Gothenburg, Sweden - SKF released their half-year report for 2013 on July 16th.
Tom Johnstone, President and CEO, speaking concerning the results:
“SKF delivered a good performance and a strong cash flow. Demand was somewhat better in the quarter than we expected in April and this combined with the steps we are taking to reduce our costs enabled us to continue our journey to deliver a sequentially improving operating margin. Our cost reduction programme remains in focus and further steps were taken during the quarter.
The profitability in our automotive business is developing in the right way due to strong execution and improving demand especially in our truck business and vehicle service market. We continue to be successful in gaining new business especially with new products which help reduce weight and friction and so improve fuel consumption. We do not see any major improvement in demand in our industrial markets around the world but despite this we have taken a number of important orders particularly within aerospace and our service business.
As you would expect, the strong automotive business and weaker industrial business negatively affected our mix. While there continues to be uncertainty from a macro viewpoint we expect demand in the third quarter to remain on the same level which means it will be slightly higher compared to the same quarter last year. The manufacturing level was increased during the second quarter and we will stay at that level in the third quarter.”
Key figures | Q2 2013 | Q2 2012 | YTD 2013 | YTD 2012 |
| Net sales, SEKm | 16,392 | 17,174 | 31,544 | 34,105 |
| Operating profit, SEKm | 1,837 | 2,049 | 3,317 | 4,185 |
| Operating margin, % | 11.2 | 11.9 | 10.5 | 12.3 |
| Operating margin excluding one-off costs, % | 12.4 | 12.7 | 11.9 | 12.7 |
| Profit before taxes, SEKm | 1,627 | 1,774 | 2,864 | 3,730 |
| Net profit, SEKm | 1,104 | 1,244 | 1,922 | 2,570 |
| Basic earnings per share, SEK | 2.36 | 2.63 | 4.10 | 5.44 |
The operating profit was affected by one-off costs in the second quarter by around SEK 190 million (140), and in the half year by around SEK 440 million (140).
| Net sales change y-o-y, in SEK,attributable to: | Volume | Price/ mix | Structure | Currency effect | Total |
| Q2 2013 | -1.6% | -0.6% | 2.6% | -5.0% | -4.6% |
| Half year 2013 | -5.1% | 0.0% | 2.0% | -4.4% | -7.5% |
Sales in the second quarter in local currencies and excluding structure decreased by 4% in Europe and Asia, it was relatively unchanged in North America and decreased by 3% in Middle East and Africa. In Latin America they increased by 14%.
Manufacturing in the second quarter was relatively unchanged compared to last year.
Sales in the first half year in local currencies and excluding structure decreased by 7% in Europe, by 6% in North America, by 5% in Asia and by 4% in Middle East and Africa. In Latin America they increased by 11%.
Manufacturing in the first half year was slightly lower compared to last year.
Outlook for the third quarter of 2013
Demand compared to the third quarter 2012
The demand for SKF’s products and services is expected to be slightly higher for the Group, Asia and North America as well as for all the business areas. It is expected to be relatively unchanged for Europe and higher for Latin America.
Demand compared to the second quarter 2013
The demand for SKF’s products and services is expected to be relatively unchanged for the Group, Europe, Asia and North America as well as for all the business areas. It is expected to be slightly higher for Latin America.
Manufacturing
Manufacturing is expected to be slightly higher year over year and relatively unchanged compared to the second quarter.
