SKF nine-month report 2015

2015 October 16, 12:00 CEST

Gothenburg, 16 October 2015:

Alrik Danielson, President and CEO:

“The expected weakening of market demand that we flagged for in July materialised and gathered pace during the quarter, especially in Asia and North America. As a result, sales in local currency declined by 5%. Production rates were reduced during the quarter and inventories were kept under control. Our financial performance was impacted by the lower sales volumes.

Agreements have been reached with almost all of the 1 500 white-collar staff that is part of our cost reduction programme. Given current market conditions, these actions alone are, however, not sufficient and we will continue our cost reduction activities across the Group.

In Europe, we saw growth in the railway sector but significantly weaker demand in both the energy and metals sectors. In North America and Asia, overall industrial demand was significantly lower, with the exception of the energy sector in Asia, which saw significant growth.

Our automotive business grew in line with overall market development in Europe but not in North America.

The Automotive Market profit improvement programme is progressing, with a more detailed update to be presented at our upcoming Capital Markets Day.

Divestments of non-core businesses continued, with the sale of Canfield Technologies. The proceeds are being used to strengthen the balance sheet and to be reinvested in our core business.

Entering the fourth quarter, we expect the macro-economic uncertainty to continue and as a consequence we expect demand in the fourth quarter to be slightly lower sequentially and lower year-over-year. We are adjusting our production levels accordingly.”

Key figures, SEKmQ3 2015Q3 2014YTD 2015YTD 2014
Net sales18 36717 78757 78252 476
Operating profit excl. one-time items1 9762 0926 9296 214
Operating margin excl. one-time items, %10.811.812.011.8
One-time items in operating profit-151-19-1 000-21
Operating profit1 8252 0735 9296 193
Operating margin, %9.911.710.311.8
Profit before taxes, excl. operating and financial one-time items1 6291 8466 2315 496
Profit before taxes1 3481 8275 1815 375
Net cash flow after investments before financing1 8081 4764 45011
Key figures30 Sep
30 Jun
30 Sep
Net working capital, % of annual sales29.730.932.4
ROCE for the 12-month period, %11.912.68.5
Net debt/equity, %114.2113.4132.5
Net debt/EBITDA2.92.84.5
Net sales change y-o-y, %:OrganicStructureCurrencyTotal
Q3 2015-4.7-
Organic sales change in local currencies,
per region y-o-y, %:
AsiaMiddle East
& Africa
Q3 2015-0.7-10.80.9-7.812.2

Outlook for the fourth quarter 2015

Demand compared to the fourth quarter 2014
The demand for SKF’s products and services is expected to be lower for the Group where demand for the Auto motive Market is expected to be relatively unchanged, while demand for the Specialty Business is expected to be slightly lower and demand for the Industrial Market is expected to be lower. Split by markets, demand is expected to be relatively unchanged in Europe and Latin America and significantly lower in North America and Asia.

Demand compared to the third quarter 2015
The demand for SKF’s products and services is expected to be slightly lower for the Group where demand for the Industrial Market and the Automotive Market is expected to be slightly lower while demand for the Specialty Business is expected to be relatively unchanged. Split by markets, demand is expected to be relatively unchanged in Europe and slightly lower in North America, Latin America and Asia.

A teleconference will be held on 16 October 2015at 14:00 (CEST):

SE: +46 8 5033 6538 
UK: +44 20 3427 1912 
US: +1 212 444 0896

You will find all information regarding SKF Nine-month report 2015 on the IR website.

Aktiebolaget SKF

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 12:00 on 16 October 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:

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 15,000 distributor locations worldwide. Annual sales in 2014 were SEK 70 975 million and the number of employees was 48 593.  

® SKF is a registered trademark of the SKF Group.

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