Gothenberg, Sweden-based bearings maker SKF reported its 2017 fourth quarter and full-year financials on Thursday, led by solid gains in sales and profit.
The world's largest manufacturer of industrial bearings had Q4 sales of $2.47 billion, up 4.0 percent year-over-year (YoY), with organic sales up 8.2 percent. Total profit of $220 million increased 19.3 percent, while operating profit of $266 million increased 27.2 percent. Operating margin of 10.4 percent compared with 8.5 percent a year earlier. By geography, organic sales increased 4.7 percent in North America, 9.1 percent in Europe, 7.3 percent in Latin America, 10.0 percent in Asia and 13.3 percent in Middle East & Africa.
It was the fifth straight quarter of organic growth for SKF following six straight quarters of decline from 2015-2016, after which the company underwent organizational and management changes, sold off business units and reduced its factory footprint.
SKF's Industrial segment — 69.2 percent of total business — had 3.2 percent YoY sales growth in Q4, with organic sales up 7.7 percent. Automotive sales grew 5.9 percent overall, and 9.6 percent organically.
"Our focus on raising prices, for both distributors and OEMs, and controlling costs is bearing fruit," SKF president and CEO Alrik Danielson said.
For the full year, SKF's 2017 sales of $9.88 billion increased 7.4 percent, with organic sales up 8.2 percent. Profit of $970 million increased 13.6 percent, while operating profit of $1.09 billion increased 14.1 percent. Operating margin of 11.0 percent compared with 10.4 percent in 2016. By geography, organic sales increased 7.7 percent in North America, 5.8 percent in Europe, 10.6 percent in Latin America, 11.5 percent in Asia and 14.8 percent in Middle East & Africa.
SKF's Industrial segment — 69.2 percent of total business — had 6.7 percent YoY sales growth in 2017, with organic sales up 8.4 percent. Automotive sales grew 8.9 percent overall, and 7.9 percent organically.
SKF said its Industrial end market breakdown at the end of 2017 is:
- Industrial distribution - 41 percent
- Industry general - 17 percent
- Industry, heavy and special - 11 percent
- Aerospace - 8 percent
- Energy - 8 percent
- Off-highway - 6 percent
- Railway - 6 percent
- Other - 3 percent
SKS's Automotive end market break down is:
- Cars and light trucks - 49 percent
- Vehicle aftermarket - 27 percent
- Trucks - 17 percent
- Two-wheelers and Electrical - 6 percent
- Off-highway - 1 percent