SKF Year-end report 2018

Gothenburg, 29 January 2019

Alrik Danielson, President and CEO:

“2018 was an excellent year for SKF, with record results and a significantly strengthened balance sheet. In recognition of this, the Board has decided to propose an increased dividend of SEK 6.00 per share to the Annual General Meeting.

During the fourth quarter, we delivered an organic sales growth of 5% for the Group, with net sales at SEK 21.2 billion.

Operating profit was SEK 2.9 billion. Operating margin was 13.7%, impacted positively by the divestment of SKF Motion Technologies. Impairments of assets and customer settlements and restructuring had a negative impact. The net of the above had a positive impact on operating profit of SEK 705 million.

Cash flow was very strong at SEK 4.3 billion, supported by strong operational performance, including continued reductions in finished goods inventories and the divestment of SKF Motion Technologies.

The industrial business had a strong organic sales growth of 9%. Operating performance remained strong, with a reported operating margin of 18.3% (12.8% in the previous year).

The automotive business also remained resilient, but due to costs for restructuring and customer settlements it reports an operating margin of 2.1%. Organic sales development was -3.7%, with European sales continuing to be impacted by the WLTP test cycles. In China, demand for trucks and cars softened.

The fourth quarter was a busy one in terms of our efforts to improve competitiveness in our manufacturing and consolidate our footprint. We announced investments and footprint optimizations in France, Germany, China and UK.

Investments in automation and technology step-up continues, with a further investment in Schweinfurt, Germany announced in November, as well as the inauguration of an automated assembly line for LEAP aero-engine bearings in Valenciennes, France.

As presented at our Capital Markets Day in November, we now have around 4 million connected bearings, of which half are connected to our REP Centers around the world enabling us to provide customers with reliable rotation.

Entering the first quarter of 2019, we expect to see relatively unchanged volumes for the Group, slightly higher for Industrial and lower for Automotive.”

Key figures, SEKm Q4 2018 Q4 2017 2018 2017
Net sales 21,192 19,481 85,713 77,938
Operating profit 2,902 2,017 11,049 8,592
Operating margin, % 13.7 10.4 12.9 11.0
Profit before taxes 2,636 1,784 10,188 7,658
Net cash flow after investments before financing 4,259 1,704 8,326 4,753
Basic earnings per share 4.63 4.12 16.0 12.02

Net sales change y-o-y, %, Q4 Organic Structure Currency Total
SKF Group 5.0 -1.0 4.8 8.8
Industrial 8.8 -1.4 5.6 13.0
Automotive -3.7 0.0 3.1 -0.6

Net sales change y-o-y, %, 2018 Organic Structure Currency Total
SKF Group 7.1 -0.6 3.5 10.0
Industrial 9.4 -0.8 3.9 12.5
Automotive 2.1 0.0 2.3 4.4

Organic sales change in local currencies, per region y-o-y, %, Q4 Europe North America Latin America Asia Middle East & Africa
SKF Group 1.5 10.8 -0.5 8.1 -3.4
Industrial + +++ ++ +++ --
Automotive - +/- --- -- ---

Organic sales change in local currencies, per region y-o-y, %, 2018 Europe North America Latin America Asia Middle East & Africa
SKF Group 5.9 6.6 -1.0 12.4 1.4
Industrial +++ ++ +/- +++ +/-
Automotive +/- ++ +/- ++ ---

Outlook and guidance

Demand for Q1 2019 compared to Q1 2018
The demand for SKF’s products and services is expected to be relatively unchanged for the Group, including slightly higher demand for Industrial and lower demand for Automotive. Demand is expected to be higher in North America, slightly higher in Asia, relatively unchanged in Latin America and slightly lower in Europe.

Guidance Q1 2019

  • Financial net: SEK -200 million
  • Currency impact on the operating profit is expected to be around SEK +140 million compared with 2018, based on exchange rates per 31 December 2018.

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 29 January 2019 at 14:00 (CET):
International +44 (0) 2071 928000
United Kingdom, Local +44 (0)8445718892
Sweden, (Local) +46 (0)850692180
United States (Local) +16315107495


Aktiebolaget SKF

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 29 January 2019 at 13:00.

For further information, please contact:
PRESS: Theo Kjellberg, Director, Press Relations

tel: 46 31 337 6576, mobile: 46 725-776576, e-mail:

INVESTOR RELATIONS: Patrik Stenberg, Head of Investor Relations
Patrik Stenberg, 46 31-337 2104; 46 705-472 104;

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 2017 were SEK 77 938 million and the number of employees was 45 678.  

® SKF is a registered trademark of the SKF Group.





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2018 was an excellent year for SKF, with record results and a significantly strengthened balance sheet.
Alrik Danielson