SKF Nine-month report 2010
Tom Johnstone, President and CEO:
“Our sales continued to develop very positively during the quarter and were significantly higher compared to the same quarter last year. We have increased our manufacturing level during the quarter to meet the very good demand and to improve our service to the market.
Our actions to reduce cost combined with the positive demand development has resulted in a very strong quarter for the Group with record operating profit and operating margin and a very strong cash flow. We expect our sales to continue to develop positively in the fourth quarter.
SKF is now operating in line with its main financial targets which were set in 2007 and as a result of the strong performance and the strategy for the Group we are now announcing new financial targets.
I am pleased that we have now reached the agreement to acquire Lincoln Industrial, a leading lubrication systems company with a strong financial performance. Lincoln Industrial is very complementary to our lubrication systems business from a technology and geographical viewpoint. The combined businesses will significantly improve our ability to develop and deliver solutions for our customers.”
| Q3 | Q3 | YTD | YTD | |
| 2010 | 2009 | 2010 | 2009 | |
| Net sales, SEKm | 15,465 | 13,324 | 45,620 | 42,340 |
| Operating profit, SEKm | 2,309 | 957 | 6,250 | 2,199 |
| Operating margin, % | 14.9 | 7.2 | 13.7 | 5.2 |
| Operating margin excl. restructuring, % | 14.9 | 8.7 | 13.9 | 7.3 |
| Profit before taxes, SEKm | 1,950 | 689 | 5,501 | 1,532 |
| Net profit, SEKm | 1,425 | 483 | 3,946 | 1,200 |
| Basic earnings per share, SEK | 3.05 | 1.01 | 8.41 | 2.56 |
The increase of 16.1% in net sales for the quarter, in SEK, was attributable to: volume 19.0%, price/mix 0.3% and currency effects -3.2%. For the first nine months, the increase of 7.7%, in SEK, was attributable to: volume 13.4%, price/mix -0.2% and currency effects -5.5%.
SKF divested its holding in Oy Ovako Ab in 2006 and a vendor note due for repayment in 3-6 years was issued by the buyer. Due to a change of ownership in Ovako the company's debt position, including the vendor note, was restructured. As a result of this, SKF has a negative effect of around SEK 150 million, with no cash effect, in its financial net for the third quarter.
Outlook for the fourth quarter of 2010
Development compared to the fourth quarter last year
The demand for SKF products and services is expected to be significantly higher for the Group, the divisions and for the different geographical areas.
Development compared to the third quarter 2010 and adjusted for normal seasonality
The demand is expected to be slightly higher for the Group, the divisions and for the different geographical areas.
Manufacturing level
The manufacturing level will be significantly higher year on year and unchanged compared to the third quarter, adjusted for normal seasonality.
Göteborg, 19 October 2010
Aktiebolaget SKF
(publ.)
Tom Johnstone
President and CEO
AB SKF may be required to disclose the information provided herein according to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 08.00 (CEST) on 19 October 2010.
Further information can be obtained from:
Ingalill Östman, Group Communication
tel: +46-31-3373260, mobile: +46-706-973260, e-mail: ingalill.ostman@skf.com
Marita Björk, Investor Relations
tel: +46-31-3371994, mobile: +46-705-181994, e-mail: marita.bjork@skf.com
Aktiebolaget SKF, SE-415 50 Göteborg, Sweden, Company reg.no. 556007-3495, Tel: +46-31-3371000, fax: +46-31-3372832, www.skf.com