Impact on SKF’s upcoming fourth quarter result 2013
2013 December 20, 08:15 CET
Gothenburg, Sweden, 20 December 2013: SKF informs about impact on SKF’s upcoming fourth quarter result 2013.
European Commission investigation
As previously advised, the European Commission is investigating possible infringements of European competition law by certain bearing manufacturers regarding the supply of bearings to the automotive manufacturing industry in Europe. In the course of this proceeding, the Commission visited SKF offices in Sweden and Germany in November 2011.
SKF has fully cooperated with the Commission and has undertaken its own investigation. Based on this and SKF’s best estimate of a possible amount of a fine, SKF will take a provision of SEK 3 billion in its fourth quarter result. SKF believes that the Commission may impose a fine on SKF in 2014.
“I deeply regret that this has happened. Even if we believe it has not caused any damage to our business partners, this should not have happened and is not at all in line with the values we have in SKF. We have a clear code of conduct and a well-established compliance program, which we operate throughout the Group, but it did not prevent this from happening. We have since taken further steps to intensify training and knowledge on this throughout the Group” says Tom Johnstone, President and CEO. “We have previously advised that the likely fine will materially affect our result and cash flow and have taken our best estimate of a possible fine into the result.”
Kaydon acquisition impact
Kaydons sales figures for the fourth quarter are estimated to be around SEK 750 million. The operating results will be impacted by around SEK 250 million caused by amortization of inventory revaluation to fair value and other acquisition cost, which will result in an operating loss of around SEK 150 million.
Going forward Kaydon is expected in 2014 to operate around the Groups operating margin target level, including amortization of assets identified in the purchase price allocations.
Information regarding the preliminary purchase price allocation of the Kaydon Corporation, see SKF’s website: investors.skf.com
Other one-time items
SKF expects to take additional one-time cost in the fourth quarter of around SEK 100 million, whereof around half of it refers to the ongoing restructuring programme.
Sales development in the fourth quarter
Sales for the fourth quarter are broadly in line with the outlook given in the nine-month results however the mix of sales has been unfavorable. This in combination with a slightly lower manufacturing than planned is expected to have a somewhat negative impact on the quarterly result compared to the previous quarter.
The SKF Year-end report 2013 will be published on Tuesday, 28 January 2014.
20 December at 09.00 (CET), 08.00 (UK)
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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 08.15 on 20 December 2013.
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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 2012 were SEK 64,575 million and the number of employees was 46,775. www.skf.com
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