SKF nine-months report 2001

SKF nine-months report 2001 Robust results in the third quarter The SKF Group reports a profit before taxes for the first nine months of 2001 of MSEK 2 296 (2 241). Excluding the non-recurring items in the first quarter last year of MSEK 100, the figure is MSEK 2 296 (2 141) up 7.2%. Profit for the third quarter was MSEK 685 (732). The volume of sales was flat in Europe in the third quarter compared to the same period last year. In North America the steep downturn continued. The volume of sales was slightly up in the Asian region. The terrorist attack in the US had a minor effect on the Group's figures for the third quarter. The immediate effect in September was lower sales to the automotive segment in the US. Outlook: The risk for a deeper downturn in market demand for the next quarters has now increased. The production rate will be further reduced in the fourth quarter this year. Summary: Ø Operating profit for the first nine months of 2001 amounted to MSEK 2 703 (2 733). The figure for the third quarter was MSEK 816 (891). Ø The operating margin for the first nine months of 2001 amounted to 8.4% (9.3), and for the third quarter to 8.0% (9.4). Excluding non- recurring items, the operating margin was 8.4% (9.0) and 8.0% (9.4) respectively. Ø Cash flow after investments before financing amounted to MSEK 2 838 (1 792). Cash flow for the third quarter was MSEK 1 092 (706). Ø Net sales amounted to MSEK 32 282 (29 389), an increase of 9.8% compared with the figure for the corresponding period in 2000. Net sales for the third quarter amounted to MSEK 10 228 (9 495), an increase of 7.7%. Ø The increase in net sales for the first nine months was attributable to: structure +0.4%, volume -1.5%, price/mix +1.7% and currency effect +9.2%. The corresponding figures for the third quarter were; structure +0.4%, volume -3.2%, price/mix +1.6% and currency effect +8.9%. Ø Net profit amounted to MSEK 1 571 (1 430) and earnings per share to SEK 13.80 (12.56). Net profit for the third quarter was MSEK 489 (506). The Group's financial net for the first nine months of 2001 was MSEK - 407 (-492). Additions to tangible assets totalled MSEK 1 041 (925). At the end of September, the Group's inventories amounted to 22.5% (23.5) of annual sales. Group solvency was 39.4% (35.6). The short-term financial assets are now exceeding short-term and long-term loans by MSEK 522. Return on capital employed for the 12-month period ended September 30 was 15.3% (15.8). Return on equity was 14.5% (15.7). Compared with the corresponding period 2000, exchange rates for the first nine months of 2001, including translations effects and flows from transactions, had a positive effect on SKF's profits before taxes to an estimated amount of MSEK 325 whereof MSEK 100 refer to the third quarter of 2001. The average number of employees was 37 921 (39 519) and the registered number of employees was 38 466 (40 512). During the first nine months of 2001 the number of employees was reduced by 1 935. In the third quarter, 781 employees left the Group, thereof approximately 650 IT staff, related to the transfer of IT services to EDS. Divisions The result by Divisions is based on SKF management reporting. The Industrial Division's external sales for the first nine months amounted to MSEK 7 426 (6 437), an increase of 15.4%. Total sales (sales and deliveries to external and internal customers) were MSEK 11 896 (10 689). The Division's operating result for the first nine months was MSEK 1 208 (1 248) with an operating margin of 10.2% (11.7) on total sales including internal deliveries. The volume of sales in Europe decreased somewhat during the third quarter compared to the same period last year. In North America the already weak volume of sales continued. The sales volume to the windmill industry developed strongly. Sales to the railway industry developed positively both in Europe and China. The Automotive Division's external sales for the first nine months amounted to MSEK 7 304 (6 659), an increase of 9.7%. Total sales were MSEK 8 404 (7 588). The Division's operating result for the first nine months was MSEK 246 (269) with an operating margin of 2.9% (3.5) on total sales including internal deliveries. The volume of sales to the European car industry was slightly higher for the third quarter compared to the same period last year. The sales volume to the truck industry was lower compared to a year ago. In North America the sales volume to the car and light truck segment weakened again and was lower compared to a year ago. The very weak volume of sales to the truck industry continued. The volume of sales to the Vehicle Service Market in Europe was higher than the corresponding period last year. The SKF Group continued to strengthen its leading position as supplier of bearings, seals and solutions to the world automotive industry. The new Ford Fiesta and Volvo's new Sport Utility Vehicle will be equipped with bearings and seals from SKF. The Electrical Division's external sales for the first nine months amounted to MSEK 1 316 (1 179), an increase of 11.6%. Total sales were MSEK 4 689 (4 710). The Division's operating result for the first nine months was MSEK 294 (391) with an operating margin of 6.3% (8.3) on total sales including internal deliveries. The volume of sales in the third quarter was lower than a year ago in Europe while volume of sales was substantially higher in Asia. The Service Division's external sales for the first nine months amounted to MSEK 10 085 (9 376), an increase of 7.6%. Total sales were MSEK 11 259 (10 199). The Division's operating result for the first nine months was MSEK 906 (745) with an operating margin of 8.0% (7.3) on total sales including internal deliveries. The volume of sales in Europe was slightly down in the third quarter compared with the same period last year. In North America the volume of sales was substantially below last year's level. In Asia the volume of sales was slightly up compared to a year ago while it was lower in Latin America and in Africa and the Middle East. Performance based service contracts are increasing step-by-step, penetrating new markets and gaining new customers. The Seals Division's external sales for the first nine months amounted to MSEK 3 075 (3 022), an increase of 1.8%. Total sales were MSEK 3 575 (3 504). The Division's operating result for the first nine months was MSEK 53 (119) with an operating margin of 1.5% (3.4) on total sales including internal deliveries. The Seals Division is highly dependent on the North American car and truck market. The volume of sales was substantially lower than the corresponding period last year. To adapt to the lower demand, production in the Division was more than 20% below last year's levels. The Steel Division's external sales for the first nine months amounted to MSEK 1 334 (1 249), an increase of 6.8%. Total sales were MSEK 2 312 (2 297). The Division's operating result for the first nine months was MSEK -33 (11) with an operating margin of -1.4% (0.5) on total sales including internal deliveries. The volume of sales in the third quarter was substantially lower than during the same period last year. Production levels continued to be reduced also during the third quarter for tubes, rings and bars. The number of employees was reduced by 57. Aerospace and other businesses reported external sales of MSEK 1 699 (1 403), an increase of 21.1%. Total sales were MSEK 3 047 (2 773). The operating result for the first nine months of 2001 was MSEK 197 (205), resulting in an operating margin of 6.5% (7.4) on total sales including internal deliveries. The aerospace business amounts to just above half of the turnover for the unit. The remainder consists mainly of the forging and rings businesses. The sales volumes of bearings and seals to the jet engine and helicopter manufacturers were above the volumes for the corresponding period last year. The main market is North America. The sales volume of airframe components, mainly for the European market, was higher than a year ago. Previous Outlook statement Half year 2001: Over the next quarters the overall market demand for the Group is expected to decrease further in terms of volume. Considerably lower production compared with the third quarter in 2000 is planned for the third quarter this year. Overhead presentation from SKF For your convenience, an overhead presentation of SKF's nine-months result will be published on SKF's internet site at the following address: http://investors.skf.com/?page=presentations. Göteborg, October 18, 2001 Aktiebolaget SKF (publ.) Sune Carlsson President Enclosures: Consolidated financial information Consolidated balance sheets Consolidated statements of cash flow Consolidated financial information - yearly and quarterly comparisons (Group and Divisions) The accounting principles and methods of calculation are those described in Note 1 in the Annual Report 2000. The quarterly report has not been audited by the Company's auditors. SKF's report on the full year of 2001 will be published on Tuesday, January 29, 2002. Further information can be obtained from: Lars G Malmer, Group Communication, tel +46-705-371541, e-mail: lars.g.malmer@skf.com Marita Björk, Investor Relations, tel +46-705-181994, e-mail: marita.bjork@skf.com Aktiebolaget SKF, SE-415 50 Göteborg, Sweden, telephone +46-31-3371000, fax +46-31-3372832, www.skf.com Enclosure 1 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/10/18/20011018BIT00410/bit0002.doc Full Report http://www.waymaker.net/bitonline/2001/10/18/20011018BIT00410/bit0002.pdf Full Report