SKF First-quarter report 2019
Gothenburg, 25 April 2019
Alrik Danielson, President and CEO:
“Demand in the first quarter developed in line with our expectations. Net sales reached SEK 21.3 billion and organic sales were relatively unchanged compared to last year. Operating profit, at SEK 2.7 billion, was strong.
Our operating margin was 12.5%, as positive pricing and efforts to reduce our underlying cost base continue to show results. This is especially encouraging given that we had a negative effect from higher raw material prices in the quarter. Cash flow was SEK 684 million (SEK 259 million last year), a clear year-over-year improvement but still a focus for us to continue to improve during 2019.
The industrial business delivered a strong operating margin of 15.4% (15.0% last year) and an organic growth of 3%. Sales grew in all of our three main markets: Europe, Asia and North America.
The automotive business delivered a 5.5% operating margin (7.7% last year) and a negative organic sales development of 5.9%. The business was negatively impacted by significantly reduced sales volumes in North America and lower sales volumes in Europe and Asia. In general, performance across the truck market was stronger than cars across all regions, except for Latin America, where we saw strong sales also to the car segment.
We continue to place significant emphasis on strengthening our balance sheet, improving cash flow and minimising the impact of cost inflation. These efforts are showing on the bottom line and my firm belief is that SKF is in a very good position entering a market with slowing demand.
In the second quarter of 2019, we expect to see slightly lower volumes for the Group, relatively unchanged for Industrial and lower for Automotive.”
Key figures, SEKm |
Q1 2019 | Q1 2018 |
| Net sales | 21,278 | 20,560 |
| Operating profit | 2,658 | 2,625 |
| Operating margin, % | 12.5 | 12.8 |
| Profit before taxes | 2,442 | 2,425 |
| Net cash flow after investments before financing | 684 | 259 |
| Basic earnings per share | 3.77 | 3.77 |
| Net sales change y-o-y, %, Q1 |
Organic | Structure | Currency | Total |
| SKF Group | 0.3 | -2.5 | 5.7 | 3.5 |
| Industrial | 3.0 | -3.6 | 6.0 | 5.4 |
| Automotive | -5.9 | 0.0 | 5.0 | -0.9 |
| Organic sales change in local currencies, per region y-o-y, %, Q1 | Europe | North America | Latin America | Asia | Middle East & Africa |
| SKF Group | 0.9 | 0.1 | 2.1 | 0.0 | -8.3 |
| Industrial | ++ | ++ | + | + | -- |
| Automotive | -- | --- | ++ | -- | --- |
Outlook and guidance
Demand for Q2 2019 compared to Q2 2018
The demand for SKF’s products and services is expected to be slightly lower for the Group, including relatively unchanged demand for Industrial and lower demand for Automotive. Demand is expected to be slightly lower in Europe, Asia and in North America and higher in Latin America.
Guidance Q2 2019
- Financial net: SEK -240 million
- Currency impact on the operating profit is expected to be around SEK +110 million compared with Q2 2018, based on exchange rates per 31 March 2019.
Guidance 2019
- Tax level excluding effect related to divested businesses: around 28%
- Additions to property, plant and equipment: around SEK 2,800 million
A teleconference will be held on 25 April 2019 at 9:00 (CET):
Conference ID: SKF or 9198512
Standard International: +44 (0) 2071 928000
Sweden: +46 (0)850692180
United States: +16315107495
Website: http://investors.skf.com/en/result-centre
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 25 April 2019 at 8:00.
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 2018 were SEK 85 713 million and the number of employees was 44 428. www.skf.com
® SKF is a registered trademark of the SKF Group.
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