Great. Thanks. Welcome to all of you to this presentation of our year-end report, but of course, focusing particularly on the performance in Q4 2020. As usual, I'm going to start off with some general comments and also some comments on our business areas before handing over to Ulf to guide you to the financial pages before I'm getting back again and doing a summary before opening up for a Q&A session.
As usual as well, we're going to use for this presentation, the deck that you can find on our homepage, where we're highlighting the main topics in our report. That's what I'm going to refer to and get back to that.
Moving down to page two in this presentation deck with the agenda, as already stated, starting with the highlights on business areas by me, financials, you're going to be guided by Ulf on that, and then some summary and some comments on the outlook for the running quarter, and then finishing off with a Q&A session.
Turning to page three, headings for our report, Strong End to the Year Toward a Better 2021. I'm going to talk more about that, but that is the way we feel it overall, when we are reporting this quarter and also looking into the running year. Sales decreased quite a lot, 10% organically, by 3%, which is a sequential improvement, but we had a substantial negative currency in the quarter, pushed down the sales in Swedish kronas by 7%.
EBIT came in at a little bit north of SEK 1.1 billion, which is then corresponding to a margin of 30.6%, which is actually the best-ever EBIT for Trelleborg in the Q4 and also the best-ever margin for Trelleborg in Q4. Items affecting comparability came in slightly lower than our guidance, which we also guided for that we did expect it to be lower than earlier guidance. Ulf will get back and comment a little bit more on this in his presentation.
All of it is related to earlier announced actions. Cash flow, very strong in the quarter. We managed to, of course, assisted by a strong EBITDA and also with the good management of CapEx and also maybe we're particularly happy with good management also working capital in the quarter. We continued to lower inventory, we continued to manage the account receivables in a good way.
The cash flow individually, let's say in this quarter alone, is actually the best ever quarter for Trelleborg in all aspects when we look at the operating cash flow. Cash conversion, let's say consequentially very high at 125%, which of course not sustainable, but very happy to deliver this cash flow in such a difficult year as 2020, which we think also showed that we have strong operational control, not only on the cost and EBIT, but also on the cash.
Dividend proposed for the AGM coming up in April is SEK 5 per share, which is on the higher end of our policy. We said 30%-50% of net profit, but we feel this is well motivated by strong balance sheet and also with taking into perspective that we didn't pay any dividend in 2020.
Also to note, post Q4, we also announced a separate press release was sent out with a new climate target, what we call 50 by 25, which means that we should, let's say, half our CO2 emissions from now and up until 2025. We also give a guidance that we should be fully carbon neutral by 2035.
This is a work which, of course, has been running for some time, which will now be intensified, and we'll get back and comment more on this later in 2021 when we will give more details of what we're going to do here and what this means for our operations. We'll get back to that later, but no more comments on this in this call. Shifting to page four, on the organic sales overall, as you see, there is a strong difference here.
When we say in this individual quarter, we have 10% growth, basically, what we call Asian other markets and also what we call Central Eastern Europe and also South and other Americas, where we're running a 10% organic growth. Western Europe, as we're still separating out this market, it's a flattish while we have a strong negative in North America. Very strong in Asia, Europe getting flattish, North America still negative.
Here we see maybe some overperformance in Asia, and we see improvements if we comment a little bit going forward. We see continued improvements in Western Europe, and we see also America getting better here as we're moving into this quarter. This is the overall geographical development. Turning to page five, back to the agenda and touching on the business areas.
Quickly moving to page six, talking about Industrial Solutions, very strong operational performance in the quarter by Industrial Solutions, still negative organically. Main push down aerospace, even though a small part of Industrial Solutions, it's impacting. Basically half of the negative organic sales is actually coming from the drop that we see in the aerospace, where we still are adjusting.
We have been adjusting very well here to this drop, which you see in the margins. If you, let's say, highlight some areas developing better in the quarter, construction getting better, we also see, of course, like everybody else, a very strong bounce back in light vehicles, automotive in the quarter, even though look in the small parts of the BA, still, of course, impacting in a positive way. EBIT and EBIT margin increased to an all-time high for this business area.
Very strong cost control and also, we should say, a very positive sales mix in the quarter. Already now commenting on that this EBIT margin of 15%, you should not see as a guidance for the next running quarter. We believe that this is an extraordinary quarter, and we're going to get back closer to our target margin for Industrial Solutions as we move forward, when the target margin is then, let's say, 12%.
That is really what we see going forward here. Once again, strong sales mix here pushed especially by some good project orders in the quarter related both to railway, to some oil and gas projects, and also to what we call marine construction, which means, let's say, berthing and mooring products.
All of them, let's say, delivering extraordinary good performance in the quarter, which then pushed up the margin to this 15%, which of course we are very happy to deliver. Turning to page seven, talking about Sealing Solutions, heading improving sequentially. Aerospace still tough.
That is, as we said before, aerospace, we do not expect, let's say, actually an immediate improvement. We all know, Wall Street already commented on that, we are now feeling comfortable that we get to adjusting our cost base as we move forward, so at least it will not be seen in the margin, even though it will continue to impact organic sales for Sealing Solutions in next coming quarter. Yellow goods industry getting better, especially in Europe and Asia. That is also improving our mix going forward.
We still have a fairly strong negative here in North America, where we also see some lights in the tunnel, even though we do expect that it's going to take some time to get back to where we were before, let's say, the COVID impact in North America, but once again, we expect it to be better quarter-on-quarter.
Light vehicle here, of course, even though it's not a very major part of this one, but also as already commented on Industrial Solutions, it's of course also strong positive push in the quarter. Margin, EBIT, we are dropping. We are still impacted, as I already commented on the aerospace.
As we move forward, we believe we're going to get back on the margin side closer to where we were before, even though, once again, that we do expect continued negative impact in the organic sales in the next few quarters from this aerospace in Sealing.
Overall, also in this area, we are satisfied with the performance, and we feel that we have everything very well under control going forward. Moving to the Wheel Systems on page eight. Very good Agri in the quarter, as I guess several of you have noticed from these kind of different indicators following Agri.
We should also say we still have, let's say, a 2-digit negative organic growth coming from the material handling year-over-year, and that is where we still, of course, see signals here as well as getting better, but we should be open to tell that in the quarter, we still had a very strong negative coming from material handling comparing year-over-year. Organic sales, although overall positive at 8%, which is kind of stopped by exchange rates.
Overall, we're ending up more or less flattish on net sales. Overall, of course, these extra volumes, also in combination with some continued cost discipline and price discipline in the quarter. Also we should note here, we continue to see benefits from the structural improvements, structural investment that we've been doing for a few years in this area.
We now saw benefits from the moving production, especially into our Serbian factory, and also partly on the reallocation that is ongoing among our Czech Republic factories, is also assisting us to get a better efficiency and a better profit. We're happy to deliver a two-digit EBIT margin on this one.
We also note that still, if this is better, but all of you know as well from a seasonal point of view, Q4 is always the lowest quarter for Wheel System, and that's of course also impacting the overall margin in the quarter. We also, let's say, just to be fair, also to say a year ago, 4.4% is not really that we had a margin, EBIT margin last year is not really the normal running rate last year.
We did major inventory adjustment and did some underproduction in the quarter, which did push down the margin in that quarter alone. Also going forward, positive Agri sentiment, while we're still waiting a little bit for the material handling getting back and fully on track. Turning to page nine, Businesses Under Development.
Strong negative organic sales coming, which we already also guided for before, that we saw Offshore Oil and Gas pushing down. Actually, the order book in Oil and Gas is quite good. Year-on-year is actually slightly up compared to a year ago, but we see that several of the projects being delayed. Also here, we still have an impact from the COVID, where we have difficulties doing site installations, which is then pushing some of the sales forward, and that was impacting in the quarter.
We also see a slight lower deliveries in other parts with Printing, Blankets, and Technical Rubber here, although the Offshore is the major kind of negative in the quarter in looking at sales.
Although with these very strong negative organic sales, we still managed to improve the margin and more than double the margin actually, and also increased the profit substantially, coming from a general very good cost control and cost adjustments in the quarter, and also some structural improvements in the Czech operations, where we had also telling about before that we have been moving around some assets in Czech operations and also adjusting for overall lower sales.
We also want to comment in this quarterly report that we are well on the way of achieving our overall guidance to get this sorted and decided how to manage it forward. All of the businesses within Business Under Development will be managed in 2021, and we are in several, what we call, advanced discussions with external stakeholders for some of the businesses in this area.
Hopefully, some of that can be concluded fairly soon, and all of it being managed well within 2021. That is the comments on the business areas. Turning over to the agenda, financials, page 10, and then quickly handing over to page 11, and Ulf to guide us through the financials.
Thank you, Peter. Let me take you through the consolidated group numbers. On my first slide, page 11, sales development, you can see that the organic development in the quarter was a -3%, which sequentially was an improvement versus the Q3 organic development of -7%. Our core business reported organic development of -1% versus Q3 organic development of -8%.
All business areas reported a sequential improvement in quarter four, and I want to highlight Business Area Trelleborg Wheel Systems organic growth in the quarter of +8%, despite the fact that material handling and construction tires are still down year-over-year.
Businesses Under Development reported organic development of -16%, impacted by fewer project deliveries within Offshore. Next slide, page 12, describes the historical performance of our organic growth.
On slide 13, you will find a report of sales development per quarter as well as rolling 12 months. On slide 14 presents our EBIT development. Our EBIT reached SEK 1,106 million in the quarter and with an EBIT margin of 13.6%.
The EBIT margin improvement shows the strength of our flexible cost base. Our core business reports an EBIT margin of 14.4%, and I want to highlight Business Area Industrial Solutions' EBIT margin of 15% in the quarter. Cost adjustments and a positive sales mix is behind this strong margin.
Businesses Under Development continued to improve and reports a better EBIT and EBIT margin versus the same period a year ago, despite having a negative 16% organic growth. Quite a tough currency headwind in the quarter. Translation impacts EBIT with a negative SEK 96 million. Slide 15 EBIT margin on a rolling 12 months basis.
A stable EBIT margin looking over the period, despite having exposure to many tough market conditions throughout this time frame. Again, this slide shows how agile our cost base is. On a rolling 12 months basis, we are currently at 13% EBIT margin for the group, and with core business at 13.8%.
The next slide, 16, present the profit and loss statement for the total group. Items affecting comparability consist of the restructuring cost, and it came in below our annual guideline of SEK 700 million. Some SEK 300 million of last year's non-utilized restructuring costs will then roll over to 2021 to be placed on the top of the normal SEK 200 million for 2021. About SEK 500 million restructuring costs in 2021. However, don't forget that we also will have a real estate capital gain of approximately SEK 145 million to be booked in quarter one.
Financial net is impacted positively by a lower net debt, but with a slightly higher interest compared with the same period a year ago. The tax rate was 24% in quarter. Our guidance of an underlying tax rate of 25% still stands. Slide 17, present earning per share, adjusted for comparability items, which was up 16% to SEK 2.90.
Slide 18 describes the development of our operating cash flow, the best cash flow in a single quarter. CapEx spending is well managed by the business areas and came in accordance with our full-year guidance of SEK 1.2 billion.
The strong focus on working capital continues to develop positively, even though the release in the quarter is lower than previous year due to a higher activity in the quarter. Slide 19 presents the rolling 12 months operating cash flow and the cash conversion. The business areas have handled this cash flow very well.
Slide 20 shows our leverage and gearing developments, strong operational cash flow, no dividend payout, and no acquisitions have strengthened the group's balance sheet and readiness. Net debt was positively impacted by FX movements of SEK 732 million year to date.
Slide 21 describes the return on equity, where the long-term target is 12%, including items affecting comparability. Finally, on page 22, I want to finish off this part of the presentation by repeating our financial guidelines for the full year 2021.
As I said, CapEx will be then SEK 1.4 billion. The restructuring cost will then be SEK 500 million, which is then, as I said earlier, SEK 300 million spillover from 2020. We would have a real estate capital gain of approximately SEK 140 million-SEK 150 million in quarter one 2021. The underlying tax rate, that will be 25%. It's estimated 25%. We have amortization of intangible assets around SEK 400 million. Peter, back to you.
Thanks, Ulf. Turning to the agenda, page 23 for a summary and some comments on the running outlook. Quickly turning to page 24. Strong end to the year toward a better 2021. I think we are happy with the management of the business within Q4, and we also believe or feel comfortable that we created a very good foundation going into 2021 with both a lower cost base and also some structural improvements.
With the slight uptick on the demand, we will see benefits from this better base. Individually, let's say we're looking back again to the quarter four sales down by 10%, but 7% currency and 3% from organic EBIT and margin at the highest level ever for Trelleborg in a quarter four. Items affecting comparability, slightly lower than the guidance, ending up at SEK 166, already commented by Ulf on that.
What we see looking forward, cash flow, best ever quarter for Trelleborg in terms of cash flow, which is then of course strengthening the balance sheet and creating, let's say, a good foundation also for potential structural improvements going forward.
Cash conversion then consequentially very high at 125, and thereby with this strengthened balance sheet and no dividend in 2020, we propose an increase of the dividend up to SEK 5, which is EUR 25 up in relation to the dividend paid in 2019.
We also comment here that after the quarter, we also announced new climate targets, which we're going to get back and comment more on that during this year. Turning then to page 25 on our agenda, we of course still impacted by the market conditions on COVID. We'll be although getting more manageable, we'll be still impacted.
For instance, sitting here today, we still have two factories in China, which actually closed down by the authorities, which is then still, of course, impacting us, and we have to be very open for this, continue to focus on our employees and making sure that we keep a very safe environment for everybody while still doing our best to comply with our customers' requests and make sure that we support them in the best possible way.
Still very high on the agenda. Commenting also this review of Businesses Under Development, we feel comfortable that we're going to manage this within 2021 as our guidance was when this was gathered in this unit.
We have ongoing structural discussions, and we feel that the overall environment for this kind of discussions is good, which is then a little bit limiting us on this, what you call continued portfolio management.
We feel that the valuations for M&A at the moment is actually quite high, and we need to be careful. We're going to continue to work on M&A, but that's going to be focused on deals which is creating substantial synergies as we feel that the overall valuations is very high, which is then of course benefiting us on the other side as we're looking for these structural ideas for business and development.
This is something we're watching carefully. Continue to have a very focus on operational efficiency measures, and footprint optimization. We feel comfortable that we have a good methods for this and well under control, which I think also shown in Q4 or throughout 2020. Good under control, also commented by Ulf before.
Of course, at the other side, we continue to invest in innovation, customer integration, and using new technologies in order to create foundations for more recurring income from several of our operations. That is still high on the agenda, and we're still working on integration of some acquisitions.
Even though we have not done an acquisition this year, we still see some benefits kicking in from earlier acquisitions. This is something our priority is for 2021. Turning for 26 and commenting a little more specific on the outlook for Q1, we feel that we have a sequentially a better demand in Q1 compared to Q4.
We have a strong growth of the order book in Q4, which is then creating comfort going into Q1, although we need to comment also that we still have a very negative year-on-year comparisons for aerospace, and we expect that also for oil and gas. We have a few segments which are going to be substantially down overall in Q1 compared to a year ago, which means that we shouldn't read this into that we foresee.
We are going to be expecting a few percentage points, better organic growth, but not really any major changes going into this quarter compared to the previous quarter. This is the way you should read the outlook. Then turning to page 27, the final agenda point Q&A, and then turning to page 28, and then opening up for questions from all of you listening in. Please go ahead.
Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Our first question comes from the line of Claes Bolin from Citi. Please go ahead.
Yes. Hi, Peter and Ulf. It's Claes at Citi. The first one is on Wheel Systems and Agri recovery, and it's now very broad-based, which is good to see. I wanted to ask you on the aftermarket, Peter, and Europe specifically. Through our contacts, we're hearing of an imminent replacement cycle in the higher horsepower segments. Are you seeing Europe accelerating now on the aftermarket side or has that yet to come through in a big way? I guess such recovery would be good for mix if that happens. I'll start there.
Yeah, it's correct. It is a recovery in the aftermarket but also in the OE, and that is always a balance. The market is probably asking for more tires than is available at the moment, and it will always be a balance in order to keep this. Long term, we feel that we get more benefits supplying the OEMs to get our targets, let's say, fitted on the real equipment.
At the same time, we want to get, let's say, the maximum margins by selling into the aftermarket. It's a balance. There is a growing demand in both channels, and that is something that we're working on more or less daily in order to get that balanced between short term, long term. Yeah, there is a firm uptick in all channels.
Very good. My second one is on the margin in Wheel Systems. How much of the savings at group level would you say will fall into Wheels this year? I understand that most of the structural savings will be targeting areas such as aerospace, I think there are structural savings synergies. You have the capacity expansion in Wheels as well, if we could get some sort of number there. I guess on price cost, I guess you should be able to keep this relatively stable when growth is this solid, right?
I don't know, because the immediate savings that we've been initiating throughout the year has been mainly kicking into Industrial Solutions and Sealing Solutions. While in Wheel Systems, it's more long-term structural improvement. As you know, we've been shifting volumes into Serbia. We are now in the middle of a major reshuffling of capacity within the Czech Republic, actually.
We announced the closure of one of the factories there in Zlín and moving the majority of that volume into Otrokovice. We're in the middle of that. I should say we still have some kind of structural improvements, and this project in Czech Republic will run up to quarter one, I think, 2022.
That's another year running before we are finished with that. That is another couple of millions of EUR, which is kicking in from that one. I don't say that for Wheel Systems, we feel comfortable that we have more structural savings kicking in. On top of that, as you already said, good demand from the Agri segment.
Where we're a little bit surprised, to be negatively surprised, is of course, material handling, where we did expect that to get back closer. We still see good kind of signals from the OEMs on demand on that one. Now as the overall industrial demand is growing, we usually also see a growing demand for the aftermarket for forklifts and material handling. That is not yet in the figures for Q4, but we do see an improvement in that area also going forward.
Very good. My final one, quick one, is on portfolio optimization and Businesses Under Development. You say discussions have intensified. You said several discussions, Peter. Are we talking about the entire portfolio being looked at or is it just offshore oil and gas? Just to understand the scope better.
We're working on all aspects, but we are not looking at a clean cut and sell everything to one party. It's going to be, let's say, in bits and pieces, and some of it is also being restructured. Just to not misinterpret that, smaller parts of it is also being adjusted to maybe, let's say, be managed more long term and then moving back to core business.
That is when it's showing good prospects and good profitability. We also have some of that ongoing. What we're commenting here, the majority of the business is probably to be sold. The vast majority of the business is to be sold, and that is the way we will manage it. There is not one process, it's several processes.
Thank you.
The next question comes from the line of Robert Davies from Morgan Stanley. Please go ahead.
Yes. Thank you. Morning. Thank you for taking my questions. The first was just maybe if you could give us a little more color on just what you're seeing from a kind of monthly development perspective within North America. I know you've called out that region as being a sort of particular area of weakness through the fourth quarter. Just be interested in sort of the monthly development as my first question. Thank you.
No, as I already commented, we have seen a improvement throughout Q4, let's say meaningful improvement that I said at the ending of the quarter was much better than the beginning of the quarter. I don't really want to say that there is kind of a meaningful improvement. Of course, we say minus 15% in this, we do not at all expect that to be on that level in Q1.
Thank you. Just I guess on the aerospace side, just you mentioned sort of down 50% or so, coming to the fourth quarter. Are you hearing anything on that side that's getting better or is that just sort of down at a low level and sort of trending sideways now?
In a way, trending sideways, but while we still do have some slight improvement, but we're talking about individual percentage points here on some inventory reductions ending and doing that. Overall, we do expect still, let's say, on this 50% level.
That is what we are adjusting for and what we are kind of doing. While said that, also for Trelleborg perspective, we do have some new platforms kicking in, which could improve that a little bit, but overall, we do not expect any kind of changes in overall demand.
Understood. Thank you. My final question, you sort of alluded to the material handling that within Wheel Systems having not come back as well as you'd sort of hoped. Through 2021, what are you expecting for that business in terms of development through the year?
We do expect a substantial improvement, I don't want to say a percentage on that one. As I said, we have been running also in Q4, but by 10% plus negative organic growth. We, of course, if we can get back to four or something, then that's a substantial improvement. Honestly, the indications, if you look at the market, that actually this should get even better. We're of course planning for that, but we have to adjust to the reality.
Yeah
there's good indications as probably you know as well, following Caterpillar and Hyster and whatever, and they are kind of talking positive, but we don't really see it in the figures yet. We do expect kind of a substantial improvement compared to what we saw in Q4.
Understood. Thank you. That was all my questions. Thanks very much.
Just as a final reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. Our next question comes from the line of Agnieszka Vilela from Nordea. Please go ahead.
Thank you. I would like to start with Industrial Solutions. If you could elaborate on the sales mix in the quarter and the reasons for the kind of good margin performance. Also, if you could remind us what's behind the kind of margin target that you have for the division. I appreciate the fact that you have it at 12%, my understanding is that it was based on the kind of old structure without the coated business in it, which had better profitability. If you could just explain what you're thinking behind it.
Okay. For Industrial Solutions, as I said before, we had an extraordinary good quarter in the marine business, where we sell into ports and harbors and let's say ship mooring. That was kind of very good quarter where we had a few individual projects.
We also had a few good projects for railway also impacting and overall also in our kind of house business where we do have some, not call it oil and gas, but we have some LNG transfer and some kind of liquid natural gas transfer, which also delivered goods. That was overall, I should say luck, but it was everything was kind of aligned and it get good. On top of that, Industrial Solutions has been very well pushing down the cost.
When the sales came in slightly better than the kind of expectations, we had a very strong drop through on all some extra sales. That is something which was a little bit too good. Talking about the 12%, it might be that we should revise that in the future, but we want to deliver a solid 12% plus before we kind of start to discuss about some new target setting or some adjustment of that. Of course, seeing 15 in Q4, then of course that is something which is also internally creating some discussions on what is really the long-term potential of this business.
Thank you. Just on your outlook, you expect slightly better demand sequentially in Q1, what's your thinking there? Also, I was a bit surprised by your comment that you expect only kind of few percentage points improvement on the organic growth, given the fact that you get much easier comparisons in Q1. Your growth organically in Q1 last year was -8%, versus growth of -1% in Q4 2019. Comparisons are getting much easier. Just help us with how you think about that.
No, we still, for Q1, we do expect aerospace to be substantially down year-on-year. That is kind of one of the major dips where we kind of, I don't know, half the sales or something like that compared to a year ago. We do also expect oil and gas, which was actually fairly strong a year ago, to also go negative, and then basically all the other segments to improve.
If we end up at a few percentage points better, we think overall that indicates that the industrial businesses will do substantially better, less automotive will be substantially better, while we see tens of percents or maybe half sales for oil and gas and aerospace. Overall, that mix is pushing down the sales. We do expect an improvement on the margin.
We do expect improvement on the profitability as we get to a better mix. We also are getting to adjusting the cost base, especially for aerospace. That is the way we look at it at the moment, Agnieszka, and that is the way we see it once again being pushed down dramatically by aerospace and oil and gas, while basically all other areas is improving.
Great. Thank you. Just the last one from me. On the aerospace business, I recall that you said that for the full 2021, you would expect that business to be probably slightly up 5%, 10%. Is it still your thinking? Obviously, it's very early days and a very uncertain situation, but is it something that you expect still?
Yeah. That is still. We see it, let's say, as going to be strong negative in Q1. We expect it actually to be small positive year-on-year improvements for Q2, Q3, and Q4. Overall, we do expect if that falls out, it's still going to be, let's say, a small growth overall for the aerospace activity.
Thank you.
We have one more question from the line of Karl Bokvist from ABG. Please go ahead.
Thank you and good morning. My first one may be difficult to answer, but let's try it anyway. What is your thinking when it comes to the second half of the year in terms of somewhat normalizing costs and maybe somewhat higher discretionary spending, if we put it in relation to what you're doing when it comes to structural savings efforts?
No, we have structural improvements kicking in. We do expect kind of, let's say, higher discretionary spending. What we have not commented, of course, this improvement in overall economy will, of course, also push up the raw materials. There will be, let's say, a cost inflation hitting us definitely.
We also expect a strong volume improvement on that. If the volume improvement is not coming, then of course the costs will not escalate and the raw materials will not go up. Overall, we feel that overall this equation is well under control, and we feel comfortable that we will be able to manage these kind of expected cost increases, year-on-year cost increases, yeah, for the full 2021.
Understood. Turning to Industrial Solutions, is it possible to get a form of a hint as to how large share Marine was roughly in the quarter, or if this has improved compared to a year ago?
I don't know if I have these figures at the moment. You probably have to get back on that one. I don't really have it in front of me. I'm looking at Christofer sitting next also to me. I don't know if Christofer wants to comment on that.
The margin in Marine in Q4 was well above double digit, and that was much due to the project business Peter referred to before. Unfortunately, we will have not the same kind of project business as in Q1, which is why we expect the margin to come down from the 15% to a more normal level.
12-ish
of 12-ish in Q1. That is the biggest explanation for why we cannot keep 15%, which is, by the way, the highest we have ever seen in a quarter for Industrial Solutions.
All right. Understood. Just one question on wheels. Could you give us, in your business, did you see the strongest growth in North American ag or European ag?
European ag.
All right. Thank you.
One final question from Hampus Engellau from Handelsbanken. Please go ahead.
Thank you very much. Two questions from me. I'm sorry if I'm coming back again on aerospace and Sealing Solutions business in particular, would it be possible for you to maybe discuss a little bit on the measures you're taking in the aerospace business that you're seeing?
Also, given how we see aviation going forward, what kind of structure, lower activity you're planning for in more a normalized level, something of course on maybe less business traveling and all of that?
Last question, again, coming back also this on the Businesses Under Development. As you highlighted, Peter, that minor businesses are going through restructuring might be kept within the group. Is that solely on the back of a business development and adding to group going forward, or is it also price issue here? What I'm trying to search for is it price that is the main reason here, or how should we think about parts that might remain in the group? Just some question. Thanks.
To talk about aerospace, we do not expect, let's say, in the foreseeable future, the aerospace to get back to where it was before. It's still kind of an interesting business. It's a high spec business. You have a long, let's say, aftermarket cycle. We think if you look at overall, call it contribution margin or gross margin business, what remains within aerospace is still a very attractive business.
Overall, we are adjusting our cost base to work on the halved business on that. On that half, let's say, following these changes that has been doing, which is mainly related to factory moves, and we have been shifting factories. I think I highlighted that before. It takes time to get these approvals done.
We now have some of these approvals. We now are able to shift manufacturing among our factories, thereby solving a few of these overall cost issues. We expect us to get back to the, let's say, margins that we had before, even though the sales will be half or something compared to before.
From this base, we do expect that there is possibilities to grow, as we still have some consolidation efforts ongoing. We see possibilities to widen our offering within aerospace and to grow from a new base.
We still see this as an attractive business. We still feel that we have very good overall positions. It's simply that it took us a few quarters to adjust the cost base to this new reality of a business being, yeah, basically 50% of what it was before.
That is the way we look at aerospace. It is still an attractive business, still a high spec business. It is still highly engineered product, still a lot of safety focus on it. Even though if the sales going forward is only half of what it was before, it is still a very interesting business. We simply have to adjust our cost base and primarily then relate it to our manufacturing footprint. Second question, sorry, what is that?
On this remaining is still that we have some interesting bits and pieces in the offshore area, especially where it's not really oil and gas related, but more related to other business segments, which is still interesting for us to keep, which fits fairly well together with some other businesses in Trelleborg in the way that they are approaching the same market segments.
The reason for reallocating some businesses is not that we are not able to sell it. It's good performing businesses where we feel that we will be able to develop them in the new eras. Of course, you shouldn't overread this.
What we're discussing about reallocating back is a fairly small part of overall Business Under Development. That is niche products and some lightweight composite materials where we could use that into signature management.
We have some interesting businesses, for instance, for say, offshore windmills and stuff like that, where it's, let's say, using similar technologies as we are doing in the offshore areas. We have been reallocating that among the businesses within this offshore area in order to more focus on that.
We have some other areas which is more related to load bearings, as we call it, on some anti-vibration components, which is targeting, let's say, oil and gas, which is still going to be very good, let's say, add-on to our businesses within industrial anti-vibration, and is simply an extra arm on that. Then we can use that technology also for some kind of other anti-vibration activities.
This is a strategic rationale behind us keeping it, and it's definitely not an area that we are not able to sell it or we're not able to find a good value for it. It's simply that we believe it's a good business to keep because we believe that we could, after this kind of reallocation of responsibilities and sorting out some of these factory splits, we feel this is a good business to keep, which will be adding value to the remaining business of Trelleborg. Once again, we feel very comfortable that this solution that we're going for with Businesses Under Development will be a very good solution.
Thank you.
As there are no further questions, I'll hand it back to the speakers for closing remarks.
Good. Thank you. Thanks again all of you for listening in on this. Delivering Trelleborg, as we said, heading to good ending of the year and a good kind of setting for moving into 2021. We feel comfortable that 2021 will be better than 2020. On top of that, also, we feel now more comfortable than before.
Always been comfortable, but more comfortable before that we also get out of this Businesses Under Development, we get into a more solid structure of Trelleborg, we can more start to build on the future.
Of course, when this is done, we need to get back to all of you and be better outlining on how we want to develop Trelleborg further beyond this kind of activity that has been the focus, both with the COVID year and also with this Businesses Under Development.
We're going to get happy to get back to you and discuss that in the next few quarters. Thanks again, and if you have any further questions, I'm sure that Christofer is happy to support and as always available, of course. Please contact Christofer, and Christofer will then call on me or Ulf if there is any need for further clarification. Meanwhile, take care, stay safe, and hopefully see you soon. Thank you.