SKF nine-month report 2017
Gothenburg, 31 October 2017
Alrik Danielson, President and CEO:
“The third quarter was characterized by continued organic growth and operating margin improvement.
Net sales, at SEK 18.6 billion, increased organically by 8%. The industrial business grew by 9.5%, with strong growth in all regions. The automotive business grew by 4.9%.
Net debt decreased by SEK 1.3 billion, taking us below our net debt/equity target of 80%.
Our adjusted operating profit was SEK 2.2 billion, up 400 million from last year, giving an adjusted operating margin of 11.9%.
The automotive business has continued to strengthen its adjusted operating margin, which was 7.6%, driven by increased volumes and cost control.
The industrial business delivered a significantly improved adjusted operating margin of 13.8%, driven by higher sales volumes and improved factory utilization rates.
During the quarter, we have seen the positive effects from the industrial distribution price increases announced in the first half of the year. Where contractual terms allow, we have also increased prices to OEMs.
On 24 October, we announced the latest step in consolidating our manufacturing footprint. We are expanding our existing sealing solution site in Salt Lake City, Utah, while we will close our factory in Seneca, Kansas.
The Gothenburg factory has developed a new line of spherical roller bearings for the wind segment. These bearings are among the first to be tested at the Sven Wingquist Test Centre in Schweinfurt, Germany.
We continue to make good progress in our rotating equipment performance offering. One recent example is the IMx-8 remote condition monitoring solution selected by a Nordic shipping company, supporting its efforts to improve reliability across its fleet of 10 oil and chemicals tankers. This compact system is a plug-and-play solution that is compatible with its existing maintenance system. Sensors detect machine parts and transmit signals online to SKF’s certified Remote Diagnostic Center in Hamburg, Germany, where specialists report machinery deviations.
Entering the fourth quarter, we expect to see continued growth in all major regions, as reflected in our market outlook.”
|Key figures, SEKm||Q3 2017||Q3 2016||Jan-Sep 2017||Jan-Sep 2016|
|Adjusted operating profit**||2,211||1,811||7,004||5,803|
|Adjusted operating margin, %**||11.9||10.1||12.0||10.8|
|Items affecting comparability**||-246||380||-429||138|
|Operating margin, %||10.5||12.2||11.2||11.0|
|Adjusted profit before taxes**||1,938||1,669||6,303||5,225|
|Profit before taxes||1,692||2,049||5,874||5,363|
|Net cash flow after investments before financing||681||1,554||3,049||6,289|
* Cash discounts are from January 1, 2017 classified as a reduction of Net sales. Previously published figures have been restated accordingly.
** Please see page 15 of report for definitions
|Net sales change y-o-y, %||Organic||Structure||Currency||Total|
|Organic sales change in local currencies, per region y-o-y, %||Europe||North America||Latin America||Asia||Middle East & Africa|
Outlook for the fourth quarter 2017
Demand compared to the fourth quarter 2016
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 higher in Europe, North America and in Asia and significantly higher in Latin America.
Demand compared to the third quarter 2017
The demand for SKF’s products and services is expected to be relatively unchanged for the Group including Industrial and Automotive. Demand is expected to be slightly higher in Europe and relatively unchanged in North America, Asia and in Latin America.
A teleconference will be held on 31 October 2017 at 14:00 (CET):
SE: +46 (0)8 5065 3936
UK: +44 (0)20 3427 1904
US: +1 212 444 0896
You will find all information regarding the SKF nine-month report 2017 on the IR website.
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 31 October 2017 kl. 13.00 CET.
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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 2016 were SEK 72 589 million and the number of employees was 44 868. www.skf.com
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