Sweden-based bearings maker SKF — which appointed a new CEO in January — reported its 2020 fourth quarter and full year financial results on Tuesday, showing continued considerable improvement in organic sales that are now essentially back to breakeven after a downtrodden 2020.
The company posted total Q4 sales of $2.33 billion, down 8.2 percent year-over-year overall, with organic sales down just 0.1 percent. That follows a 5.1 percent organic decline in Q3 and a 25 percent decline in Q2. Q4 organic sales were up 12.3 percent in Latin America, up 7.7 percent in Asia, up 3.8 percent in Middle East & Africa, down 4.3 percent in North America and down 6.5 percent in Europe.
By business segment:
- Q4 total sales in SKF's Industrial unit fell 11.3 percent year-over-year, with organic sales down 4.4 percent and an operating margin of 12.3 percent. For the full year, Industrial sales were down 11.6 percent from 2019, with organic sales down 8.8 percent and an operating margin of 12.4 percent.
- Q4 total sales in SKF's Automotive unit were up 1.8 percent year-over-year, with organic sales up 11.1 percent and an operating margin of 8.9 percent. For the full year, Automotive sales were down 16.5 percent, with organic sales down 12.8 percent and an operating margin of 1.5 percent.
SKF had a Q4 operating profit of $262 million, up from $230 million a year earlier. Q4 total profit of $190 million improved from $130 million of a year earlier and $140 million in Q3. For the full year 2020, operating profit of $840 million was down from 2019's $1.12 billion, while total profit of $530 million was down from 2019's $690 million.
"Capitalizing on new ways of working, ensuring we create and maintain simplified organizational structures and always keep the customer's needs at heart has enabled us to continually reduce our headcount during the year, with a further head-count reduction in the quarter of 200," said CEO Alrik Danielson, who will be succeeded by current SAS Group chief executive during the first half of this year. "Investments in and consolidation of our factories continued during the quarter, including the announcement of a consolidation of our slewing bearing manufacturing and supporting functions in France."
SKF said it expects to see mid-single-digit year-over-year organic sales growth in the first quarter of 2021.