SKF First quarter report 2017

2017 April 27, 08:00 CEST

Gothenburg, 27 April 2017

Alrik Danielson, President and CEO:

“The first quarter of the year has seen continued growth, an improved operating margin and continued debt reduction.

The increase in demand strengthened gradually during the quarter. Net sales, at 19.6 billion, increased by 11% compared to the first quarter last year, with the strongest development in North America and Asia. Sequentially, sales increased by 4%, with a broad-based improvement across all regions and most of our customer industries.

During the quarter we have managed to ramp-up production in a cost efficient way which together with well managed fixed costs contributed to an adjusted operating profit of 2 357 million (385 million higher than last year) and an adjusted operating margin of 12%.

Our industrial business delivered an adjusted operating margin of 14.2% and our automotive business continued to improve its profitability, delivering an adjusted operating margin of 7.2%.

The first large scale go-live of our new ERP system in January went well. During the quarter extensive support resources have supported the users to learn the new way of working and ramp-up to normal productivity. The Unite program implementation continues in line with earlier communicated plan and budget.

Cash flow generation was 64 million, impacted by increased working capital as a result of our growth in the quarter. We continued to strengthen our balance sheet and our net debt decreased by 892 million in the quarter, taking us below our net debt/equity target of 80%.

At our Capital Markets Day in Gothenburg in the beginning of April we showcased our new, automated spherical roller bearing channel. Its ramp-up has gone according to plan, with in excess of 200 000 bearings already delivered to customers. We also presented a number of new product launches focusing on the continued digitalization of the industry, as well as application-specific bearing solutions.

For the second quarter of 2017, demand for our products and services is expected to be higher compared to the same period last year and slightly higher compared to the first quarter of 2017.”

Key figures, SEKmQ1 2017Q1 2016
Net sales*19 60117 676
Adjusted operating profit**2 3571 972
Adjusted operating margin**12.011.2
Items affecting comparability**-62-97
Operating profit2 2951 875
Operating margin, %11.710.6
Adjusted profit before taxes**2 1871 755
Profit before taxes2 1251 658
Net cash flow after investments before financing64510

* Cash discounts are from January 1, 2017 classified as a reduction of Net sales. Previously published figures have been restated accordingly.
** Please see page 15 of First quarter report 2017 for full definitions 


Net sales change y-o-y, %OrganicStructureCurrencyTotal
Q1 20178.0-2.04.910.9


Organic sales change in local currencies, per region y-o-y, %EuropeNorth AmericaLatin AmericaAsiaMiddle East & Africa
Q1 20175.07.811.412.89.5


Outlook for the second quarter 2017

Demand compared to the second quarter 2016
The demand for SKF’s products and services is expected to be higher for the Group and for Industrial. Demand for Automotive is expected to be significantly higher. Demand is expected to be slightly higher in Europe, significantly higher in North America and in Asia and higher in Latin America.

Demand compared to the first quarter 2017
The demand for SKF’s products and services is expected to be slightly higher for the Group including Industrial and Automotive. Demand is expected to be relatively unchanged in Europe and in Latin America, slightly higher in North America and higher in Asia.

A teleconference will be held on 27 April 2017 at 09:00 (CET):
SE: +46 (0)8 5876 9445
UK: +44 (0)20 3427 1914
US: +1 212 444 0481

You will find all information regarding the SKF First quarter report 2017 on the IR website.

Aktiebolaget SKF
      (publ)

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 27 April 2017 kl. 08.00 CET.

For further information, please contact:
PRESS: Theo Kjellberg, Director, Press Relations
tel: 46 31 337 6576, mobile: 46 725-776576, e-mail: theo.kjellberg@skf.com

INVESTOR RELATIONS: Patrik Stenberg, Head of Investor Relations
Patrik Stenberg, 46 31-337 2104; 46 705-472 104; patrik.stenberg@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 17,000 distributor locations worldwide. Annual sales in 2016 were SEK 72 787 million and the number of employees was 44 868. www.skf.com  

® SKF is a registered trademark of the SKF Group.

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