I got the pleasure to invite you all to Trelleborg's Capital Markets Day 2023. It's been a year and a half since we held a Capital Markets Day last, a lot of things, as you know, has happened, and this is the time to summarize some of those changes within Trelleborg, the transformation we've done in the past couple of years. It will be a full day, quite a few speakers, hopefully you will enjoy it as we go down in some deep dives into our speedboat segments, amongst them aerospace, healthcare, medical, and so on.
You probably saw also that we sent out a couple of press releases this morning where we upped our ambitions on the financial targets. We'll talk more about that. We also said that we will further invest into Asia. That was a separate press release coming out today. Without further ado, I present to you our CEO, Peter Nilsson, who will kick off this seminar.
Thank you, Christopher. I'm very happy to see all of you here, as Christopher said, for our Capital Market Day 2023, where the heading is A Better Trelleborg. That is really what we're gonna talk about today, that we have a new company. It's been in the making for some time, as most of you is well aware, we are now kind of finally leaving the station and leaving kind of Wheel Systems definitely behind us, even though, once again, it's been in the making for some time. The story here about today is to tell about A Better Trelleborg. Before that, just to bring around, please mute your phones, to make sure that we don't get interrupted, also be aware that this event is also recorded. There is a few guys following online as well.
When we get into Q&A session, it might be also that we will get some questions also from the audience further away. Theme, yes, Trelleborg, what are we today? We're talking New Horizons 2.0, which is kind of starting. This is not the first time we're resetting Trelleborg, for those of you who has been with us for some time. Did a major step 2016 when we basically left the majority of the automotive stage, and now we are also leaving kind of our first business of Trelleborg, honestly, behind us now with the tires. It started already, first tires being made in the city of Trelleborg 1897. That is been with us for a long time. That is the frame, New Horizons 2.0.
The statement here is growing Trelleborg into the world's foremost engineered polymer solutions company in our industries, and it's our industries is the key. We are to become, if we are not, we are to become the best supplier of polymer solutions in our selected industries. As Christopher said, we're gonna touch and feel a few of those industries in this presentation, but we are active in many areas, and we continue to be active in many areas. Starting Better Trelleborg, and the day we're gonna do like this. I'm gonna start off, supported here by Fredrik, give you some financial update, and also commenting on the new financial targets. We have Ulrika Wedberg here, Vice President of Sustainability for us, who's gonna guide you through some aspects of the sustainability story around Trelleborg.
Fredrik Nilsson gonna give you an update on Industrial Solutions . We have a break, and then we have, let's say, section here focusing more on Sealing Solutions for Peter Hahn, who is heading that, gonna give you an overall view on Sealing Solutions. Then we have a deep dive in Healthcare and Medical. In Sealing Solutions then, facilitated by Linda, who is heading this globally for us. Then also do the same on aerospace, where Jürgen gonna give you a guide on that. Jürgen is heading kind of the aerospace segment of Sealing Solutions globally. Then we have a break. Then finishing off, we give you also some touch on innovation, really what we're working with. Konrad Saur, who is heading, I think the title is Vice President, Innovation and Technology.
Technology, just to get it right. It's basically innovative, but also very focused on application engineering to give you some guidance on that, and then finish off with some conclusions and Q&A. This is the day. Intense. We're gonna keep it at a high pace. Once again, slides are available online. It's being recorded as well. If you don't catch everything, which we say, hopefully you do, nevertheless, you should know that's also available online. Moving on. Eventful decade. I will say that we have made some major changes. We have sold 30% of Trelleborg twice in the last 10 years. Working a lot with the portfolio. Portfolio adjustment has been in the making. We have a far better portfolio today. Get back and comment a little bit more on that.
Geographical expansion must not be forgotten either. I'm gonna touch on that also, that you're seeing a completely new Trelleborg now. We were a very European company before, but we now finally can say that we are fairly balanced. There is some more to do, especially in Asia for us, but nevertheless, this balancing has been a lot better than it was before. We must not, let's say, also in Trelleborg, not forget this efficiency improvement. We have a very good daily efficiency improvement, which is kind of assisting all of our business to get better. This is really. 10 years behind us, we're leaving us then with a different and much stronger company compared to a few years ago. Starting with exits, I mean, there is the sum of the exits been doing.
I mean, they are well known by you, but nevertheless, refreshing this that we have been leaving majority of automotive, we are leaving majority of Subsea Oil and Gas , leaving wheel systems, and then also some other smaller segments also moving. The dramatic difference in this one, and the final here is of course wheel systems that we now sold, and at the end purchase price, with adjustments in working capital and everything, enterprise value at the end is this SEK 2,100 million. A lot of money, creating a capital gain of some SEK 6 billion. The SEK 6 billion is not really defined yet because that's on accounting, that's why we cannot give a detailed figure on that.
There's still some wrap-up to be done before we end up with that, but probably an inch above 6 billion at the end. We don't feel it's gonna go below 6 billion. It's gonna be probably slightly higher, probably. Another divestment also which has kind of been sliding a little bit low is the Printing Solutions which we sold, one and a half billion SEK. Not a bad business, but because it's good cash generation, but shrinking business, it's a negative growth in this business, and then we decided then to exit it, and managed to get it out and got a slim capital gain on it as well. Nevertheless, cash in the box.
Now in this way to build a better Trelleborg, and we feel now going forward, we have a company now with all these changes being made, better growth profile, we are more profitable, and also less cyclical. Less cyclical, of course, we're leaving the agriculture market or exposure. We still have exposure to agriculture market, but the agriculture market exposure goes down dramatically. Of course, we have also this oil and gas exposure, and also long-term also the automotive. Substantially less cyclical. Looking at the growth, we have been delivering in this new setting that we have, we have been delivering 5% organic last five years. It's a solid business in terms of organic growth if you look five years back. The same applies to the margin. It's a lot better. We say roughly 16.8.
We're roughly 17% in the new structure, coming from roughly 14% before. On top of that, also the more capital efficient. We also have the Return on Capital Employed up at 16%. This is kind of a different, this is improved Trelleborg in all dimensions that you see in front of us. Going forward here, just to give you what are we really looking for now. I mean, we say we are still active in a lot of areas, but what are we really looking for? This is the way we look at Trelleborg going forward, where we would like to be. When we judge whether it's a good business or a bad business, we look at this.
If you look at the left side, A by value, C by cost, that is important for us that we want to offer solutions with this very important functional value, but that might not be the highest value as part of the total solution for the customer. That goes then as well, we would like to go for critical solution with a switching, where the customer has to think twice before they look for another provider. High switching cost. Generally, most of our products is now being single sourced from us, and it will entail some testing, it will entail some investment in equipment, there's some tooling, all of that. If they decide to switch to something else, they will need to invest to move away from us, which is of course good.
That means that high barriers to entry is also, let's say, valid. This is the one. If you then look what we want to be seen as with the customers, we want to be seen as the partners with our customers. We work closely. Most of our customers, we have been working with them for many, many years, and we have, let's say, most of them also been supplying them with a multiple of products. We don't have a one-dimensional contact with the customer. We are working with them both on sales and engineering and after sales. Most of them as well, once again, we have a multiple of contact points. We definitely want to be seen as partners with the customers. Local presence, global resources, capability.
That's also where we stand out in compared to most of our competitors. Still, it's regional and even local. We are seen as, we want to be seen as local wherever we act, but also being able to support the customers on a global scale. That is also where we sticks out a lot compared to the majority of our competitors. Materials and application experts. We are not kind of material innovators, inventors, you can say. We are using the materials which is provided by the raw material suppliers, we apply that into applications. Our value is in the combination of materials and applications. We spend a lot on testing and verification, product verification, all of that. This is kind of the characteristics that we're looking at for our business going forward.
We should say we will never get 100% fit on this, but this is kind of the move that we want to get to. This is really what we're looking for, and this is what should more and more, let's say, recognize Trelleborg when you look at the businesses that we are in. Moving over then to talking about better Trelleborg. We by that, the attractive leading positions. We talk about improved sustainability profile. I've not mentioned that as well, but while leaving, especially leaving the Wheel Systems activity, we are actually getting. We are never gonna be a sustainable company in that respect. We are still working with energy. We need energy to manufacture our products. We also use fossil input materials. Nevertheless, leaving Wheel Systems, we improved our profile substantially.
A little bit touch, and also in this presentation, touch on this a little bit more on better growth, more profitable, and less cyclical. Attractive leading positions, and this is important for us, leading positions in selected segments because we feel that we need to have a leading position. We need to be recognized as the leader in the industries where we act. We are still gonna work in a lot of different industries, and we are kind of defining this leader because certain industries, depending on the leading position could be that you're a leader in industry, you could be a leader in application, you can be also, you have to look at the competition also to make sure that you stay ahead of the competition.
This is a multidimensional picture where we are kind of looking for the angle of this leading position, which is creating an advantage for us and creating a leading edge compared to others. This is very important for us because we believe by being kind of the leading position, we will get early insights. We'll be the one closest to our customers, closest to the applications, and they'll be able to continue to stay ahead of the competition and be the best one in supporting, which will then be the best development partner for our customers. We will also see that recurring sales will come, and we will also get pricing power because if we are seen as the leader and the best, they want to buy from us because we are offering the best solutions, and then, of course, we get customer stickiness.
This is for us, a leader that we need to get in leading position. What we feel today that basically everything we have remaining Trelleborg, we have a leading position at the moment. We feel that we have a good portfolio of products. Of course, we continue to improve it. We're gonna continue to iterate and find ways to improve it further. Nevertheless, with the way we look at it today, basically everything that, of course, are some small bits and pieces which can be improved. If you look at the totality, we are very happy with all of the portfolio we have at the moment. That is then being organized in two business areas. You're gonna get more details about that from Jürgen and Peter later, where we have a slightly different, say, overall ambition in those areas.
This is not new. We talk about climbing the value ladder. We still see Industrial Solutions should work more to improve the profitability a little bit and making sure they create even more value with the products. While on Sealing Solutions, we are quite happy with the value creation in that area. It's more a matter to scale it up. What you're gonna see today is not really any new direction. It's the same direction for both of the areas, but we want, of course, want to accelerate these actions in that one. Looking then at Sealing Solutions, starting with that, this is basically top six leading positions that we have at the moment.
Once again, nothing new. We definitely see that we are kind of the global leader in most or global top three in most of this area. Automotive, we are still having, as you will see later, quite a substantial sales within Sealing is still automotive, but we're very happy with that. From a profitability point of view, that is actually slightly better than the average even. This is not dragging down the profitability of Sealing Solutions, even though sometimes automotive has, like, a bad name around it. We are not concerned about that. Of course, we want to stay in niches, and we don't want to be everywhere in automotive. Then we have Healthcare Medical, where we're building a position.
Linda gonna give you an input on that one. We're actually getting now into, for certain segments, we are getting into this global leading position also within this area. There is more to do, and we are working on that to improve that position even further. I mean, basically a very good portfolio, very focused, and very good. Maybe to highlight, especially here also, food and beverage, that is also an area now with the Minnesota, where we definitely moved up to a global leading position following that. That is kind of specific segments. Looking for Industrial Solutions, slightly different, more product-oriented or segment-oriented, but also there we have basically six positions, all of them leader.
We can say some of them, we say European leader here, but because that is because the standard in these two areas is slightly different in Europe compared to the rest of the world. We decided to focus on Europe especially, although we in both of these areas also moving more and more global. Nevertheless, all of the positions we have, we are happy with at the moment. That is the message. Everything, all the business we have is a leader in their selected segments, which is then creating a lot of benefits and creating a lot of stability going forward. One dimension, though, that I have to say also geographical balance. We talk about the positions as such, but also geography. This was Trelleborg.
We're actually going 10 years back, but when we were 75% Europe, we're a very European company. Since then, we've been focusing a lot on Asia. We have the CAGR, organic CAGR in Asia for more than 10% the last 10 years. Of course, we changed that, and China now is kind of getting very stable. Also in China, we've been growing more than 13% organic over this time period. Now, of course, we all know the China situation and the discussion, all of that. I should say also our China sales is now the vast majority of it is actually for China, and the rest is basically rest of Asia. We are not really using China as a supply base for the rest of the world, just to make that clear.
We are selling this in China or in Asia, vast majority of it. Now also we are The small, let's say, export we have from China, we are now kind of balancing a little bit by making investments in India and making investment in Vietnam to make sure that we have an alternative for China. We still believe in China. We still have plenty of opportunities to grow domestically in China. India is the same. That's a, we call a growing platform. We are still investing in India. We did the biggest investment was announced there. We're building a new factory for Sealing Solutions in India. Quick growing market, slightly lower than China in terms of growth over the last 10 years, but nevertheless, a CAGR above 10%.
It also now, as you know, this is probably also where we see India benefiting a little bit from this geopolitical discussions surrounding in China. That is also why we invest, and you're going to see us also growing our presence in India in the next few years. As you say, both China and India is also, just to comment on that, is also a very profitable market for us. That is also, let's say, a positive driver on the profitability. Other game changer, of course, that we talked about that before, is the acquisition of Minnesota Rubber & Plastics that we did, which kind of dramatically changed our footprint in North America, especially then for Sealing Solutions.
That is something also you're going to hear from Peter later on, and we tell a little bit more about the synergy and integration ongoing in that. Also to highlight that this is kind of creating a good balance for us between Europe and North America, especially for Sealing Solutions. That means that the geographical balance now going into this is 22 figures, going to be even better balanced if you look for 23 figures. Now we have dramatically changed this one and becoming kind of a global balance. As you see, we are still a little bit lower in Asia, and that is still on the agenda to grow there.
We have the last few months here actually announced now today, by today, 2 new factories in Vietnam, a new factory in India, acquisitions in China coming from Minnesota, and also, let's say, we are inaugurating a new factory also in Suzhou outside of Shanghai. We are investing in order to grow our footprint in Asia continuously. It's not easy to find acquisitions in, in Asia, but there is a few popping up now, and it might be an opportunity. During the last 10 years, we have only made minor acquisition in, in Asia. It could be a change in the next years that we could also add to this very solid organic growth, also to add some acquisitions in Asia. That is why we get even better balance.
Nevertheless, this is of course also important for us to maintain this leading position. We believe in this globally, we still believe in globalization. We still believe in that we are benefiting from being able to support our customers globally. We would like to remain the best partner also in this aspect that we are continue, once again, to be able to support our customers globally. Improve sustainability profile. Trelleborg is, as I said, we are not, I mean, we have to recognize that we're using energy, we're using electricity to manufacture our products. We're using fossil materials, we are very proud. I mean, I don't know, now Sweden, there's a lot of Swedish here, we have been the top three in this survey, I don't know for how many years.
I cannot say for five to six years. We've been, let's say the top three in this. Our system is really, really good, and we have a very well-functioning system about this. Now also following the divestiture of Wheel Systems, we're also improving it in the figure point of view. We're selling roughly 1/3 of sales, but we go down, the CO2 emissions is down by 60%, energy consumption also by 60%, and also waste is down by 40%. Of course, the profile is getting a lot better. More to be done, more to be done in this area, and Ulrika will later on guide you through this a little bit also. Then finally, on a better growth, more profitable, less cyclical.
we have this, as you know, we launched the Speedboat concept. We are allocating more and more of our resources to quick-growing areas. Strong global tailwinds, we call it, but we're also allocating to areas where we see increase in share of wallet. I mean, we still have in our industry, if you say like that, there's still plenty of suppliers into that, and we still see a great possibility to consolidate supply and become a bigger supplier. Supplying, let's say, bigger solutions in that area. We're going to touch on that, especially aerospace, we see a drive on that. Also in medical, we see a great potential to, on top of these global tailwinds, also to this increase in share of wallet.
Today, we feel roughly, of course, not absolute figures, this is a little bit judgment, but we feel that, let's say, we have roughly 40% of the business which is above 5%, and we have 60%, which is still kind of following industrial production. This is of course not absolute figures. This is more a judgment on what we have today. That is the way we feel the portfolio today. Looking at the 60%, we still see plenty of potential to over-deliver growth in this area as well by being innovative and differentiate and grow our market share. We still see great potential to do that. We've been successful in doing it, and we're going to continue to grow it. We believe that we will be able to outgrow this.
On these speedboats, as I said, we're going to be 5. Here we have a few areas. This is a few examples of kind of speedboat areas which we are targeting. I'm not gonna talk a lot about that. You're gonna see parts of this also in the presentations from Peter, Jean-Paul, Linda, and Jürgen on this one. This is kind of the areas where we are focusing with a slightly different angle. This is really what we say today. We are a better Trelleborg. We are focused on attractive leading positions. We are well-positioned in that one. We have improved our sustainability profile, and we will continue to improve the sustainability profile.
We have, let's say, a company which is better growing, more profitable, and less cyclical, which means that we are actually today standing here and moving forward with a far better Trelleborg. On top of that, we also have this now net cash position coming. As you know, we are getting the money, and we estimate in this SEK 20 billion is really what we have in the next two, three years in our balancing to spend. Based on that is, of course, the income and free cash flow over these years. If we believe we have, let's say, spending of that one, which could be used in different dimensions, and Fredrik gonna get back and touch on that a little bit more in his presentation. Also, we have been delivering on our financial targets, and they've been communicated today.
Also, Fredrik, if we guide us to you, we will also have new sustainability targets presented today. Also, let's say, Ulrika will give you that. This is really, once again, better Trelleborg, and that is the focus of today to have this presenting the New Horizons, growing Trelleborg into the world's foremost engineered polymer solutions company in our selected industries. This is kind of the introduction. By that, I hand over to Fredrik to guide you through the financials before we opening it up for the Q&A. Please, Fredrik.
Thank you, Peter. You have already heard several times a better Trelleborg, but I will now, with figures, try to explain why we have a better Trelleborg. If you're looking at our growth over the last 5 years, and if we start with total sales, we have had a CAGR of around 8% over the last 5 years. If you then look at total sales, and then we do a little bit of pro forma, so we adjust it with acquisitions that we have announced 2022, then we actually have a total sales growth of 10% over the same time period. If we are zooming in on organic sales, it's 5% growth between 2018 and 2022 in average.
We then move on looking at the returns and cash conversion, you can see the EBIT margin has been more than 15% during this period, Return on Capital Employed more than 14%, and I will say a very strong cash conversion of 90% for the continuing operations. We talk about less cyclicality, and this is just to show the growth in wheel systems. You can see it has been much more volatile compared to the rest of Trelleborg. Having said that, though, the last two years has been really, really good for wheel systems. As Peter mentioned, we had a good inflow of money here recently with the closing of both printing blankets business and wheel systems. We have also today announced in the press release that there will be 2 one-off items reported here during the second quarter.
One is linked to that we have got in all the cash, so we have to close some of our interest rate swaps. That will generate an income in the financial net of SEK 215 million before tax that will be reported here during the second quarter in the financial net. We have also reviewed our legal structure, which will create an one-off tax cost of SEK 150 million. That will also be reported here during the second quarter as a tax expense. Net-net, that will be a positive around SEK 30 million after the tax on the interest rate swaps and the one-off charge for the legal structure. Looking into the cash position following the divestments, you can see here that we will come into net position.
We have not guided exactly, but for sure there will be some SEK billions in net cash position here by the end of June. Peter talked about SEK 20 billion in financial capacity, and that we will use wisely. How will we use them? We will continue to invest in organic growth. We will invest into the organization of our speedboats. We would like to accelerate the bolt-on acquisitions that we're doing. We have the share buyback program, and we will continue to pay a dividend. I will give you a little bit more detail to each of these areas. Our CapEx level will go up slightly here during 2023 and 2024, which we have already communicated. We have talked about one and a half billion SEK. That is unchanged. It's not a new guidance.
It's just that we will have slightly more investments over the coming 2 years. We are building 2 factories now in Vietnam. We have one with Sealing Solutions that will be operational here later this year, and then the new one that we announced in Industrial Solutions that will be ready in 2026. We are also adding capacity in India. We are adding around 60% more production capacity due to the good growth we have seen in India over the last years. We are continuing to work with our operational excellence, so we are working with our footprint consolidation both in Europe and in the U.S. We're upgrading our IT systems, so that will generate a little bit of extra investments to lift up our IT platforms to a good standard, and also, of course, drive efficiency. China, new factory in Industrial Solutions.
Finally, we would also like to highlight with what we're doing with Minnesota Rubber & Plastics, where we do additional investments to drive automation and efficiency, which we also communicated when we announced the acquisition of Minnesota Rubber & Plastics. We will also like to scale up the pace of our M&As, and then it's mainly focusing on the bolt-on acquisitions. We have talked several times about that we have 200 companies in our pipeline, and that still remains. That's where we build the relationship and try to work and to then accelerate the pace of closing acquisitions. We have also a very systematic approach from how we reach out to the targets, how we work through the due diligence, how we do the decision, and also how we do the integration.
This is a very standardized and rigorous process that Trelleborg is using for all the acquisitions. Talk a little bit about the share buybacks. We started with them in March last year. Up to the end of the first quarter, we have bought back around 6% of the total shares, which now was canceled after the AGM in April this year. That is converted to around SEK 3.8 billion. We now have the ambition with the divestments behind us to buy back own shares for around SEK 1 billion per quarter. For a full year, that should be SEK 4 billion. We have the dividend policy of 30%-50% of earnings per share should go out in dividend. If you look at the last 3 years, we have paid out around 40%.
If we're now looking into a better Trelleborg, how has we then performed compared to our financial targets? The current financial target is a sales growth of 5%-8%, and we have delivered 7.2%, so we are in the upper quartile of our target. EBIT margin, that was raised to 16% at the Capital Market Day in 2021, and full year performance for 2022 was 16.8%, so also delivery on that one. Return on Capital Employed, that is 14.2% in average over the last years. That means that we actually are beating all our 3 current targets. As you have already also seen today and Peter talked about, we have decided to raise the bar and come out with new financial targets.
The new targets will be sales growth of more than 8%, around half of it should be organic, and half of it should be from M&A. I will also say it's in fixed FX, this target. We have changed from EBIT to EBITA. You recall in the past, we are working with EBIT, now we are changing to EBITA and raising the target to 20%. The reason for that change is that we will do more acquisition, we think that is better reflecting the performance to change to EBITA. At the same time, we are also raising the bar on the Return on Capital Employed and raise that to 15%.
Just to show you here on the screen the difference, you see sales growth now more than 8%, EBITA margin more than 20%, and Return on Capital Employed more than 15%. This target, or though these targets, should be seen as a midterm targets. It's not something that we will deliver in 2023. This is for some years ahead. To give you a little bit of more historical data to see the difference between EBIT and EBITA, what will that be for impact on our numbers? If you can see on 2022, it was slightly less than 1 percentage point in difference between EBIT and EBITA. If you just look at our first quarter, due to the Minnesota acquisition, we are in the range of 1.1 to 1.2 percentage point in difference between the EBIT and EBITA.
In the deck, you will also find here the difference in EBIT to EBITA for Industrial Solutions, which is roughly one percentage point. For Sealing Solutions, which has been on a half percentage point, climbing upwards 2022, and now in the first quarter where we have a full quarter of Minnesota into the numbers, it was slightly above 1.5 percentage point in difference between the EBIT and the EBITA. I would also like to highlight here short term in Sealing Solutions, there will be a little bit of pressure on the margin due to that what we acquire has a lower margin, and we are also investing in some of the speedboats areas.
That will start to improve, and the margin will start to come back when we are delivering on the synergies. The cost synergies will come earlier. That will start to come, kicking in already this year. The sales synergies, as we have said earlier, will take 24 to 36 months until we will have the full run rate on the synergies. Then we expect to be on par or slightly above what we had before the acquisition. I would like to round off this session with just repeat the financial guidelines. This is nothing new. It is exactly the same you saw after the Q1 presentation.
CapEx, SEK 1.5 billion for the full year, slightly higher, as we have said, in 2023 and 2024, and then it should go back to something between 3.5% and 4% of the sales. Restructuring cost, around SEK 250 million. Amortization of intangibles, of course, higher this year compared to last year. We have estimated them to around SEK 500 million. Finally, the underlying tax rate remains unchanged as well with 26%. That was all from my side. Thank you.
Quickly moving over. Next session, Ulrika, on the stage to guide you through sustainability. This, of course, Ulrika will tell you, is selected of this one, but also an invitation to a deep dive.
For a deep dive later on, of course.
Please.
I have now 15 minutes when I'm gonna take you to and explain why we are a leader for sustainability in our industry. Looking at this, which Peter already presented to you know, the survey, sustainable companies, Hållbara Bolag within Sweden. As Peter said, we have already been recognized for the performance that we're having. For the last years, we have been among the top six within our category. For the last two years, actually on second place. We also made a huge improvement among all companies because all companies participating, there were 121, and then we improved from sixth place in 2021 to third place last year. There is some recognition being put in place for us. Of course, it's due to that we have been working with sustainability for many years, not only now.
Focusing on three different areas, as you can see here with targets and actions. We have actions with operations, we have actions within compliance and with social engagement. Compliance, that is our license to operate. We follow rules and regulations. We don't take or give bribes, and we don't make agreements with competitors. We have social engagement in all of our sites. We want all of our sites to be e-engaged where they are in the world. We have targets that they should, you know, work with helping children with education, helping children with getting more exercise in sports, and also local environmental activities. Every site that we're having have fulfilled this to 100%. Now, let's focus a little bit more on what we're doing in operation because this is a very wide area than that I'm gonna cover.
As Peter already mentioned, after the divestment of Trelleborg Printing Solutions and Trelleborg Wheel Systems, we have a very improved performance when it comes to sustainability in our operations. We have improved or we have reduced our CO2 emissions with 60%, and that is Scope 1 and Scope 2. Scope 1 is with what we emit ourselves in our production, mainly by using natural gas. Scope 2 is the energy that we purchase, mainly electricity and steam. Now, after divestment, we are down to 109,000 tons of CO2. Just to give you reference, there is another Swedish company, for example, having around over 9 million tons of CO2 in Scope 1 and Scope 2. We are not even amongst the, you know, top 20 CO2 emitters in Sweden.
We have reduced our energy consumption with 60%, that is mainly due to reduction in natural gas. We now use 70% less natural gas than we did before. Clearly showing here. Less waste generated in our productions. We now have a very good sustainability platform to move on. Now we need to take the next step. Now we need to raise the ladder. As you've already seen today, we have communicated three new sustainability targets. One is within climate, one is within circularity, and one is within people. Looking at climate, CO2 reductions, we have a very good history of reaching and working with this. We first had the target set to reduce 15% by 2015, which we achieved that. We had a target of setting 20% by 2020, we achieved that.
Now presently, the last target was 15% by 2025. We have already achieved that as well. We need to do something new. I mean, you still always need to improve and increase your actions. What we're really doing now is that we're changing the target setting from a relative target to an absolute target. The target that I showed you before, they were in relation to sales. If someone would like to be mean to us, you could say, you know, you only increased your sales, and thereby reaching your targets, you don't do anything on the CO2 side. That was not the case for us, but it could have been. Now, we're gonna focus on absolute targets. It's an absolute reduction that we need to do and that we need to reach. We have now submitted science-based targets.
We submitted them beginning of April. If some of you are a little bit familiar with the area, you know that there are very many companies submitting right now, we won't get them approved until this year end, as of quarter four. We have been doing this together with an external consultant, I mean, we are really experienced in this, we don't think there will be many changes to the targets we have submitted. Still, we need to wait for the approval then in quarter four. What we are doing, we're taking Scope 1 and Scope 2, and as said, which was mainly natural gas for us, and then electricity, and then following the 1.5 degree scenario from the Paris Agreement. The temperature rise should stick to one and a half degrees.
Those should be reduced with 50% until 2030. Main actions will be energy efficiency. I mean, that's the best part of it all. Less energy you use, the better it is. We will transfer to more re-renewable electricity, and we start focusing on the natural gas use, especially where we use it for heating. That's where it's easiest to transfer to alternatives. We're also taking the Scope 3 into consideration. You know the Scope 3 is everything outside our own gates, from where the raw materials are produced to the end of life treatment of our products. There are in total 15 categories, and the biggest one for us is purchased goods and services, our raw materials that is. This is pretty new. Scope 1 and Scope 2 we've been reporting on for many years.
Scope 3, we did the first estimation 2021 to see where we are. If you take the total, our emissions within Scope 3 are 90%, and within Scope 1 and 2, 10%. Here we need to work very closely with our suppliers. That is also why it's accepted from the Science Based Targets when it comes to Scope 3, that you reduced in line with the well below 2 degrees scenario. We'll have a 25% reduction, absolute reduction still until 2030. We have already started. We have asked 35% of our suppliers to report on CDP, Carbon Disclosure Project. The best way for having them to setting targets and then actions to reduce their CO2 and then immediately have an effect on us.
This is one of the targets which we presented today, but will be then in place until 2030. We have circularity, and as Peter mentioned at the beginning, we are a fossil-based company. Our products are fossil-based. Since a couple of years ago, we have, you know, been looking into alternative materials, you know, using more bio-based and recycled materials in our products. Now we also have a target on that. Until 2030, we will have 25% recycled or bio-based material in our products. This is a workforce called Polymers for Tomorrow, where we have identified 8 different materials right now. Now, you know, increasing the efforts with this work, we can also see where we can have the most impact working with our suppliers because they still need to supply the materials and then being more bio-based and recycled.
Of course, also working with our customers because they also need to have the interest for sustainable products. What we really see is that the closer we are to the end user of the product, the bigger the interest is. The best of all, where you see where the customers have targets on reducing the CO2 emissions themselves, there's a huge interest to work with us in this area. Next target, 25% recycled or bio-based materials in our products until 2030. The last target which was presented today is in with the area of diversity. Of course, we as a company embrace diversity, equity and inclusion. We want to have a diverse workforce. We need to make sure that everyone in that workforce is also included because otherwise, you know, they won't stay.
Everyone should also have the same opportunity within the company, and that is equity. The one activity which we now have set a target on is 30% female managers in the group until 2030, level 1 to 5. How are we going to do this? It doesn't come from itself. We have these like women influencers, where we're highlighting and focusing on women within the company, making sure that they are seen and understood internally and externally, showing that this is a great company to work for. Also, if it's male dominant, it's still also great to work for as a female. We will also have gender neutral ads being looked upon as an external consultant and making sure that we have 50% female applicants to open positions.
These are the first step we're taking, also then for 30% female managers within level one to five until 2030. These are the targets that we presented today and that we're focused on. Of course, there's much, much more being done with this area. I mean, we of course focus when it comes to, you know, Code of Conduct training. We have, you know, making sure that we reduce injuries within the company. We also work on excellence within people, within purchasing. It's a little bit too little time to focus on that right now. If you wanna know more, then in that case, please take a look at our Sustainability Report and Annual Report. That is very much more descriptive.
As a sustainability leader as leader for sustainability in our industry, of course, we also need to report and explain on all the different, what we say, all the different aspect that, you know, we have to report on like GRI, for example. We report on that since many years. We are clear on describing our risk and opportunity according to the Task Force on Climate-related Financial Disclosures , TCFD. We do that. We also see where it can affect the United Nations sustainability goals. We are now preparing to report on the new EU legislation. I mean, it's huge and it's big and it's a lot of effort, but we make sure that we can report on 2024. We also follow the taxonomy that I think many of you have heard about. There is one issue with the taxonomy.
We are a component supplier, so we are not allowed to report on the taxonomy in the different areas where we actually deliver into categories covered by that taxonomy. Take wind power generation for example. We have components going in there, but we can't report it as a sales of it because it's only a component, not the finished product. We will, as it's today, always report zero sales into the taxonomy, but then we are calculating ourself how much we are having, so that we get a feeling for it.
The taxonomy as it is, that is not in favor for us in that sense. That's the question I tend to get, "Why are you have zero sales?" Yeah, we are not allowed. Our auditors tell us, "You can't do it because you're not covered." I think that also goes for other companies. There's something to be considering in what we're doing. This was a very short overview of the work we are doing, our targets that we have set, which are now also official. I think, and I hope that you agree with me that where we are, that we are a leader for sustainability in our industry, and by raising the bar, we will also continue to be a leader for sustainability in our industry.
For the ones of you who want to know more about this and have a little bit of more deep dive what's behind of this, we're gonna have a 1-hour digital session on the 27th of June, where we then present a bit more what we're doing in actual tasks and what effort it demand. Please just send me an email or ask your colleague to send me an email, and we will make sure that you can attend. Thank you.
Great. Thanks a lot. I think we have time for a short Q&A, before we move into focusing on Industrial Solutions and then focusing on Sealing Solutions. Please shoot. Any questions, or do you wanna wait until later? Chris?
Fredrik, on the balance sheet, I mean, you will sit on quite a lot of cash. How long will you intend to sit on it and, you know, what do you see as an optimal gearing level for Trelleborg in its new structure?
We have listeners online also, please look, you have a microphone, you can ask the question so the listeners online can hear your question as well.
Now it works.
Oh.
Yeah. Yeah. Basically on the balance sheet.
Live globally.
I do a song here. How long you intend to sit on the cash or you're willing to sit on the cash and what, over time, you know, what type of gearing level you see as an optimal one for Trelleborg in this new structure?
I mean, we don't feel we are in a rush to change the balance sheet. I mean, I think we are sitting in a very strong position. I mean, we are looking and scouting for a lot on the M&A market, and we'd like to grow through more acquisition. We're also investing more. Of course, we would like to use this opportunity now to be able to accelerate our M&A agenda. If you look more long term, I will say we are prepared to go up to 2x net debt over EBITDA, which is also our earlier communicated target.
If you say that your half of the growth should be from acquisition, so that's basically 4.5%. That doesn't burn much cash to basically add that type of M&A growth.
That's right. That's also the reason why we continue to do the share buyback and then paying out, as I said, the dividend between 30% and 50%. Of course, if we're looking into over a couple of years, see that we cannot use them wisely, then of course, we need to looking into how we're getting the right gearing. I think we will not stress to make that step.
We should say, if we end up with that, I mean, we have commented before, most likely then it will be a redemption program of some kind, on some dimension and some kind. We have not really put a timing for it. We keep that a little bit open at the moment.
Thank you. I have two questions. The first one you mentioned about the bolt-ons. Is there any possibility whatsoever that you might, you know, over the next five years add a third business area, Peter?
No, let's put it like that, we're not looking for it. Of course, I mean, depending on what happens, it might be the case, but it's not on the agenda at the moment. So this is something, but I mean, I should not rule it out forever, but at the moment it's not on the agenda.
Talking then about the margins also for, or your new financial targets margin, could you say something about what sort of margin you imply on the different business areas also?
We have decided that we will not communicate specific targets on the business areas. What you have is, of course, you know the EBIT, and we're also showing you the difference between the EBIT to the EBITA. That is around 1 percentage point from, on Industrial Solutions, and it's a little bit more than 1.5 percentage point on Sealing Solutions to go from EBIT to EBITA. We will not communicate BA specific targets for the business areas.
I might steal Jürgen's presentation here, but, or, when you're talking about, climbing the profitability ladder within Industrial Solutions, how far have you come? This has been an ongoing process now for quite some time.
Yeah, I mean, we see, I mean, Jean-Paul has to comment on that himself how much he wanna promise. I mean, we of course, we're continuing upwards. I mean, let's put it, Jean-Paul , we are in a.
Yes.
stable improvement. That is, I mean, what we continue. We don't expect it to make a big jump. We expect it to continue to improve, we're not looking for. We don't believe it's the best way of creating value to go for very high jumps because that means that we probably have to exit a few areas. I think it's a balanced approach on growth and margin. We do expect the margin to continue upwards in a, let's put it like a similar pace as we have seen the last few years.
Okay, just a final, just coming back to your answer there, Fredrik, also. From today's levels and into 2025, I assume that you expect the Sealing Solutions to be back to 23% after 2025 sometimes. Is that really where you're going to see the major improvement in terms of margins where we are from today? To your new target. Is that a fair way to see it?
I think, as you're saying, we have the target of 20% EBITA. Of course, we will improve the Sealing Solutions up to 23% or slightly more as you can see in the presentation. At the same time, continue to climbing the value ladder with industrial solution and improving that margin. If we do that, then we should be at 20%.
I'll just follow up on the Industrial Solutions margin then. Just a quick one. If you look at the % of sales, how much of your % today is delivering the margins you want them to deliver, and how much is underperforming, if you may?
Yes. Again, that's a very specific question, though, which we don't actually.
No, let's say, we are. There is no dogs in the portfolio. We are happy with the performance all over improvement potential all over.
Yes.
We don't really wanna comment any further than that. It's not really that there is any kind of fixes to be done. It's simply to.
That's fine.
Let's say, have a tick up in all of them. Of course, there are little different levels.
Profit, yeah.
Yeah, low tens up to low twenties.
Right.
That is kind of the difference, but it's also size of the demand, size of the different businesses.
Yes.
Of course there is a mixed bag, but none of them are dogs, and none of them are in for a fix. All of them was actually a small uptick, small improvement, ambition. Great. Let's end it there. You can get back.
Great.
You can ask more questions later on the same topics, and then, hand in the floor to Jean-Paul to give you.
Thank you.
Guidance on Industrial Solutions.
Good afternoon, everyone. Trelleborg Industrial Solutions, all on one slide. Easy to understand. A global business with over 1,000 different products. That's the difficult part, is if you're going into the detail and trying to analyze where's this product, which segment is it, et cetera, that becomes more difficult. Overarching, we are a niche player. We are looking for applications where we can be leading in and create the necessary value that we are looking for from a bottom line perspective, and also value for the customer, of course. These 1,000 products generating about SEK 14 billion in sales, 85% coming from general industries or general industrial, diversified industrials, I'm sorry about that. I'll go a bit more into detail about what that means. 7% automotive, 5% aerospace, and 3% medical and healthcare.
2022, we not only hit an all-time record in sales, but also in profitability, both from an absolute value as well as a return on sales perspective. Diversified industrials, looking into that, well, what is behind that? Well, two-thirds of the products that we supply into this segment are related to construction and infrastructure, products for energy and renewables, products for ports and marine, i.e. the boats themselves. That is two-thirds of the overall diversified industrial business, differently said, 50% of our overall sales are within these three areas, products for these three areas. When defining what makes the difference or what makes Trelleborg Industrial Solutions better than its competition, what allows it to grow faster than its competitors, what allows it to be leading in the areas that it plays in, this is one of the key answers to it.
We have a profound knowledge and experience, historical one, on core competence with respect to the polymers that we use, our materials, a key material that we're here using. We continue to develop that knowledge via the 15 R&D centers that we have around the world. That's probably quite a few more than any of our near competitors have. With these 15 R&D centers around the world, we're able to be very customer-centric and locally developing the required products. They are not all the same in all the regions around the world. Our second key differentiator is probably that we have a decentralized organizational structure, and that allows us to be extremely quick when it comes to entering new growth segments or even to new geographies.
We're always a step ahead of the competition with respect to that, agile and able to move rapidly into these new growth areas. Our third defining element and success factor is that whenever we go into an application or a niche, a segment which we want to play in, we evaluate that application very carefully, and we consider and look at it if we can add value to the customer. Our products have to absolutely add value. We're not a commodity mass market supplier here. We're always looking for the niche where we can add value, and very importantly, I said earlier on, where we can be leading in because that's the stickiness of the customer. Those three factors differentiate us from the, what I would say, the competitors and also allow us to demand a premium with respect to pricing.
Looking at some of these niches and applications where we are leading in, this is. They don't all fit on the slide here, but these are some of the examples. Taking the top line and just maybe one of them, we can take the aerospace one in the middle. Our coated fabrics unit there is the supplier of the fabrics for all escape slides and life vests for all the, all the airplanes produced by Boeing and all the airplanes produced by Airbus. A very nice niche position that we have there. So we're on every single plane that you ever go on, more or less, as long as it's a big one and not a jet. Over the past five years, we have also developed our organization, our structure quite differently.
We used to be Eurocentric, as you can see here, but we have expanded into Americas and into Asia. Over the past five years, we've nearly doubled the amount of factories that we have there and are very happy that we've been able to follow the new growth areas, the new geographies where there has been growth. That has transpired into the sales that we have had over the growth in sales that we've had over the past 10 years, growing steadily at a steady rate despite also the corona period. We've been growing at over 8% on an annual basis. It does include acquisitions, but the acquisitions element is relatively small here. We're more likely to have bolt-on acquisitions in the size of 10 or SEK 100 billion SEK or SEK 200 billion .
We don't tend to have anything above that. There's a lot of organic growth here. More importantly, that growth hasn't come through the sacrifice of margins. It has actually helped us develop our margins, again, as we have continued to focus on these specific segments where we can add value. The bottom line, or EBITA, has been able to increase rather interestingly also over the past five years, doubling in value terms between 2018 and 2022. How are we gonna continue to climb up this value ladder going forward? We have defined three specific focus areas on which how we want to do that. The first is we will continue to focus on the growth segments.
We've defined those, and we'll put the necessary resources and infrastructure in place to take that through and carry that through, and I'll show you some of those in a minute. We will continue to develop our geographical presence outside of Europe. We see great opportunities, both in Asia and in Americas for Trelleborg Industrial Solutions. Third, we have our, what we call our value creation aspect. This is what actually allows us to increase our margins bottom line, which I'll explain in a little second. Looking at the growth segments, here are some examples of which the ones that we have recognized. When we talk about water infrastructure, there's actually two growth segments in one. On the one side, there's the water networks, the new networks being put down around the world. Let me get.
There's a huge demand in this. Let me give you an example. India, nearly 18% of the worldwide population now lives in India, and only 55% have tap water in their houses. You can imagine the demand that is coming just from one location with respect to putting down new water networks. We deliver the seals, the back part. Oh, sorry. Can't even. That's the slide I was actually showing, wanted to show. I didn't see that. We actually deliver the seals for this network. Outside of the new piping, there's also the repair side, i.e., in the developed countries, the pipe networks that exist are 70, 80, 90 years old, and they are way beyond their useful life.
You have a choice of either replacing these, and that's a very costly matter, where we have to dig up the old pipes and replace them with new piping. There is a whole industry which has been created to keeping the old pipes in there, but doing the repair of them by the use of inner liners, as you can see over here in the top right-hand corner. We are also in this business supplying the inner liners to this industry. Let me give you also here an example. 50% of the water that flows through these networks in the USA never reaches the tap. It is lost on the way. You can imagine when we talk about sustainability and opportunities to improve there are gigantic.
The authorities have realized that, and they are putting the necessary funds behind that, so that this repair side of the business will also grow quite significantly over the decades to come, especially in the developed countries around the world. Also in Europe, 25% of the water is lost in the soil before it reaches our taps. It's an enormous market. We've decided to double up in this in this segment, not only having our inner liners, but also acquiring a robotic manufacturer who here finds the holes, repairs the holes, and actually does the curing of the inner liners, which we did late late 2022. We're expanding our portfolio, making it a better offering for those companies that are actually doing the repair work. That's one of the growth segments that we see.
Another growth segment, wind power that we mentioned earlier on. No need to discuss that. We all know which way that is going. The growth there is probably gonna maybe even outpace what the number that you see here behind me. I think as the consciousness towards renewables increases, we will see a great expansion in this field also. We supply all the yellow parts that you can see in this picture, the anti-vibration solutions, basically to ensure that maximum energy is transferred from the generator to the transformers, and also that the wind turbine doesn't have any cracks due to the movements that come there. Also in the background picture, you see the offshore wind power farms here. In an offshore business, the yellow parts that we produce here are called so-called skirt and grout seals.
They are there to ensure that the wind turbines don't fall over in the case of a storm, and also that the salt water does not penetrate into them and harm them. Nice business there with some very specific niche products that we have, which we will be able to accompany the growth of this sector in. The third growth area in the energy sector is here the LNG. LNG growth is a transitional fuel source that is already replacing oil and coal in a significant manner. As we move more towards the renewable sources, LNG will play a major role going forward. It already is.
Also here we are the suppliers of complete end-to-end solutions as far as the transfer of the liquid natural gas is concerned, from one, from the fields themselves, from afar onto the large boat vessels that brings it to the regions where the gas is required. Before it reaches us in Europe, it is transferred from a huge boat into a smaller boat, these boats being then able to enter into ports for the offloading. We provide pretty much everything that you can see here in the back of the picture, be that the hoses, the cryogenic hoses, the composite hoses, the emergency release hooks, the safety valves, the filtration system. We have a complete offering with respect to the LNG segment here.
A very nice position there also. Healthcare and fabrics, we don't need to talk too much about the growth in this segment, but we are a supplier of wearables on the side, on one side, i.e., the fabrics for the wearables. We're a supplier of the fabrics for such products as blood pressure cufflinks, which you can see here on top right. Hospitals are moving away from PVC furniture, as this is carcinogenic, and they are moving more towards antibacterial surfaces. Again, there, we are a supplier of these antibacterial surfaces and products for furniture. That's a very nice growth opportunity that we see going forward. Last but not least, as an example here, aerospace.
I've already mentioned that we are supplier of 100% of the escape slides and life jackets for the two worldwide main manufacturers in the world. We're also moving into the cabins here with our profiles, and these profiles are being used in the sensitive areas, notably where there's electrical power in that area. Also there, a nice opportunity going forward. That's one of the logics behind why we're going to continue to climb the value ladder and also continue to outgrow the overall GDP growth around the world. The second area that we wish to continue on is with respect to our geographical development. We have clearly defined a path where we want to grow by 25% over the next 3 years in Asia.
This is pure organic, non-M&A related in this specific case. We have defined the focus areas where we want to do that, with what products we want to do that. We have put the necessary teams in place and the infrastructure as well, as far as the footprint is concerned, to enable that growth over the next three years. Here's an example again. We are opening our first factory in Japan for our automotive boots. These automotive boots, it's the yellow parts and the which you can see here, which are close to your wheels, the so-called transmission, sorry, steering and transmission boots, where they actually protect the axles from water and grit. There at the moment, we already have, probably every fifth car in the world is equipped with our boots.
By moving to Japan, we will be able to tackle the Japanese automotive sector, which, where we are not so present in, because to be able to supply that industry, you have to actually have a presence in Japan, where they do the R&D testing and the development of the new automotive sector. With that presence there, we'll be able to not only supply Japan itself, but all Japanese vehicles around the world going forward. That's a very nice organic growth plan that we have there.
Also in China, where we've been very successful with our anti-vibration solutions and our cable entry solutions, and have, are now currently moving into a new factory there, where we're expanding our capacity by 50%, and that in turn will give us the necessary capacity and availability to grow with the targets that I mentioned earlier on. Longer term, also here, with, in accordance with the press release which came out today, by 2026, we will be producing most of the docking and mooring solutions that we have for ports, and also for infrastructure sales in Vietnam. They're a wonderful greenfield development which, yeah, which is on its way, with an investment of some SEK 400 million, announced.
Also looking beyond the next three years, we know where we want to be and where we want to play in. North America, not forgetting North America, also here, we want to grow by 20% over the next three years. We have a clear defined focus areas again, and also we have put the necessary teams and infrastructure in place to allow for that. We have here on the one side also consolidated some of the existing factories that we have. We've moved them, consolidated them and at the same time, developed some additional capacity to allow for that growth. Here's an example of our windows and profiles business, which is also for high-rise buildings facades, where we are one of the major suppliers in the world of.
That along with some other projects which we have, for example, in the engineering coated fabrics businesses, where we have various sites in the USA where the consolidation process is also ongoing, where we will be ready for this growth that I mentioned. Our last factor, and very importantly, is the value creation factor. We at Trelleborg Industrial Solutions see that you can only create value for your customer in three possible ways on a long-term basis. The first is innovation. Very simple. If you don't innovate, you have a me-too product, and you are not going to be able to demand a premium price for the product that you have. That's quite easy and logical to understand. We have to permanently be innovating.
We have the 15 R&D centers in place to be able to do that. We will continue to do so and go move along that path. The second factor is often forgotten in many companies, the ease of doing business. You spend a lot of money to win a customer over, and once he is yours, you forget about him. He becomes Mr. XYZ. He becomes a number. That's exactly what we don't want to be doing. We want to be having customers that love doing business with us, that whenever they have a need, talk to us. How do we do that? By ensuring that all the touch points that we have with him are input exactly how he or she wishes that to be.
What is the response time when it comes to responding to a mail? What is the availability of the common products that he has? What is the quality expectations that they have set and we have set? Do they conform with what we have been saying? How is the invoicing? What happens if something goes wrong with the quality? How do we respond in those times? All of these touch points, we want to ensure that we make it as easy as possible for the customer to be happy with us and to accept a premium pricing. Take Amazon as an example. Probably a lot of us have shopped at one moment in time at Amazon, and it's definitely not because of the price that we shop there. It's because it's easy to do business there.
It's so easy to place an order and to receive a product rapidly. That's what we would like to be in the industrial sector as well. Then the third factor, which value creator, this is quite a special one, what we call business accelerators. Business accelerator is something when we manage to create an innovation for our customer which allows the customer to actually increase his or her sales and/or bottom line profitability. That's what we call a business accelerator. As an example here, some of the examples, top left-hand corner, you see, this again is in the pipe repair business. We have developed the world's first sustainable pipe, sustainable inner liner, pipe repair liner, called PipeCure Eco here. It's made out of 100% recycled material.
As you can imagine, the authorities and local municipalities at the moment when they think about water and repairing these leaks in the water system, if you're able to give the resellers of this product a solution which really differentiates them from the rest, i.e., through the sustainability factor, the sales curves increases quite dramatically, or you're able to demand quite a premium price for this product. Top right-hand corner, FLEXX Curve for the railways, for the railway manufacturers. We supply a lot of anti-vibration solutions to this industry. We ensure that the ride is as smooth as possible. In addition, on that journey, we understood that one of the pain points for the industry was actually the wear and tear of the wheels and the track.
There was an incredible cost involved in the wear of the track and the wheels. There we developed a product, so-called Hydraulic Axle Guide Bearing. This Hydraulic Axle Guide Bearing ensures that the wheel is permanently parallel to the track, even when cornering. At the same time, as you maybe know, when you drive a car too fast around a corner, you have the G-forces being pushed out. We ensure at the same time that the wagon and the weight distribution on the rail tracks is very evenly spread. That reduces the wheel wear and the rail wear quite significantly. That's an important business accelerator for the manufacturer of the train who's selling the product to the industry. Bottom right-hand corner, this is our ports business.
This is a so-called AutoMoor. As you know, container ships have become bigger and bigger, 3, 400 meters long nowadays. They, to actually dock them, the final 10, 15 meters before they are docked to port can take up to an hour. Once they are docked, you see these people from 15 roof ceilings, from 15 floors up throwing a rope over the over the ship to moor the boat, secure the boat to the dock.
Now that, with our product here on the bottom right, is not only a better and safer way to do that, we can get rid of the ropes, but it also accelerates the docking process, from what is 1 hour to a couple of minutes. Basically, it's a giant hydraulic arm which reaches out to the ship when it's still in the water and brings the ship on shore. Then when, also when it comes to any waves, et cetera, it secures that the ship is permanently at a stable level, allowing the offloading of containers to be far more rapid. The last business acceleration opportunity here is in the medical and healthcare system. This is actually a bed cover.
The bed cover has sensors within it because in hospitals, when you, when you are long-term hospitalized, you get so-called pressure sores if you do not move. These pressure sores cost the industry $ millions in lawsuits, especially in America. These sensors actually measure if the body of the person has not moved, and due to that, then either give away a signal to the relevant place or actually get the bed in motion with motors. That reduces the, yes, the law. The, the pressure also reduces the hospitalization time quite significantly. Also a wonderful business accelerator for the person or for the company entity selling the beds.
These are some of the examples of why we believe that we will continue to grow and climb the value ladder going forward. In summary, again, a lot of products, a lot of different products, but all of them in leading positions within niches. We have a footprint which we have developed, which has become more global, but we still see opportunities to grow in that area and also to consolidate some of the areas that we have. We wish to continue to accelerate our growth out of Europe, and we have well-defined areas and focus, and we know the geographies and the focus areas on how we wish to do that. Last but not least, this value creation, the business accelerator, is a key success factor. Thank you.
Great. Thank you, Jean-Paul.
Thank you.
Any questions for Jean-Paul? Are we gathering it later or have you had any immediate concerns or...
Thank you.
I have no concerns.
Just one question, if I may.
Please.
Could you tell us a little bit about the margin range in your product?
Again?
What are, I mean. If you were to look at the least profitable one, because you have exited some businesses in this over the coming years, and sort of just to get a feel for, is it a big.
I mean, one of the items I said is, we're not a mass-market product. We're not into commodities. We are permanently evaluating our portfolio. It does happen that after a while, certain things become less profitable, they are, so to speak, commoditized or me-too products and we actually move out of them. That's the innovational part. Our margins remain quite steady, it's not due to the fact that the margins across the products remain steady, it's because we're permanently renewing the portfolio.
We're also investing into new. It depends, how you split it, of course. I mean, I don't know P&Ls how many we have. Like 50 or something.
Yes.
I don't know, give or take. 50 different ones.
Yes.
of course, some of these 50 is still zero+ . That is small ones, and that is something where we, let's say, expect to improve. A few of them is probably about 20.
Right.
I mean, if you take the bigger parts. I mean, which is the bigger areas, I mean, I think they're very varies a little bit, but between 12, 13, up to 20.
Up to 20, yes.
That is kind of the ballpark.
Up to 20.
Within this there is some smaller businesses which is lower and higher. I mean, in the big packages with. There's no dogs. I mean, no any problems in it. I mean, if we.
No.
If we are running something which a few percentage points.
Right. I see.
That is because we want it to be that, because that is something we are investing in and something we're growing in. It don't really,
Oh, that's good. I mean, that's great. Just a final question also upon your growth. I mean, we've seen a lot of price increases.
Yes.
Just how big portion of that? I understand the value creation is a very good way keep price increases.
Absolutely.
In sort of cost plus, do you have any niches here or do you see, you know, prices having to come down going forward or?
okay, because of raw materials coming down, you mean, et cetera?
Yes. Yes.
I think we're, we've been extremely nimble in passing on these increases, and I think we're very good at holding onto them. We're also conscious that there are sectors where you nonetheless need to adapt to them. There are some sectors where we're adapting our pricing, of course.
Overall not an issue.
But.
Overall not an issue at all.
No, no, no. I mean, overall not at all.
No. No.
No. It, I mean, fundamentally, we don't mind prices going up. Quite the opposite.
Like, I mean, we are benefiting from an inflationary environment.
Yes. Yes.
Than a deflationary environment. We benefit from the pricing going up.
Sure. Absolutely.
Or the cost going up.
Yeah. Yeah. Please. Please.
Thank you. Apart from perhaps aerospace and healthcare that you do disclose, the other categories that you highlight there, such as wind power and water infrastructure.
Yes.
Those grouped together, how much as a share of Industrial Solutions do they account for?
Again, where? The wind power and?
Well.
Water.
Yeah, water infrastructure, wind power, LNG, those segments that are not disclosed separately today, such as healthcare and aerospace, et cetera.
We aren't really 20? I don't know. You're looking at Christofer.
Roughly.
Yeah. If I say these three together, 20% probably.
Roughly. 15, 20.
Maybe even high 20%, 25%. LNG growing quickly.
Yes.
If we say that the speedboats for the whole group is 40% that implies, of course, that we have more speedboats in Sealing Solutions than we do in Industrial. I think 25 is reasonable.
30. 25% , 30% .
Yeah. This really varies a little bit. It's a little bit up and down. I mean, a lot of moving targets here.
We have many speedboats as well they're smaller size. Yeah.Please
I was thinking a little bit about the business accelerators.
Yes.
I think you call them. If you could tell us a little bit about the process behind that. The applications you showed.
Sure.
They were quite different niche-
They are.
Different applications.
Yes, yes.
How do you find?
Yes. I guess.
How do you develop the process?
the core of our business absolutely remains polymer-based. Once we are in an industry segment, because we are so close to the customers, we get to learn about their pain points. And then we evaluate, do we have an opportunity here where we can develop a product? Does it fit within our total offering to develop a product which will actually increase the overall value of what we are supplying? If you take the example of ports here, I mean, the fundamental business used to be fenders, and still is to as large extent. Fenders is, many people will not say, "Well, fenders can be a commodity," but when it comes to supertankers of three, 400 meters long, they're no longer such a commodity.
We try and add more value to that product by supplying other solutions which we have understood in that specific application or industry segment, there are concerns of. We've come up with the docking and mooring solutions as one of the opportunities that we saw to increase value and create value. There's also the interface between the vessel, the port, and the port authorities. This final stretch, there's an element there where we have solutions which go into IT software even, where we are very specialized, but as soon as the boat comes into a harbor, the captain is no longer allowed to drive the boat. You have to have specialist tugboats. We have IT solutions there, software solutions which are put in 30%, 40% of the of the major ports in the world where we supply these solutions to.
As we say, that is an area we did not really talk that much.
No.
That's probably an area where we move the most.
Yes.
From a commodity over.
Yes.
A system supplier.
Value creating, yes
Now then, of course, when doing that, it opening up new avenues.
Yes.
it's opening up new growth opportunities. I think now we are seen as the global experts in the final 100 yards.
Of the birth.
Of the birth, coming from the fixed installation on the quay. Less a quick release hooks.
Yes.
Mooring systems that you saw, automated mooring communication systems, so now we're selling, the product with value for that is in the 20s.
Quite considerable.
20 different products. The biggest ports in the world, they actually buy all the 20. Before they were cherry-picking, but now we try to combine.
It's a complete solution.
Can we really explain now you communicate.
You got.
Panama Canal now that they are saying you need Trelleborg system when you go through the canal, otherwise you're not allowed to pass the canal. We trust the Trelleborg system because they are safe, we can communicate with them, they can communicate with the berthing and mooring. I can't remember, but they are paying fines if they don't use our system or our system
No, no, it's a 50.
Or something similar.
Yes.
At the moment.
It's a $50,000.
This is the only one existing.
$50,000 fine if you do not have our system as of October this year. I may add, on your boat to go through the Panama Canal.
That, that is being communicated.
Yes.
But it's not a big I mean, that is...
It's 1,000 boats per year which go through it. Usually the same they, it's a software.
But this is the way we would like to integrate and be more, and that's I think is a very good example on this one coming from.
The value create business acceleration.
Low margin commodity product up to something now.
Yes.
We're gonna sell license fees and annual. I mean, that's gonna be.
Recurring, yes.
A different revenue model as well down the line. From an organizational and people perspective, how you drive that, because there has to be some entrepreneurial spirit to do that.
Absolutely. that's the decent.
How you allocate the resources.
Yes. I think that culture is within Trelleborg overall.
Strategically.
It's a decentralized organization. The full P&L responsibility, lies-
We want people to drive their own business.
Yeah. Yes.
We want them to be challenging. We do not always agree.
No.
He doesn't always agree with his guys. That is the way we want it to be. That is the way we want people to take ownership. We want them to be proud.
Yes.
We want them to push their business.
Yes.
We want them to challenge us as managers.
Absolutely.
We want them to have differences of opinion and to really entertain this entrepreneurial way of running business.
That's what makes us agile, as I mentioned earlier on. We're able to move quickly, faster than other entities, into new geographies and new growth segments. That's what.
Good. Great.
Thank you.
Coffee break. For how long? I'm looking at Mr. Sjögren.
Should we say, start with, 20 minutes and then.
In 20.
Touch it up.
10 to three.
Yes.
Back 10 to three, Nilsson. Should we get started again? A session focusing more on Trelleborg Sealing Solutions, which then with Peter who's on the stage, and later on we'll be joined also with his colleagues, Linda and Jürgen, speaking about Medical Healthcare and Aerospace. Peter, go ahead.
Thank you, Peter. Good afternoon. Trelleborg Sealing Solutions session. Let's do an overview now and deep dive later. Just like Jean-Paul, here is everything on one page. Nice summary of the business. Roughly SEK 15.6 billion we closed last year of a nice EBIT margin of 23%. I'll take this opportunity to explain our segment focus, roughly 13% and the same for Aerospace, the two big pillars in this business, and we'll do deep dives on these. We have an automotive business, but I shouldn't say a automotive business. It's actually two different automotive businesses in there, roughly sharing 50% each. One is the damping solutions, noise reduction, and the other one is seals business.
We have half of the business being in the diversified industrials, which is a conglomerate of many different segments, we'll have a few in the Speedboat, we'll have a bit more detail. We are roughly 9,500 people around the globe, very decentralized as well. We heard that before. R&D centers spread around the globe. We'll talk about that and exceeding 40 factories now. A continuous growth story with the same blip we saw earlier, the corona impact, it was one significant harsh reduction, a very strong growth. You see a little bit of the effect of acquisition here in 2022 already. Here is the EBITDA development, slightly ahead of the sales growth. It comes with volume, that's one of the messages.
Later on, we're ready to accelerate structures there. Peter and Fredrik have already talked about this. Yes, you will see in the coming periods a dip, but it will be recovered. I have a session later on to explain a bit of what we do to actually make this happen. We are ready to scale up and accelerate. I have to say it is based on three pillars. The first one, scale up in the operational model. We have a model that works, we have a model that is global, it is aligned, and therefore we can dock on acquisitions, we can grow organically without changing the model. We have, of course, always to invest in capacity, so some of the new factories, the additions to factories, that happens all the time is everywhere.
It is based on supporting the growth or enables the growth. The portfolio. Jean-Paul mentioned that he has 1,000 products. We have 500,000 products. It's quite a logistical challenge. The good news is, of course, naturally with similar sales, they're much smaller value, and that is an advantage to in terms of balancing risk, but it's also an advantage in the sense that the ups and downs aren't that strong. Nevertheless, we have to have such a wide portfolio because we have a one-stop shop concept. The customers come to us, we talk to them about sharing their concerns, their issues. We don't sell a single product from a single factory and try to pitch that.
We sell a solution, and the solution is not one solution, it's the entire range of seals that they may need. If we have to buy it, source it from a third-party partner, or we make it in our own factories, is a little less relevant. It's about the providing the full package. The final and the last big pillar, we'll talk about innovation later as well, we need to be the global development partner. Our customers, most of all our customers are global customers. They have locations around the world. They have development centers around the world. Engineering, they have different factories. We need to be where the customers are, not just in sales, but also in the engineering support. As you can see from the flags, we're in the major industrial hubs in this case. We're ready to accelerate.
Three topics. We'll look at growth segments. What are the segments that we believe have the highest growth? I will spend some time to go through the Minnesota Rubber & Plastics acquisition. Finally, Asia acceleration. Let's look at the speedboats, as we had to call them last time. They're still valid, they're still the same. The growth rates, as you can see, of these markets are substantial. There's, of course, subsegments that are much faster-growing, other subsegments are slower. These are staggering growth numbers, and they provide us not only the potential to grow with what we have, but to invest through that growth into adjacencies, as we call them, venturing out into other products that we may need, and therefore expanding the product range, and therefore expanding even further the sales potential.
I have a few examples for that in a moment. You see the big ones, aerospace, healthcare, we'll do deep dives. Industrial automation, the highest projected growth rate for the future. Touch on these in a moment. Food, beverage, and water, very nice space to be in. Semiconductor, very long-run growth projection. Finally, you could say the emerging areas of electrification and hydrogen. Let's do an aerospace deep dive. Overview, sorry. We have been in this business since the 1950s, 1950 that is, and we've been there in the space of hydraulic seals. The very first seal actually that was sold was a rubber seal that went into an aircraft repair of American fighter planes in Europe at the time. It just so happens anecdotally that that was a seal made by Minnesota Rubber.
We're now coming full circle back to being together. We have been very strong in what we call the hydraulics and actuation. Actuation is flight controls. That makes a plane fly and steer, as one example. Landing gear is also hydraulics, and in the last 10 years, we've had a substantial progress there. We then ventured into getting into the engine seals a couple of years ago, years back. Jürgen will have much more details on what this actually means. You could say you just continue that path.
You go to aerodynamic seals that are all the seals that you can see when the flaps come out, and you can actually see the seals in operation, to improve the aerodynamics of the plane, all the way now getting into the galley, into the inside, into interior, in the seat components. It's a story of continuous growing, and that is my illustration example for how do you venture into adjacent products. We have the engineering contacts, we have the purchasing contacts. Then finally, there's a very nice opportunity which we don't normally play in, which is aftermarket. Margins are phenomenal in the aftermarket between the original equipment maker and the actual airplane. There's a lot of space, and we have docked on with a number of key players in that market to play in that as well. Healthcare and medical.
Yes, the business is set up to double by 2025. More details later. It is fundamentally a story of acquisition historically. We have, through the very first acquisition, the Specialty Silicone Fabricators , we have gotten into this business because we bought a company that was in aerospace, and they happened to have this as a side business. For us, you could say it's, it was the nucleus, the start of getting into healthcare and medical. Silcotech was already the first acquisition that we had an intent to expand our capabilities in liquid silicone. From there, we will hear more from Linda, it was a sequence of add-ons to build a new business, basically. Three pillars today. Three pillars, the first one being medical components from silicone.
Around the silicone component, you can then add a few more parts, put them together, and provide a component assembly, a module. That is the first and the strongest pillar. The second pillar is biopharma. What is biopharma? Think about vaccine development, not only for Corona, but for many other vaccines that are under development. That happens in a specific space, for that we have a significant growth plan. Finally, drug elution. What is drug elution? It's the combination of a silicone carrier embedding a pharmaceutical that then releases over time. Again, we'll have more examples later on. Talk about the industrial. What is industrial automation? Well, it's everything that has to do with robotics. We have talked in the past about robots being a growth initiative for us because it's in our core sweet spot.
It is highly demanding from a technical aspect. It's high movement, it's high pressure, fast reaction. All of that is in these industrial robots, the very large ones which you've seen when you see factories make producing cars as an example. There is another emerging market within the robotics field, which is service robots. We all know the little vacuum cleaner robots. That's not the type I'm talking about. We're talking about elderly care being done by a robot. We're talking about widespread in Asia now, service robots in restaurants, and many more of those applications. It's certainly an emerging market. We see strong growth there, and this is what we're focusing. Then there's the handling systems. In the past, well, still today, there's a lot of pneumatics, air-driven systems handling components and parts.
This is all moving now. This is all changing. It's sustainability as one driver for that. It's all moving to electric. Within electric, there's improved electricity capability. In that space, there's a lot of growth, there's a lot of change, and we love change because it's a way to position us with the customers into a solution that they may have to solve an issue. Finally, the sensors which we're looking at. For us, the sensor becomes interesting when it gets embedded in the seal. Food, beverage, and water. An interesting market. An interesting market because it's highly complex. It is a niche-y and very fragmented business, and therefore, what does that mean, fragmented business? Small quantities for each of the applications, but they all share one thing. You have to have a certificate, you have to have an approval.
For instance, in the water industry, there is 3 or 4 globally accepted standards, each for the regions, and the frontrunner is the one that has a material range that fulfills all of these approvals. That's exactly what we're after. Look at our customers. These are the OEMs that are in for food and beverage, for in processing and packaging. When you come to water, it's in the distribution and in the point of use where our seals play a major role. We look at semiconductor. There is no doubt that this, in the long run, is a strong growth market. It's driven by the AI, by Internet of Things, increased communication, and there's a constant drive to get higher yields in production to get more complex device and is, of course, smaller ones.
Again, a lot of change. Our targets are the equipment manufacturers, so those guys that make equipment to actually make a semiconductor. It's also the chip manufacturers themselves, the fabs that are around the world. Right now, there's a big strong drive in the Americas and in Europe to build new fabs in terms of getting a regional balance and with political uncertainty, of course, there's a high momentum. That means more machines. That means, of course, more business. Long term, a very, very good business. For us, it is venturing into even more of the seals that are needed. This is a schematic of a production machine to get all of these seals gaps. You look at the pictures, say there's plenty of opportunity to grow.
It's the customer contacts, the customer approvals that are needed to expand in that market. The final one, a bit more further out when it comes to volume, electric cars. First of all, 70% of our current portfolio is already, we'll say, suitable for electric vehicles and/or I would say is dual use. Whatever number of cars are being produced, we don't really care with most of our portfolio, whether it's a combustion engine or electric. It's prepared, it's ready, it's dual use. It's interesting to see what the project pipeline looks at. Roughly 35% overall, over all of the business, of automotive is already electric vehicle-related.
It varies between 20% on the damping side, where they don't really care at all whether it's electric or not because a brake shim is needed in all of the cars. On the side of the seals, 50% of all of our projects are directly electric vehicle related. You won't see significant sales in the early days, but it's a significant ramp up with growth rates of, for the electric vehicles right now of 30%-40% and then tapering out to an average of 10% in the long run. This is, you could say, the replacement business and more of what is today in the combustion engine. Here's a few of those examples. I just talked about the brake shims for noise reduction.
This is one you see on the, on the left side. Powertrain seals looks like transmission seals today. It's different type of seals, but similar challenge. Battery protectors, electric power unit protectors. A whole variety of systems that need seals again, even in an electric car. When we talk e-mobility, it's not just cars, it's bikes, bicycles. We shouldn't underestimate the huge volume. We are talking multi-multimillion of revenue just for seals for this one application. This is a, in this case, a Bosch drive, which is already in the 4th generation, planning for the 5th generation. The batteries have to be sealed. Even these displays have to be sealed. It's a huge market. For Bosch alone, this is SEK one and a half billion revenue to make these systems.
We are their sole supplier. Hydrogen. While we talk electric for cars, we see that the market has taken a decision. It's not electric. Trucks. Trucks will be driven with hydrogen in the long run. Therefore, when we looked at this, a while back, we said, "What is it that we need?" Well, you see our H2 ready and tested stamp. We needed to find new materials that are sealing hydrogen, which is one of the biggest challenges there is in the world, due to the size of the molecular structure. Nevertheless, these tests are finished. We have the materials. They're released, they're launched, they're being marketed. Therefore, you see a lot of projects in this field now developing.
When these trucks come to market, which is sometime, I would say, the next 3-5 years, the volume starts significantly ramping up. They're gonna be with our seals. Minnesota Rubber, as we talked. We do a strategic plan, of course, every year. In this strategic plan, there's six selected priorities that I brought with me today. One is to establish an elastomer production site in the U.S. We have the same ambition for China, to have a location there. We said we need to scale up further our intellectual property and capabilities on the material side. Food, beverage, water, we just talked about this speedboat. Healthcare and medical, we talked about this speedboat. We said there is a more balanced regional sales setup with Minnesota Rubber bringing us a nice balance from a region-regional point of view.
This was before. We're now at par, roughly, for 39%-41% between the Americas and Europe. You could see these ticks on all of those strategic ambitions and priorities. They have brought to us several production sites in the US and in Mexico. We've expanded with a site in China, which was desperately desired, needed. They've brought a whole bunch of new capabilities from recipe point of view. They were very present, I have to differentiate, very present in water, which we were a bit weaker in Europe. It's a great complementary capability set. Of course, they have a sizable business in healthcare and medical. We are really happy. These are not all our priorities from a strategic plan, but they're ticking six of those major ones. This is a significant benefit for us.
Of course, this has to be paid, and it is paid with the synergies coming over time. There is many of those. It would be far too expensive to talk about this today in detail. The sum of all of those that we project by a run rate in 2025 is exceeding SEK 250 million. It's made up, you could see the dark ones being cost and the other ones being sales-related synergies. Now, sales-related synergies is always looked upon to say, "I just plug them in and it'll come somehow." That's not the case here. We have a detailed action list. There's 51 projects, of which 2/3 of them are sales-related synergy activities. It is about training the salespeople.
It's cross-training them for the various product lines because now we have a new set of customers that can be approached with each other's products from the past. There is optimizing volumes between the factories. There is, we heard this earlier, automation and efficiency improvements that we have already started to kick in. A lot of work, but a lot of benefit coming in, and that's why we are fully convinced that the recovery that is projected here is not just a simulation on paper. It's, it's real. It's starting to come alive. All of those 51 actions have been kicked off and are starting to get some traction. We will see these sales effects, of course, coming next year and the and the year after with some significant increase.
All together now, we see this is a pro forma of including a full year of Minnesota Rubber projected. We see a continued nice balance of our portfolio on from a segment point of view. We see something that we have developed. They brought to us another innovation center, which we will see later with when Linda presents. Of course, we have a much broader manufacturing base, which will of course cross-use as well. Last button is the increase in Asia-Pacific. Historically, we have grown in excess of 10% and in certain years over 15%, in the entire Asia region. There is no, there's no end to this. It continues to grow at a higher pace. In the strategic plan, these are the four focus areas that we see the highest momentum.
Again, you see healthcare and medical and aerospace. Semiconductor, of course, because this is a region that is heavily with a heavy share in the global market of semicon. You also see the typical historic industrial seals, which we heard earlier, a speedboat could also be a mini speedboat in the area of a less growing, fast-growing market. Fundamentally, focusing on that industrial seals is simply our core business because the market is still quite active in that area. Those four are the key ones. As I mentioned, in order to support this growth, we are expanding capacity, we are expanding in China, and we've just added the MRP factory. We're building the new factory in India, property being closed soon.
Vietnam is coming online end of this year, amongst other add-ons that we have in the region to the factories. In summarizing our scale-up and acceleration story, it's a scalable business model, so we can dock on more without doing it. We are focusing on these attractive segments. This is where the growth comes from. We look continuously for further dock-on acquisitions, accelerating Asia-Pacific, strong focus now also in the M&A area. Finally, we need to continue, of course, our performance from a financial point of view. With that, I hand over to Linda Muroski. She is responsible for the global healthcare and medical business and also does the Americas industrial business. Linda, you're
Yep. Thank you, Peter. Well, I'm looking forward to explaining to you a little bit more about our healthcare and medical business. You know, first, we talk about what are we trying to do in our healthcare and medical business, and one of them is to help improve the patient quality of life. How do we do that is through a team of experts that we have working for us that you'll see how we've put that together. We do this through partnership with our customers. With that, we're looking for a better patient outcome. When there's a better patient outcome, our customers are going to get their products reimbursed by insurance companies. Unfortunately, somebody has to pay for these things. Typically it is an insurance company.
No matter where you are in the world, you need to get this reimbursement. We feel very confident that with the team that we have set up, with the capabilities that we have, that we'll be able to double our sales by 2025, and doing this from a baseline of 2022. With that in mind, how did we get these capabilities? We did that through, as Peter had mentioned, through some major step change in acquisitions, starting back in 2005 with the acquisition of SF Medical. The capability that brought us was tubing and braided hose. Today we use that in the biopharma market. Various other ones, Specialty Silicone Fabricators (SSF) was a major milestone for us back in 2016.
When we purchased that company, we got an array of products in the liquid silicone market with different types of technologies from molding to sheeting to extrusion. Liquid silicone is used as an inert. You can put it in the body as an implantable. We moved into the implantable market in 2016. Then with Sil-Pro, we brought in high volume, high automation. They also had tooling as part of their acquisition. Now we had in-house tooling for liquid silicone rubber, and we also picked up thermoplastics. As you can see, the more that we continue to add on these capabilities, the more solutions we can bring to our customers. We had something exciting happen last year, and that was the acquisition of Minnesota Rubber. It really was a step change for us in our healthcare and medical.
A lot of people didn't understand how much business Minnesota Rubber had in the healthcare and medical space. It was actually 25% of their business. We saw that as being a very significant acquisition for us in the healthcare and medical space. What it brings to us is additional capabilities that we can take to market. Trelleborg always strong in the material science area, but now with Minnesota Rubber and the focus that they had in the healthcare and medical space, it really completes our portfolio. When we look at Asia manufacturing, Minnesota Rubber has Class 8 cleanrooms in China. We didn't have that. Now we could add that to our portfolio. You can see here that our portfolio is not complete yet because we're still focused on additional expansion in the Asian market, either through acquisition or through greenfield.
Looking at OEM relationships, the beauty of this acquisition was that we were not really going after the same customers. We see from the OEM relationships that we have complementary customer portfolio, so we can take the offerings from both organizations and really get those sales synergies that Peter spoke about. Lastly, the finished medical device assembly. Here they have an expertise, we bring in an expertise, and we really are able to come up with a full package for our customers. It has been really exciting seeing the portfolio come together with the Minnesota Rubber. But, you know, what does that look like now? From a business unit, we're still focused on the top 75 medical device companies in the world. We're over SEK 2 billion, and we're also in all three regions now.
We're seen in Americas, Europe, and we also have small production in Asia. This is, you know, good position that we're in, and we have an array of capabilities for us to take to market. There's a whole host of things we're able to do. Let me jump into a little bit about the growth rates that we're seeing across the regions. We look at the Americas, it's at an 11% CAGR. Why is that? Most of the development of new innovations around the healthcare and medical space really come from the Americas, and it is driven by that. Look at Europe and, certainly China and Asia, you know, China doing the in China for China by 2025. There's great growth in all regions.
It's a nice, consistently growing market space that can weather other storms because, you know, it's a product that everybody needs, and they pretty much need it consistently. With that in mind, these are the three focal points that Peter had pointed out that we're really focused on. Medical device components and integrated solutions. What does that really mean for us? It means that we're moving beyond just producing the components, but we're actually assembling the product. We're sending it out for sterilization. We're packaging it for the OEM so that they can take it to market. We're seeing pretty good growth there. From a biopharma standpoint, you know, this is where we're making novel drugs and therapies, and I'll talk a little bit about that more in a deep dive there that I'm gonna do in a second.
Drug elution, a lot of people, when I say drug elution, they might not quite understand what that is. This is when we take a combination product of a medical device, and we add an active pharmaceutical ingredient to it, and then that product typically gets implanted into the body, and then the drug elutes over time. I'll go into some applications that we're working on for that as well. Point is for the medical device components and the integrated solutions, we feel like we're a leader in the industry. We have a bit of work to do around the biopharma and the drug elution, but we're growing in those spaces and really making a name for ourselves. Let's talk about the medical device and components here.
When we start to look at what is driving the market, there are a few market drivers around customers looking for smart devices. Certainly during the pandemic, doctors were looking for more diagnostics so they could treat patients through like a telemedicine instead of bringing a patient into their office. We're really seeing trends to continue down that path. They're also looking for less invasive type of medical therapies. Nobody wants to do a surgery and then a second surgery. The more that they can look for smaller openings when they're putting orthopedics in, these are the kind of things that they're looking for. Also in this area, we're seeing a great degree of supply chain consolidation.
Remember I mentioned that customers don't wanna just see somebody who can provide a component, but they're looking for someone who can manage the entire supply chain, make many of the components, and put them together for them. These are some of the areas that we see that we have a strength. In the biopharma market, this market trend is we're seeing much more investment by governments and private companies in the development of new novel drugs. With that, they're looking for a single-use system to be able to make those drugs because it's faster and more simple for them to produce them. Here we are making single-use systems for our customers, and I'll show you an example of that in just a second of a project that we most recently won. Some good things here.
The other thing about this is we need to invest. People are looking for in-region, for-region production. While we're a global organization, we do need to provide our products on a regional basis to help with that supply chain concern that they have. What we've done already is we've already announced that we're making an investment into our Northborough, Massachusetts facility. There we're making that a biopharma center of excellence, and we've also started to put an investment into Europe. Eventually we'll get into Asia, and we'll have all three regions covered with this product portfolio. Lastly, the drug elution. Here, why would somebody want a product that's going to have a drug elution?
This is about targeting the drug to the area that you're looking to treat, whether that be a therapy for prostate cancer or even a contraceptive. These are some of the areas that we work on here for targeted delivery and patient compliance. Those are the 2 key factors for that. Within our manufacturing portfolio, we have the capability of putting products together through highly automated cells all the way to the complex handling of a drug elution product and the safety concerns that would be associated with that. This is an interesting slide. If you look at silicone, plastics, metals, just the silicone market alone was at SEK 10 billion , so it's pretty large. The biggest part for us to really get exponential growth is by that integrated solution.
You can see this is where manufacturers, OEMs are outsourcing the component assembly. If we're making the assembly, we're making the components, and then we're assembling together, we have a far greater reach in terms of wallet and spend from our customers. With that in mind, these are 3 examples of where we've been able to do that. A first example, these products are made out of our Paso Robles facility in California, and here we make everything that you see in that photo. That product is used in during childbirth to prevent women from hemorrhaging. We put that together for the customer, and we also, you know, have it sterilized and packaged and ready for shipment to hospitals for them. In the middle is biopharma, the part in a circle.
These are products that are used for the tubes and braided hose. These are used for one-time use systems. We've gotten awarded the business to put that together. Originally when we started working with the customer, all we were doing was making the hose and the tube. With the acquisition of Minnesota Rubber, the other plastic components that are on this, we have now the capability to make and supply for the customer, so you can already see the synergies at work. Lastly, the drug elution. This particular product is used for patients who are getting cataract surgery, and the two pieces of blue that you see on there contain the eye drops that the patient would require for a three-year time period.
After three years, the patient goes to the doctor, and those pieces are taken off, and new pieces are put on. This allows the patient to have that patient compliance of making sure that they're taking those eye drops, but they never really have to do it themselves. There's some really good technology I think that we can bring to market as Trelleborg. What does this mean? It means that we need to expand our capabilities, though. While our core was around this liquid silicone rubber, over time we've been able to add other types of services like assembly, other things like material development, thermoplastics, but we still have a ways to go to complete the picture.
One of the things that we have been doing, though, and a key differentiator for us, has been working with the customer earlier on in the process of their development. Through the acquisition of Minnesota Rubber, we also then inherited this innovation center. This now allows us to help our customers with design for manufacture, taking it all the way through a prototyping, a bridge tool to full serial production all under one roof. It's pretty exciting to have that access to such a state-of-the-art facility. In conclusion, we have these key things that we're working towards, right? We are a global leader in critical parts. As I said, liquid silicone rubber is an implantable usually used in devices related to heart transplants and other pieces.
We're really seeing a niche application where we can bring value to the market. It's not just everything that we're working on. It's real niche-led growth in attractive areas. Of course, we're becoming an integrated solutions provider, and over time, we're using our M&A strategy as a catalyst to fill in these gaps in order to help us accelerate our business faster with the objective by 2025 of doubling our business. That's what I have. Next up is Jürgen.
Yes.
Introduce yourself, Jürgen.
Yes. That's me. That's me as well. I'm Business Unit President for Global Aerospace and in charge of the European industrial sales. Now spending the next 15 minutes to talk about aerospace and how we want to grow the business in aerospace. I guess the question we want to answer together is, does aerospace qualify as a good speedboat? Hopefully, the answer that you all will have is yes, we feel that is a really good speedboat. You saw this sentence earlier in Peter's presentation, growing Trelleborg into the world's foremost engineered polymer solutions company. That also applies for aerospace where we have selected, as we feel, the right segments to be successful in this market.
When we look at this picture here, it shows basically our ambition with our products and services to make our flight experience that we all have, more safe, to make it comfortable, and to make it sustainable. We heard a bit about sustainability, and it's also a big topic in aviation, as we will see a little bit later on. This is where we are today. As a business, we are just over 2 billion SEK in turnover in aerospace globally. We focus on value-adding products and services. I think we heard that earlier from Jürgen Bosch as well. That's what makes the difference. It's not selling commodities or whatever. It's really selling the products where we can add something for our customers.
Of course, it's both the OEMs and the MRO market, and we'll have a look at that a little later on. You heard us talking about local presence and global reach. It also applies for aerospace. There's a lot happening in Europe where we traditionally have been quite strong, but nowadays there's also a lot happening in Asia-Pacific. China wants to build their own planes, and there's a lot of development going on as we speak, and we are now very well positioned to capture that growth and be in those developments. This is the selected applications that we see ourselves in. When you look at the top line, you can see we consider ourselves as global leaders in those application areas.
When you look at the bottom line, that's all the areas where we want to become global leaders in the next years to come. Today, of course, we sell products and services into engines. I'll have a slide on that a bit later on to explain that. Sealing system for landing gears is an application that is quite important for us. We sell airframe seals into aerodynamic structures. We now, not too long ago with the acquisition, we got window seals for aircraft, and we are global leader in control systems. The ones we are focusing on in future is also braking systems, interior cabins, the flight deck, the avionics, and the electronic systems. You saw this slide before, and Peter briefly went through.
15 years ago, that was a slide which was quite empty because the only thing you would have seen on there is the hydraulic and actuation. It started to add with the aerodynamic seals, the airframe seals, supported by an acquisition that we did back then. We had many new products going into an aircraft. It was followed 8 years ago with engine seals. It was followed 6 years ago with entering the aftermarket. It was followed 3 years ago entering the inside of the aircraft with the main cabin systems, the galley applications, and the lavatory and water systems. Very recently, we added the window seals through an acquisition, and I'll have a slide on that a little later on.
To give you a feel for the products in these different areas, we have taken out the engine seals. This is basically the details talking about products we sell into an engine. In the LEAP project eight, nine years ago, originally, the customer asked us for exactly those three areas. They asked us for rotary seals to go into the gearboxes. They asked us for high temperature resistant O-rings for the bearing chambers. They asked us for various seals to go into pumps. As we went through the project together, they all of a sudden started, "Well, could you make rubber metal gaskets for us? Could you make VBV system seals?
Could you make clamping blocks?" During the project, in working with the customers in a very close relationship, we actually, what was originally 3 areas, we ended up supplying 11 different product areas into the engine, which I think at the end it was 139 different items that we sell now into the leading engines today. That illustrates how we go about increasing our share of wallet. Because what you've seen here, compared to 10 years, 12 years ago, probably our share of wallet in an individual aircraft is factor 6 higher than what it used to be. We come to that a bit later on as well, what it means in terms of growth targets and ambitions going forward.
When we look at the different subsegments in aerospace, then the biggest one for us is commercial aviation or civil aviation. The civil aircraft, that's the regional jets, the A220. It's the single aisle planes, the A320, the 737s from Boeing. It's then the twin aisles, the big planes, complemented by cargo planes, which is becoming a growing segment the last, let's say, three, four, five years with all the supply chain issues going on in the world. Of course, complemented by the aftermarket and the maintenance, repair, and overhaul business, so that goes hand in hand. As we mentioned, this one we developed around five to six years ago. You have military and defense, then followed by helicopters.
Space is a very important one for the future because I think what we see is a commercialization of space and space tourism to be not taking off for the next 5 years, but for sure the next 10 or 15 years. A very new area, and it hasn't even got an area assigned to it yet, is Advanced Air Mobility, which is also something which will change our lives as we speak. You see the arrows, and most of them go up, except for helicopters, because there is, of course, if you like, a competition with the Advanced Air Mobility solutions. Helicopters will stay where they are, but we will see a lot of growth in the Advanced Air Mobility.
We briefly mentioned sustainability, it is becoming a big topic for aviation as well. What you see here is the CO₂ emissions per revenue passenger kilometer, which is the KPI that is used to measure the efficiency of an aircraft. When you look at 1990, it was around 200 grams per revenue passenger kilometer. Nowadays, we are down to half of that, just below 100. Of course, there is a very clear trend. I think the long-term goal is a zero emission aviation, but it is really a long-term goal. What we have to recognize is in aerospace, developments take a long time. Today, we work on eco fuels, we work on hydrogen, we work on electric aircrafts. Realistically, for the next, let's say, 7-10 years, the commercial relevance won't be that big.
We of course do the work now to be there and to be the one supplying the seats. What it means is for the next, let's say, 10 years, in order to become more sustainable, we have to use latest technology. What we will see is when we look at the next slide, a lot of replacements of aircraft, and that is to do with sustainability. Today, in the air, you have about 23,000 commercial aircraft. What we know is that until 2040, this number will actually grow to 47,000. When you look at the projections of the big OEMs, then that's what they expect to build as aircraft overall. About the same amount will be new aircraft of what we have today.
On top of that, we will replace 2 out of 3 aircraft that are currently in the air. We will actually overall see around about 40,000 aircraft to be built. To give you an idea, when you today look at the commercial aircraft side, then they build between 1,600 and 1,800 a year with the current build rates. They have to ramp up the OEMs in order to be able to build that number of planes. Nice and a nice growth path ahead of us. One slide on the Advanced Air Mobility. Probably not many of you have flown with one of these yet, but what you can be sure is that in 10 years from now, probably almost every one of us will have used one of those vehicles.
Because what we see, of course, is in highly densely populated areas and cities, the ground is full. In order to be mobile, you have to go up in the air. That's for, of course, passenger transports, but also for cargo deliveries and stuff like that. The industry expects between 2035 and 2040 to have 150,000 of these flying. A new market hasn't been there 5 years ago, but very interesting because of course, lots of things that rotate and lots of product opportunities for us in aerospace. Of course, the big names, they already look into it and want to be part of that market going forward.
Still early days, still need some time because when you imagine about air regulation as one topic, no one is actually now ready to have 10,000 of those flying around at the same time. It will come, it will happen, and it will come sooner than what we think. One other aspect which I think is important is the consolidation in the aerospace ecosystem. On one hand, we will see new OEM players, China as one example to mention, that will build their own plane. On the other hand, what we will see is a consolidation in the lower tiers. Of course, we want to be part of that. As you have seen with the acquisitions we've done, we are active there, and we want to continue to be active there in future.
Talking about the two acquisitions, one we did last year, one we are in the process of doing, I'd like to give you a bit of rationale why we actually did those acquisitions. If we look at MG Silikon, now TSS Lindau, based in Germany, we actually got nice sales. On top of the sales, when you look at the European market, you've got three main countries. You've got France, you've got the U.K., and you've got Germany. Historically, we were not very strong in Germany. We were very focused on France and on the U.K. With TSS Lindau now, most of their sales are actually in Germany. All of a sudden, we have a much better balance within Europe. We have broadened our product range, briefly touched on the window seals.
We produce them, we injection mold silicone in Lindau, all of a sudden, we can actually offer an integrated solution to our customers because we also make the plastic components that go behind the window. A window for us is now a system rather than individual products. Looking at Rainier Rubber, of course, in the Americas, we have not been present with our own manufacturing footprint in aerospace. That's a key achievement that we will get through that acquisition, we will get material approvals. If you have approved materials with your OEM, your time to market is a lot quicker and you save a lot of development work. That's an important one, and we are very close to key customers being based in Seattle. Growth for us in aerospace is really two-dimensional.
One is the market is growing with the shift to sustainable aircraft, with the fleet renewals, with the new emerging markets. That is what you see here, the market growth. On top of that, our ability to increase our share of wallet is giving us an extra boost and giving us the opportunity to outgrow the market when it comes to our growth rates that we expect. You've seen that figure for health care and medical, it equally applies to aerospace. We want to double our sales in 2025 compared to 2022.
Through organic growth, that's an important factor, through expanding our offering with new products that we don't have in our portfolio today yet, and with M&A activities. With that in mind, to summarize, it is basically critical applications where we want to be the global leader for aerospace. We get tailwind through the rapidly growing market, which is quite nice. We like that. We are able to expand our offering and increase our share of wallet. Of course, with the right acquisition, we can really add on and dock on to the growth rates that we expect. That was my few slides on aerospace.
Great. Thanks, Jürgen. This was an introduction to Sealing Solutions. It's been well-performing, if I may say, for many years. Of course, we feel that we have a very good position to continue to develop Sealing Solutions and continue to deliver very good figures. We have made, as you said, let's say, major acquisition, the biggest acquisition ever. I mean, we should say that we have done many acquisitions within Sealing Solutions, but I mean, now we have Minnesota on stream. Of course, you notice that the margin going down. To just to remind you, all acquisitions that we have been doing over the years on Sealing Solutions has been with lower profitability than the, let's say, the average of Sealing Solutions. Still, you have not seen this in the figures.
Now, unfortunately, this is too big for us to absorb immediately. It will take a few years to integrate it, but we have been integrating a lot of acquisitions. I don't remember the name, but 20-ish acquisitions over the last 10, 15 years. Even more, I guess. Even though I should know this figure, but I don't know that. It should be some 20, 25 acquisitions which has been integrated. Please, all of them with a lower profitability than the average of Sealing Solutions. Now it's a bigger one. Now we need some time to integrate it, and very confident and very happy to do that. On top of that, we now, I say, accelerating this move towards speedboats, that we say.
You've seen that now in our communication all towards you, but also internally, we are escalating that. That is maybe also just, we are investing at the moment in resources here, and that is also something which is costing us at the moment. We did not really comment that much actually on Q1 this year, but you should know that in the Q1, which was a little bit lower profitability, there is also quite a lot of extra costs in order actually to, let's say, to create a better foundation for the future growth. You're gonna continue to see that we are investing more in resources. It's gonna cost us some money short term, for sure, to kind of, to create this new foundation for, let's say, improved foundation for growth within Sealing Solutions.
We think it's very well-invested money for the future to make sure that we create a better foundation for growth in Sealing Solutions. That is kind of the way we look at it. You have a deep dive on the two of the biggest, as I say, two, if not the biggest, but probably two of the biggest kind of speedboats by Linda and Jürgen then to, let's say, give you some insights on this. As Peter mentioned before, we also have plenty of other similar activities, although not that kind of isolated. It's more that integrated with other activities. That is what we wanted to share with you on Sealing Solutions. Any questions on this? Peter, to Peter or Jürgen or Linda? Otherwise, we take a quick break again for, 10 minutes?
10 minutes.
10 minutes, we sum up with some comments on innovation and value creation, let's say, wrap up at the end. Please, back in 10 minutes, which means 4:00 P.M. Area. It's a lot of activities, but nevertheless, to give you a flavor because we feel that this is really a major driver for our value creation, which is sometimes not fully understood. Just to share with you and give you some insights on, on this dimension of value creation. Konrad.
Thanks, Peter.
Yeah, sure.
I would like to start off with people like I are usually the expendables. We are usually referred to as cost center. What you have seen throughout the presentations today, there was a lot of mention about how we differentiate in our markets, how we have become leaders, and that is through innovation, but not innovation as a purpose in itself, but innovation to meet and exceed the demands of our customers. When we go, into it, what are the Trelleborg innovation principles? That equally applies for TIS as well as Sealing Solutions. Those are universally applicable.
The focus on segments, the expertise, speaking the language of the segments, fully understanding what the requirements are, be it regulatory requirements, material approvals, certifications, whatever it is, being an expert that you are on eye-side with your customers, then they recognize you are someone that they can trust. Trust is very important. The next intimacy is the application-driven material development. As Peter said very early this morning when opening up, we're not developing new base polymers, but we are developing application-specific solutions. We take what the big chemical companies provide and add value to it through adding a secret sauce. The, the sauce is sometimes really secret. We add value because we have that proximity, we know exactly what is required today and in future for the specific applications. Jürgen was mentioning the aero parts and the efficiency that has gone up.
Part of it is that the engines running are running at higher temperatures. You have a better burning process of the fuel that gives you greater efficiency that requires more, more demanding materials withstanding higher temperatures. Having that proximity, understanding the application that we can propose solutions to customers, that we have a solution out of the pocket, dear customer, we have it, that is the license for us to grow, to win new business, to be part of the customer's innovation process. Customer-centric solutions. We understand where the segments are going, but also we understand where individual customers are going. We work with world market leaders. As Jean-Paul said, we want to help our customers to either improve their margins or improve their market share, so when they see that we are providing value to them, they are partnering up with us.
I will have another slide of why this is relevant. Then, of course, last but not least, it's the two elements, the Polymers for Tomorrow that we also take opportunity of an increased drive towards sustainability. Today, in all our organizations, design for sustainability, design for energy efficiency, however you may call it, is an integral part of what we do. Sustainability is part of our DNA. Our engineers live and breathe it all day in and out. Then, of course, last really, but not least, it's the rigorous testing of products. Jürgen, in his presentation, mentioned the landing gear. We have invested in a landing gear that can run the seals for the landing gear over the entire life cycle of a plane. We are offloading validation, testing, experimenting from our customers.
What that does is we get not only one, not two, but three steps closer to our customers. We are actually part of their engineering team. That gives us great opportunities. It opens doors. This allows us to play in these segments and have leading positions because we speak the language of our customers, we are deeply ingrained with our customers, we know exactly what they need today. They will talk to us what they need tomorrow. This is how innovation secures that leading position that we're having, because we speak about what is it the customer needs, and we do this upfront investment in developments for what the customers need in future.
We are adding relevance in our customer-supplier relationship by supplying them with all the samples, with the innovations, with the new materials, the new designs that they need for their next product generation. We will have a couple of examples. Hydrogen is a very interesting one. How much turnover do we have in hydrogen seals today? Not very relevant. We are designed and specified in the solutions today that will be on the market in five years' time. That means today approved, hockey stick growth in the future. That is the reason why we are investing it. It's the early insights that allow us to have the solution ready by the time the customers need it. This avoids that we fall into the commodity trap. This allows us to be on the cutting edge with our suppliers.
Of course, that requires some sort of investment, that requires agility, and I want to give you one example how this is important, the early insights. You know, when in, say, when I was young, long time ago, the car producers, every seven or eight years, brought a new model on the market. The innovation cycle was half of it. Three and a half, four years, there was an upgrade, but when you wanted to be a new supplier into it or bring an innovation to it, the lead time was five to nine years. Today in electro mobility, product innovations go to the market every year. Very agile, very quick, and a supplier of choice really only can make a difference when you can live up with that speed and be upfront.
That means prototype samples, designs in days, not in years. Speed, agility, we have to be on our toes. The early insights make us the preferred development partner, so we are sitting around the table. We are not waiting until purchasing issues and request for quote. We're up there with the engineers. We are offering solutions that are convincing, that help and improve the customer's products, customers stick to us because we provide them solutions they don't get anywhere else. This gives us pricing power. Yes, also, I as an engineer can speak to economic terms. We have to. That brings us recurring sales, and this becomes a cycle that reinforces itself. We have to deliver to deserve the place at the table when it comes to innovation. Innovation has to be relevant, it's not a purpose in itself.
Innovation is not on an ivory tower. Innovation happens hand-in-hand with our customers and for our customers every day. There is a history where we have been growing collectively. We come from a market where we sold catalog products, industry standards. Delivery time, competence, recommending the materials already back then differentiated us from competitors in the market. We then went into ever more complexity. Complex parts, more design competence. The greatest thing here is that is a solution that we are developing together with the customers that when we start it, they don't even know that they need it. Nobody could replicate that. That is multi-component solutions, that's highly engineered solutions for a very specific customer case.
We take a lot of responsibility across all our businesses from our customers by helping them designing solutions, testing solutions, making sure they are ready for form, fit, and function. We are offloading a lot of burdens from our customers. In return, we sit at the table. When business decisions, when awards are being given, this is how we win business. Today we are, as Jürgen said, a one-stop shop. Our customers get everything from the engineering to the standard that they need as well. That in combination with services and others really sets us apart from pretty much every competition. It is the niches, looking into what is coming next. What is the next big thing? I was speaking to hydrogen already. Very many people today claim that they have H2 ready.
We make the difference, we have H2 ready & tested. We have demonstrated that our products work out in the field. Again, do we make a lot of turnover today? No. In 5 years' time, this will be fundamentally different. The same is true for our colleagues at TIS, that they are more into the infrastructure where we have been speaking about these cryogenic solutions. We had LNG in mind. That technology equally applies for hydrogen and other cryogenic media. An investment has been made knowing that a technology will come our way. Today, the market asks for it, we have a product that is ready to sell. The same with the emergency release systems. What we all now speak about building new LNG terminals, that technology sits on the ship. You don't need it harbor site.
Makes it very quick to build new LNG terminals. Intelligent solutions. Really climbing up the value ladder. This is where we come from, and this is the future. Now, the products look pretty similar, and actually they are. However, this is a material that has been specifically developed and has a much higher value because it is persistent against the migration of hydrogen. The value that we can sell this product at is a multiple of what this product is being sold at. It may look like a commodity, but it's not. It has value and engineering content in it. This is how we collectively differentiate from the market. The journey, the transition from a material intense to an engineering company is, I would say, complete.
Materials, we have gained the complete control over the material IP, digitalization in all terms, compliance that our materials meet the application criteria. We have built R&D capabilities. You have seen both Peter and Jürgen Bosch speaking about the R&D centers that we have in the organization. That mission is accomplished. However, we are not done. The next stop is the next generation of materials. It's about sustainable solutions. We will see more Artificial Intelligence being used in design to further accelerate things. Further digitalization, more functional integration. When you remember that picture that was there in the value chain, that multi-component part, that is exactly when we speak about functional integration. That is not only a seal, it is the housing, it is a thermal decoupling, it's a vibration decoupling, it has multiple functions in one component.
A few examples what we are working on, innovations, again, very close to the application, high-speed rotary seals that are electrically conductive for electric engines. It's not only a seal, it also takes the static current off, which usually destroys the electric engine if not taken care of. High-performance plastics replacing steel. That's an aerospace part, super lightweight, withstands high temperatures, sought after. Jürgen was speaking about actuators. Today they are of steel. No, that's not dirt, it's shimmering. That's a complete carbon fiber-based actuator, 60% weight reduction. If you imagine what it means, 60% when you're out on the wing tips, that's worth a lot of money. That is also a very nice example.
We start in aerospace, but we already have robotics customer that are asking for the same lightweight because they want these quick accelerated movements where weight also plays a key role. This is how technology transfers over segments. We spoke about solutions that have replication factor, developed for LNG, applicable for hydrogen and other technologies. Digital solution, Jean-Paul was speaking about that mooring product and you were mentioning it, that in the Panama Canal that is licensed now. Smart systems helping for patient care, Polymers for Tomorrow, where we take responsibility to close loops to develop new materials that are more sustainable. Of course, we do have the evidence for a circular product. We're walking the talk, we're delivering what we promise. We do that in great proximity to our customers.
We do it hand-in-hand with our customers, earning our seat at the table, earning our position working with the technology developers and our customers. We don't end up knocking at the door asking if we could get an RFQ. We are a development partner, which helps us differentiating. We do that through a lot of decentralized competence. A lot of colleagues are out there solving customer problems, working on cutting-edge challenges, and you have seen very many examples through the presentations today. Wrapping up, the segment focus is important to replace a crystal ball. We know what is happening.
We know what has a very high likelihood of success. It is the customer's centric solutions where we work hand-in-hand with the customer. It's the application-driven material development. It's the product verification where we simulate, where we test the entire life cycle of a product that makes the difference, where we take burdens off our customers, where they can buy approved, proven solutions because we do the testing for them. That gives us the leading position in our selective segments.
Thank you. Just to share with you a little bit insights here from top level, just to show also how we're thinking and how this innovation is actually driving. We don't talk about it that much externally, but of course, internally is one of the very important driver for us to make sure that we stay ahead and this combination, understanding materials and doing the application and the customers together, which I think, well, we are kind of unique, we say, in the area. We have a lot of our competitors, which is, I mean, let's be fair, they are probably better than us in the materials, but they are definitely not better than us in understanding. Sorry. Nanoi was very disappointed when I said it was I got the evil eye there.
Jokes aside, let's say they spend more money on the material, but maybe neglect this dimension on understanding the segment, understand the application. That is where I think we're unique, and we're offering a complete solution, and that is kind of driven from this background of the innovation. That is really a foundation from this. Quickly, conclusion. Trelleborg, a lot of changes in Trelleborg. We recognize that. It's kind of challenging sometimes to get the story across. We have tried today to tell you a little bit about the kind of new Trelleborg, and we find today that we have, let's say, leading positions all over.
We have a good portfolio. We have done some portfolio changes, some major portfolio changes for the last 5 years. We now feel that all, everything we have is good positions. Not everything is delivering on top of they should deliver. We have plenty of improvement possibilities, but nevertheless, the starting point and the positions we have is very good. The fundamentals or the characteristics that we're pushing here now is this buy value, critical function, high switching cost, high barriers of entry.
That is why we would try to gather it. Of course, offering, talking to the customers. We talk about we definitely want to be partners with our customers. We work very close with our customers. I mean, one thing that we don't talk also to separate us from a lot of our competitors, a lot of our competitors is still selling the products to distributors, to agents, to partners. We decided many years ago actually to bypass that. We have a higher selling cost in Trelleborg compared to most of our competitors, but we also get a higher gross profit than most of our competitors. That is a switch that we did several years ago in order to be, you know, more unique.
Of course, it put demands on us to understand applications, to understand, and also to create bigger solutions. That is a step we made in really to become partners of our customers in all dimensions. Local presence, global reach, or global resources and capabilities also where we stand out and where we would like to stand out, it means, like, Linda touched in her, that we are targeting the top 75, and that is basically the same in industrial aerospace. I mean, we're working with the global customers, we're working with the best customers, the market leaders in each industry. By then offering global presence, we are able to support them better than most of our competitors. Then in the background, materials and application expertise, that is kind of a combination of these two which really makes us different.
That mean that a better Trelleborg is being created. We are not yet as good as we can be, of course. We have a lot of things to do, nevertheless, the starting point now is a better Trelleborg than we had before, we look at that, at the figures. I mean, we have been, say, over-delivering. We've been not over-delivering, we have been delivered according to the targets, this is upgrade. I mean, you know, I've been CEO for quite some time, this is the third time we're actually beating the previous targets, we have to, or we are upgrading the target. We have a history also of delivering the targets. We don't know.
I mean, I honestly say that of course, we would like to have done this a little bit earlier, but we had, let's say, you know, the pandemic in between and some other issues. Nevertheless, we are delivering on the targets, and we have been delivering the targets before as well. Now we're upping the targets, new financial targets, talking about 8%, more than 8% sales growth, more than 20% EBITDA, and more than 15% Return on Capital Employed. This is a medium-term target. It's not immediate target. We are investing at the moment. I should say that as well.
We have decided to invest at the moment to create the foundation to really make sure we deliver on this over time, because it takes investments, it takes some efforts in order to create the foundation to deliver on this in a solid way. Sustainability is important. It's becoming more important. We have a very good system for sustainability. We have been recognized in Sweden as being among the best in the total sustainability work. We are not kind of a sustainable company. We working with energy, we working with electricity.
We are using fossil-based raw materials, but we will improve in this. I mean, the one is done, we have been delivering. This is also the fourth time, actually, we are kind of increasing our, let's say, CO2 targets. We have been delivering three times on the three previous targets. Now we're launching a new target, going from relative to absolute climate targets. Have a solid plan. I really invite you to join us in June 29th.
27
27th to go into this in detail and give you some more flavor on all the actions. This is nothing that we talk about. There is actions on every single site. There's actions in a multiple of dimensions in order to make sure that we continue to over-deliver on this target as well. Innovate to get an even better Trelleborg. We don't know, we developed this slogan yesterday, so I don't know whether that is good. Nevertheless, we said that that is an even better Trelleborg. That's of course what we want to do. We want to be even better growth profile, even more profitable, and even less cyclical. That is something that we really would like to show you.
Of course, by doing this, we have a financial capacity of more than SEK 20 billion for the next few years, which of course, we're gonna use wisely. We have this share buyback, which is the foundation on this. We're gonna intention is to continue to do this share buybacks, of course, for many years. We are solid dividends. We're probably not gonna go any extraordinary dividends. I say that because we will not do that. We will use this to have a solid dividend over time. We don't see this an immediate, let's say, release of capital. It will happen over time. Of course, the most important accelerating investments and acquisitions, we are investing slightly more.
We are investing above our depreciation, but that is on purpose because now we are building a new foundation in Asia, investing in the kind of system control, you know, digitalization and also controlling the business. We are investing in these IT systems at the moment, more than the depreciation. We also continue as we do acquisitions, continue to acquisition, we will have to continue also to do CapEx in improving our setup in Europe and North America. While doing this, of course, we're focusing on the speedboats. We have this as a selective area of speedboats, but we are internally Changing. We are upgrading the way we work in order to be even better in allocating the resources to the areas with creating good profits and good growth. There are more than these segments.
Some of them is based on, let's say, underlying markets growing. Other is based on that we're increasing our share of wallet or increasing our market share. There's different, let's say, dimensions in this, but we are allocating this. Once again, short term, it's gonna cost us some money because we're building up resources. We are creating, let's say, new foundations for growth over time. Gonna continue to grow in Asia. We are still underrepresented in Asia. We see still plenty of opportunity. Of course, we do this knowing this kind of, how should I say, global discussions, if I may say, what's gonna happen. We are anticipating that it's gonna be a little bit tougher in China on export. Our main investments here is actually to grow in the local markets.
We are not dependent on Asia for import into Europe or import into North America. For those cases we are in, we make sure that we have alternatives because we are investing in China for China, basically. We are investing in Vietnam. Vietnam honestly is mainly for exports. That is not for the local market. That is create a new manufacturing base for that one. India is kind of a combination, both for export, but also for the rapidly growing Indian market. We are overspending here as well. We are doing investments. We are at the moment building, as I say, factories in China, factories in India, factories in Vietnam.
I mean, we have plenty of activities going there in order to create this new base for Asia, while still continue to grow organically on the local market. Game changer in North America, especially for Sealing Solutions. Minnesota, we know is big acquisition for Trelleborg. We usually don't do these kind of acquisitions. This was, I say, once in a lifetime, and it was a one opportunity that we didn't want to miss. We know it was profitable. We know it was a well-positioned business, which is then reflected in the valuation. Nevertheless, we believe, as I think you saw also both from Peter and Linda especially, this is ticking a lot of boxes for us. It's a good strategic addition.
We know it's gonna take time before we get back and get the same profitability on this as we have for all of Sealing Solutions. Once again, this is slightly bigger than we have done before, but I said we have 20-ish acquisitions in this, what we have been doing in Sealing Solutions, so please trust us. We will deliver on this. We will get the profitability on this. It will take a few years before we get back fully on track, we have a good game plan. We have more than 50 actions running, We have a very committed management also to deliver on these benefits. Acquisitions, yes, it will be. There is a big pipeline we are targeting. We have a good mapping of these opportunities. We are very selective, We're looking for synergistic acquisitions.
It's not gonna be acquisitions with the stand-alone. It's gonna be something which is kind of combined with what we already have, and we know what we're doing on this one also, because this is also something that we've been doing for a long time, all to do an even better Trelleborg. That is kind of the end of it. Finally, remind you, Capital Markets Day 2018 , this was the target, 46 delivered. Now we say we're setting a new up here, we say 48. This is kind of the new setting for us to make sure that we continue to improve Trelleborg, and we continue to develop a better company over time, of course, with in mind to create value for our shareholders.
At the end of the day, this is what it's about for us, to create value. We are not looking short-term to do it. We are looking to building a better Trelleborg, a more solid Trelleborg that will deliver value over time. Q&A. Is there any questions remaining? I know there is something. If you start, there is something from the.
Yes. If you have any questions, just raise your hand and, yeah, we'll start.
Thank you. Just a question on, you talked about the growth target and the margin target. The Return on Capital Employed target that was also raised. Is it kind of a combination that you are perhaps willing to accept initially lower Return on Capital Employed from the acquisition side because your organic investments are more accretive from day one? Is it that all investments should be above the new target in a fairly quick manner?
I, sorry, I didn't really get the question. What is the, what is the question? I mean, do you think that the target is too low? Is that the?
No, it's more how you see the kind of timeline of the investments that you make. For example, your CapEx plans, you historically said, like, it's a payback time of a few years or something, and then that should be in line with your Return on Capital Employed target. When you make an acquisition, like Minnesota, then it could perhaps take a few years before you.
No, we need to I mean, if you do a slightly bigger acquisitions, I think we'd still have to accept that that is a high single-digit returns in the beginning. That needs to take a few years before we get it up to 15. So that is kind of reflection of that. We of course. If you go smaller acquisitions, more synergistically, we will get the returns quicker. That is something we don't really know, honestly. So I mean, there's no total game plan on that. That is what we said. Nevertheless, whatever we buy, whatever we get in, we would like to make sure that we get above this 15. Most acquisitions, if I may say, is actually with a higher return.
I don't know, Fredrik, if you wanna supplement in a way on this, on the return.
I think what you are saying, Peter, is that, when you're doing an acquisition, they are normally coming in with, also lower profitability. When you're looking at the return, that will be dilutive, initially. Particularly if you do the bolt-on, that should quite quickly ramp up to, our current Return on Capital Employed level. Just to follow up on, the speedboat categories overall, would you say that based on your view on them now, that they also have a higher margin potential as well?
not necessarily, no. It's the same. I should say rather, because some of the speedboats is kind of early phases, is higher growth. I shouldn't say it all are lower. Looking at Peter and Jean-Paul, not necessarily maybe initially lower, but, it varies. I mean, let's put it varies a lot. some of the early speedboats is actually lower. In average, I should probably not say that they are higher. It's more that similar profitability but higher growth. Isn't it? I mean, I look at some. Is that?
At least from my side, yes, definitely.
Yeah. I think it's the same picture.
I'm not expecting higher.
Yeah, same. Yeah. There's not really a difference. It's simply higher growth.
Yes.
I also have some questions online here, you know, relates to pretty much the same thing, the Return on Capital Employed. I think you answered half of the question, but the question that Klas Olsson from Citi asked in London is if we can talk about the underlying Return on Capital Employed. What can you do to improve this further, and are you planning to change your management incentives here to drive that improvement?
Management incentives, not. I mean, you can always debate on management incentives and what you want to have and about, but you cannot make it too complicated. Sorry, most managers is quite simple. You want to have them to work on one dimension or to work on a few dimensions. Of course, we are tracking that, and we are approving, we're looking through it, but as a management incentive programs, we do not consider that as a tool. I mean, if we don't do any acquisitions, if we simply grow, then the return on capital will go substantially higher. Let's put it like that. The what is kind of pulling down the return on capital is that we do not expect to be able to do acquisitions. We will generate 15% plus return on capital immediately.
As part of this is that we do expect that we have to do some acquisitions that will take time to get up to this level. I don't know whether that is addressing Clas' concerns.
I'll have to ask Clas. Also, he asked questions on the margins of Industrial Solutions, why we should see further margin expansion in Industrial Solutions, and to what extent is the margin higher in speedboats like LNG, wind infrastructure? Is there a price mix story here?
That's a wide question. Do you wanna address it yourself?
I can go.
It's.
There's a pretty high. I mean, first of all, one shouldn't forget that Industrial Solutions have increased their margin by more than half a percentage points each year for the past 10 years.
Definitely.
It's one of the biggest success stories we've seen. Of course, when we invest into these speedboats, and also, mind you, the channel mix, I mean the country mix. When we grow in Asia, we tend to have higher margins in Asia.
True.
That brings also part of the story why that can continue.
No, no, as you say, I think Jean-Paul and his team, they should be very. I mean, honestly, just to be very blunt and direct, we are very happy with this. We are very proud of this, that we have, Christopher said, we have let's say 0.5 percentage points 10 years in a row annually growing. If we continue like that, we are very happy.
Happy.
We are okay. We always want to do better. We think that is a very good development. That is something that If we can continue in the same way, then actually we are very satisfied.
Yeah, that goes of course also for Sealing Solutions. When they are growing in Asia we tend to have a little bit better margins in Asia.
True.
That should continue as well. Another question is trying to understand the margin improvement better towards the 20% EBITA margin at group level. It looks like most of the margin improvement in TSS is driven by realizing the synergies through MRP, I am curious about other improvements as well, costs linked to the building of the speedboat exposures leveling off in the next few years. I mean, we're spending more now, but at one point, they will level off. Whether there is a higher price mix in the speedboat segments in TSS, Sealing Solutions.
I think we're getting into a lot of detailed questions. There's a lot of moving, let's say things in this basket. Overall, I must say that we are pretty happy having TSS delivering this 22%-23% EBITA and growing, and that we are not aiming for.
No.
For any higher margin at the moment. Of course, it comes, then it's very good, but the overall driver for TSS is actually to create growth and get up to this margin again with Minnesota, but then growing on that level. We are not, I mean, we are not targeting 25% EBITA. I mean, I should be honest with that. We are not doing that. We are more focusing on getting it up to 23% with a good growth behind. That is the way. I mean, there could be opinions on it. There could be somebody having different views on it, but just to be also to be very open and blunt about it, that is the way we look at it.
One should also remember that in Sealing Solutions, the difference between margins from a lower margin product and a higher margin product is very small. We have pretty much a very even margin throughout all the different segments. Again, like I mentioned, as we are growing in Asia, where we are by far the smallest, we tend to have the best margin in that region. Yes, there is always the potential to increase as we grow long term.
That is not the ambition. The ambition is.
Yes.
Get to 23, 22, 23, and then create good underlying growth on that profitability level.
Any more questions from the audience? Yes.
Can I just continue on the Industrial Solutions margin, just to get a more specific answer? I mean, because historically, you've basically indicated that it's been sort of a 12%-14% EBIT margin business. Now you've sort of cleaned up the structure a bit, but what is actually gonna take the margin.
Climbing.
To this new level? I mean, is it?
Climbing the value ladder.
Yeah. It's gonna be just small, nitty-gritty work. What is new now versus historically then in this climbing the value ladder?
Starting on a higher level.
You're not gonna do anything new in terms of way of working.
No, it's more focusing on all the.
It's more of the same of what-
We've been doing over the last five years. I don't know if you, I mean, the growth has been at a steady average rate, more or less, but the actual bottom line profitability has sort of exponentially increased over the last five years, and that's through the strength and focus on making sure that every application we're in, we really are creating value. Create value in both ways, for the customer and in the end, for us. It's, it's more of a very specific focus on issues.
Constantly finding new niches.
Yes.
Now we're talking about the lining of let's say, water pipes, and that is a new business for us.
Yes.
Honestly, we say we don't make any profit on it at the moment. We're still growing into it. We see great profit possibilities.
Opportunities, yeah.
It's gonna grow and it's gonna. That is finding these new niches. Now we talk here, we had also, let's say, offshore wind, which is also an area.
Sure.
We have these, what you call grout seals. When you're grouting the, when you put the pistons.
Pillar.
Pillar, let's say, offshore. You put them down in salt water and all of that. That is a new sealing application. It's a new challenge for the wind power producers. They have problems with that fatigue. They have rust. We have found a solution for it, and now suddenly rolling out.
Great.
It's more finding these small niches. This market, I don't know, it was SEK 150 million or something like that.
Yes, yes. We have a lot of them.
We're not the only ones, and we are selling it, and we're finding that niche. Jean-Paul and his team, they're working.
Very focused.
50 on different let's say 50 on these things.
Growth sectors.
We need to improve, and of course, we're learning from each other, we're catching. I don't think you should expect any major moves. You simply continue.
More of the same.
I think we've proven it over 10 years, and now we continue to push it up step by step.
Can I do one more?
Sure.
Just on, I mean, we're halfway through, or more than halfway through May. If you can talk a bit about demand and how the demand trends are.
Not, I mean, of course, it's always fine-tuning. I mean, I, same as we commented, I don't see any, honest to say. We do expect some deterioration, but we don't see it. We are preparing our contingency plans. We have that in mind, but it's not really, we don't have to push the button yet. Hopefully, we never have to push the button. We have been kind of preparing, and we are expecting a downturn, which we are, sorry to say, kind of happy to get the downturn. Of course, no, not for the share price going down or whatever, the performance going down, but it also creates some opportunities if this is happening. This is always a mixed bag.
You don't know if it'll go down more than 30% then?
No, no, no, not 30. 30 is fine. No, no, you actually say one, because I mean, this is a little bit, but we are not seeing any difference. There's no difference at the moment. it's continuing. It's the same. We are preparing ourselves for a downturn, it's not happening, and if it's not happening, then we don't have to do anything.
I think that we're actually running over by 15 minutes, and that concludes the Q&A session, and it concludes the Capital Markets Day. you know, we