SKF First-quarter results 2015 Alrik Danielson, President and CEO. 17 April 2015

Transcription

1 1 SKF First-quarter results 2015 Alrik Danielson, President and CEO 17 April 2015

2 Examples of new business in Q Chongqing General Industry (Group) Co and JiangSu Jin Tong Ling Fluid Machinery Technology Co, China High-speed permanent magnetic blower solutions Volvo Car Corporation, Sweden Wheel hub bearing units with low friction grease Autopartes NAPA, Mexico Agreement to market SKF s product range Citroen C4 Cactus, Peugeot 2008 and Fiat 500X Products and solutions SKF Group Slide 2 17 April 2015

3 Highlights 3 SKF has worked closely with Scuderia Ferrari to produce bearing sets manufactured from specially developed tool steel Re-signed the contract as a Ducati Corse Official Technical partner Achieved the energy management ISO certification on a global scale SKF will invest SEK 190 million to modernize its spherical roller bearing factory in Gothenburg, Sweden SKF Group Slide 3 17 April 2015

4 SKF Generalized Bearing Life Model 4 Surface vs sub-surface failure modes internal geometry heat treatment surface finish contamination resistance wear resistance reduced vibration longer service life lower noise load rating limiting speed steel composition coatings lubrication reduced friction reduced vibration corrosion resistance SKF Group Slide 4 17 April 2015

5 Innovations at Hannover Fair 5 Two new oil-free bearing solutions for centrifugal compressors in chillers A solution to improve the reliability, safety and performance of jack-up gearboxes used in the offshore oil and gas industry and in the renewable energy industry A new shaft alignment tool, specifically designed for usage with smartphones or tablets A new magnetic bearing control cabinet for turbo-machinery, for onshore, offshore and subsea turbo-machinery SKF Enlight, combines a powerful new mobile app with a special Bluetooth-enabled sensor SKF Data Collect, a cloud-based solution to record and manage data SKF Group Slide 5 17 April 2015

6 Construction of a large-size bearing test centre in Schweinfurt, Germany 6 The test center will have two large size test rigs, one for wind turbines and one for other industries. The investment will total SEK 360 million, and is expected to be completed during the first half of SKF Group Slide 6 17 April 2015

7 Christian Johansson, new Senior Vice President and CFO 7 Bachelor of Science in Business Administration, Stockholm University Currently CFO at Gunnebo AB Christian has solid executive experience managing global business services. Before joining Gunnebo: -Vice President Region Americas and EMEA for Volvo Business Services -SVP and CFO for Volvo Trucks -Regional Director, Central Eastern Europe within ABB Service World Wide. Christian will start his new position in SKF no later than October SKF Group Slide 7 17 April 2015

8 SKF Group Q Financial performance (SEKm) Net sales Operating profit Operating margin, % Operating margin excl. one-time items, % Profit before taxes Basic earnings per share, SEK Cash flow after investments before financing * Organic sales change y-o-y: SKF Group 1.4% Europe 1.0% Industrial Market 1.8% North America -2.4% Automotive Market 0.6% Asia 5.6% Specialty Business 0.7% Latin America 0.4% Middle East and Africa 14.2% Manufacturing was higher y-o-y and compared to last year. * Previously published cash flow information is restated SKF Group Slide 8 17 April 2015

9 Organic sales growth in local currency 9 % change y-o-y SKF Group Slide 9 17 April 2015

10 Organic sales growth in local currency 10 % y-o-y % 2 1.4% % Q Structure in 2013: 2.5% Structure in 2014: 3.7% Structure in 2015: 0% SKF Group Slide April 2015

11 Sales development by geography Organic growth in local currency Q vs Q Europe 1.0% North America -2.4% Asia/Pacific 5.6% Latin America 0.4% Middle East & Africa 14.2% SKF Group Slide April 2015

12 Components in net sales Percent y-o-y Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Organic Structure Sales in local currency Currency Net sales SKF Group Slide April 2015

13 Operating profit as reported 13 SEKm SKF Group Slide April 2015

14 Operating profit excluding one-time items 14 SEKm SKF Group Slide April 2015

15 Operating margin 15 One-time items % * Excluding one-time items * 11.7* 12.2* Q SKF Group Slide April 2015

16 Operating margin per business area as reported 16 % Industrial Market Specialty Business* Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q * Q4 2013, impacted by cost related to Kaydon acquisition Automotive Market SKF Group Slide April 2015

17 Operating margin per business area excl. one-time items 17 % Industrial Market Specialty Business Automotive Market -3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q SKF Group Slide April 2015

18 Operating profit bridge, Q SEKm Q One-time Organic sales Acquisitions/ Currency Savings Other* Q items at growth in local divestments impact from 2014 currencies restructuring exchange programme rates * Includes general inflation, manufacturing and purchasing impacts, IT project and running costs, and R&D.. SKF Group Slide April 2015

19 Restructuring programme 19 Main activities: - merging the two industrial businesses - streamlining of supporting country organisations in all main countries - general staff optimization and productivity improvements Reduction of annual cost by SEK 1.2 billion by the end of Total cost for the programme around SEK 1.4 billion, covering people. Major part of the programme expected to be implemented within 2015 After first quarter 2015 around 40% of planned activities are in progress Q Cost, SEKm 535 People affected 575 Cost savings in Q1 - Annual cost savings, SEKm: 460 effective beginning 2016 SKF Group Slide April 2015

20 Net working capital as % of annual sales 20 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Target: 27% SKF Group Slide April 2015

21 Return on capital employed 21 % One-time items * Excluding one-time items * 14.8* 14.5* YTD 2015 ROCE: Operating profit plus interest income, as a percentage of twelve months rolling average of total assets less the average of non-interest bearing liabilities. SKF Group Slide April 2015

22 Cash flow, after investments before financing* 22 SEKm ) 2) 3) 1) Excl. acq. and div.: 1) Q SEK -69 million 2) Q SEK 871 million 3) Q SEK million Excl. EU payment 4) Q SEK million * 2013 and 2014 are restated SKF Group Slide April 2015

23 Net debt 23 SEKm AB SKF, dividend paid (SEKm): 2013 Q Q Cash out from major acquisitions (SEKm): 2013 Q Q EU payment (SEKm): 2014 Q Net debt: Loans and net provisions for post-employment benefits less short-term financial assets excluding derivatives. SKF Group Slide April 2015

24 Debt structure, maturity years 24 EURm Available credit facilities: EUR 500 million 2019 SEK million 2018 EUR 150 million 2017 No financial covenants nor material adverse change clause SKF Group Slide April 2015

25 April 2015: SKF demand outlook Q Demand compared to the second quarter 2014 The demand for SKF s products and services is expected to be relatively unchanged for the Group and for Europe. For Asia it is expected to be higher and for North and Latin America slightly lower. Per business area, for both Industrial Market and Automotive Market it is expected to be relatively unchanged, and for Specialty Business to be slightly higher. Demand compared to the first quarter 2015 The demand for SKF s products and services is expected to be relatively unchanged for the Group, Europe and North America. For Asia it is expected to be higher and for Latin America slightly lower. Per business area, for both Industrial Market and Automotive Market it is expected to be relatively unchanged, and for Specialty Business to be slightly higher. Manufacturing Manufacturing is expected to be relatively unchanged year over year and compared to the first quarter. SKF Group Slide April 2015

26 Guidance for 2015* 26 Q2 2015: Financial net: around SEK -230 million Currency impact on operating profit vs 2014 Q2: SEK +800 million 2015: Tax level: below 30% for 2015 Additions to PPE: around SEK million for 2015 * Guidance is approximate and based on current assumptions and exchange rates. SKF Group Slide April 2015

27 Cautionary statement 27 This presentation contains forward-looking statements that are based on the current expectations of the management of SKF. Although management believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those implied in the forward-looking statements as a result of, among other factors, changes in economic, market and competitive conditions, changes in the regulatory environment and other government actions, fluctuations in exchange rates and other factors mentioned in SKF's latest annual report (available on under the Administration Report; Important factors influencing the financial results", "Financial risks" and "Sensitivity analysis. SKF Group Slide April 2015

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