SKF Half-year report 2018
Gothenburg, 19 July 2018
Alrik Danielson, President and CEO:
“Our record start to 2018 has continued. Sales grew by 9% organically, to SEK 22.6 billion and our operating profit was SEK 2,925 million – SKF’s highest reported quarterly profit to date. Our operating margin, at 12.9%, continues to improve. Cash flow was also strong, at 2.2 billion.
The industrial business had a strong quarter with an operating margin of 14.6% and an organic growth of 10.7%, with strong growth in both Asia and Europe. We also saw stronger growth in North America, albeit from a lower level. By industry, we saw particular strength in heavy industries and industrial drives.
The automotive business delivered a strong operating margin of 8.9%, driven by good demand for both trucks and light vehicles. Organic growth was 5.2%, a clear sign that we continue to outpace vehicle production levels.
We continue to invest in the development of our value propositions, through the opening of a Rotating Equipment Performance Center in Gothenburg. The Center’s team of machine health specialists will act as a Nordic hub for the monitoring of connected customer machines as well as playing an important role in developing new logistic solutions for spare parts and remanufacturing services.
During the last 18 months, we accelerated production to ensure high customer service levels. As foreseen and communicated in April, production has been adjusted during the second quarter, to avoid building inventories. Entering the third quarter of 2018, we expect to see continued growth for both our industrial and automotive businesses.”
| Key figures, SEKm | Q2 2018 | Q2 2017 | Half year 2018 | Half year 2017 |
| Net sales | 22,620 | 20,229 | 43,180 | 39,830 |
| Operating profit | 2,925 | 2,315 | 5,550 | 4,610 |
| Operating margin, % | 12.9 | 11.4 | 12.9 | 11.6 |
| Profit before taxes | 2,783 | 2,057 | 5,208 | 4,182 |
| Net cash flow after investments before financing | 2,182 | 2,304 | 2,441 | 2,368 |
| Basic earnings per share | 4.25 | 2.51 | 8.02 | 5.61 |
| Net sales change y-o-y, %, Q2 | Organic | Structure | Currency | Total |
| SKF Group | 9.0 | -0.6 | 3.4 | 11.8 |
| Industrial | 10.7 | -0.9 | 3.9 | 13.7 |
| Automotive | 5.2 | 0.0 | 2.4 | 7.6 |
| Net sales change y-o-y, %, Half year | Organic | Structure | Currency | Total |
| SKF Group | 8.3 | -0.7 | 0.8 | 8.4 |
| Industrial | 9.6 | -1.0 | 1.2 | 9.8 |
| Automotive | 5.3 | 0.0 | 0.0 | 5.3 |
| Organic sales change in local currencies, per region y-o-y, %, Q2 | Europe | North America | Latin America | Asia | Middle East & Africa |
| SKF Group | 8.7 | 5.3 | -3.5 | 17.2 | 5.6 |
| Industrial | +++ | + | --- | +++ | + |
| Automotive | +/- | ++ | +/- | +++ | --- |
| Organic sales change in local currencies, per region y-o-y, %, Half year | Europe | North America | Latin America | Asia | Middle East & Africa |
| SKF Group | 8.2 | 4.2 | -1.5 | 15.3 | 9.2 |
| Industrial | +++ | +/- | -- | +++ | +++ |
| Automotive | + | ++ | ++ | +++ | --- |
Outlook and guidance
Demand for Q3 2018 compared to Q3 2017
The demand for SKF’s products and services is expected to be higher for the Group, including Industrial and Automotive. Demand is expected to be significantly higher in Asia, higher in Europe and North America, and slightly lower in Latin America.
Guidance Q3 2018
- Financial net: SEK -200 million.
- Currency impact on the operating profit is expected to be around SEK +180 million compared with 2017, based on exchange rates per 30 June 2018.
Guidance 2018
- Tax level excluding effect related to divested businesses: around 28%.
- Additions to property, plant and equipment: around SEK 2,400 million.
A teleconference will be held on 19 July 2018 at 9:00 (CEST):
SE: +46 (0)8 5065 3942
UK: +44 (0)330 336 9411
US: +1 323 794 2093
You will find all information regarding the SKF Half-year results 2018 on the IR website.
Aktiebolaget SKF
(publ)
The information in this press release is information which AB SKF is required to disclose under the EU Market Abuse Regulation (EU) No 596/2014 The information was provided by the above contact persons for publication on 19 July 2018 at 08:00
For further information, please contact:
PRESS: Theo Kjellberg, Director, Press Relations
tel: 46 31 337 6576, mobile: 46 725-776576, e-mail: theo.kjellberg@skf.com
INVESTOR RELATIONS: Patrik Stenberg, Head of Investor Relations
Patrik Stenberg, 46 31-337 2104; 46 705-472 104; patrik.stenberg@skf.com
SKF is a leading global supplier of bearings, seals, mechatronics, lubrication systems, and services which include technical support, maintenance and reliability services, engineering consulting and training. SKF is represented in more than 130 countries and has around 17,000 distributor locations worldwide. Annual sales in 2017 were SEK 77 938 million and the number of employees was 45 678. www.skf.com
® SKF is a registered trademark of the SKF Group.
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