SKF Half-year report 2017
Gothenburg, 21 July 2017
Alrik Danielson, President and CEO:
“The second quarter saw strong organic growth and an improved operating margin. Sales development was positive in all regions, as underlying industrial activity and investments increased.
Net sales, at SEK 20.2 billion, increased organically by 7.5% compared to the second quarter last year, with North America and Asia growing by double-digits, 10% and 12% respectively.
Improved sales volumes and factory utilization rates contributed to an adjusted operating profit of SEK 2,436 million, 416 million higher than last year and an adjusted operating margin of 12%.
The automotive business developed in a solid manner, with a good operational improvement, delivering an adjusted operating margin of 8.1%. The industrial business delivered an adjusted operating margin of 13.8%.
Our underlying cash flow generation ability is robust, at SEK 2.3 billion in the quarter. We continued to focus on our core bearing business, with the divestment of Reelcraft completed in June, which impacted cash flow positively by SEK 892 million. In total, we have now raised approximately SEK 5 billion from divestments in the last two years.
A few weeks ago we inaugurated the Sven Wingquist Test Center for large-size bearings in Schweinfurt, Germany. The center is the first in the world that can test large-size bearings – with a diameter of up to six metres – under dynamic loading conditions, simulating actual operating conditions, making customer development processes faster and more reliable. This is just one example of how we are investing in the development of software and hardware that support product and rotating equipment performance, our two value propositions in key industries.
As we move into the second half of the year, we expect to see continued broad-based industrial activity and growth.
For the third quarter of 2017, demand for our products and services is expected to be higher compared to the same period last year.”
| Key figures, SEKm | Q2 2017 | Q2 2016 | H1 2017 | H1 2016 |
| Net sales* | 20,229 | 18,319 | 39,830 | 35,995 |
| Adjusted operating profit** | 2,436 | 2,020 | 4 793 | 3,992 |
| Adjusted operating margin, %** | 12.0 | 11.0 | 12.0 | 11.1 |
| Items affecting comparability** | -121 | -145 | -183 | -242 |
| Operating profit | 2,315 | 1,875 | 4,610 | 3,750 |
| Operating margin, % | 11.4 | 10.2 | 11.6 | 10.4 |
| Adjusted profit before taxes** | 2,178 | 1,801 | 4,365 | 3,556 |
| Profit before taxes | 2,057 | 1,656 | 4,182 | 3,314 |
| Net cash flow after investments before financing | 2,304 | 4,225 | 2,368 | 4,735 |
* Cash discounts are from January 1, 2017 classified as a reduction of Net sales. Previously published figures have been restated accordingly.
** Please see page 17 of report for definitions
| Net sales change y-o-y, % | Organic | Structure | Currency | Total |
| Q2 2017 | 7.5 | -2.0 | 4.9 | 10.4 |
| H1 2017 | 7.7 | -2.0 | 5.0 | 10.7 |
| Organic sales change in local currencies, per region y-o-y, % |
Europe | North America |
Latin America |
Asia | Middle East & Africa |
| Q2 2017 | 3.1 | 10.0 | 9.9 | 11.7 | 13.3 |
| H1 2017 | 4.1 | 8.9 | 10.6 | 12.2 | 11.5 |
Outlook for the third quarter 2017
Demand compared to the third 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 second quarter 2017
The demand for SKF’s products and services is expected to be lower for the Group and Industrial and slightly lower for Automotive. Demand is expected to be significantly lower in Europe and relatively unchanged in North America, Asia and in Latin America.
A teleconference will be held on 21 July 2017 at 09:00 (CET):
SE: +46 (0)8 5033 6539
UK: +44 (0)20 3427 1912
US: +1 646 254 3360
You will find all information regarding the SKF Half year report 2017 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 21 July 2017 kl. 08.00 CET.
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 2016 were SEK 72 589 million and the number of employees was 44 868. www.skf.com
® SKF is a registered trademark of the SKF Group.
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