SKF Year-end report 2014
Alrik Danielson, President and CEO:
”Demand was in line with our expectations for the quarter with growth, in volume terms, just under 2%. Our industrial business gained some momentum while, as expected, the automotive business slowed somewhat. Geographically, Asia once again had the strongest growth and North and Latin America developed well, while Europe remained relatively unchanged.
Especially pleasing was our cash flow performance during the quarter, which after investments and before financing was very strong, at SEK 2 billion with both accounts receivables and inventories going down.
The focus remained on the marketplace, with a high activity level, a lot of new business gained and several customer awards received. Attention was also given to finalizing the new simplified, efficient and more customer-focused industrial market structure. This was done by merging our two industrial businesses and was launched on 1 January 2015. Combined with a rationalization of corporate staff functions, we estimate that this set-up will result in a reduction of approxi-mately 1 500 employees worldwide, giving a sizeable white collar productivity improvement. With our simplified structure, I am convinced that we will be even better and quicker at creating competitive products and services with customer applications in focus.
Looking forward, we continue to experience volatility in the market place. Sequentially, we expect the demand to be relatively unchanged for the Group. However, the short-term demand effects of the very low mineral and oil prices as well as the recent currency movements, with a stronger dollar, are difficult to predict.
Finally I would like to thank Tom Johnstone, for his help and support during my transitional period.”
Key figures |
Q4 2014 | Q4 2013 | 2014 | 2013 |
| Net sales, SEKm | 18 499 | 16 430 | 70 975 | 63 597 |
| Operating profit/loss, SEKm | 1 608 | -1 547 | 7 801 | 3 693 |
| Operating profit excluding one-time items, SEKm | 2 078 | 1 803 | 8 291 | 7 568 |
| Operating margin, % | 8.7 | -9.4 | 11.0 | 5.8 |
| Operating margin excl. one-time items % | 11.2 | 11.0 | 11.7 | 11.9 |
| Profit before taxes, SEKm | 1 293 | -1 760 | 6 668 | 2 821 |
| Net profit, SEKm | 881 | -2 043 | 4 750 | 1 044 |
| Basic earnings per share, SEK | 1.84 | -4.57 | 10.10 | 2.00 |
The operating profit for Q4 includes one-time items of SEK -470 m (-3 350), of which
SEK -250 m relates to impairments and other one-time costs, and SEK -220 m to restructuring. The full-year results include one-time items of SEK -490 m (-3 875). The figure for 2013 includes a provision for the European Commission payment of SEK 3 000 m.
| Net sales change y-o-y, in SEK, attributable to: | Volume | Price/mix | Structure | Currency effect |
Total |
| Q4 2014, % | 1.8 | 1.0 | 0.9 | 8.9 | 12.6 |
| Full year, % | 3.3 | 0.6 | 3.7 | 4.0 | 11.6 |
Sales in the fourth quarter in local currencies and excluding structure increased by 1% in Europe, 2% in North America, 4% in Latin America and 8% in Asia, they decreased by 5% in Middle East and Africa. Manufacturing in the fourth quarter was relatively unchanged compared to last year.
Sales for the full year in local currencies and excluding structure compared to last year increased by 1% in Europe, 3% in North America, 1% in Latin America, 10% in Asia, and 9% in Middle East and Africa. Manufacturing for the full year was slightly higher compared to last year.
Dividend proposal
The Board has decided to propose an unchanged dividend of SEK 5.50 per share to the Annual General Meeting.
Outlook for the first quarter of 2015
Demand compared to the first quarter 2014
The demand for SKF’s products and services are expected to be slightly higher for the Group, higher for Asia and relatively unchanged for Europe, North America and Latin America. It is expected to be relatively unchanged for Automotive Market and Specialty Business and slightly higher for Industrial Market.
Demand compared to the fourth quarter 2014
The demand for SKF’s products and services are expected to be relatively unchanged for the Group, Europe and Latin America, and slightly higher for Asia and North America. It is expected to be relatively unchanged for Industrial Market and Automotive Market and slightly higher for Specialty Business.
Manufacturing
Manufacturing is expected to be higher year over year and compared to the fourth quarter
Gothenburg, 28 January 2015
Aktiebolaget SKF
(publ)
A teleconference will be held on 28 January at 14.00 (CET), 13.00 (UK), 08.00 (US):
SE: +46 8 5065 3938
UK: +44 203 427 1909
US: +1 646 254 3365
You will find all information regarding SKF Year-end results 2014 on the IR website.
investors.skf.com/quarterlyreporting
AB SKF is required to disclose the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication at around 13.00 on 28 January 2015.
For further information, please contact:
MEDIA HOTLINE: 46 31 337 2400
PRESS: Theo Kjellberg, Director, Press Relations
tel: 46 31 337 6576, mobile: 46 725-776576, e-mail: theo.kjellberg@skf.com
INVESTOR RELATIONS: Marita Björk, Head of Investor Relations
tel: 46 31-337 1994, mobile: 46 705-181994, e-mail: marita.bjork@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 15,000 distributor locations worldwide. Annual sales in 2014 were SEK 70 975 million and the number of employees was 48 593. www.skf.com
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