate development and continuous changes in interest rate and exchange rate positions.

Raw material Raw material risk Raw material risks are linked to supply and the structuring of prices of raw materials necessary for production. Trelleborg purchases large volumes of polymer material, additives and prefabricated metal components.

Management Trelleborg manages the fluctuations in raw material prices through, among others, measures taken by local purchasers through a group-wide purchasing organization, to a limited extent hedging under forward contracts of natural rubber supplies, and through close relationships with world-leading suppliers, altogether aiming to result in competitive prices and alternative suppliers of important raw materials. Further, Trelleborg is to some extent, through its global presence, able to balance regional price and exchange rate differences. In light of the competitive situation on several of Trelle-borg’s markets it is a continuous risk that Trelleborg can not fully compensate for increasing costs, resulting in decreasing margins.

During 2008 Trelleborg’s raw material exposure amounted to approximately SEK 8,300 M, distributed according to the chart above. For 2009 a decrease in volumes and prices for raw material is expected, having a positive effect on the Group’s earnings. The ab-solute effect will however depend on the price development for raw materials, the development of sales volumes and Trelleborg’s ability to resist possible demands of cost reduction from customers.

Natural rubber, 10%

Synthetic polymers and additive materials, 70%

Metal content in components, 20%

Indicative raw material exposure 2008

1) Goodwill is presented in the table according to the new operating structure for the periods January-March in 2008 and 2009. For the full years 2006, 2007 and 2008 goodwill is presen-ted according to the operating structure in effect at the date of the respective report. For a more detailed explanation regarding the differences between the new and the old operating structure, see p. 37.



Interest rates Interest rate riskInterest rate risks imply the risk of negative effects on the Group’s cash flows and earnings due to changes in market interest rates. As most of the Group’s debt bears variable interest, the Group focuses on interest-rated cash flow risk. The impact on the Group’s interest income/expense depends on fixed-interest terms for borrowing and investments. The Group seeks a balance between the estimated cur-rent cost of borrowing and the risk of sustaining a significant nega-tive impact on earnings in the event of a sudden, major movement in interest rates, implementing interest rate hedging as appropriate.

SensitivityAs per December 31, 2008, the Group’s interest bearing net debt totalled SEK 12,706 M and the average remaining fixed-interest term was approximately 6.5 months. The table below illustrates the impact on the Group’s earnings before tax as a result of a 1 percent-age point increase in the interest rate in a currency that Trelleborg has loans or financial investments in.

Interest rate risk – impact on 2009 earnings of an increase of the interest rate by 1 percentage point, (SEK M)*

CurrencyGross debt Net debt

Percent of net debt

Impact on earnings

before tax of a 1 percentage

point increase of the interest

rate before hedging

Impact on earnings before

tax of a 1 per-centage point

increase of the interest rate

after hedging

EUR 7,216 7,076 56% –71 –41

USD 2,793 2,713 21% –27 –1

GBP 945 929 7% –9 –6

SEK 1,563 1,280 10% –13 –13

Other 1,122 708 6% –1 –5

Total 13,639 12,706 100% –121 –66

* Based on closing net debt and fixed-interest terms as of December 31, 2008.

Management• The Group’s treasury activities are centralized in Group Treasury,

which functions as both an operating unit and a staff service body. Group Treasury is responsible for the group companies’ ex-ternal bank relations, liquidity management, net financial items, interest bearing liabilities and assets, as well as for the common payment systems, in the capacity of internal bank. The centraliza-tion aims to achieve substantial economies of scale, a lower cost of financing and better internal control and management of the Group’s financial risks. Within the framework of the Group’s Treasury Policy, there is also an opportunity to conduct certain proprietary trading in currency and interest rate instruments.

• Borrowing: The average fixed-interest term for the Group’s gross borrowings, including effects of derivative instruments, may be a maximum of four years.

• Financial investments: The average fixed-interest term for interest bearing investments, including effects of derivative instruments, may be no longer than two years on a maximum amount of SEK 2,000 M, or its equivalent in other currencies.

CurrenciesForeign exchange risk Foreign exchange risk is the risk of exchange rate fluctuations having an adverse impact on the consolidated income statement, balance sheet and/or cash flows. Foreign exchange risk occurs in the form of both transaction and translation risk.Transaction risk: Currency flows arising when goods and services are bought or sold in currencies other than the subsidiary’s local cur-rency give rise to transaction exposure.

Trelleborg’s global operation gives rise to extensive cash flows in foreign currencies.

The Group’s net exposure 2008 amounted to an annual value of approximately SEK 2,400 M. The table below illustrates the cur-rencies with the greatest net flows and how much of these flows that were hedged as of December 31, 2008. A positive net flow implies that in-flows are larger than out-flows.

Currency (SEK M) Net flow Of which hedged

EUR* 1,088 368

SEK –687 –239

USD** –425 132

* EUR includes flows in currencies that covary with EUR, such as DKK and MLT.** USD includes flows in currencies that covary with USD, such as LKR, CNY and HKD.

Currency pairs with largest net flows over 12 months

Currency pair SEK M Currency pair SEK M

EUR/LKR 372 EUR/PLN 192

EUR/SEK 352 GBP/SEK 159

EUR/DKK 344 EUR/NOK –165

EUR/GBP 302 EUR/BRL –114

Translation risk – income statement: Exchange rate movements impact the Group’s earnings when the income statements of foreign subsidiaries are translated to SEK. Since the Group’s earnings are to a large extent generated outside Sweden, the impact from exchange rate movements on the consolidated income statement can be substantial.

The table below illustrates translation effects in regards to cur-rency effects on the income statement 2008.

Net sales EBIT Net profit

Exchange rate change

%*Currency (SEK M)

EUR 470 –30 –14 3.8%

GBP –306 –29 –14 –10.6%

USD –187 –2 –9 2.7%

Other 67 –8 –24 –

Total 44 –69 –61 –

* Actual exchange rate change against SEK during 2008.

Translation risk – balance sheet: In connection with the translation of the Group’s investments in foreign subsidiaries to SEK, there is a risk that changes in exchange rates will affect the consolidated balance sheet.



The table below presents a sensitivity analysis on translation expo-sure in the balance sheet, before consideration of possible tax effects at December 31, 2008:

Net investment

Of which hedged %

Impact on equity if SEK increases 1 percentage pointCurrency (SEK M)

EUR 10,354 58% –44

GBP 1,868 62% –7

USD 2,829 37% –18

Other 4,441 25% –33

Total 19,492 48% –102

Management• Transaction risk: Group companies may hedge a maximum of 100

percent of forecasted net exposure per currency pair over a period of 12 months and up to 100 percent of invoiced net flows per currency pair. Projects with an order value exceeding an amount of EUR 1 M shall always be hedged.

• Translation risk – income statement: The Group normally does not hedge this risk.

• Translation risk – balance sheet: Investments in foreign subsidiaries and associated companies may be hedged to between 0 and 100 percent of the investment’s value (which, because of the tax effect, implies a maximum hedge of approximately 70 percent). A deci-sion to hedge follows an overall evaluation of foreign-exchange levels and the effects on costs, liquidity and taxes, as well as on the Group’s net debt to equity ratio.

Items affecting comparabilityTrelleborg defines items affecting comparability as non-recurring specified events which make comparison over time more difficult. In the case of termination of certain business lines or similar re-structuring activities, a lower limit of SEK 20 M has been set. The term “items affecting comparability” is only used in the operative reporting.

Action programsTrelleborg’s strategy is to grow by focusing on achieving leading market positions within profitable segments with good underly-ing growth. Trelleborg accomplishes this with a strong focus on structured portfolio management, in order to continuously, and on a long term basis, ensure that the Group is positioned towards attractive customers and markets.

As part of this strategy, the Group has, during the last years, launched and implemented a number of action programs. The main purpose of these programs is to generate cost savings, but also to adapt Trelleborg to markets which are deemed to be attractive, both geographically and product wise.

During 2006–2008, action programs at a total cost of approxi-mately SEK 2,300 M have been carried out. The majority of these programs, at a cost of SEK 1,530 M, have been carried out within the business area Trelleborg Automotive, in which Trelleborg has, for a number of years, not been able to fully extract synergies and has a non-optimal structure of previously acquired units. The restructuring efforts, initiated in 2006 and expanded in 2008, were estimated to yield annual savings of approximately SEK 285 M, with full effect as of 2010/2011. These savings are at this point in time still expected to be significant, but are, among other factors, dependent on the underlying volumes in the market as well as on exchange rate movements.

The table below summarizes the costs for action programs with Trelleborg as well as costs related to other items affecting compara-bility during the years 2006–2008 and the periods January–March 2008 and 2009. The table also shows the aggregate cash flow relat-ing to these action programs until and including March 2009.

Based on today’s market situation, Trelleborg expects additional costs related to action programs during 2009, but at a significantly lower level compared to the level in 2008. The remaining cash flow effect after the first quarter of 2009 from items affecting compara-bility already charged is estimated at approximately SEK 800 M, of which approximately SEK 400 M is related to legal costs and approximately SEK 350 M is related to action programs within Trelleborg Automotive.

For more detailed descriptions of the action programs per busi-ness area, reference is made to the 2006–2008 annual reports.

Legal expenses During 2007 and 2008, a total expense of SEK 516 M has been charged against earnings as a consequence of legal proceedings related to anti-trust investigations involving certain types of marine fenders and marine oil hoses. For further information, see p. 66.

Sale of real estate In January 2007, Trelleborg entered into an agreement with Skan-ska regarding the sale of real estate assets in Södra Hammarbyham-nen in Stockholm. Upon access to the site, an amount of SEK 100 M was paid. In addition, an agreement was made that upon legal approval of a local plan an additional payment, dependent on the level of development and timing, shall be made. The first payment of SEK 100 M related to the access to the site resulted in a gain before tax of SEK 26 M.

SEK M

Cost

Area Jan–Mar 2009 Jan–Mar 2008 2008 2007 2006 Total cost Total cash flow*

Trelleborg Engineered Systems –5 –22 –79 –89 –36 –209 –211

Trelleborg Automotive –8 –25 –868 –382 –280 –1,538 –537

Trelleborg Sealing Solutions –2 – –32 – – –34 –9

Trelleborg Wheel Systems –2 –1 –15 –27 –21 –65 –67

Real estate – – – 26 – 26 –

Legal costs and other – – –430 –86 – –516 –134

Total –17 –48 –1,424 –558 –337 –2,336 –958

* Including cash flow from provisions made before 2006.


Board of direCtors, Group manaGement and auditors

Board of Directors

Composition of the Board of Directors 2009/2010

Name Born Position Elected IndependentAudit

CommitteeFinance

CommitteeRemuneration

Committee

Holdings shares

of series B

Anders Narvinger 1948 Chairman 1999 Yes Member Member Chairman 10,000

Heléne Bergquist 1958 Member 2004 Yes Chairman Chairman – 1,500

Staffan Bohman 1949 Member 2000 Yes – – Member 25,000

Hans Biörck 1951 Member 2009 No1 – – – –

Claes Lindqvist 1950 Member 2004 No1 Member Member Member 10,000

Sören Mellstig 1951 Member 2008 Yes – – – 20,000

Peter Nilsson 1966 Member 2006 No1 – – – 26,5003

Mikael Nilsson2 1967 Member 2009 –

Alf Fredlund2 1946 Member 2001 7,600

Karin Linsjö2 1954 Member 2000 167

Birgitta Håkansson2 1950 Deputy 2008 527

1 Claes Lindqvist and Hans Biörck are deemed not independent in relation to the Company’s major shareholders since they both have assignments for Trelleborg’s main shareholder Dunker interests. Peter Nilsson is deemed not independent in relation to the Company as a result of his position as Trelleborg’s President.

2 Employee representative.3 Peter Nilsson also holds 100,000 call options regarding 100,000 shares of series B.

Anders Narvinger, born 1948Board of Directors member since 1999 and chairman of the Board of Directors since 2002Education: Master of Science degree in Engineering and Graduate in Business Administration.Other assignments: President of Teknikföretagen. Chairman of Alfa Laval AB, Coor Service Management AB and Vin & Sprit AB. Board of Directors member of Volvo Car Corporation and proposed to be elected in JM AB.Previous assignments in the past five years: Chairman of the Swedish Trade Council, Ireco Holding AB, Institute of Technology in Lund, Invest in Sweden Agency and Lund University Develop-ment AB.Holdings: 10,000 shares of series B.

Peter Nilsson, born 1966President and CEO, Board of Directors member since 2006Education: Master of Science degree in Engineering.Other assignments: Board of Directors member of Beijer Alma

AB, the Chamber of Commerce and Industry of Southern Sweden and Trioplast Industrier AB.Previous assignments in the past five years: –Holdings: 26,500 shares of series B and 100,000 call options regarding 100,000 shares of series B.

Heléne Bergquist, born 1958Board of Directors member since 2004Education: Graduate in Business Administration.Other assignments: Chairman of INVISIO Headsets AB. Board of Directors member of Nordic Growth Market NGM AB and Pertendo AB.Previous assignments in the past five years: Chairman of NGM Holding AB. Board of Directors member of the Swedish Ac-counting Standards Board and Redovisningsrådets Service AB. Senior Vice President, head of Management Assurance & Special Assignments and Senior Vice President and Group Controller of Electrolux AB. Holdings: 1,500 shares of series B.



Hans Biörck, born 1951Board of Directors member since 2009Education: Graduate in Business Administration.Other assignments: Vice president and CFO of Skanska AB. Member of Henry and Gerda Dunkers Foundation and Founda-tion No 2 and member of the Swedish Financial Reporting Board.Previous assignments in the past five years: Chairman of Ahl-strömska Skolan Fastighets AB.Holdings: –

Staffan Bohman, born 1949Board of Directors member since 2000Education: Stockholm school of Economics and Stanford Business School in the US.Other assignments: Chairman of Staffan Bohman AB. Vice chair-man of Scania AB. Board of Directors member of Atlas Copco AB, Boliden AB, Inter IKEA Holding SA, OSM AB, Ramundberget Alpina AB and Ratos AB. EDB Business Partner of ASA, Oslo.Previous assignments in the past five years: President and Board of Directors member of Sapa AB. Vice chairman of Swedfund International AB. Holdings: 25,000 shares of series B.

Claes Lindqvist, born 1950Board of Directors member since 2004Education: Graduate in Business Administration and Master of Science degree in Engineering.Other assignments: President of Henry Dunkers förvaltnings AB. Chairman of DHF Airport Systems AB. Board of Directors member of Air to Air AB, Bioactive Polymers AB, Connect Skåne AB, the Dunkerska Foundations, Emstone AB, Living Plant Nor-dic AB, Novotek AB, Reosense AB and Svenska Handelsbanken (southern region). Previous assignments in the past five years: President of Höganäs AB and Öresundskraft AB. Board of Directors member of Höganäs AB, Klippan AB, Konstruktionsbakelit AB and Öresundskraft Produktion AB.Holdings: 10,000 shares of series B.

Sören Mellstig, born 1951Board of Directors member since 2008Education: Graduate in Business Administration.Other assignments: Chairman of Aleris AB, Textilia AB and Vatus Medical AB. Board of Directors member of Dako A/S, Ferrosan A/S, Munters AB, PaloDex Oy and Rindi Energi AB.Previous assignments in the past five years: President of Gambro AB.Holdings: 20,000 shares of series B.

Members appointed by employees

Mikael Nilsson, born 1967Employee representative since 2009, appointed by the Unions of the Trelleborg Group (LO)Engineering employeeEducation: Tool maker, training in labor law and personnel policy.Other assignments: Chairman of the Rubber Association at Trelleborg Industri AB. Vice chairman of the Industrial Labor Union (LO). Member of Trelleborg European Work Council.Previous assignments in the past five years: –Holdings: –

Alf Fredlund, born 1946Employee representative since 2001, appointed by the Unions of the Trelleborg Group (PTK)EngineerEducation: Engineering education.Other assignments: Chairman of Unionen Trelleborg AB. Member of the Industrial Labor Union (PTK). Member of Trelleborg Euro-pean Work Council.Previous assignments in the past five years: –Holdings: 7,600 shares of series B (own and family members’).

Karin Linsjö, born 1954Employee representative since 2000, appointed by the Unions of the Trelleborg Group (LO)Education: Plant training.Other assignments: Member of the Social Services Board of Direc-tors, Municipality of Trelleborg.Previous assignments in the past five years: –Holdings: 167 shares of series B.

Birgitta Håkansson, born 1950Deputy employee representative since 2008, appointed by the Unions of the Trelleborg Group (PTK)Salaried employeeEducation: Secretarial education and training in IT and accounting.Other assignments: Vice chairman of Unionen Trelleborg AB.Previous assignments in the past five years: –Holdings: 527 shares of series B.

Group Management

Peter Nilsson, born 1966President and CEO, Board of Directors memberEmployed since 1995 and in current position since 2005.Education: Master of Science degree in Engineering.Other assignments: Board of Directors member of Beijer Alma AB, the Chamber of Commerce and Industry of Southern Sweden and Trioplast Industrier AB.Previous assignments in the past five years: –Holdings: 26,500 shares of series B and 100,000 call options regarding 100,000 shares of series B.



Bo Jacobsson, born 1951CFO and Vice PresidentActive within the Group 1975–1997. CFO since 2002 and Vice President since 2005.Education: University studies in Business Administration.Other assignments: -Previous assignments in the past five years: –Holdings: 10,000 shares of series B (own and family members’) and 25,000 call options regarding 25,000 shares of series B.

Lennart Johansson, born 1960Business Area President, Trelleborg Engineered SystemsEmployed and in current position since 2005.Education: Master of Science degree in Engineering.Other assignments: -Previous assignments in the past five years: Business unit Man-ager of Kemira Oy.Holdings: 25,000 call options regarding 25,000 shares of series B.

Roger Johansson, born 1965Business Area President, Trelleborg AutomotiveEmployed and in current position since 2007.Education: Master of Business and Economic Science.Other assignments: -Previous assignments in the past five years: Responsible for General Motors Powertrain Europe and General Motors Purchas-ing Europe.Holdings: 5,000 shares of series B and 25,000 call options regard-ing 25,000 shares of series B.

Claus Barsøe, born 1949Business Area President, Trelleborg Sealing SolutionsEmployed and in current position since 2003.Education: Bachelor of Science in EconomicsOther assignments: –Previous assignments in the past five years: –Holdings: 25,000 call options regarding 25,000 shares of series B.

Maurizio Vischi, born 1955Business Area President, Trelleborg Wheel SystemsEmployed since 1999 and in current position since 2001.Education: Master of Business Administration.Other assignments: –Previous assignments in the past five years: –Holdings: 25,000 call options regarding 25,000 shares of series B.

Peter Suter, born 1943Senior Vice President, Procurement and Strategic ProjectsEmployed since 1991 and in current position since 2007.Education: Master of Business Administration.Other assignments: –Previous assignments in the past five years: Chairman and Board of Directors member of BLIC (European Association of the Rub-ber Industry). Board of Directors member of ETRMA (European

Tyre and Rubber Manufacturers Association). Board of Directors member of Rosengård Invest AB.Holdings: 10,185 shares of series B (own and family members’).

Peter Svenburg, born 1949Senior Vice President, ITEmployed and in current position since 2006.Education: Master of Laws.Other assignments: President of Exekvens Consulting AB.Previous assignments in the past five years: Board of Directors member of Scancem Kapitalfond AB.Holdings: 107 shares of series B.

Claes Jörwall, born 1953Senior Vice President, Taxes and Group StructuresEmployed and in current position since 1988.Education: Graduate in Business Administration.Other assignments: –Previous assignments in the past five years: –Holdings: 5,273 shares of series B.

Ulf Gradén, born 1954Senior Vice President, General Counsel and SecretaryEmployed and in current position since 2001.Education: Master of Laws and reporting clerk at the court of appeal.Other assignments: Member of Advisory Board Europe of FM Global.Previous assignments in the past five years: –Holdings: 10,000 call options regarding 10,000 shares of series B.

Sören Andersson, born 1956Senior Vice President, Human ResourcesEmployed and in current position since 1998.Other assignments: –Education: University studies in economics, sociology and educa-tion.Previous assignments in the past five years: Board of Directors member of the Swedish Industrial and Chemical Employers As-sociation. Holdings: 2,000 shares of series B and 10,000 call options regard-ing 10,000 shares of series B.

Viktoria Bergman, born 1965Senior Vice President, Corporate CommunicationsEmployed since 2002 and in current position since 2005.Education: Studies in marketing, communications and PR.Other assignments: Board of Directors member of the Swedish Public Relations Association. Board of Directors deputy of Rosen-gård Invest AB.Previous assignments in the past five years: –Holdings: 500 shares of series B (own and family members’) and 10,000 call options regarding 10,000 shares of series B.



Other information regarding the Board of Directors and Group Management All members of the Board of Directors and individuals in the Group Management have an office address at Trelleborg AB, Johan Kocksgatan 10, SE-231 22, Trelleborg. No board assignments are temporal in ways differing from what is set forth in the Swedish Companies Act (2005:551). There are no family ties between the members of the Board of Directors or the Group Management. No Board of Directors member or individual in the Group Manage-ment has been convicted in any fraud-related lawsuit during the past five years. Neither is there any information from the past five years regarding these persons’ involvement in any bankruptcy, liq-uidation or bankruptcy administration, except for Claes Lindqvist who left his assignment as Board of Directors member of Klippan AB some time before the company entered into bankruptcy in 2006. Nor is there any allegation and/or sanction on the part of any authority against any of these persons and none of them has during the past five years been prohibited by a court of law from becoming a member in a company’s administrative, management or control function, nor to have a leading or overall function in a company. There is no potential conflict of interest for any of the members of the Board or person in the Group management, hence no mem-ber of the Board of Directors or person who is part of the Group Management has any private interests that could conflict with the interests of the Company. That some members of the Board of Directors and the Group Management have economic interests in the Company by holding shares or options is apparent through the enumeration above.

AuditorPricewaterhouseCoopers AB, firm of authorized public auditors, SE-113 97 Stockholm, was re-elected as the Company’s auditor by the 2008 Annual General Meeting until the 2012 Annual General Meeting, with authorized public accountant Göran Tidström as Auditor in charge and authorized public accountant Olov Karlsson as Assistant auditor.

Göran Tidström, born 1946Authorized public accountant (member of FAR SRS), Auditor in chargeOrdinary auditor of the Group since 2004. Partner of Pricewater-houseCoopers since 1976.Education: Graduate in Business Administration, Authorized public accountant since 1973.Other assignments: Chairman of EFRAG (European Financial Reporting Group). Auditor of AB Volvo, the Royal Opera, Meda AB and Telia Sonera AB. Deputy president of IFAC (International Federation of Accountants). Previous assignments in the past five years: –Holdings: –

Olov Karlsson, born 1949Authorized public accountant (member of FAR SRS), Assistant auditorAuditor in the Group since 2004. Partner of PricewaterhouseCoo-pers since 1987. Education: Economist program Umeå University, authorized public accountant since 1980.Other assignments: Auditor of AB Volvo.Previous assignments in the past five years: –Holdings: –


Corporate GovernanCe

Corporate Governance in Trelleborg emanates from Swedish legis-lation, primarily the Swedish Companies Act (Aktiebolagslagen), its Articles of Association, NASDAQ OMX rules and regulations for issuers (the “Rules”) and rules and recommendations published by relevant organisations. The Company applies the Swedish Code of Corporate Governance (the “Code”). The Code builds on the principle of “comply or explain”. This implies that a Company which applies the Code may deviate from individual provisions, but, if so doing, has to provide an explanation through which the grounds for the deviation is disclosed. The Company complies with the Code and had no deviations to report during 2008.

General Meeting of ShareholdersThe right of shareholders to make decisions in the affairs of Trelleborg is exercised by the Annual General Meeting or, where appropriate, an Extraordinary General Meeting, which is Trelle-borg’s highest decision-making body. The Annual General Meeting is usually held in Trelleborg, Sweden, in the month of April. The Meeting, appoints the members and Chairman of the Board of Directors, elects the auditor, resolves on the adoption of the income statement and balance sheet, resolves on the allocation of the Com-pany’s profit and the discharge from liability to the Company for the Board of Directors members and the CEO, makes resolutions regarding the appointment of the Nominations Committee and its work, the principles for the remuneration and employment terms for the CEO and other senior executives and changes to the Articles of Association etc.

The Nomination CommitteePursuant to the Code Trelleborg’s Annual General Meeting makes resolutions regarding procedures for the appointment and work of the Nominations Committee. The 2009 Annual General Meeting resolved that a Nominations Committee shall operate in order to prepare and present proposals to the shareholders at the Annual General Meeting regarding the election of Board of Directors members, the Chairman and, where applicable, present proposals regarding auditors and remuneration to the Board of Directors, Board committees and the auditors. The Nominations Committee shall consist of five members, who are to be representatives of the five largest shareholders at the close of the third quarter. According-ly, the Chairman of the Board of Directors shall, at the close of the third quarter, contact the five largest shareholders in the Company, who shall each be given the opportunity to appoint one member,

who ought not to be a member of the Board of Directors, to the Nominations Committee. In addition, the Nominations Commit-tee may decide that the Chairman of the Board of Directors be a part of the Committee, but not be appointed its chairman.

The Nomination Committee for the Annual General Meeting of 2009 comprised of Didrik Normark (Henry och Gerda Dunkers Stiftelse), Ramsay Brufer (Alecta), Lars Öhrstedt (AFA Försäkring), Henrik Didner (Didner & Gerge Aktiefond) and KG Lindvall (Swedbank Robur).

The Board of DirectorsComposition of the Board of DirectorsIn accordance with the Articles of Association, the Board of Direc-tors of Trelleborg AB shall consist of three to ten members, elected annually by the Annual General Meeting for the period until the end of the next Annual General Meeting. Although the Articles of Association allow for the election of deputies, there are currently no deputies elected by the Annual General Meeting. In recent years, the Annual General Meeting has elected seven members, including the Chief Executive Officer, who is also the Group Chief Executive. In accordance with legislation, employees elect three Board of Di-rectors members and a deputy. Trelleborg’s CFO participates in the Board of Directors meetings as does the General Counsel, who also serves as the Board of Directors’s Secretary. The Board of Directors has, within itself, established three committees, the Audit Commit-tee, the Remunerations Committee and the Finance Committee.

Responsibilities and work of the Board of DirectorsThe responsibilities of the Board of Directors include monitoring the work of the President through ongoing reviews of the operation over the year, ensuring that Trelleborg’s organization, management and guidelines for the administration of the Company’s interests are structured appropriately and that there is satisfactory internal control. In addition, the responsibilities of the Board of Directors include setting strategies and targets, establishing internal control instruments, deciding on major acquisitions and divestments of operations, deciding on other major investments, deciding on financial investments and loans in accordance with Trelleborg’s Treasury Policy and issuing financial reports, as well as evaluating the management of operations and planning managerial succession. The Board of Directors must convene at least seven times a year and otherwise as necessary.



Internal controlThe responsibility of the Board of Directors for internal control is regulated in the Swedish Companies Act and in the Swedish Code of Corporate Governance, which also includes requirements on annual external information disclosure concerning how internal control is organized insofar as it affects financial reporting. The Board of Directors bears the overall responsibility for internal control of the financial reporting. The Board of Directors has established a written formal work plan that clarifies the Board of Directors’s responsibilities and regulates the Board of Directors’s and its committees’ internal distribution of work. The responsi-bility for maintaining an effective control environment and the ongoing work on internal control as regards the financial reporting is delegated to the CEO.

Board CommitteesThe Audit Committee usually meets in connection with the Board of Directors meetings and has the primary task of ensuring compli-ance with established principles for financial reporting and internal control and that appropriate relationships with the Company’s auditor are maintained in accordance with the “Instruction for the Audit Committee established by the Board of Directors of Trelle-borg AB”. The results of the Audit Committee’s work in the form of observations, recommendations and proposed decisions and measures are continuously reported to the Board of Directors.

The Finance Committee has the primary task of supporting and monitoring financial operations, annually assessing and proposing changes to the Finance Policy, evaluating and preparing matters for decision by the Board of Directors and, after each meeting, report-ing on its work at the subsequent Board of Directors meeting.

The Remunerations Committee has the primary task of repre-senting the Board of Directors in matters concerning remuneration and terms of employment for the CEO and executives reporting directly to him based on the principles for remuneration and terms of employment for the CEO and other senior executives as adopted by the Annual General Meeting. The Committee continuously reports its work to the Board of Directors.

Remuneration to the Board of Directors during the period 2008–20091

No remuneration is made to the members of the Finance Committee. Consultancy fees have not been paid to the Board of Directors members.

SEK

OfficeRemuneration to the

Board of Directors 2008

Audit Committee Remuneration

2008

Remunerations Committee

2008Total amount

2008Name

Anders Narvinger Chairman 950,000 100,000 50,000 1,100,000

Heléne Bergquist Member 360,000 100,000 – 460,000

Staffan Bohman Member 360,000 – 50,000 410,000

Rolf Kjellman2 Member 360,000 150,000 – 510,000

Claes Lindqvist Member 360,000 – 50,000 410,000

Sören Mellstig Member 360,000 – – 360,000

Hans Biörck3 Member – – – –

Peter Nilsson CEO – – – –

Totalt 2,750,000 350,000 150,000 3,250,000

1 For a specifikation of the renumeration to the Board of Directors in 2008, see note 3 in Trelleborg’s 2008 annual report.2 Rolf Kjellman declined re-election by the Annual General Meeting and is no longer a member of the Board of Directors.3 Hans Biörck was appointed a member of the Board of Directors at the Annual General Meeting of 2009.

For information on the composition of the Board Committees, please see “Board of Directors, senior executives and auditors”.

Independence of the Board of DirectorsThe Board of Directors’s assessment, which is shared by the Nomi-nations Committee, regarding the members’ position of depen-dence in relation to the Company and the shareholders is presented in the table “Composition of the Board 2009/2010” under the sec-tion “Board of Directors, senior executives and auditors”. Accord-ing to the requirements set out in the Rules and the Swedish Code of Corporate Governance, the majority of the Board of Directors members elected by the General Meeting must be independent in relation to the Company and the Company management, and at least two of such Board of Directors members shall also be indepen-dent in relation to the Company’s major shareholders. As evident from the table, Trelleborg complies with such requirements.

Remuneration to the Board of Directors and the members of the Board CommitteesThe fees paid to the members of the Board of Directors elected by the Annual General Meeting are established by the Annual General Meeting based on the proposals of the Nominations Commit-tee. The Annual General Meeting of 2009 decided that the upon a remuneration to the present Board of Directors, for the period immediately following the Annual General Meeting of 2009 up to and including the Annual General meeting of 2010, exclusive of travel expenses compensation, shall be paid in the amount of SEK 2,750,000 to be distributed amongst the members of the Board of Directors, the chairman to receive SEK 950,000 and the remain-ing Board of Directors members elected by the Annual General Meeting and not being employed within the Group to receive SEK 360,000. In excess of this remuneration, the Annual General Meeting decided that remuneration is to be paid to the members of the Audit Committee, in the amount of SEK 150,000 to the chairman and SEK 100,000 to the remaining members, and to the Remuneration Committee, in the amount of SEK 50,000 to each of its members.



The table below accounts for the remunerations to the Board of Directors during the period 2008 – 2009, allocated to the respec-tive Board of Directors members.

AuditorsThe independent auditors are appointed at the Annual General Meeting for a period of four years. The certified accountants Price-waterhouse Coopers AB were re-appointed at the Annual General Meeting of 2008. Certified auditor Göran Tidström is appointed as the head Auditor and certified auditor Olov Karlsson is acting as co-auditor. The auditor’s work is based upon an audit plan and the auditor regularly provides reports containing his findings to the Audit Committee, and to the Board of Directors following so called hard-close-reviews during the fall, and in connection with the half-year financial statements and annual accounts being established by the Board of Directors. The auditor gathers opinions from the Au-dit Committee concerning risks for Trelleborg which are taken into consideration in the audit plan. The auditor also participates at the Annual General Meeting in order to present the auditor’s report, describing the reviews performed and relevant findings. During the latest three financial years, the remuneration having been paid to Pricewaterhouse Coopers AB amounts to SEK 137 M, whereby SEK 46 M are attributable to 2008. Other than compensation for auditing (SEK 37 M), the remuneration for 2008 comprise mainly of compensation for tax advise and advise in connection with acquisitions.

CEO and Group ManagementThe CEO, who is also the Group Chief Executive, operations in accordance with the Swedish Companies Act, other legislation and regulations, applicable rules for listed companies, including the Code, the Articles of Association and the parameters set by the Board of Directors, including its instructions to the CEO. In con-sultation with the Chairman of the Board of Directors, the CEO prepares necessary information and documentation on the basis of which the Board of Directors can make well founded decisions, presents matters and motivates proposed decisions, while reporting to the Board of Directors on the development of the Company. The CEO is responsible for leading the work conducted by Group Management and makes decisions in consultation with other members of the management team, which consists of the heads of the business areas and Group staff functions.

Remuneration to group management 20081

SEK T

Office Year Fixed salary Variable salary Pension Benefits Total

CEO 2008 6,693 – 2,402 153 9,248

Deputy chief executive 2008 3,211 – 2,024 127 5,362

Group management, remaining (10 people) 2008 28,168 5,228 8,046 817 42,259

Total 2008 38,072 5,228 12,472 1,097 56,869

1 For a specifikation of the renumeration to the Board of Directors in 2008, see note 3 in Trelleborg’s 2008 annual report.

Remuneration to senior executivesPrinciplesThe following principles for remuneration to senior executives in the Group were adopted by the Annual General Meeting of 2009. Trelleborg’s principles for remuneration to senior executives entail that the Company shall offer market-based terms of employment that enable the Company to recruit, develop and retain senior executives. The remuneration structure shall comprise fixed and variable salary, pension and other remuneration, which together form the individual’s total remuneration package. Trelleborg continuously gathers and evaluates information on market-based remuneration levels for relevant industries and markets. It shall be possible for the principles for remuneration to vary depending on local conditions.

Remuneration to management during 2008CEODuring 2008, the CEO, who is also the Group Chief Executive, received a fixed salary and other remuneration as shown in the table below. Pursuant to agreement, the CEO has the possibility of obtaining a variable salary. The variable salary has an established upper limit for the year 2008, which corresponds to 65 percent of the fixed salary and is completely based on the Group’s profit before tax, excluding the effect of structural changes approved by the Board of Directors. The variable salary does not constitute pension-able income. In 2008, no variable salary was paid to the CEO, as the target figures were not achieved. The CEO has a pension agree-ment that entitles him to retire at the age of 65. However, under the terms of the pension agreement, both the Company and the CEO have the right, without special justification, to request early retirement from the age of 60, with a mutual six month notice of termination. The employment agreement and pension agreement shall be rendered invalid from the effective date of the CEO’s early retirement. The pension agreement is solely premium based, and the premium is calculated at 40 percent of the fixed annual salary. Pension premiums were expensed in 2008 as shown in the table below. The CEO’s employment contract stipulates that termination of employment by the Company shall be subject to a period of no-tice of 24 months, which does not apply if termination is initiated by the CEO. The period of notice for the CEO is six months.



Other senior executivesThe principles for remuneration to other senior executives are based on both a fixed and variable salary. The variable part has an established upper limit that amounts to about 25-60 percent of the fixed annual salary, based mainly on earnings trends. Some of the executives have agreements specifying mutual rights to request early retirement from the age of 60. In this case, compensation, normally amounting to 60 percent of the fixed annual salary, is paid until the age of 65, when the regular pension payments become effec-tive. The regular pension plans are defined-contribution schemes, whereby the pension premium is calculated at 30 percent of the fixed annual salary. For certain senior executives, extended notice of termination periods apply when initiated by the Company, nor-mally 12, 18 or 24 months, which do not apply when initiated by the individual. For the President and other senior executives, there is an opportunity to have a company car as a benefit. The Group has a global remuneration policy that covers all managers and senior employees. In addition, there is a policy that covers certain provisions for remuneration to senior executives, which covers pen-sion terms, medical expenses, insurances and company cars.

Long-term incentive programIn 2005 the Board of Directors resolved to introduce a long-term incentive program for the CEO and certain senior executives that hold a significant influence on the Group’s earnings per share. The Board of Directors also resolved to introduce a similar program in 2006, 2007, 2008 and 2009. The programs are ongoing three-year programs for which the Board of Directors will, on a yearly basis, possibly approve new programs and define their scope, objective and number of participants. The incentive programs are cash-based and constitute a supplement to the annual variable salaries, pro-vided that the executive is employed by the Group as per December 31 in the year in which the program ends.

PurposeThe incentive program is directional and has long-term content that aims to continue to promote commitment of senior execu-tives to the Group’s development and thereby increase value for the Group’s shareholders.

Target figures The target figures for the incentive program is the Group’s earnings per share, with an annual improvement of 10 percent, excluding items affecting comparability and the impact of any share buyback programs, and includes costs for the programs. For 2006, the Board of Directors established a target of SEK 14.10 in earnings per share, in 2007, a target of SEK 11.90 and in 2008, a target of SEK 14.40, with the upper cap for all programs set at 25 percent of the maxi-mum annual variable salary per year.

Outcome and paymentThe result is calculated annually and accumulated over the three-year period, and potential payments are made in the first quarter of the year after the program expires. Accordingly, for the program approved for 2005, payment was made in the first quarter of 2008, for the program approved in 2006, payments will be made in the first quarter of 2009, for the program approved in 2007, payments will be made in the first quarter of 2010, and for the program ap-proved in 2008, payments will be made in the first quarter of 2011. The payments do not constitute pensionable income. In 2008, earnings were charged with SEK – T (9,964).

Other incentive programsThe Group has no ongoing convertible debenture or warrants programs at the present time.

Call option programHenry and Gerda Dunkers Donationsfond 2 has decided to offer certain management executives of Trelleborg to purchase call op-tions which carry rights to purchase shares of series B in Trelleborg AB. The call options will be offered at market price. The offering has been fully utilised. Nine management executives have pur-chased 255,000 call options at a price of SEK 10.98 per option. Each call option will entitle to purchase one share of series B in Trelleborg AB during the period March 15, 2008 – March 15, 2012 at an exercise price of SEK 125.50. The Company does not participate in the offer and will not have any expenses in connec-tion with the offer.


Share capital etc.Under its current Articles of Association, the Company’s share capital shall be not less than SEK 1,500 M and not more than SEK 6,000 M, divided into not fewer than 60,000,000 shares and not more than 240,000,000 shares. The Company may issue two series of shares: shares of series A and shares of series B. Each Series A share entitles the holder to 10 votes and each Series B share entitles the holder to one vote. Shares of series A may be issued in a quantity corresponding to no more than 1/3 of the shares in the Company and shares of series B in a quantity corresponding to no more than 91/100 of the shares in the Company.

The Company’s registered share capital as of the date of this prospectus is SEK 2,258,931,525 represented by 90,357,261 shares, of which 9,500,000 shares are of series A and 80,857,261 shares are of series B, each with a quota value of SEK 25. The full quantity of shares of series A are owned by Dunker interests. The shares in Trelleborg have been issued in accordance with Swedish legislation and are denoted in SEK. A shareholder’s rights can only be changed in accordance with the procedure stated in the Swedish Companies Act (2005:551). The forthcoming rights issue will, if full fully subscribed for, result in an increase in the number of shares in the Company from a total of 90,357,261 shares to a total of 271,071,783, corresponding to an increase of 200 percent. For shareholders who refrain from subscribing for shares in the forth-coming rights issue, there will be a dilution effect of a total of not more than 180,714,522 newly issued shares, corresponding to 67 percent of the share capital in the Company after the rights issue.

Certain rights attached to the sharesVoting rightsAt General Meetings of shareholders each qualified voter is entitled to vote for the full number of series A and shares of series B such shareholder holds, or represents, in the Company, without limitation of voting powers. Each series A share entitles the holder to 10 votes and each series B share entitles the holder to one vote.

Preferential right to new shares, etc.If the Company issues new shares of both series A and series B in a cash issue or a set-off issue (kvittningsemission), the holders of shares of series A and shares of series B, as the case may be, have preferential right to subscribe for new shares of the same series in proportion to the number of shares held prior to the rights issue (primary pref-erential right). Shares not subscribed for by virtue of such primary preferential right are offered to all shareholders for subscription (subsidiary preferential right). If the shares so offered are insufficient

to cover the subscription by virtue of subsidiary preferential right, the shares are distributed among the subscribers in proportion to the number of shares they already own, and, to the extent this cannot be done, by drawing of lots.

If the Company decides, through a cash issue or a set-off issue, to issue shares of one series only, such shares shall be offered to all shareholders for subscription, irrespective of whether they hold shares of series A or shares of series B, in proportion to the number of shares already held by such shareholders.

If the Company issues warrants or convertibles through a cash issue or a set-off issue, the shareholders have the same preferential right to subscribe for warrants or convertibles as if such new shares as the warrants or convertibles pertain to were issued.

If the Company’s share capital is increased by way of a bonus issue (fondemission), new shares of series A and series B are to be issued in proportion to the number of shares of the respective series already issued. In such case old shares of a certain series shall carry the right of new shares of the same series.

Right to Dividend and Liquidation ProceedsAll shares carry equal rights to dividends as well as to the Company’s assets and potential surplus in the event of liquidation.

Reduction of the share capital and amendments to the Articles of AssociationIn order to enable and facilitate the rights issue, the Annual General Meeting on 23 April 2009 resolved, in accordance with a proposal from the Board of Directors, to reduce the Company’s share capital by SEK 2,078,217,003, without redemption of shares, for transfer of the reduction amount to a fund to be used pursuant to a resolution by a General Meeting. The reduction of the share capital requires that the share capital limits in the Company’s Articles of Associa-tion to be changed. Accordingly, the Annual General Meeting on 23 April 2009 also resolved to amend Article 4 of the Articles of Association, to the effect that the Company’s share capital limits are changed from not less than SEK 1,500 M and not more than SEK 6,000 M to not less than SEK 175 M and not more than SEK 700 M. Following the reduction of the share capital, the Company’s share capital will amount to SEK 180,714,522, divided into a total of 90,357,261 shares with a quota value of SEK 2 per share. The share capital reduction can be implemented without authorization from the Swedish Companies Registration Office or from an ordinary court, since the Company will carry out the rights issue and a bonus issue of SEK 2,078,217,003 simultaneously, as a consequence of which neither the Company’s restricted equity nor its share capital

share Capital and ownership struCture



Development of the share capitalChange in number of shares Quota

value (SEK)Year Event Total

Shares of series A

Shares of series B

Shares of series E *

Total number of shares

Change in share capital (SEK)

Total share capital (SEK)

1991 Conversion of debenture 1,056 – 1,056 – 65,188,469 26,400 1,629,711,725 25

1991 Conversion of debenture 1,267 – 1,267 – 65,189,736 31,675 1,629,743,400 25

1992 Rights issue 1:5, rate 70 13,037,947 1,585,920 11,452,027 – 78,227,683 325,948,675 1,955,692,075 25

1993 Rights issue 1:2, rate 30 39,113,841 2,484,480 36,629,361 – 117,341,524 977,846,025 2,933,538,100 25

2000 Reduction following share buyback

11,734,152 – 11,734,152 – 105,607,372 –293,353,800 2,640,184,300 25

2001 Rights issue 15,000,000 – – 15,000,000 120,607,372 375,000,000 3,015,184,300 25

2001 Share reduction without reimbursement

5,000,000 – 5,000,000 – 115,607,372 –125,000,000 2,890,184,300 25


10,000,000 – 10,000,000 – 105,607,372 –250,000,000 2,640,184,300 25


15,000,000 – – 15,000,000 90,607,372 –375,000,000 2,265,184,300 25

2003 Conversion of debt instruments

2,254 – 2,254 – 90,609,626 56,350 2,265,240,650 25


486,158 – 486,158 – 91,095,784 12,153,950 2,277,394,600 25


314,948 – 314,948 – 91,410,732 7,873,700 2,285,268,300 25


19,177 – 19,177 – 91,429,909 479,425 2,285,747,725 25

2003 Utilisation of warrants 40,509 – 40,509 – 91,470,418 1,012,725 2,286,760,450 25


35,612 – 35,612 – 91,506,030 890,300 2,287,650,750 25

2004 Utilisation of warrants 25,030 – 25,030 – 91,531,060 625,750 2,288,276,500 25

2004 Utilisation of warrants 1,271,928 – 1,271,928 – 92,802,988 31,798,200 2,320,074,700 25


1,512,207 – 1,512,207 – 94,315,195 37,805,175 2,357,879,875 25


1,609,118 – 1,609,118 – 95,924,313 40,227,950 2,398,107,825 25

2004 Utilisation of warrants 56,048 – 56,048 – 95,980,361 1,401,200 2,399,509,025 25


5,623,100 – 5,623,100 – 90,357,261 –140,577,500 2,258,931,525 25

2009 Planned reduction – – – – 90,357,261 –2,078,217,003 180,714,522 2

2009 Planned rights issue 180,714,522 19,000,000 161,714,522 – 271,071,783 361,429,044 542,143,566 2

2009 Planned bonus issue – – – – 271,071,783 2,078,217,003 2,620,360,569 9.67

* All shares of series E have been redeemed and there are no longer any outstanding shares of series E in the Company.

will be reduced. The rights issue will require additional amendments to the Company’s Articles of Association. Therefore, in order to en-able the rights issue, the Annual General Meeting on April 23, 2009 resolved to further amend Articles 4 and 5 of the Articles of Associa-tion to the effect that (i) the share capital limits are changed from not less than SEK 175 M and not more than SEK 700 M to not less than

SEK 2,000 M and not more than SEK 8,000 M and (ii) the limits regarding the number of shares are changed from not fewer than 60,000,000 and not more than 240,000,000 to not fewer than 175 000 000 and not more than 700 000 000. See Articles 4 and 5 in the section “Articles of Association”.



Ownership structureTrelleborg’s largest shareholder as per March 31, 2009 were Dunker interests with in aggregate 12,269,774 shares (9,500,000 shares of series A and 2,769,774 shares of series B), corresponding to 13.6 percent of the share capital and 55.6 percent of the votes in the Company. Dunker interests have undertaken to exercise its pro rata share of the rights issues in the rights issue, see further “Legal issues

Ownership structure

Number of sharesNumber of share-

holders

Portion of the total number of shares, percent

1 – 1,000 39,663 10.8

1,001 – 5,000 3,581 9.0

5,001 – 50,000 673 9.9

50,001 – 132 70.3

Total 44,049 100.0

Ownership by country

Country

Portion of the total number of shares, percent

Sweden 77.8

United Kingdom 3.3

US 3.2

Other countries 15.7

Total 100.0

Largest shareholders of Trelleborg

OwnerShares of series A

Shares of series B Total

Percent of share capital

Percent of votes

Dunker interests 9,500,000 2,769,774 12,269,774 13.6 55.6

AFA Försäkring – 7,975,080 7,975,080 8.8 4.5

Alecta – 7,365,000 7,365,000 8.2 4.2

Didner & Gerge Fonder – 6,817,900 6,817,900 7.5 3.9

Unionen – 1,646,600 1,646,600 1.8 0.9

Milano i Malmö – 1,600,000 1,600,000 1.8 0.9

Swedbank Robur funds – 1,396,202 1,396,202 1.5 0.8

Sten K Johnson (indirectly through company) – 1,172,400 1,172,400 1.3 0.7

Skandia Liv – 1,132,684 1,132,684 1.3 0.6

SEB funds – 1,094,515 1,094,515 1.2 0.6

Total 10 largest shareholders – 32,970,155 42,470,155 47.0 72.7

Other shareholders – 47,887,106 47,887,106 53.0 27.3

Total 9,500,000 80,857,261 90,357,261 100.0 100.0

and complementary information” / “Underwriting Agreement and Subscription Undertaking”. The tables below show the owner-ship structure of Trelleborg and the distribution of the ownership divided into order of size, according to information from SIS Ägarservice AB as of March 31, 2009. Furthermore the distribution of ownership divided by current ownership structure and country is illustrated.

Central securities depository affiliationThe Company and the shares are cleared through the electronic securities system operated by Euroclear Sweden, the Swedish central securities depository (Euroclear Sweden AB, Box 7822, SE-103 97 Stockholm, Sweden). No share certificates have been issued with respect to the shares or will be issued with respect to the new shares. The ISIN-code of series B is SE0000114837. The ISIN-code of shares of series A is SE0000114811.

Shareholders’ agreementsTo the best of Trelleborg’s Board of Directors’ knowledge, with the exception of agreements between units within Dunker inter-ests, see “Underwriting Agreement and Subscription Underta-

ing” p. 65, no shareholders’ agreements or equivalent agreements exist between shareholders in Trelleborg with the objective of creating a joint influence over the Company. To the best of Trelleborg’s Board of Directors’ knowledge there are no agree-ments or equivalent arrangements that may lead to a change in control over the Company.

Dividends and dividend policyFuture dividends will be adjusted in line with, inter alia, Trelle-borg’s profit level, financial position and future development possibilities. The dividends policy of the Group provides that, over the long-term, dividends will comprise 30–50 percent of the annual net profit. In accordance with the proposition from



the Board of Directors, the Annual General Meeting on April 23, 2009 resolved that no dividends were to be paid for the year of 2008. The reasons presented in the proposition from the Board of Directors were the result for the relevant year, the bal-ance sheet of the Company and the great uncertainty as to future market development. Dividends for the year 2007 were SEK 6.50 per share.

Dividends in Swedish companies are decided upon by the General Meeting. Dividends may only be made if the company, after such dividends, still enjoys full coverage of its restricted equity and further to the extent that such dividends appear justified taking into consideration (i) the demands with respect to size of shareholders’ equity which are imposed by the nature, scope and risks associated with the operations, and (ii) the company’s need to strengthen its balance sheet, liquidity and financial position in general (the prudence rule). As a general rule, the shareholders may not decide upon larger dividends than those proposed or approved by the Board of Directors.

Dividends are normally paid to shareholders as an amount in cash through Euroclear Sweden. The right to dividends vests in any person who is registered as a shareholder in the share register main-tained by Euroclear Sweden on the record date as determined by the General Meeting. If a shareholder cannot be contacted through Euroclear Sweden, the shareholder’s claim on Trelleborg with respect to the dividend remains and is limited only by the statute of limitations rule (10 years). Where the statute of limitations applies, the dividend amount accrues to Trelleborg. Neither the Swedish Companies Act or Trelleborg’s Articles of Association contain any restriction on the right to dividends with respect to shareholders domiciled outside of Sweden. Other than in case of possible restric-tions in connection with bank or clearing systems in the concerned jurisdictions, payments of dividends to such shareholders are made in the same way as to other shareholders domiciled in Sweden. However, in relation to shareholders who are subject to restricted taxation in Sweden, normally a Swedish withholding tax is payable, see “Taxation issues in Sweden”.

Share price developmentTrelleborg’s series B share is listed on the Stockholm exchange since 1964. It is listed on NASDAQ OMX Stockholm Large Cap. The chart set out below illustrates the share price develop-ment and the number of shares traded in the Trelleborg during the period from January 1, 2004 up to and including April 17, 2009.

Source: SIX


The Articles of Association described below was adopted at the Annual General Meeting on April 25, 2006, and is registered at the Swedish Companies Registration Office. In italics below § 4 and § 5, the changes of the Articles of Association that was resolved by the Annual General Meeting on April 23, 2009, are specified. For further information see under the heading “Reduction of the share capital and amendments to the Articles of Association” in the sec-tion “Share capital and ownership structure”.

Articles of Association and other informationArticles of Association§1. The name of the Company is Trelleborg AB. The Company is public (publ).

§2. The registered office of the Company shall be situated in Trelleborg.

§3. The objective of the Company’s operations - directly or indi-rectly - is to conduct manufacturing and sales, as well as service and contracting operations within, primarily, the rubber and plastics industries, as well as other operations connected with or comple-mentary to the said fields, and to engage in finance and liquidity management as well as management of real and movable estate.

§4. The share capital shall amount to a minimum of 1,500 million Swedish kronor (SEK 1,500 M) and a maximum of 6,000 million Swedish kronor (SEK 6,000 M).§4. The share capital shall amount to a minimum of 2,000 million Swedish kronor (SEK 2,000 M) and a maximum of 8,000 million Swedish kronor (SEK 8,000 M). (Resolved by the Annual General Meeting 2009, but not yet registered.)

§5. The number of shares shall amount to not less than 60,000,000 and not more than 240,000,000.§5. The number of shares shall amount to not less than 175 000 000 and not more than 700 000 000. (Resolved by the Annual General Meeting 2009, but not yet registered.)

§6. Shares may be issued in two series, designated series A and B. Shares of series A can be issued in a number equivalent to a maximum of 1/3 of the shares in the Company, shares of series B in a number equivalent to a maximum of 91/100 of the shares in the

Company. One series A share carries the right to ten (10) votes, and one series B share carries the right to one (1) vote.

Series A and shares of series B carry equal rights to participation in the Company’s assets and profits.

If the Company decides to issue new series A and shares of series B by a cash or offset issue, holders of series A and shares of series B shall have preferential rights to subscribe for new shares of the same share type, in relation to the number of shares the holder owns prior to the new issue (primary preferential rights). Shares that are not subscribed for by primary preferential rights shall be offered to all shareholders for subscription (subsidiary preferential rights). If shares offered in this way are not sufficient in number for the sub-scription by subsidiary preferential right, the shares shall be divided between the subscribers in relation to the number of shares owned by them prior to the division or, if this is not possible, by lot.

If the Company decides to issue by cash or offset issue shares only of series A or series B, all shareholders, irrespective of whether their shares are of series A or series B, shall have preferential rights to subscribe for new shares in proportion to the number of shares owned prior to the issue.

If the Company decides to issue by cash or offset issue share warrants or convertibles, shareholders have preferential rights to subscribe for warrants as if the issue applied to those shares that may be subscribed on the basis of the warrants, or preferential rights to subscribe for convertibles as if the issue applied to those shares for which the convertibles may be exchanged.

The aforementioned shall not restrict the possibility to decide on a cash or offset issue for which the shareholders’ preferential rights are waived.

In the case of an increase in the share capital by a bonus issue, new series A and shares of series B shall be issued in proportion to the previous number of shares of these share types. Thus, old shares of a certain share type shall carry entitlement to new shares of the same type. The aforementioned shall not restrict the possibility of issuing shares of a new series through a bonus issue following the necessary amendment to the Articles of Association.

§7. The part of the Board that is elected by the Annual General Meeting shall consist of a minimum of three and a maximum of ten members with no deputies. Members are elected annually at the Annual General Meeting for the period up to the end of the next Annual General Meeting.

artiCles of assoCiation


artiCles of assoCiation

§8. An authorized auditing firm shall be appointed as the Group’s auditors.

§9. Notice convening a shareholders’ meeting shall be announced in Post- och Inrikes Tidningar and Dagens Industri.

To participate in a shareholders’ meeting, shareholders shall no-tify the Company not later than 3 p m on the date specified in the notice convening the meeting. This may not be a Sunday, public holiday, Saturday, Midsummer Eve, Christmas Eve or New Year’s Eve, nor may it fall less than five working days prior to the meeting.

Assistants may only accompany shareholders at shareholders’ meetings if such shareholder gives notification of the number of assistants in the manner described above in connection with notifi-cation of shareholders’ participation in shareholders’ meetings.

§10. Shareholders’ meetings shall be held in Trelleborg.

§11. The following matters shall be considered at the Annual General Meeting:1. Election of Chairman of the meeting.2. Confirmation and approval of the register of voters.3. Election of one or two officers to verify the minutes.4. Confirmation that the meeting has been properly convened.5. Approval of the agenda.6. Consideration of the Annual Report and the Auditor’s Report,

and the consolidated Financial Statement and the consolidated Auditor’s Report.

7. Resolutions concerning: a. Adoption of the Income Statement, the Balance Sheet, the

consolidated Income Statement and the consolidated Balance Sheet.

b. The disposition of the Company’s profit or loss in accor-dance with the adopted Balance Sheet.

c. The discharge of the members of the Board and the Presi-dent from personal liability for the fiscal year.

8. Confirmation of the number of Board of Directors members.9. Confirmation of fees for members of the Board and the autho-

rized firm of auditors.10. Election of Board of Directors members and, if applicable, the

authorized firm of auditors.

11. Other matters to be considered at the Annual General Meeting in accordance with the Swedish Companies’ Act (2005:551) or the articles of association of the Company.

§12. At the Annual General Meeting, each registered voter is en-titled to vote for the full number of shares owned and represented by him/her.

§13. Those who are not shareholders shall have the right to attend or otherwise follow the proceedings of the Annual General Meeting according to conditions determined by the Board.

§14. The calendar year shall be the Company’s fiscal year.

§15. Shareholders or trustees who, on the record date, are entered in the shareholders’ register and noted in a control register in ac-cordance with chapter 4 of the Swedish Financial Instruments Act (1998:1479) or those listed in a control account, in accordance with Chapter 4, Section 18, paragraph 1, lines 6 and 8 of the afore-mentioned Act shall be deemed to be authorized to exercise the rights detailed in Chapter 4, Section 39 of the Swedish Companies Act (2005:551).

Other informationThe Company’s corporate registration number is 556006-3421 and the registered office of the Company is in the municipality of Trelleborg. The Company was founded in Sweden on 24 August 1905 and was registered with the Swedish Companies Registra-tion Office on 30 October 1905. The Company has managed its operations since then. The Company is a public limited liability company regulated by the Swedish Companies Act (2005:551).


Key contractsCustomers and suppliersTrelleborg’s customer and supplier contracts are related to the continuing operations. The Group does not depend on any single supplier. A single supplier interruption could entail a temporary decline in sales or increased costs for the individual company con-cerned, but is not considered to lead to any material consequences for the Group as a whole as there is essentially always alternative suppliers. Trelleborg is also not dependent on any single customer contract within any of the business areas as the business is highly diversified. Within Trelleborg Automotive (a business area within the Group), which has a more concentrated customer base than the other business areas, Renault-Nissan and Ford constitute the single largest customers of the Group. However, Trelleborg is not depen-dent upon any individual contracts with any of these customers.

Credit agreementsDuring 2005 the Group took up a syndicated loan in the form of a credit facility allowing for revolving facilities in several currencies. The facility comprises two tranches; EUR 750 M (SEK 8,239 M1) and USD 600 M (SEK 4,972 M2). A larger part of the facility (SEK 12,752 M) matures in March 2012, whilst a smaller part (SEK 459 M) matures during 2011. Other than this syndicated loan facility, the Group has six bilateral bank loans, maturing between 2010 and 2012. Four of these loans, SEK 1,379 M in total, are credit facilities allowing for flexible utilisation. These credit facilities together with the syndicated loan facility constitute the major part of the con-firmed credit facilities of the Group. The long-term interest-bearing debts of the Group also include four bond loans, issued as private placements, maturing between 2010 and 2015. Two of these bond loans amount to EUR 90 M in total (SEK 988 M) and the remain-ing amount to SEK 360 M.

A part of the short-term interest-bearing debts of the Group consists of the Group’s Swedish commercial paper program which has a maximum limit of SEK 4,000 M, and admits terms of up to 12 months. As of March 31, 2009 SEK 807 M were outstanding under this program. The remaining part of the Group’s short-term interest-bearing debts is comprised of short-term bilateral bank loans, the short-term part of the long-term bond loans, borrowings through overdraft facilities and negative market value on derva-

tive instruments, totaling SEK 1,931 M as of March 31, 2009. Through overdraft facilities the Group has confirmed non-commit-ted credit facilities amounting to SEK 1,806 M.

The syndicated loan agreement contains financial covenants regarding the ratio of net debt to equity (“Net debt to equity ratio”) and which interest coverage ratio should be upheld should a certain Net debt to equity ratio be exceeded. Corresponding financial covenants can also be found in some of the Group’s other loan and credit facility agreements. Trelleborg’s loan conditions will not change as long as the Net debt to equity ratio is 150 percent or lower. The basis for calculation differs from the published Net debt to equity ratio presented in the interim report as pension liabilites are included in the net debt under the loan agreement. Thus, by the end of 2008, the Net debt to equity ratio according to the loan agreement was 133 percent. By March 31, 2009 the Net debt to equity ratio according to the same basis for calculation was 130 percent. The Net debt to equity ratio by March 31, 2009 would have been 92 percent, if the rights issue had taken place on March 31, 2009 (given full subscription of the rights issue and after issue costs). All of the above financing agreements also include other standard covenants and terms.

For more detailed information regarding the debts and borrow-ings of the Group, please see p. 45 of this prospectus and note 27 in the Annual Accounts for 2008.

Acquisitions and divestmentsDuring the past two years, Trelleborg has conducted a number of acquisitions of material importance to the Group, as well as a smaller number of divestments as a part of the Group’s ambition to optimise its holdings and its focus on certain segments.

During 2007, six acquisitions were made, all of which had complementary attributes. The acquisitions affected Trelleborg’s cash-flow in the amount of SEK 616 M. Trelleborg’s acquisition of Epros and Epros International, with approximately 30 employees and a net turnover of approximately SEK 90 M, was finalised in January of 2007. In November of 2007 the Group acquired the as-sets of the sealing distributor Sealing Solutions, with approximately 40 employees and a net turnover of approximately SEK 100 M.

Within the scope of the strategic and operational program Trelleborg divested its business operations within the business area Trelleborg Automotive in Coventry, United Kingdom, during

leGal Considerations and supplementary information

1) Converted to SEK according to an exchange rate of 10.9858, as per 31 March 2009.2) Converted to SEK according to an exchange rate of 8.2863, as per 31 March 2009.



2007. The business had approximately 110 employees and a turn-over during 2006 of approximately SEK 150 M.

During 2008 six complementary acquisitions and two acquisi-tions of remaining minority shares were conducted. The acquisi-tions affected Trelleborg’s cash-flow in the amount of SEK 802 M. The acquisitions comprised a total turnover of approximately SEK 1,215 M and 970 employees. Among these transactions was the acquisition of the business operations of the American company MacDermid Offset Printing Blankets, comprising a turnover of SEK 540 M and 400 employees.

See also p. 30 for a compilation of acquisitions conducted dur-ing, inter alia, 2007 and 2008.

Underwriting Agreement and subscription undertakingsUnderwriting Agreement with the ManagersOn March 22, 2009 an underwriting agreement (the “Underwriting Agreement”) was entered into between Trelleborg and the Manag-ers (DnB NOR Markets, Handelsbanken Capital Markets, Nordea and SEB Enskilda) in contemplation of the rights issue. Under reservation of certain conditions, the Managers have undertaken to subscribe for a specified proportion of new shares which have not been subscribed for during the subscription period, corresponding to an aggregate maximum amount of SEK 901 M. As compensation to the Managers for their subscription undertaking according to the Underwriting Agreement, Trelleborg has undertaken to (i) pay an underwriting fee to the Managers in an amount corresponding to 3.5 percent of the maximum undertaking (approximately SEK 31.5 M), and (ii) in addition to the underwriting fee reimburse the Managers for costs attributable to legal fees and other expenses incurred in rela-tion to the rights issue.

Pursuant to the Underwriting Agreement, Trelleborg has pro-vided the Managers with warranties and indemnities customary in relation to these types of agreements. In addition, the Underwriting Agreement contains customary conditions of termination of said agreement for the benefit of the Managers, e.g. the right to termi-nate the agreement in case of violations of the warranties provided by Trelleborg as well as the occurrence of certain adverse circum-stances affecting the conditions (financial or otherwise) or prospects of Trelleborg, or the financial markets as a whole. Termination of the Underwriting Agreement may be effected up to and includ-ing the day when payment is made to Trelleborg for new shares subscribed for by the Managers.

According to the Underwriting Agreement, the Managers’ un-dertakings are subject to certain customary terms and conditions, including, inter alia, (i) that the Managers receive legal opinions as well as opinions from the auditors of the Company in contempla-tion of the rights issue, (ii) that SFSA approves the prospectus and (iii) that the Board of Directors and the Annual General Meeting of Trelleborg pass certain resolutions which are necessary for the execution of the rights issue. In addition, the Managers’ undertak-ings are conditional upon that none of the Larger Shareholders (as defined below), that have undertaken to subscribe for their pro rata share, or in addition thereof, or any of the other investors who have

undertaken to subscribe for new shares, fails to fulfill its respective subscription undertaking or guarantee undertaking before the day when Trelleborg publishes the final result of the rights issue.

In addition, Trelleborg has provided certain other undertakings pursuant to the Underwriting Agreement including, inter alia, not to issue or transfer any shares from the day of entering into the Un-derwriting Agreement up to and including the day falling 180 days after the day when Trelleborg publishes the final result of the rights issue, without the prior written consent of the Joint Lead Managers (Handelsbanken Capital Markets, Nordea and SEB Enskilda).

Subscription undertakingsSix larger shareholders of Trelleborg, including AFA Försäkring1, Alecta, Dunker interests (consisting of Henry and Gerda Dunker Donation Fund No. 2, Henry and Gerda Dunker Foundation, Henry Dunkers Förvaltnings AB, Förvaltningsaktiebolaget HD and Aktiebolaget Hevea), Handelsbolaget Milano i Malmö, Tibia Konsult AB and Unionen (”Larger Shareholders”), together repre-senting 9,500,000 series A shares and 22,345,609 series B shares in Trelleborg, have, separately and not jointly, undertaken to subscribe for their respective pro rata share of the shares (primary preferential right) in the rights issue. Dunker interests, AFA Försäkring1, Alecta, Handelsbolaget Milano i Malmö and Tibia Konsult AB have further undertaken not to reduce their respective share holdings during the period starting on the day of entering into the respective subscription agreements and ending on the last day of the subscrip-tion period for the rights issue. No fee is paid in compensation for these subscription undertakings.

Additional guarantee undertakingsIn addition to the undertakings according to the above, Handels-bolaget Milano i Malmö, Suollovaara Invest AB, Tibia Konsult AB and Älvsbyhus i Bjärnum AB, have, separately and not jointly, undertaken to subscribe and pay for additional new shares, cor-responding to approximately SEK 523 M (corresponding to approximately 25 percent of the rights issue). As compensation for such guarantee undertakings, Trelleborg has undertaken to pay a fee of 4 percent (approximately SEK 20.9 M).

These guarantee commitments are subject to that Trelleborg’s Board of Directors and Annual General Meeting make certain resolutions that are required for the completion of the rights issue. Apart from this the guarantee commitments are unconditional.

Non-secured undertakingsThe subscription undertakings and guarantee undertakings de-scribed above are not secured. Consequently there is a risk that one or more of the Larger Shareholders, other investors or the Managers fail to fulfill their respective undertakings. See further ”Risk Factors – Risks Related to the Share issue”.

AssignmentNew shares which have not been subscribed for as a result of pri-mary or secondary preferential rights shall firstly be assigned to the

1) Excluding Kollektivavtalsstiftelsen Trygghetsfonden TSL, which is the owner of 183,245 shares of series B.



Underwriting Agreement and Subscription Undertakings

Subscription undertakings (correspon-ding to a maximum of approximately 60 percent of the rights issue) Current shareholdings

Share of subscribed new shares with priority right pursuant to the subscrip-

tion undertaking

Additional guarantee

undertakings

Total undertakings as proportion of total rights

issue proceeds

AFA Försäkring1 7,791,835 shares of series B 8.6% 8.6%

Alecta2 7,365,000 shares of series B 8.2% 8.2%

Dunker interests3 9,500,000 shares of series A

13.6%

13.6%2,769,774 shares of series B

Unionen4 1,646,600 shares of series B 1.8% 1.8%

Handelsbolaget Milano i Malmö5 1,600,000 shares of series B 1.8% 150,000,000 SEK 8.7%

Tibia Konsult AB6 1,172,400 shares of series B 1.3% 73,000,000 SEK 4.7%

Soullovaara Invest AB7 150,000,000 SEK 6.9%

Älvsbyhus i Bjärnum AB8 150,000,000 SEK 6.9%

Total undertakings 35.2% 523,000,000 SEK 59.4%

Guarantee undertakings of the Managers (corresponding to a maximum of approximately 40 percent of the rights issue)

Maximum guarantee amount

Total guarantee underta-kings as proportion of total

rights issue proceeds

DnB NOR Bank ASA9 135,000,000 SEK 6.1%

Nordea Bank AB10 283,000,000 SEK 12.8%

Skandinaviska Enskilda Banken AB11 283,000,000 SEK 12.8%

Svenska Handelsbanken AB12 200,000,000 SEK 9.0%

Total undertakings 901,000,000 SEK13 40.6%

1) Excluding Kollektivavtalsstiftelsen Trygghetsfonden TSL, which is the owner of 183,245 shares of series B, AFA Försäkring, contact via AFA Livförsäkringsaktiebolag, address SE-106 27 Stockholm, Sweden, visiting address Klara södra kyrkogata 18, SE-111 52 Stockholm, Sweden.

2) Alecta Pensionsförsäkring Ömsesidigt, Regeringsgatan 107, SE-103 73 Stockholm, Sweden.3) Dunkerintressen, contact via Henry o. Gerda Dunkers Stiftelse, Stortorget 16, SE-252 23 Helsingborg, Sweden.4) Unionen, Olof Palmes gata 17, SE-105 32 Stockholm, Sweden.5) Handelsbolaget Milano i Malmö, Box 5322, SE-200 72 Malmö, Sweden.6) Tibia Konsult Aktiebolag, c/o Midway Holding AB, Gustav Adolfs Torg 47, SE-211 39 Malmö, Sweden.7) Suollovaara Invest AB, Ställverksvägen 6, SE-942 81 Älvsbyn, Sweden.8) Älvsbyhus i Bjärnum AB, SE-942 81 Älvsbyn, Sweden.9) DnB NOR Bank ASA, Stranden 21, N-0021 Oslo, Norway.10) Nordea Bank AB, Smålandsgatan 17, SE-105 71 Stockholm, Sweden.11) Skandinaviska Enskilda Banken AB, Kungsträdgårdsgatan 8, SE-106 40, Stockholm, Sweden.12) Svenska Handelsbanken AB, Blasieholmstorg 11, SE-106 70 Stockholm, Sweden.13) Whereas this maximum amount is based on the size of the rights issue amounting to SEK 2,200 M and whereas the rights issue was established at SEK 2,169 M, the undertaking of

the Managers is, in reality, correspondent to SEK 881 M.

Larger Shareholders and other investors undertaking to subscribe for new shares according to the above, secondly to those, not enjoy-ing any preferential right, and, thirdly, to the Managers.

Total undertakings and feesTo summarise, the subscription undertakings and guarantee undertakings by the Larger Shareholders, as well as other investors, amounts to, in total, approximately 60 percent of the rights issue, corresponding to approximately SEK 1,320 M. Provided that the conditions of the Underwriting Agreement are met, the remainder of the rights issue is guaranteed by the Managers, whereby the rights issue is covered, as a whole, by subscription undertakings or guarantee undertakings. The total fee paid as compensation for the guarantee undertakings amounts to approximately SEK 52.4 M.

Additional informationIn addition to the matters accounted for above and to what is stated in “Other information regarding the Board of Directors and Group Management” on p. 53, none of the persons involved in the rights issue has any additional economic, or otherwise relevant, interests of importance to the rights issue.

DisputesThe Group conducts operations in several countries and, in con-nection with ongoing operations, disputes with and claims against the companies of the Group arise from time to time. Trelleborg considers that the disputes currently in progress are in all material respects covered by the Group’s insurance or that provisions have been made corresponding to the estimated risk.



Competition law disputesOne of Trelleborg’s American subsidiaries has, since 2005, been subject to investigations by the American competition authorities concerning price-fixing agreements on the market for marine fend-ers. During the course of the investigations, three former employees of the subsidiary have confessed to having taken part in criminal acts, and subsequently been found guilty by a court of law. The relevant subsidiary is formally suspended as a supplier to the public sector in the USA, in consequence of which deliveries to such cus-tomers are only effected by virtue of exemptions granted on a case by case basis. A settlement has recently been made with the Depart-ment of Justice in the US meaning that the concerned American subsidiary shall pay USD 7.5 M in fines for its involvement in such unfair price-fixing agreements. Trelleborg has on-going discussions with the relevant American authorities with the purpose of reaching other necessary settlements regarding the price-fixing agreements and the subsequent investigation. Trelleborg hopes to be able to reach such settlements during 2009.

One of Trelleborg’s French subsidiaries has, since 2007, been subject to investigations by competition authorities concerning price-fixing agreements relating to certain types of marine oil hoses. Two former employees of the subsidiary have confessed to having taken part in criminal acts, and subsequently been found guilty by an American court of law. A settlement has recently been made with the Department of Justice in the US meaning that the concerned French subsidiary shall pay USD 3.5 M in fines for its involvement in such unfair price-fixing agreements. In January 2009, The European Commission imposed fines on the French subsidiary of Trelleborg in the amount of EUR 24.5 M. Trelleborg has appealed the decision to the Court of First Instance for the purpose of lowering the fines. As far as the Group is aware, in ad-dition to the investigations and actions performed by competition authorities in the EU and the US, national authorities in Australia, Brasil and Korea are investigating the above matters. However, these investigations are not yet concluded, why any possible liability for the Group, including sanctions and related costs, are uncertain. The competition authority in Japan has completed its investigation of the relevant matter without imposing any fines on the Group.

As none of the above mentioned issues concerning competition law have been fully resolved, the extent of the final liability for the Group, in relation to relevant authorities and other parties, due to breach of the relevant competition law provisions, is uncertain. In view of these matters, a total amount of SEK 516 M has been charged against earnings by Trelleborg during 2007 and 2008. Trelleborg considers this amount to be sufficient to cover all costs arising as a result of the situation.

Competition law is a prioritized risk area within the Group and an extensive program has been introduced containing, among other things, clarification of group-wide guidelines and rules, a detailed review and audit of certain types of potentially sensitive agreements such as, for example, distribution and agency agreements, extensive and recurrent education of employees and introduction of proce-dures for approving memberships of organizations.

Claims related to asbestosSince the early 90’s, an American subsidiary of Trelleborg, the dis-tribution company Goodall Rubber Company Inc., has, together with hundreds of other American companies, been subject to judicial proceedings concerning the handling of asbestos products, primarily from business operations during the 1930’s and 1940’s. Even though these lawsuits have the character of lawsuits en masse, Goodall has not been subject to any class actions, and Goodall is re-garded as highly peripheral in the proceedings. No clear and actual connection between Goodall, its business operations and the suffer-ing individuals has yet been shown, and the vast majority of claims have also been dismissed. All business operations in Goodall were sold in 2006 and the company is now dormant. Trelleborg will con-tinue to manage these matters in the same way as it has done up till now. In addition, the Group is involved in a case regarding claims for exposure to asbestos in the UK, initiated by former employees. The amounts claimed are relatively small and any possible impact on the Group is estimated to be marginal, if not non-existent.

Tax dispute under appeal to the Supreme Administrative CourtThe County Administrative Court of Skåne admitted, in a judge-ment from 2004, certain deductions made by Trelleborg regarding a tax loss of approximately SEK 600 M, incurred in connection with the divestment of certain operations during 1999. In its judg-ment of February 7, 2008, the Administrative Court of Appeal in Gothenburg, after appeal by the Swedish tax authority, amended the judgment of the County Administrative Court of Skåne, not admitting the relevant tax deductions. The relevant tax loss, which is calculated at approximately SEK 158 M, has not been recorded as an asset in the accounts of the Company. The judgment by the Administrative Court of Appeal thus did not have any impact on the statement of results or the balance sheet of the Company. Trelleborg has appealed the judgment of the Administrative Court of Appeal to the Supreme Administrative Court, where the matter is now pending.

Intellectual propertyPursuant to the assessment of the Board of Directors, Trelleborg has the intellectual property rights necessary to carry on the relevant business operations. The Group is not considered to be dependent on any particular patent, even though certain segments of the pro-duction, to a greater extent than others, are based on patents and/or protections of design. In addition, there are no single patent which is of significant importance for the Group’s operations or profitabil-ity. Different production processes, utilised within the Group, are to a great extent based on internal know-how. In numerous cases, Trelleborg deliberately refrains from applying for patents in order to avoid showing its competitors how to copy such production processes.

Transactions with closely related partiesWhen Group companies deliver products or provide services to other Group companies, such transactions are performed at market price and on market terms.



No member of the Board of Directors, nor any member of Group Management, currently, or during the period that is covered by the historical financial information in this prospectus (i.e., the from 2006 to March 31, 2009), has participated directly or indirectly in any transaction with the Company that is, or would have been, unusual or made according to unusual terms. During such period, the Company has not granted any loans or provided any guarantees to or for the benefit of any member of the Board of Directors or any member of the Group Management.

Reference is also made to the Underwriting Agreement and the subscription undertakings concluded with certain of the Com-pany’s shareholders, described in more detail under the section “Underwriting Agreement and Subscrption Undertakings” above.

Incorporation through referenceThe financial reports of the Company from 2006, 2007 and 2008 form part of this prospectus and are to be read as such. The finan-

Subsidiary Company of registrationPro rata holding of

shares and votes

Trelleborg Sealing Solutions Germany GmbH Germany 100%

Trelleborg Industrie SAS France 100%

Trelleborg Sealing Solutions UK Ltd United Kingdom 100%

Trelleborg Wheel Systems Spa Italy 100%

Trelleborg Yale South Haven Inc United States 100%

Trelleborg Industri AB Sweden 100%

Trelleborg Sealing Solutions US Inc United States 100%

Trelleborg CRP Inc United States 100%

Trelleborg Automotive Spain SA Spain 100%

Trelleborg Engineered Systems Italy SpA Italy 100%

Trelleborg Automotive Germany GmbH Germany 100%

Trelleborg Sealing Solutions Helsingör A/S Denmark 100%

Trelleborg Phoenix A/S Denmark 100%

Trelleborg Wheel Systems GmbH Germany 100%

Trelleborg Rubore AB Sweden 100%

Trelleborg Wheel Systems Belgium NV Belgium 100%

Trelleborg Treasury AB Sweden 100%

Documents available for reviewCopies of the following documents are available for review at the head office of Trelleborg, Johan Kocksgatan 10, Trelleborg, during business days and between regular office hours.• Articles of association of Trelleborg• Audited annual accounts of Trelleborg for the financial years of

2006, 2007 and 2008• Interim report for January – March 2009.

cial reports referred to above are presented in Trelleborg’s annual accounts for 2006 (with reference to p. 45–75), 2007 (with refer-ence to p. 44–85) and 2008 (with reference to p. 71–109). Pages of the annual accounts not referred to, contain information otherwise presented in other parts of this prospectus. The financial reports have been audited by the Company’s auditors and the respective auditor’s report form part of the accounts. The relevant annual accounts as well as the Articles of Association of the Company can be found on the Company’s website www.trelleborg.com. Such documentation is also provided by the Company, free of charge, during the validity period of this prospectus.

Material subsidiariesThe Company is the parent of the Group. The schedule below sets out the most important subsidiaries of the Company. For additional information regarding the Company’s and Group’s holdings and shares in subsidiaries, see note 17 in Trelleborg’s 2008 annual report.


interim report January–marCh 2009

TRELLEBORG AB INTERIM REPORT JANUARY – MARCH 2009

Published April 17, 2009 1 (22)

Lower volume and earnings due to continued sharp decline in demand

Net sales in the first quarter of 2009 totaled SEK 6,877 M (8,067).

Operating profit amounted to SEK 46 M (574) and was impacted negatively by costs for capacity adjustments totaling approximately SEK 50 M

Operating cash flow amounted to SEK 478 M (neg: 388) and was impacted positively by lower tied-up operating capital and a lower investment level. Free cash flow amounted to SEK 26 M (neg: 698).

The debt/equity ratio improved to 122 percent, compared with 124 percent on December 31, 2008.

The Board of Directors has resolved, subject to approval by the Annual General Meeting, to raise SEK 2.2 billion, before transaction cost, in a rights issue. The rights issue will strengthen Trelleborg’s financial position and increase the ability of the Group to further improve its market positions.

“The year 2009 began with a continued sharp decline in demand and the

prevailing sense of uncertainty regarding the demand trend during the

nearest quarters is considerable. Since the second quarter of 2008, we have

implemented extensive capacity adjustments and we are now working

aggressively to capitalize on the opportunities arising in the current market

situation. We are continuously improving our market positions.”

Market outlook for the second quarter of 2009. Overall, demand is expected to remain in line with the first quarter of 2009.

Market outlook for the second quarter of 2009

January - March Apr 2008 - Full year

SEK M 2009 2008 Mar 2009 2008

Net sales 6 877 8 067 30 073 31 263Operating profit 46 574 -154 374

Profit for the period 65 309 -502 -258

Earnings per share, SEK 1) 0,70 3,35 -5,60 -2,95

Operating profit, excl. items affecting comparability 63 622 1 239 1 798

Earnings per share, SEK, excl. items affecting comparability 1) 0,85 3,75 6,85 9,75

1) Profit for the period attributable to equity holders of the parent divided by the average number of shares

President and CEO Peter Nilsson:





The Group’s key figures

January – March 2009 Net sales. The Trelleborg Group’s net sales for the first quarter of 2009 amounted to SEK 6,877 M (8,067), down 15 percent. Organic sales declined by 27 percent. Based on comparable exchange rates, the total decline in sales amounted to 25 percent.

Demand continued to weaken, particularly in the automotive sector and in the industrial capital goods sector.

Operating profit and earnings per share. Operating profit during the first quarter totaled SEK 46 M (574). Operating profit was impacted negatively by a sharp decline in volumes and the fact that it was not possible to reduce fixed costs in pace with the rapid decline in volumes. Earnings were also affected by costs for capacity adjustments and personnel reductions totaling approximately SEK 50 M.

Items affecting comparability amounted to an expense of SEK 17 M (refer to page 4).

Exchange-rate fluctuations arising in the translation of the earnings of foreign Group companies had a positive impact of SEK 8 M on earnings, compared with the same period in 2008.

A net financial expense of SEK 139 M (expense: 132) was recognized, corresponding to an average interest rate of 4.3 percent (5.0).

Loss before tax amounted to SEK 93 M (profit: 442). Net profit was SEK 65 M (309). The Group’s tax expense was impacted positively by the capitalization of losses carried forward in Germany and the UK totaling

Operating profit totaled SEK 46 M

Change in net sales Jan - Mar Jan - Mar

% 2009 2008Organic sales -27 +5Acquisitions/divestments +2 +1

Currency impact +10 -2Total -15 +4

Key ratios Jan - Mar Apr 2008 - Full year

SEK M 2009 2008 Mar 2009 2008

Net sales 6 877 8 067 30 073 31 263Operating profit 46 574 -154 374Profit before tax -93 442 -701 -166

Profit for the period 65 309 -502 -258 - attributable to equity holders of the parent 65 305 -507 -267

- attributable to minority interest 0 4 5 9Earnings per share, SEK 1) 0,70 3,35 -5,60 -2,95

Operating key ratios Jan - Mar Apr 2008 - Full year

SEK M 2009 2008 Mar 2009 2008Excluding items affecting comparability

Operating profit 63 622 1 239 1 798Earnings per share, SEK 1) 0,85 3,75 6,85 9,75

EBITDA, % 5,0 10,8 7,7 9,1Operating margin (ROS), % 0,9 7,7 4,1 5,71) Profit for the period attributable to equity holders of the parent divided by the average number of shares

Organic sales declined by 27%





SEK 123 M and the successful resolution of a tax dispute in Sweden totaling SEK 18 M. Excluding these items, the tax rate amounted to 18 percent (30). Earnings per share totaled SEK 0.70 (3.35).

Cash flow. The operating cash flow increased compared with the preceding year and amounted to SEK 478 M (neg: 388) in the first quarter. Working capital decreased during the first quarter of the year, partly as a result of declining volumes and effective control over inventory levels, which had a positive effect on cash flow. Investments declined to SEK 239 M (324), mainly due to deferred investments.

Free cash flow amounted to SEK 26 M (neg: 698). Free cash flow was impacted by the positive operating cash-flow trend, which was offset by the utilization of restructuring provisions amounting to an expense of SEK 112 M (expense: 70), taxes to an expense of SEK 8 M (expense: 86) and financial items amounting to an expense of SEK 332 M (expense: 154). Tax items were impacted positively by such factors as the successful resolution of a tax dispute. Financial items were affected adversely by the accrual difference between interest received and interest paid in connection with interest-rate swaps totaling negative SEK 168 M.

Net debt. Net debt rose by SEK 268 M during the period to SEK 12,974 M, an increase primarily attributable to exchange-rate differences.

The debt/equity ratio improved to 122 percent, compared with 124 percent on December 31, 2008. The impact of the exchange-rate effect on net loans was offset by a positive translation difference on shareholders’ equity.

Financing. Trelleborg has long-term basic financing, via a syndicated loan, that extends into 2012. Long-term credit facilities, including other long-term loans, amounted to approximately SEK 16,600 M at the end of the quarter. The unutilized portion amounted to approximately SEK 5,800 M. Short-term financing totaled about SEK 2,700 M.

The equity/assets ratio was 32 percent (34). Return on capital employed during the most recent 12-month period was negative (full-year 2008: 1.8 percent).

At the end of the period, capital employed amounted to SEK 22,480 M, compared with SEK 22,238 M at year-end 2008.

Shareholders’ equity per share amounted to SEK 116 (108) at the end of the period.

Positive free cash flow

Apr 2008 - Full year Apr 2008 - Full year% Mar 2009 2008 Mar 2009 2008

Return on capital employed neg 1,8 5,6 8,4Return on shareholders’ equity neg neg 6,0 8,8

Group Excl. items affecting comparability

Change in net debt Jan - Mar Full year

SEK M 2009 2008 2008

Net debt, opening balance -12 706 -10 093 -10 093

Net cash flow for the period 5 -736 -977

Borrowing costs 0 1 0

Exchange rate differences -273 266 -1 636

Net debt, closing balance -12 974 -10 562 -12 706

Debt/equity ratio, % 122 107 124

Debt/equity ratio amounted to 122 percent

Negative return on capital employed and shareholders’ equity





The Group’s operating key figures

January – March 2009 Earnings and margins. Operating profit, excluding items affecting comparability, amounted to SEK 63 M (622). Operating profit was impacted negatively by a sharp decline in volumes and the fact that it was not possible to reduce fixed costs in pace with the rapid decline in volumes. Earnings were also affected by costs for capacity adjustments and personnel reductions totaling approximately SEK 50 M.

Adjustments made to prices of raw materials gradually impact Trelleborg with a time lag of three to six months. Due to the sharp decline in volumes, which resulted in low inventory turnover, falling raw material prices had only a marginal impact during the first quarter of 2009.

Exchange-rate fluctuations arising in the translation of the earnings of foreign Group companies and from transaction flows had a marginal impact on the Group’s earnings.

The operating margin was 0.9 percent (7.7). Operating profit before depreciation (EBITDA) amounted to SEK 349 M (871). The EBITDA margin for the quarter was 5.0 percent (10.8).

The Group recognized a loss before tax of SEK 76 M (profit: 490) and net profit amounted to SEK 78 M (343). Earnings per share totaled SEK 0.85 (3.75).

Cash flow and capital employed. The operating cash flow increased compared with the preceding year and amounted to SEK 478 M (neg: 388) in the first quarter. Operating cash flow during the most recent 12-month period amounted to SEK 2,460 M. Working capital declined during the first quarter of the year, partly as a result of declining volumes and effective control over inventory levels, which had a positive effect on cash flow. Investments declined to SEK 239 M (324), mainly due to deferred investments. At the end of the period, capital employed amounted to SEK 22,480 M (20,288).

Items affecting comparability for the calculation of operating key figures. Items affecting comparability totaling an expense of SEK 17 M (expense: 48) before tax have been excluded from calculations of the Group’s operating key figures.

Items affecting comparability mainly comprise restructuring costs for the previously announced and ongoing programs in Group’s four business areas.

The previously announced and ongoing restructuring programs within Trelleborg Automotive, with the aim of improving the business area’s production structure, have now entered the completion stage. Costs for these programs totaling SEK 8 M were charged against the first quarter of 2009. The remaining costs are estimated at approximately SEK 40 M and will be charged against 2009.

Apr 2008 - Full year

Mar 2009 2008Operating cash flow, SEK M 2 460 1 594

Operating cash flow/operating profit % 199 89

Operating cash flow per share, SEK 27,25 17,65

Operating profit of SEK 63 M (622)

EBITDA amounted to SEK 349 M (871), corresponding to a margin of 5.0 percent (10.8)

Items affecting comparability during the quarter: Expense of SEK 17 M before tax and expense of SEK 13 M after tax





During the quarter, Trelleborg Sealing Solutions initiated a consolidation of its units in Italy and the UK, respectively, and focusing its operations in Poland. The total cost of these measures is expected to amount to about SEK 100 M, of which SEK 2 M was charged against the first quarter of 2009. The initiated projects are expected to have a short repayment period.

The carrying amount of provisions recognized for action programs amounted to SEK 415 M at the end of the quarter and is expected to be charged against consolidated cash flow for 2009 and 2010. At the end of the quarter, the carrying amount of provisions recognized for ongoing competition investigations (see page 6) totaled SEK 375 M. While this amount is expected to be charged against the Group’s future cash flows, the payment date depends on ongoing procedures. Other

Guaranteed rights issue of SEK 2.2 billion. On March 22, 2009, the Board of Directors of Trelleborg resolved, subject to approval by the Annual General Meeting on April 23, 2009, to raise SEK 2.2 billion in a rights issue of class A and B shares. The rights issue will strengthen Trelleborg’s financial position and increase the Group’s ability to further improve its market position.

The rights issue is fully guaranteed by Trelleborg’s largest shareholders and other parties. Subscription commitments and additional guarantees from these parties amount to approximately 60 percent of the rights issue. In addition, a group of institutional shareholders, collectively representing approximately 11 percent of the share capital and 6 percent of the votes, have expressed their support for the rights issue and announced their intention to vote in favor of an approval of the rights issue at the Annual General Meeting. The remainder of the rights issue is, subject to customary conditions, underwritten by the company’s main banks.

Holders of class A and B shares will have preferential rights to subscribe for new shares of the same series in proportion to their existing holdings (primary subscription rights).

Background and reasons. In recent years, Trelleborg has worked actively to position itself within attractive market segments and has initiated several action programs. These initiatives are expected to create opportunities for Trelleborg to further improve its market position and strengthen its earnings moving forward.

However, the sharp decline in the global economy since autumn 2008 has resulted in increased uncertainty and significantly altered the Group’s short-term market conditions. During the first quarter of 2009, Trelleborg’s

Items affecting comparability of operating profit 1) Jan - Mar Apr 2008 - Full year

SEK M 2009 2008 Mar 2009 2008

Trelleborg Engineered Systems -5 -22 -62 -79Trelleborg Automotive -8 -25 -851 -868

Trelleborg Sealing Solutions -2 - -34 -32

Trelleborg Wheel Systems -2 -1 -16 -15

Legal non-recurring items - - -430 -430

Total items affecting comparability -17 -48 -1 393 -1 424

1) Main part reported as other operating expenses

Guaranteed rights issue of SEK 2.2 billion





sales declined by 15 percent compared with the year-earlier period, despite the positive impact of the weak SEK on sales.

Trelleborg has a financial target of maintaining a net debt/equity ratio of 75-125 percent. On March 31, 2009, the net debt/equity ratio was 122 percent. Due to the current market conditions, the Board of Directors of Trelleborg believes that strengthening the capital base will significantly improve the company’s ability to ensure that the net debt/equity ratio remains within the stated range and that the Group maintains sufficient financial flexibility moving forward. The rights issue will strengthen the balance sheet so that, all other things being equal, excluding transaction costs, the net debt/equity would have been 84 percent if the rights issue had been completed on March 31, 2009.

Preliminary timetable for the rights issue April 21 Subscription price and terms are decided and announced

through a press release. April 23 Annual General Meeting decides on the rights issue

adopted by the Board of Directors. April 24 First day of trading in the shares ex-rights to participation

in the rights issue. April 28 Record date for participation in the rights issue, meaning

that shareholders registered in Trelleborg’s share register on this date will receive subscription rights entitling participation in the rights issue.

April 28 Estimated date of publication of the prospectus. April 30 – May 14 Trading in subscription rights. April 30 – May 19 Subscription period.

For more information about the rights issue, refer to the separate press release published on March 23, 2009 at www.trelleborg.com.

Competition investigation. As previously announced, two of Trelleborg’s subsidiaries in France and the US are the subject of investigations being conducted by the competition authorities in the US, the EU and Brazil regarding certain types of marine oil hoses and marine fenders.

On January 28, 2009, the European Commission announced a decision in its ongoing, previously announced competition investigation regarding certain types of marine oil hoses. The investigation began in May 2007 and Trelleborg has awaited the decision of the authorities for some time. According to the Commission’s announcement, one of the Trelleborg Group’s French subsidiaries participated in illegal price cooperation for certain types of marine oil hoses. The European Commission set the fine for the subsidiary at EUR 24.5 M.

Trelleborg has appealed the decision to the EU Court of First Instance. Based on the practice of the Court to date, it is expected to take considerable time for the matter to be settled.

The European Commission’s decision is completely independent of that expected from the US authorities on the same issue. Trelleborg has continuously assisted the US authorities and expects their decision on the matter in the near future.

The subsidiary in the US has been affected by the ongoing investigations of the US Department of Justice into the competitive conditions for certain types of marine fenders. Since the issue was raised in 2005, Trelleborg has

Trelleborg appeals the decision of the EuropeanCommission





continuously assisted the US authorities and expects a decision on the matter to be announced in the near future.

Trelleborg’s total costs for the competition investigations are estimated at SEK 516 M, which were charged against the Group’s annual accounts for 2008 and 2007. These costs include the aforementioned fines issued by the European Commission and expenses in the US and other affected countries, as well as damages and legal expenses. This assessment is still subject to uncertainties relating to length and outcome of ongoing processes.

Minor changes were made to the Group’s operating structure in the first quarter of 2009, which impacted reporting by business area, where certain operations with external annual sales of approximately SEK 60 M and with marginal earnings effect, being transferred from Trelleborg Engineered Systems to Trelleborg Automotive and Trelleborg Sealing Solutions. The comparative figures have been adjusted accordingly.

Proposals to the Annual General Meeting April 23, 2009 (previously published in the year-end report on February 11, 2009 and press release regarding rights issue on March 23, 2009)

Proposal regarding dividend. In light of the Group’s earnings for 2008, the company’s balance sheet and the considerable uncertainty regarding the future market trend, the Board proposes that no dividend be paid for 2008. The Board regards this decision as motivated in terms of the dividend policy that states that the dividend in the long term must amount to 30-50 percent of net profit for the year. The dividend for 2007 was SEK 6.50 per share.

Proposals for the Annual General Meeting. Rolf Kjellman, originally elected to the Trelleborg Board of Directors in 1997 and representing Trelleborg’s principal owner Dunkerintressen, has declined re-election at the 2009 Annual General Meeting. Rolf Kjellman, born in 1939, has retired from his position as the Executive Director of the Henry and Gerda Dunker Foundation and Donation Fund No. 2, but remains a member of the Board. Claes Lindqvist, also a member of the Board of Trelleborg will replace Rolf Kjellman as Executive Director of the Henry and Gerda Dunker Foundation and Donation Fund No. 2.

A Nominations Committee consisting of representatives of the major shareholders, corresponding to approximately 69 percent of the votes in Trelleborg, and the Chairman of the Board, has decided to propose to the Annual General Meeting that Hans Biörck be elected new member of the Board.

Hans Biörck, born in 1951, holds a degree in business administration and is Executive Vice President and Chief Financial Officer at Skanska AB. Among other positions, he was formerly CFO of Autoliv Inc and CFO of Esselte AB, where he also held other positions.

Hans Biörck has been a member of the Henry and Gerda Dunker Foundation and Donation Fund No. 2 since 2003. Hans Biörck is also a member of the Swedish Financial Reporting Board.

Moreover, the re-election of all other Board Members, Heléne Bergquist, Staffan Bohman, Claes Lindqvist, Sören Mellstig, Peter Nilsson and Anders Narvinger as Chairman, is proposed.

In addition to the Chairman of the Board, the following persons formed the Nominations Committee: Didrik Normark (Chairman of the Nominations

Minor changes to the Group’s operating structure

The Board proposes no dividend for 2008

Nominations Committee’s proposal for 2009 Annual General Meeting





Committee) of the Henry and Gerda Dunker Foundation; Ramsay Brufer, Alecta; Lars Öhrstedt, AFA Försäkring; Henrik Didner, Didner & Gerge Funds and KG Lindvall, Swedbank Robur Fonder AB.

Rights issue. The Board of Directors has resolved, subject to approval by the Annual General Meeting, to raise SEK 2.2 billion, before transaction cost, in a rights issue. See page 5.

Trelleborg’s Annual General Meeting will be held at 5 p.m. on Thursday, April 23, 2009 in Trelleborg.

Risk management Risks/risk management within Trelleborg. Trelleborg focuses continuously on identifying, evaluating and managing risks arising in various systems and processes. During 2008, an Enterprise Risk Management process (ERM) was established with the overall objective of ensuring that risks are managed systematically, that the right priorities are made and that risks are managed as efficiently as possible.

The principal risks and uncertainties currently faced by the Group pertain to the impact of the economic situation on demand, existing financing, access to future financing, exposure to foreign-exchange fluctuations, changes in value of fixed assets and legal risks.

For further information about the Group’s operational and financial risks, risk management and risk exposure, refer to Trelleborg’s Annual Report and www.trelleborg.com.

Rights issue





The Group’s market outlook

Market outlook for the second quarter of 2009. Overall, demand is expected to remain in line with the first quarter of 2009.

Outlook from the year-end report published on February 11, 2009:Market outlook for the first quarter of 2009. Overall, lower demand is expected compared with the fourth quarter of 2008.

Trelleborg, April 17, 2009 The Board of Directors of Trelleborg AB (publ)

_____________________________________________________________

This report was prepared in accordance with IAS 34 Interim Financial Reporting. A large number of amendments to existing standards, new interpretations and one new standard (IFRS 8) came into effect on January 1, 2009. Trelleborg considers the following standards and interpretations, which took effect on January 1, 2009, to be relevant to the presentation of its financial statements and the accounting principles:

IFRS 8: Operating Segments. This standard requires that segment information be presented on the basis of a management approach. Trelleborg’s segment information is already presented on the same basis as is used for internal reporting purposes by the highest executive decision-maker (the President). Accordingly, there is no change in Trelleborg AB’s segment division compared with the segments previously presented in accordance with IAS 14. IAS 1: Presentation of Financial Statements.

The amendment to this standard involves a change to the presentation of financial statements. In accordance with IAS 1, Trelleborg has opted to present the Group’s total earnings divided into two statements: a separate income statement and a statement of comprehensive income. Furthermore, the consolidated statement of changes in shareholders’ equity only includes transactions with the Group’s owners.

In all other respects, Trelleborg continues to apply the same accounting principles and valuation methods as those described in the most recent Annual Report.

This report was not subject to special review by the company’s auditors (refer to page 20).

Market outlook for the second quarter of 2009





Trelleborg Engineered Systems

Demand in the business area’s main markets remained highly variable. A substantial decline occurred within industrial segments, while demand in project-related operations, offshore oil/gas and infrastructure construction remained stable.

Organic sales fell 17 percent during the quarter. Sales in the infrastructure construction and offshore segments were in line with the year-earlier period. Including exchange-rate effects, sales were in line with the preceding year.

Operating profit fell as a result of continued decline in volumes in several segments causing an under-absorption of fixed costs, which are addressed by implementing capacity adjustments and personnel reductions. Profit was impacted adversely by the costs related to these measures.

Disruptions to production in the offshore oil/gas segment continued to have a negative impact on profit and amounted to approximately SEK 30 M. The situation is gradually improving and operation is deemed to have returned to a normal level during second half of 2009.

The previously announced projects aimed at improving the production structure continue and several are now in the completion stage. The business area also continuously reviews its opportunities to implement further improvements to the production structure. Operating cash flow was strong as a result of lower tied-up operating capital.

The construction of the new unit in China for infrastructure-related products is currently in the completion stage. This operation will open up the Chinese market and offer cost-efficient production, which also generates benefits in other markets.

Jan - Mar Apr 2008 - Full yearSEK M 2009 2008 Mar 2009 2008Excluding items affecting comparabilityNet sales 2 862 2 856 12 234 12 228

Operating profit 117 266 934 1 083Operating margin (ROS), % 4,0 9,2 7,4 8,6

Operating cash flow 285 -82 1 162 795Operating cash flow/operating profit, % 244 neg 124 73

Including items affecting comparability

Operating profit 112 244 872 1 004ROS, % 3,8 8,5 6,9 8,0

Additional key ratios on pages 17 - 19

Sales

Operating profit

Other

Market trend





Trelleborg Automotive

Car production in North America declined by approximately 53 percent in the first quarter of 2009 compared with the same period in 2008. Car production was down 40 percent in Western Europe and 42 percent in Eastern Europe. Car production in Asia (excluding Japan) declined by 24 percent. (source: JD Power/Trelleborg).

Organic sales fell 41 percent due to a continued sharp decline in global demand, accentuated by inventory reductions by several manufacturers in the automotive industry. Including exchange-rate effects, sales declined by 33 percent.

Operating profit was impacted adversely by the considerable volume reductions in the market causing an under-absorption of fixed costs, which are addressed by implementing extensive capacity adjustments and personnel reductions.

The business area’s ongoing action program has now entered the completion stage and is beginning to have effects. Compared with the first quarter of 2008, the workforce has been reduced by approximately 2,500 positions, corresponding to about 25 percent of the business area’s employees.

Despite falling prices, the business area managed to reduce its inventory levels, resulting in a positive effect on cash flow. However, the inventory levels were not reduced at a rate that would enable the effect of lower raw material prices to be felt during the quarter, but the impact is expected to gradually take effect from the second quarter of 2009.

The business area intends to apply for any relevant government programs pertaining to outstanding accounts receivable from certain car manufacturers in the US.


Operating profit -175 33 -587 -379Operating margin (ROS), % neg 1,3 neg neg

Operating cash flow -17 -325 367 59Operating cash flow/operating profit, % neg neg neg neg

Including items affecting comparability

Operating profit -183 8 -1 438 -1 247ROS, % neg 0,3 neg neg


Market trend

Sales

Operating profit

Other





Trelleborg Sealing Solutions

The market conditions in most of the business area’s end markets continued to weaken during the quarter, particularly in the industrial and automotive sectors.

Organic sales during the quarter fell 32 percent as a result of continued lower demand for industrial capital goods in Europe as well as the global automotive industry. Including exchange-rate effects, sales declined by 20 percent.

Operating profit declined due to continued rapidly falling volumes causing an under-absorption of fixed costs. Fixed costs were reduced through extensive capacity reductions and personnel cutbacks, which had a negative effect on profit during the quarter.

The business area continuously improves its production structure with the aim of streamlining its operations and reducing its fixed costs. During the quarter, the business area initiated a consolidation of its units in Italy and the UK, respectively, and focusing its operations in Poland. The total costs are estimated at about SEK 100 M, of which SEK 2 M was charged against the first quarter of 2009. The initiated projects are expected to have a short repayment period. In addition, the business area also continuously reviews its opportunities to implement further improvements to the production structure.

A unit in Derbyshire in the UK was divested at carrying amount. The unit manufactures gangways between train carriages and has approximately 80 employees and sales of about SEK 80 M. The divestment had a marginal impact on the Group’s earnings. The divestment is part of the Group’s portfolio management, since the operations are not deemed strategically suitable for Trelleborg.


Operating profit 41 249 682 890

Operating margin (ROS), % 3,2 15,7 11,9 14,8

Operating cash flow 122 124 920 922Operating cash flow/operating profit, % 298 50 135 104Including items affecting comparability

Operating profit 39 249 648 858ROS, % 3,1 15,7 11,3 14,2


Market trend

Sales

Operating profit

Other





Trelleborg Wheel Systems

In general, a substantial slowdown occurred in the agricultural sector. Nonetheless, the positive trend for high-performance agricultural tires continued during the quarter, which benefited Trelleborg as the Group’s products are well-positioned in this area. Global demand for industrial tires continued to decline sharply as a result of the weaker industrial economy.

A 14-percent decline in organic sales was reported during the quarter. Sales of agricultural tires varied among the different sub-segments, but remained strong within high-performance agricultural tires. Sales of industrial tires declined sharply. Including exchange-rate effects, total sales fell by 1 percent.

Operating profit for the quarter was in line with 2008. It was favorably impacted by a high level of capacity utilization in high-performance agricultural tires and an improved product and price mix. Earnings were negatively affected by lower volumes in industrial tires.

More efficient management of working capital resulted in a positive operating cash-flow trend.

Work to expand and strengthen the offering of the business area continued, including the signing of a strategic distribution agreement during the quarter, which enables an expansion of the product portfolio in existing sales channels in Europe.

The consolidation of the industrial tire production operations in Sri Lanka, aimed at establishing a more efficient production structure, is now in its final stage. This involves relocating the industrial tire production operations in Hartville in the US, where production will be discontinued in the second quarter of 2009.

Jan - Mar Apr 2008 - Full yearSEK M 2009 2008 Mar 2009 2008Excluding items affecting comparabilityNet sales 950 962 3 696 3 708

Operating profit 102 109 356 363

Operating margin (ROS), % 10,8 11,4 9,6 9,8

Operating cash flow 122 -34 285 129Operating cash flow/operating profit, % 120 neg 80 36Including items affecting comparability

Operating profit 100 108 340 348ROS, % 10,6 11,3 9,2 9,4


Market trend

Sales

Operating profit

Other





Financial accounts

Income StatementsGroup Jan - Mar Apr 2008 - Full year

SEK M 2009 2008 Mar 2009 2008

Net sales 6 877 8 067 30 073 31 263Cost of goods sold -5 375 -6 023 -22 955 -23 603

Gross profit 1 502 2 044 7 118 7 660Selling expenses -632 -598 -2 471 -2 437Administrative expenses -675 -740 -2 917 -2 982Research and development costs -167 -150 -620 -603Other operating income/expense 15 17 -1 284 -1 282

Profit from part. in assoc. companies 3 1 20 18

Operating profit 46 574 -154 374Financial income and expenses -139 -132 -547 -540

Profit before tax -93 442 -701 -166

Tax 158 -133 199 -92


Profit attributable to:Equity holders of the parent 65 305 -507 -267Minority interest 0 4 5 9

Earnings per share Jan - Mar Apr 2008 - Full year

SEK 2009 2008 Mar 2009 2008

Earnings per share 0,70 3,35 -5,60 -2,95

Number of shares

End of period 90 357 261 90 357 261 90 357 261 90 357 261

Average number 90 357 261 90 357 261 90 357 261 90 357 261

Statements of comprehensive incomeJan - Mar Apr 2008 - Full year

SEK M 2009 2008 Mar 2009 2008


Other comprehensive income

Cash flow hedges -1 -11 -137 -147

Hedging of net investment -140 207 -1 544 -1 197

Translation difference 410 -591 3 066 2 065Income tax relating to components of other comprehensive income 38 -58 449 353

Other comprehensive income, net of tax 307 -453 1 834 1 074

Total comprehensive income 372 -144 1 332 816

Profit attributable to:

Equity holders of the parent 374 -135 1 317 808

Minority interest -2 -9 15 8





Balance SheetsGroup Mar 31 Mar 31 Dec 31

SEK M 2009 2008 2008Property, plant and equipment 7 246 6 185 7 137

Intangible assets 12 102 9 805 11 833Financial assets 1 798 876 1 586

Total non-current assets 21 146 16 866 20 556Inventories 4 598 4 064 4 775Current operating receivables 6 987 7 978 7 505

Current interest-bearing receivables 152 130 178Cash and cash equivalents 501 483 749

Total current assets 12 238 12 655 13 207

Total assets 33 384 29 521 33 763

Shareholders' equity, excluding minority share 10 527 9 797 10 153Minority share 83 111 85

Total equity 10 610 9 908 10 238

Non-current interest-bearing liabilities 10 897 7 883 10 834Other non-current liabilities 1 859 1 508 1 977

Total non-current liabilities 12 756 9 391 12 811

Interest-bearing current liabilities 2 738 3 296 2 805Other current liabilities 7 280 6 926 7 909

Total current liabilities 10 018 10 222 10 714

Total equity and liabilities 33 384 29 521 33 763

Specification of changes in equity Mar 31 Mar 31 Dec 31

SEK M 2009 2008 2008

Attributable to equity holders of the parent

Opening balance, January 1 10 153 9 932 9 932Total comprehensive income 374 -135 808

Dividend - - -587

Closing balance 10 527 9 797 10 153Attributable to minority interest

Opening balance, January 1 85 120 120Total comprehensive income -2 -9 8

Dividend 0 - -3Acquisitions - - -40

Closing balance 83 111 85

Sum total equity, closing balance 10 610 9 908 10 238





Cash flow statementsGroup Jan - Mar Apr 2008 - Full year

SEK M 2009 2008 Mar 2009 2008

Operating activities

Operating profit 46 574 -154 374

Adjustments for items not included in cash flow:

Depreciation, property, plant and equipment 245 214 928 897

Depreciation, intangible assets 42 35 164 157

Impairment losses, property, plant and equipment 5 4 393 392Impairment losses, intangible assets 0 - 32 32

Provision for restructuring costs 11 44 983 1 016Undistributed result from part. in assoc. companies 7 5 -13 -15

356 876 2 333 2 853Interest received and other financial items -344 -13 -146 185

Interest paid and other financial items 12 -141 -360 -513Taxes paid -8 -86 -324 -402Cash flow from operating activities before changes in working capital 16 636 1 503 2 123Cash flow from changes in working capital:

Change in inventories 289 -180 335 -134

Change in operating receivables 598 -686 2 353 1 069Change in operating liabilities -531 -77 -1 202 -748

Utilization of restructuring provisions -112 -70 -489 -447

Cash flow from operating activities 260 -377 2 500 1 863Investing activities

Acquisitions -21 -38 -785 -802Restructuring measures in acquired entities - 0 0 -

Disposals 1) - - -2 -2Capital expenditure, property, plant and equipment -219 -302 -1 284 -1 367

Capital expenditure in intangible assets -20 -22 -157 -159

Sale of non-current assets 5 3 82 80

Cash flow from investing activities -255 -359 -2 146 -2 250

Financing activities

Change in interest-bearing investments 544 -34 246 -332

Change in interest-bearing liabilities -814 748 -74 1 488Dividend paid to shareholders - - -587 -587Dividend paid to minority 0 - -3 -3

Cash flow from the financing activities -270 714 -418 566

Cash flow for the period -265 -22 -64 179

Cash and cash equivalents:

At beginning of the period 749 530 483 530Exchange rate differences 17 -25 82 40

Cash and cash equivalents at end of period 501 483 501 7491) Including cash flow in entities for which an agreement regarding discontinuation has been reached





Group reviewJan - Mar Apr 2008 - Full year

SEK M 2009 2008 Mar 2009 2008

Excluding items affecting comparability

Net sales 6 877 8 067 30 073 31 263

EBITDA 349 871 2 346 2 868

Operating profit 63 622 1 239 1 798

Profit for the period 78 343 624 889

Net sales Jan - Mar Apr 2008 - Full yearSEK M 2009 2008 Mar 2009 2008

Trelleborg Engineered Systems 2 862 2 856 12 234 12 228

Trelleborg Automotive 1 826 2 726 8 606 9 506

Trelleborg Sealing Solutions 1 276 1 587 5 723 6 034

Trelleborg Wheel Systems 950 962 3 696 3 708

Eliminations -37 -64 -186 -213

Total 6 877 8 067 30 073 31 263

EBITDA 1) Jan - Mar Apr 2008 - Full yearSEK M 2009 2008 Mar 2009 2008

Excluding items affecting comparabilityTrelleborg Engineered Systems 210 338 1 289 1 417

Trelleborg Automotive -67 138 -142 63


Trelleborg Wheel Systems 128 133 448 453

Other companies -3 -2 -9 -8

Group items -17 -31 -128 -142

Total excluding items affecting comparability 349 871 2 346 2 868


Trelleborg Engineered Systems 0 -19 -44 -63Trelleborg Automotive -8 -25 -464 -481

Trelleborg Sealing Solutions -1 - -28 -27

Trelleborg Wheel Systems -2 -1 -16 -15Legal non-recurring items - - -430 -430

Total including items affecting comparability 338 826 1 364 1 852

1) Operating profit before depreciations and impairment losses.

EBITDA 1) Jan - Mar Apr 2008 - Full year

% 2009 2008 Mar 2009 2008Excluding items affecting comparabilityTrelleborg Engineered Systems 7,2 11,7 10,3 11,4

Trelleborg Automotive neg 5,1 neg 0,7Trelleborg Sealing Solutions 7,7 18,6 15,5 18,0Trelleborg Wheel Systems 13,5 13,9 12,1 12,2

Total excluding items affecting comparability 5,0 10,8 7,7 9,1Including items affecting comparability

Trelleborg Engineered Systems 7,2 11,1 10,0 10,9Trelleborg Automotive neg 4,2 neg negTrelleborg Sealing Solutions 7,5 18,6 15,0 17,5

Trelleborg Wheel Systems 13,3 13,8 11,7 11,8

Total including items affecting comparability 4,9 10,2 4,5 5,9

1) Operating profit before depreciations excluding participations in associated companies in relation to net sales.





Operating profit Jan - Mar Apr 2008 - Full yearSEK M 2009 2008 Mar 2009 2008

Excluding items affecting comparability

Trelleborg Engineered Systems 117 266 934 1 083

Trelleborg Automotive -175 33 -587 -379

Trelleborg Sealing Solutions 41 249 682 890

Trelleborg Wheel Systems 102 109 356 363

Other companies -3 -3 -9 -9

Group items -19 -32 -137 -150

Total excluding items affecting comparability 63 622 1 239 1 798


Trelleborg Engineered Systems -5 -22 -62 -79

Trelleborg Automotive -8 -25 -851 -868Trelleborg Sealing Solutions -2 - -34 -32Trelleborg Wheel Systems -2 -1 -16 -15

Legal non-recurring items - - -430 -430Total including items affecting comparability 46 574 -154 374

Operating margin, (ROS) 1) Jan - Mar Apr 2008 - Full year% 2009 2008 Mar 2009 2008Excluding items affecting comparabilityTrelleborg Engineered Systems 4,0 9,2 7,4 8,6

Trelleborg Automotive neg 1,3 neg negTrelleborg Sealing Solutions 3,2 15,7 11,9 14,8Trelleborg Wheel Systems 10,8 11,4 9,6 9,8

Total excluding items affecting comparability 0,9 7,7 4,1 5,7Including items affecting comparability

Trelleborg Engineered Systems 3,8 8,5 6,9 8,0Trelleborg Automotive neg 0,3 neg negTrelleborg Sealing Solutions 3,1 15,7 11,3 14,2

Trelleborg Wheel Systems 10,6 11,3 9,2 9,4

Total including items affecting comparability 0,6 7,1 neg 1,1

1) Operating profit excluding participations in associated companies in relation to net sales.

Capital employed 1) Mar 31 Mar 31 Dec 31

SEK M 2009 2008 2008

Trelleborg Engineered Systems 7 866 6 351 7 812

Trelleborg Automotive 5 079 5 407 5 102

Trelleborg Sealing Solutions 8 118 6 916 8 046

Trelleborg Wheel Systems 2 182 1 764 2 145

Other companies 21 16 19

Group items 4 51 -3

Provisions for restructuring measures -790 -217 -883

Total 22 480 20 288 22 238

1) Total assets less interest-bearing investments and non-interest bearing operating liabilities (including pension liabilities) and excluding tax receivables and tax liabilities.





Return on capital employed, (ROCE) 1) Apr 2008 - Apr 2007- Full year

% Mar 2009 Mar 2008 2008Excluding items affecting comparabilityTrelleborg Engineered Systems 12,6 18,3 15,5

Trelleborg Automotive neg 3,5 negTrelleborg Sealing Solutions 9,0 12,7 12,3

Trelleborg Wheel Systems 18,0 19,0 19,5

Total excluding items affecting comparability 5,6 11,4 8,4Including items affecting comparability

Trelleborg Engineered Systems 11,8 16,7 14,5Trelleborg Automotive neg neg neg

Trelleborg Sealing Solutions 8,6 12,7 11,9

Trelleborg Wheel Systems 17,4 17,5 18,9

Total including items affecting comparability neg 9,3 1,8

1) Operating profit in relation to average capital employed.

Acquisitions, January - March

SEK M 2009 2008Purchase price - 38

Acquisition expenses 1) 21 0Net realizable value of acquired assets - 11

Goodwill 21 27

Acquired assets and liabilities:Operating assets - 11

Total - 111) Acquisitions costs relating to previous years acquisitions.

Cash flow report Capital Sold non Change in

EBITDA 1) expenditure current assets working capital Jan - Mar Apr 2008 -

SEK M 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 Mar 2009Trelleborg Engineered Systems 231 354 -80 -108 1 - 133 -328 285 -82 1 162

Trelleborg Automotive -58 150 -101 -131 2 2 140 -346 -17 -325 367Trelleborg Sealing Solutions 104 303 -22 -35 2 - 38 -144 122 124 920Trelleborg Wheel Systems 133 137 -36 -43 0 - 25 -128 122 -34 285

Other companies -3 -3 0 - - - -1 2 -4 -1 -8Group items -51 -65 0 -7 - 1 21 1 -30 -70 -266

Operating cash flow 356 876 -239 -324 5 3 356 -943 478 -388 2 460Utilization of restructuring provisions -112 -70 -489Dividend paid to minority - - -3Financial items -332 -154 -506Paid tax -8 -86 -324Free cash flow 26 -698 1 138Acquisitions -21 -38 -785

Disposals 2) - - -2Dividend paid to shareholders - - -587Sum net cash flow 5 -736 -236

1) Excluding undistributed result from associated companies and allocated group expenses

2) Including cash flow in entities for which an agreement regarding discontinuation has been reached

Total cash flow





Parent company

Income StatementsParent company Jan - Mar Apr 2008 - Full year

SEK M 2009 2008 Mar 2009 2008Administrative expenses -69 -72 -336 -339

Other operating income 17 13 267 263

Operating profit -52 -59 -69 -76

Financial income and expenses -160 -303 -1 309 -1 452

Profit before tax -212 -362 -1 378 -1 528

Tax 55 89 294 328

Profit for the period -157 -273 -1 084 -1 200

Balance SheetsParent company Mar 31 Mar 31 Dec 31

SEK M 2009 2008 2008Property, plant and equipment 30 32 30

Intangible assets 11 11 12Financial assets 33 146 32 643 33 084

Total non-current assets 33 187 32 686 33 126Current operating receivables 91 176 92Current interest-bearing receivables 1 648 1 536 1 956

Cash and cash equivalents 0 0 0

Total current assets 1 739 1 712 2 048

Total assets 34 926 34 398 35 174

Shareholders' equity 8 498 9 929 8 645

Total equity 8 498 9 929 8 645Non-current interest-bearing liabilities 52 129 52Other non-current liabilities 6 5 6

Total non-current liabilities 58 134 58Interest-bearing current liabilities 26 309 24 262 26 399Other current liabilities 61 73 72

Total current liabilities 26 370 24 335 26 471

Total equity and liabilities 34 926 34 398 35 174





Board’s assurance and Auditors’ Report

This interim report for the period January 1, 2009 to March 31, 2009 presents a fair overview of the operations, position and earnings of the Parent Company and the Group and describes significant risks and uncertainty factors that the company and the companies included in the Group face.

Trelleborg, April 17, 2009 Trelleborg AB (publ)

Anders Narvinger Heléne Bergquist Staffan Bohman Chairman of the Board

Rolf Kjellman Claes Lindqvist Birgitta Håkansson

Sören Mellstig Kim Davidsson Alf Fredlund

Karin Linsjö Peter Nilsson President and CEO

We have reviewed this report for the period January 1, 2009 to March 31, 2009 for Trelleborg AB.

The Board of Directors and the CEO are responsible for the preparation and presentation of this

interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our

responsibility is to express a conclusion on this interim report based on our review.

We conducted our review in accordance with the Swedish Standard on Review Engagements

SÖG 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A

review consists of making inquiries, primarily of persons responsible for financial and accounting

matters, and applying analytical and other review procedures. A review is substantially smaller in

scope than an audit conducted in accordance with the Standards on Auditing in Sweden (RS) and

other generally accepted auditing standards in Sweden. The procedures performed in a review do

not enable us to obtain such assurance that we would become aware of all significant matters

that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the

interim report has not been prepared, in all material respects, in accordance with IAS 34 and the

Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act,

regarding the Parent Company.

Trelleborg, April 17, 2009 PricewaterhouseCoopers AB

Göran Tidström Olov Karlsson Authorized Public Accountant Authorized Public Accountant Auditor in Charge

Board’s assurance

Auditor’s Report





Invitation to telephone conference on April 17 at 9:30 a.m.

A telephone conference will be held on April 17 at 9:30 a.m. Call +46 (0)8 – 5052 0270 or +44 20 8817 9301 and state the password “Trelleborg.” The conference will also be broadcast in real time on the Internet. Visit our website at www.trelleborg.com/investors/presentations for Internet links and presentation materials.

Calendar Annual General Meeting April 23, 2009 Six-month report 2009 July 24, 2009 Interim report January-September 2009 October 29, 2009

For further information, please contact: Investors/analysts Conny Torstensson, VP, Investor Relations Tel: +46 (0)410 – 670 70 Mobile: +46 (0)734 – 08 70 70 E-mail: [email protected]

MediaMikael Sjöblom, VP, Media Relations Tel: +46 (0)410 – 670 15 Mobile: +46 (0)733 – 74 70 15 E-mail: [email protected]

Annual Reports, the stakeholder magazine T-TIME and other information on the Trelleborg Group can be ordered from: Trelleborg AB, Corporate Communications, PO Box 153, SE-231 22 Trelleborg, by telephone on +46 (0)410-670 09, by fax on +46 (0)410- 427 63, by e-mail at [email protected] or can be downloaded from the Group’s website: www.trelleborg.com

Trelleborg AB (publ) Reg. No. 556006-3421 PO Box 153, SE- 231 22 Trelleborg, Sweden Tel: +46 (0)410-670 00, Fax: +46 (0)410-427 63 [email protected]

This report contains forward-looking statements that are based on the current expectations of the management of Trelleborg. Although management believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove correct. Accordingly, results could differ materially from those implied in the forward-looking statements as a result of, among other factors, changes in economic, market and competitive conditions, changes in the regulatory environment and other government actions, fluctuations in exchange rates and other factors.

This is information of the type that Trelleborg AB (publ) is obligated to disclose in accordance with the Swedish Securities Exchange and Clearing Operations Act and/or the Financial Instruments Trading Act. The information was issued for publication on Friday, April 17, 2009 at 7:45 a.m.


The following is a summary of certain tax consequences of the pres-ent invitation to the Company’s shareholders to subscribe for new shares. The summary is based on the legislation currently in force and is intended as general information only, for holders of shares of series B and subscription rights for shares of series B with an unlim-ited tax liability in Sweden, unless otherwise stated. The summary does not address securities held by partnerships or securities held as current assets in business operations. Moreover, the summary does not address the specific rules on tax-exempt capital gains (includ-ing non-deductibility for capital losses) in the corporate sector that may be applicable when shares or subscription rights are considered to be held for business purposes by the shareholder. Special tax rules apply to certain categories of companies. The tax treatment of each individual shareholder depends on such investor’s particu-lar circumstances. Each holder of shares and subscription rights should therefore consult a tax advisor for information on the special implications that may arise in an individual case, including the ap-plicability and effect of foreign rules and tax treaties.

IndividualsCapital gains taxationUpon the sale or other disposition of shares or other equity-related securities, such as subscription rights, a taxable capital gain or deductible capital loss arises in the capital income category. The tax rate in the capital income category is 30 percent. The capital gain or loss is normally calculated as the difference between the sales proceeds, after deducting sales costs, and the tax basis (for specific information on the tax basis for subscription rights, see “Exercise and Disposal of Subscription Rights”). The tax basis for all equity-related securities of the same series and type is calculated together in accordance with the average cost method. It should be noted that the BTAs (paid subscription shares) in this context are not consid-ered to be of the same series and type as the existing shares that en-titled the shareholder to the preferential right in the rights offering until the resolution of the rights offering has been registered with the Swedish Companies Registration Office (Bolagsverket).

Upon the sale of listed shares, such as shares of series B in the Company, the tax basis may alternatively be determined according to the standard method as 20 percent of the sales proceeds after deducting sales costs. Capital losses on listed shares are fully deduct-ible against taxable capital gains on shares and other listed equity-related securities, with the exception of shares in investment funds, so-called interest funds, which consist solely of Swedish receivables.

Up to 70 percent of capital losses on shares that cannot be offset in this way are deductible against other income in the capital income category. If there is a net loss in the capital income category, a tax reduction is allowed against municipal and national income tax, as well as against real estate tax and municipal real estate charges. A tax reduction of 30 percent is allowed on the portion of such net loss that does not exceed SEK 100,000 and 21 percent on the remaining portion. Such net loss cannot be carried forward to future fiscal years.

Certain tax Considerations in sweden

Dividend taxationFor individuals, dividends are taxed in the capital income category. The tax rate in the capital income category is 30 percent. A prelimi-nary tax of 30 percent is generally withheld on dividends paid to individuals residing in Sweden. The preliminary tax is withheld by Euroclear Sweden or, regarding nominee-registered shares, by the Swedish nominee.

Limited liability companiesCapital gains and dividend taxationFor a limited liability company, all income, including taxable capi-tal gains and dividends, is taxed in the business income category at a rate of 26.3 percent as of the financial year commencing after 31 December 2008. Capital gains and capital losses are calculated in the same manner as set forth above with respect to individuals. Deductible capital losses on shares may only be deducted against taxable capital gains on shares and other equity-related securities. Such capital losses may also, if certain conditions are fulfilled, be offset against such capital gains in a company within the same group, provided that the requirements for group contributions are met. A capital loss that could not be utilized during a given year may be carried forward and be offset against taxable capital gains on shares and other equity-related securities during later fiscal years without any limitations in time. Special rules may apply for certain particular categories of corporate shareholders, for example invest-ment funds and investment companies.

Exercise and disposal of subscription rightsThe exercise of subscription rights does not give rise to any taxa-tion. Shareholders that do not wish to utilise their preferential right to participate in the rights offering and dispose of their subscription rights will incur a taxable capital gain. Subscription rights based on a shareholding of existing shares are considered to have been acquired at SEK 0. The total sales proceeds, after deducting sales costs, shall consequently be taxable. The standard method is not applicable in this case. The tax basis for the original shares is not affected.

For subscription rights purchased or otherwise acquired (i.e. that are not received based on a shareholding of existing shares), the payment constitutes the acquisition cost. The tax basis of such subscription rights shall be taken into account when calculating the tax basis for the subscribed shares.

A subscription right that is not exercised or sold, and thus expires, is deemed disposed of at SEK 0.

Certain tax issues for shareholders and holders of subscrip-tion rights that are not tax resident in SwedenWithholding taxFor shareholders with limited tax liability in Sweden that receive dividends on shares held in a Swedish limited liability company, a Swedish withholding tax is generally payable.


Certain tax Considerations in sweden

The tax rate is 30 percent. The tax rate, however, is generally reduced for shareholders resident in other jurisdictions by tax trea-ties between Sweden and certain other countries for the avoidance of double taxation. The majority of Sweden’s tax treaties enable a reduction of the Swedish tax to the tax rate stipulated in the treaty directly at the payment of dividends, provided the requisite information is present concerning the tax residency of the person entitled to such dividend. In Sweden, normally Euroclear Sweden, or in the case of nominee-registered shares, the nominee, carries out the deduction of withholding tax. The receipt of subscription rights does not trigger any withholding tax.

If a 30 percent withholding tax is deducted from a payment to a person entitled to be taxed at a lower rate, or in the case that too much withholding tax has otherwise been withheld, a refund can be claimed from the Swedish Tax Agency (Skatteverket) prior to the expiry of the fifth calendar year following the dividend distribution.

Capital gains taxationThe holders of shares and subscription rights with limited tax liabil-ity in Sweden, and that do not operate a business from a permanent establishment in Sweden, are normally not subject to tax in Sweden for capital gains realized upon the disposal of such securities. Share-holders and holders of subscription rights may, however, be subject to taxation in their country of domicile. According to a special tax rule, individuals with limited tax liability in Sweden can, however, be subject to tax in Sweden on the sale of certain Swedish securi-ties, such as shares, BTAs and subscription rights, if they have been resident or lived permanently in Sweden at any time during the calendar year of such disposal or during the previous ten calendar years. The applicability of this rule is however limited in a number of cases by tax treaties between Sweden and other countries.


restriCtions on sale and transfer etC.

the grant of subscription rights and the offer to subscribe for new shares in the Company by virtue of subscription rights (primary preferential right) as well as without subscription rights (subsidiary preferential right) (the “offering”) to per-sons resident in, or who are citizens of, countries other than sweden, denmark, the united Kingdom and ireland may be affected by the laws of the relevant jurisdiction. investors should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to acquire new shares by virtue of subscription rights or without subscription rights.

GeneralThe Company is not taking any action to permit a public offer-ing of the new shares being offered in the Offering (through the exercise of the subscription rights or otherwise) in any jurisdiction other than Sweden, Denmark, the United Kingdom and Ireland. Receipt of the prospectus will not constitute an offer in those juris-dictions in which it would be illegal to make an offer and, in those circumstances, this prospectus is for information only and must not be copied or redistributed.

Except as otherwise disclosed in the prospectus, if an inves-tor receives a copy of this prospectus in any territory other than Sweden, Denmark, the United Kingdom and Ireland, the investor may not treat the prospectus as constituting an invitation or offer to it, nor should the investor in any event deal in the subscription rights or the new shares, unless, in the relevant jurisdiction, such an invitation or offer could lawfully be made to that investor, or the subscription rights or the new shares could lawfully be dealt in without contravention of any unfulfilled registration or other legal requirements.

Accordingly, if an investor receives a copy of the prospectus, the investor should not distribute or send the same, or transfer subscription rights or new shares to any person, in or into any juris-diction where to do so would or might contravene local securities laws or regulations. If the investor forwards this prospectus into any such territories (whether under a contractual or legal obligation or otherwise), the investor should draw the recipient’s attention to the contents of this section. Except as otherwise expressly noted in this prospectus:

(i) the subscription rights and new shares being granted or of-fered, respectively, in the Offering may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into, the United States, Canada, Australia, Hong Kong, Japan or any other jurisdiction in which it would not be permissible to offer the subscription rights or new shares (an “Ineligible Jurisdic-tion”, together the “Ineligible Jurisdictions”);

(ii) the prospectus may not be sent to any person in any Ineligible Jurisdiction; and

(iii) the crediting of subscription to an account of a shareholder or other person in an Ineligible Jurisdiction (referred to as “Ineligible Persons”) does not constitute an offer to such per-sons of the new shares and Ineligible Persons may not exercise subscription rights.

If an investor receives, delivers or otherwise transfers subscription rights, exercise subscription rights to obtain new shares or trades or otherwise deals in subscription rights or the new shares being granted or offered, respectively, in the Offering, that investor will be deemed to have made, or, in some cases, be required to make, the following representations and warranties to the Company and any person acting on the Company’s behalf, unless such require-ment is waived by the Company:

(a) the investor is not located in an Ineligible Jurisdiction, unless the investor is an existing shareholder and a “qualified insti-tutional buyer” i.e. a “QIB” as defined in, and in accordance with, Rule 144A under United States Securities Act of 1933 as currently in effect (the “Securities Act”);

(b) the investor is not an Ineligible Person other than an existing shareholder and a QIB;

(c) the investor is not acting, and has not acted, for the account or benefit of an Ineligible Person other than an existing share-holder and a QIB;

(d) unless the investor is an existing shareholder and a QIB, the investor is located outside the United States and any person for whose account or benefit it is acting on a non-discretionary basis is located outside the United States, or are existing shareholders and QIBs, and, upon acquiring new shares, the investor and any such person will be located outside the United States, or be existing shareholders and QIBs;

(e) the investor understands that neither the subscription rights nor the new shares being granted and offered, respectively, in the Offering have been or will be registered under the Securi-ties Act and may not be offered, sold, pledged, resold, granted, delivered, allotted, taken up or otherwise transferred within the United States or to or for the account or benefit of US persons except pursuant to an exemption from, or in a transaction not subject to, registration under the Securities Act; and

(f ) the investor may lawfully be offered, take up, subscribe for and receive subscription rights and the new shares being offered in the Offering in the jurisdiction in which it resides or is cur-rently located.

The Company and any persons acting on behalf of the Company will rely upon the investor’s representations and warranties. Any



provision or false information or subsequent breach of these repre-sentations and warranties may subject the investor to liability.

If a person is acting on behalf of a holder of subscription rights (including, without limitation, as a nominee, custodian or trustee), that person will be required to provide the foregoing representa-tions and warranties to the Company with respect to the exercise of subscription rights on behalf of the holder. If such person cannot or is unable to provide the foregoing representations and warranties, the Company will not be bound to authorise the allocation of any of the subscription rights or the new shares to that person or the person on whose behalf the other is acting.

Subject to the specific restrictions described below, if an inves-tor (including, without limitation, its nominees, custodians and trustees) is outside of Sweden, Denmark, the United Kingdom and Ireland, and wishes to exercise or otherwise deal in subscription rights or subscribe for new shares, the investor must satisfy itself as to full observance of the applicable laws of any relevant territory including obtaining any requisite governmental or other consents, observing any other requisite formalities and paying any issue, transfer or other taxes due in such territories.

The information set out in this section is intended as a general guide only. If the investor is in any doubt as to whether it is eligible to exercise its subscription rights or subscribe for the new shares, that investor should consult its professional advisers without delay.

Subscription rights will initially be credited to financial inter-mediaries for the accounts of shareholders that hold shares in the Company through such intermediaries as of the record date 28 April 2009. A financial intermediary may not exercise any subscrip-tion rights on behalf of any person in the Ineligible Jurisdictions or any Ineligible Persons and may be required in connection with any exercise of subscription rights to certify the same.

Subject to certain exceptions, financial intermediaries are not permitted to send this prospectus or any other information about the Offering into any Ineligible Jurisdiction or to any Ineligible Per-son. The crediting of subscription rights to the account of persons in Ineligible Jurisdictions or to Ineligible Persons does not consti-tute an offer of the new shares to such persons. Financial intermedi-aries, which include brokers, custodians and nominees, holding for Ineligible Persons may consider selling any or all subscription rights held for the benefit of such persons to the extent permitted under their arrangements with such persons and applicable law and to remit the net proceeds to the accounts of such persons.

Subject to certain exceptions, exercise instructions or certifica-tions sent from or postmarked in any Ineligible Jurisdiction will be deemed to be invalid and the new shares being offered in the Offering will not be delivered to an addressee in any Ineligible Jurisdiction. The Company reserves the right to reject any exercise or revoke any accepted exercise made in the name of any person who provides an address in an Ineligible Jurisdiction for acceptance, revocation of exercise or delivery of such new shares, who is unable to represent or warrant that such person is not in an Ineligible Jurisdiction and is not an Ineligible Person, who is not acting

on a discretionary basis for such persons, or who appears to the Company or its agents to have executed its exercise instructions or certifications in, or dispatched them from, an Ineligible Jurisdic-tion. Furthermore, the Company reserves the right, with sole and absolute discretion, to treat as invalid any exercise or purported exercise of subscription rights which appear to it to have been executed, effected or dispatched in a manner that may involve a breach or violation of the laws or regulations of any jurisdiction.

Despite any other provision of this prospectus, the Company reserves the right to permit a holder to exercise its subscription rights if the Company in its absolute discretion is satisfied that the transaction in question is exempt from or not subject to the laws or regulations giving rise to the restrictions in question. Applicable exemptions in certain jurisdictions are described further below. In any such case, the Company does not accept any liability for any actions that a holder takes or for any consequences that such holder may suffer by the Company’s acceptance of the holder’s exercise of subscription rights.

United StatesThe subscription rights and new shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may only be offered or sold within the United States to existing shareholders who are reasonably believed to be “qualified institutional buyers” (“QIB”) and who have executed a so called investor letter, in the designated form, to Trelleborg and the Joint Lead Managers.

Until 40 days after the commencement of the Offering, an offer, sale or transfer of the subscription rights or new shares within the United States by a dealer (whether or not participating in the Offering) may violate the registration requirements of the Securi-ties Act. The subscription rights and new shares have not been approved or disapproved by any US federal or US state securities commission or US regulatory authority. Furthermore, the forego-ing authorities have not passed upon or endorsed the merits of the Offering of the subscription rights and new shares or the accuracy, adequacy or completeness of this prospectus. Any representation to the contrary is a criminal offence in the United States.

Each holder of subscription rights or new shares, by accepting delivery of the prospectus, will be deemed to have represented, agreed and acknowledged that, among other things (terms used in this paragraph that are defined in Rule 144A or Regulation S under the Securities Act are used herein as defined therein):

(1) it: (i) is an existing shareholder and a “qualified institutional buyer”, or QIB; (ii) is aware, and each beneficial owner of such subscription rights or new shares has been advised, that the sale of the subscription rights or the new shares to it may be made in reliance on an exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof, or in a transaction not subject to, the registration requirements of the



Securities Act; and (iii) is acquiring such subscription rights or new shares for its own account or for the account of a QIB; or it is exercising, subscribing for or otherwise acquiring the subscription rights or new shares in an offshore transaction in accordance with Rule 903 or 904 of Regulation S;

(2) it understands that the subscription rights and new shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act and understands that such securities have not been and will not be registered under the Securities Act and, until 12 months following their issuance by the Com-pany, may not be offered, sold, pledged or otherwise transferred except: (i) in an offshore transaction in accordance with Rule 904 of Regulation S under the Securities Act; (ii) pursuant to an effective registration statement under the Securities Act; or (iii) pursuant to an exemption from registration under the Securities Act, in each case in accordance with any applicable securities law of any state of the United States;

(3) if, within 12 months following their issuance by the Com-pany, the person in question decides to offer, resell, pledge or otherwise transfer such subscription rights or new shares, such securities may be offered, sold, pledged or otherwise transferred only together with the following legend, which such subscrip-tion rights or new shares will bear unless otherwise determined by the Company in accordance with applicable law:

This security has not been, and will not be, registered under the US Securities Act of 1933 (the “Securities Act”), or with any securities regulatory authority of any state or other jurisdic-tion of the United States, and until 12 months following their issuance by Trelleborg may not be offered, sold, pledged or otherwise transferred unless registered under the Securities Act or such action is an offshore transaction in accordance with Rule 904 of Regulation S under the Securities Act or is effected pursuant to an exemption from registration under the Securi-ties Act;

(4) any offer, sale, pledge or other transfer made other than in compliance with the above-stated restrictions shall not be rec-ognized by the Company in respect of the subscription rights or the new shares;

(5) it undertakes if, within 12 months following their issuance by the Company, it offers, resells, pledges or otherwise transfers the subscription rights or the new shares, to notify such subse-quent transferee of the transfer restrictions set out in paragraphs (1) to (4) above;

(6) it is not an affiliate (as defined 501(b) under the Securities Act) of Trelleborg, and is not acting on behalf of an affiliate of Trelleborg;

(7) if the person in question is acquiring any subscription rights or new shares for the account of one or more other investors, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each such account; and

(8) Trelleborg, the Joint Lead Managers and each of their respective affiliates and agents, and others, will rely upon the truth and accuracy of the foregoing representations, warranties, acknowl-edgments and agreements.Persons receiving the prospectus are hereby notified that the

Company and other sellers of subscription rights or new shares are relying on an exemption from the registration requirements of sec-tion 5 of the Securities Act.

European Economic AreaIn relation to Member States of the European Economic Area other than Sweden, Denmark, the United Kingdom and Ireland, which have implemented the Prospectus Directive, an offer to the public of any subscription rights or new shares contemplated by the prospectus may not be made except that such an offer may be made under the following exemptions under the Prospectus Directive, if they have been implemented in that relevant member state:

(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year, (2) a total balance sheet of more than EUR 43 M and (3) an annual net turnover of more than EUR 50 M, as shown in its last annual or consolidated accounts; or

(c) to other persons provided that no such offer would result in a requirement for the publication by the Company or the Joint Lead Managers of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purpose of this provision, the expression an “offer to the public” in relation to any subscription rights or new shares in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the Offering, the subscription rights and any new shares to be offered so as to enable an investor to decide to subscribe for or acquire any such securities. The expression “Prospectus Directive” includes any relevant implementing measure in each relevant member state.

StabilizationIn connection with the rights issue, SEB Enskilda, or a representa-tive or affiliate of SEB Enskilda, may act as “Stabilization Manager” and may effect transactions with a view to supporting the stock exchange or market price of the shares, subscription rights, BTAs or new shares in order to counteract any existing selling pressure (“Stabilization Measures”).

Stabilization Measures include transactions that stabilize, main-tain or otherwise effect the market price of the shares, subscription rights, BTAs or new shares. Such transactions may include creating a syndicate short position, and engaging in stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the Managers of securities not owned by them.


Bitumen-based: Asphalt-based.

Brake shims: Rubber metal alloy rings attached to the brake lining (to minimize screech).

CR (Corporate responsibility): Refers to the responsibilities of companies towards their key stakeholders, such as employees, shareholders, customers, suppliers, the local community and the environment. Often relates to the same areas encompassed by the term sustainability or Corporate Social Responsibility (CSR).

Cross-ply tire: A former popular type of tire in which the fiber direction in its inner reinforcement, the tire cord, is placed diago-nally against the center of the tire, facing the direction of travel.

Elastomer: A polymer with high elasticity that can be stretched to at least double its length. Once the exerted pull force is relea-sed, the polymer returns almost entirely to its original length.

Global Compact: UN initiative that unites companies and social institutions around universally applicable principles for environ-ment and society. The aim is for companies to become members of society that are involved in developing solutions for challen-ges arising from increasing globalization.

Glossary

Stabilizing transactions consist of certain bids or purchases made for the purpose of preventing or retarding a decline in the market price of the securities while an offering is in progress.

The Stabilization Manager is under no obligation to engage in any such stabilization. Accordingly, there is no assurance that sta-bilization will be undertaken. If stabilization is undertaken, it may be discontinued at any time without prior notice. Stabilization may be carried out from the day of publication of this prospectus, up to and including 30 days following the subscription period, which is expected to expire on June 18, 2009 (the “Stabilization Period”).

The Stabilization Manager may not stabilize (i) the subscription rights at a price exceeding SEK 15.75 per subscription right, equal to the theoretical value of a subscription right at the announcement of the subscription price or (ii) the shares, BTAs or new shares at a price exceeding SEK 27.75 per share, BTA or new share, equal


to the sum of the subscription price and the theoretical value of a subscription right at the announcement of the subscription price (SEK 12.00 plus SEK 15.75).

As a result of such stabilization, the stock exchange or market price of the shares or other securities of the Company may be higher than would otherwise prevail in the market. Stabilization may also result in a stock exchange or market price at a level that is not sustainable in the long term.

Within one week after the end of the Stabilization Period, the Company will announce, in accordance with Article 9 of Regula-tion (EC) No. 2273/2003, whether stabilization measures have been taken, the date on which stabilization commenced, the date on which the last stabilization measures were taken and for each of the dates on which stabilization occurred, the price range within which stabilization was taken.

OEM (Original Equipment Manufacturer): The end producer of, for example, a car.

Plastics: Can be divided into two main groups. Thermoplastics are non cross-linked plastics that are solid at room temperature but become soft and moldable when heated. Hard plastics are cross-linked plastics that disintegrate upon heating and do not regain their properties.

Polymer: The word is derived from the Greek “poly,” meaning “many” and “meros” meaning “parts.” A polymer consists of a long molecular chain of linked repeated units. Polymers are made up of many small molecules – monomers – that are linked in long chains. Examples of polymers are plastics and rubber.Polymer technology: The technology relating to manufacturing processes for polymers in combination with their unique proper-ties.

Radial tires: Increasingly popular type of tire with the fibers of the inner reinforcement, the tire cord, placed in a radial direction towards the center of the tire.

Narva/B

örstryck

Important informationIn this prospectus “Trelleborg” or “Company” means, depending on the context, either Trelleborg AB or the group in which Trelleborg AB is the parent company. The “Group” means Trelleborg AB and its subsidiaries.

“Joint Lead Managers” refers to Handelsbanken Capital Markets, a business unit within Svenska Handelsbanken AB (“Handelsbanken Capital Markets”), Nordea Bank AB (“Nordea” or “Nordea Corporate Finance”) and SEB Enskilda, Skandinaviska En-skilda Banken AB (“SEB Enskilda”). “Co-Lead Manager” refers to DnB NOR Markets, a unit within DnB NOR Bank ASA (“DnB NOR Markets”). The Joint Lead Managers and the Co-Lead Managers are jointly referred to as the “Managers”.

“Euroclear Sweden” refers to Euroclear Sweden AB, formerly VPC AB. “NASDAQ OMX” refers to NASDAQ OMX Stockholm AB. “SEK” refers to Swedish crowns, “USD” refers to American dollars and “EUR” refers to Euro.

Information to investorsThis prospectus has been prepared in compliance with the standards and require-ments of the Swedish Financial Instruments Trading Act of 1991 (lagen (1991:980) om handel med finansiella instrument) (the “Trading Act”), Directive 2003/71/EC of the European Parliament and the Council (the “Prospectus Directive”) and the Com-mission Regulation (EC) No. 809/2004.

The prospectus has been approved and registered by the Swedish Financial Supervisory Authority (Finansinspektionen) (“SFSA”) pursuant to the provisions of Chapter 2, Sections 25 and 26 of the Trading Act. Approval and registration by SFSA do not imply that SFSA guarantees that the factual information provided in this prospectus is correct and complete.

The prospectus and the offering pursuant to the prospectus are governed by Swedish law. The courts of Sweden have exclusive jurisdiction to settle any dispute arising out of or in connection with this prospectus or the offering.

This prospectus has been prepared in Swedish and English language versions. In case of any inconsistency between the Swedish and the English versions of the prospectus, the Swedish version shall prevail.

None of the subscription rights, paid subscription shares (betalda tecknade aktier) (“BTAs”) or new shares have been or will be registered under the United States Securities Act of 1933 as currently in effect (the “Securities Act”) or under any other jurisdiction other than Sweden. None of the subscription rights, BTAs and new shares may, without such registration, be offered or transferred within the United States or to US persons (as defined in Regulation S under the Securities Act) except for pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Moreover, the offering in the prospectus is not directed to sharehol-ders domiciled in Canada, Australia, Hong Kong and Japan or in any other jurisdiction where participation would require additional prospectuses, registration or measures other than those pursuant to Swedish law. Accordingly, the prospectus may not be dist-ributed in any country where the distribution or the offering requires such measures or would conflict with regulations in such country or jurisdiction. Acquisition of subscription rights, BTAs or new shares in violation of the restrictions described above may be void.

In relation to member states of the European Economic Area (other than Sweden, Denmark, the United Kingdom and Ireland) which have implemented the Prospectus Directive, the offering pursuant to this prospectus can only be made where it does not give rise to a requirement to prepare a prospectus in such countries pursuant to Article 3 of the Prospectus Directive.

For more information regarding restrictions in relation to the offering in the pro-spectus, please see “Restrictions on Sale and Transfer etc”.

This prospectus has been furnished by Trelleborg based on their own informa-tion and sources Trelleborg believes to be reliable. No representation or warranty, expressed or implied, is made by the Managers as to the accuracy or completeness of any of the information set out in the prospectus and nothing in the prospectus is or shall be relied upon as a promise or representation, whether as to the past or the future, as the Managers has conducted no independent verification of the information.

Anyone making an investment decision must rely on its own assessment of Trelle borg and the offering under the prospectus, including the merits and risks in-volved, and investors must only rely on the information contained in the prospectus and any supplements to the prospectus. No person has been authorised to give any information or make any representations other than those contained in the prospectus and, if nevertheless given or made, such information or representations must not be relied upon as having been authorised by Trelleborg. The distribution of this prospectus does neither entail that the information contained therein is correct and up-to-date as per any other date than the date of this prospectus, nor that the affairs of the Company have remained unchanged since this date. In the event that the information contained in the prospectus is subject to any material change during the period starting with the publication and ending with the first trading day, such material change will be published in accordance with the provisions in the Trading Act (being the relevant legislation regarding the publication of supplements to prospectuses).

As a condition for exercising subscription rights or purchasing new shares pur-suant to the offering in the prospectus, each exercising holder or purchaser will be

deemed to have made, or, in some cases, be required to make, certain represen-tations and warranties, that will be relied upon by Trelleborg, the Managers and others. See “Restrictions on Sale and Transfer etc”. Trelleborg reserves the right, in its sole and absolute discretion, to reject any exercising of subscription rights or purchase of BTAs or new shares that it or its agents believe may give rise to a breach or violation of any law, rule or regulation.

In connection with the offering in the prospectus SEB Enskilda, or a represen-tative or affiliate of SEB Enskilda, (in such capacity, the “Stabilizing Manager”) may effect transactions which stabilize or maintain the market price of the shares, subscription rights, BTAs or new shares at levels which might not otherwise prevail. Such transactions may be effected on the exchange where the shares are listed, in the over-the-counter market or otherwise. The Stabilizing Manager is under no obligations to engage in any such stabilization measures, and such stabilization, if commenced, may be discontinued at any time without prior notice. Such stabilization measures may be carried out from the day of publication of this prospectus, up to and including 30 days following the subscription period, which is expected to expire on June 18, 2009. The Stabilization Manager may not stabilize (i) the subscription rights at a price exceeding SEK 15.75 per subscription right, equal to the theoretical value of a subscription right at the announcement of the subscription price or (ii) the shares, BTAs or new shares at a price exceeding SEK 27.75 per share, BTA or new share, equal to the sum of the subscription price and the theoretical value of a subscription right at the announcement of the subscription price (SEK 12.00 plus SEK 15.75). For a more detailed description of the stabilization activities, see “Restrictions on Sale and Transfer etc” / “Stabilization and Other Trading Activities”.

Forward-looking statements and market dataThe prospectus contains certain forward-looking statements that reflect Trelleborg’s current views with respect to future events and financial and operational performan-ce. The words “intend”, “estimate”, “expect”, “may”, “plan”, “anticipate” or similar expressions regarding indications or prognoses of future developments or trends, which are not statements based on historical facts, constitute forward-looking infor-mation. Although Trelleborg believes that these statements are based on reasonable assumptions and expectations, Trelleborg cannot give any assurances that such sta-tements will materialise. Because these forward-looking statements involve known and unknown risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statement.

Factors that could cause Trelleborg’s actual results of operations or performance to differ from the forward-looking statements include, but are not limited to, those described under “Risk Factors”. The forward-looking statements included in this prospectus speak only of the date of the prospectus. Trelleborg undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law. The prospectus contains market data and industry forecasts, including information related to the sizes of the markets in which the Group participates. The information has been extracted from a number of sources. Although Trelleborg regards these sources as reliable, the information contained in them has not been independently verified. In addition to the above, certain data in the prospectus is also derived from estimates made by Trelleborg.

Presentation of financial informationTrelleborg’s audited consolidated financial statements for 2006, 2007 and 2008, which have been prepared in accordance with International Financial Standards (“IFRS”) as enacted by the EU, are incorporated through reference and constitute a part of this prospectus. Certain financial and other information presented in this prospectus have been rounded off for the purpose of making this prospectus more easily accessible for the reader. The figures in certain columns thus do not cor-respond exactly with the declared total amount.

With the exception of the Company’s audited consolidated financial statements for 2006, 2007 and 2008, and the lucidly reviewed interim financial statement for the first quarter of 2009, no additional information within the prospectus has been reviewed or audited by the Company’s auditors.

TrelleborgHead officeTrelleborg ABJohan Kocksgatan 10Box 153SE-231 22 TrelleborgTelephone: +46 410 670 00

Financial advisorsJoint Lead Managers Handelsbanken Capital MarketsVisiting addressBlasieholmstorg 11-12Mailing addressSE-106 70 StockholmTelephone: +46 8 701 10 00

Nordea Corporate FinanceVisiting addressSmålandsgatan 17Mailing addressH115SE-105 71 Stockholm

SEB EnskildaVisiting addressKungsträdgårdsgatan 8Mailing addressSE-106 40 StockholmTelephone: +46 8 522 295 00

Co-Lead ManagerDnBNor MarketsVisiting addressStranden 22Mailing addressN-0021 Oslo Telephone: +47 2222 948880

Legal advisorsMannheimer Swartling AdvokatbyråVisiting addressSödergatan 22 Mailing addressBox 4291 SE-203 14 MalmöTelephone: +46 40 698 58 00

Account operatorEuroclear Sweden ABBox 7822SE-103 97 Stockholm

Addresses



Joint Lead Managers

Co-Lead ManagerTrelleborg AB (publ), Box 153, SE-231 22 Trelleborg, Sweden

Tel: +46 410-670 00 www.trelleborg.com