The SKF Group. SKF Investor Relations

Transcription

1 The SKF Group SKF Investor Relations July 2014

2 SKF - A truly global company Established: 1907 Sales 2013: SEK 63,597 million Employees 2013: 48,401 Production sites: SKF presence: Distributors/dealers: around 165 in 28 countries in over 130 countries 15,000 locations Global certificates: ISO OHSAS certification Slide 1

3 Net sales Industrial distribution Vehicle aftermarket 29% 11% 5% 10% Cars and light trucks 14% 11% 6% 4% 3% 5% 2% Aerospace Railway Off-highway Trucks Two-wheelers and Electrical Asia/Pacific Eastern Europe 5% 24% Middle East & Africa 3% 35% 24% North America 7% 3% Latin America Sweden Energy Industrial, 9% heavy and special Industrial, general Western Europe * Previously published shares have been restated in February 2013 Slide 2

4 SKF 2013 (25)(14)(19) (26)(13)(18) (2002) (1998) (48) (44) (53) (47) (46) (53) % of group total Net sales Average number of employees Tangible asset (10) (12) (9) (13)(14)(8) (6) (5) (4) (4) (4) (3) (5) (14) (12) (5) (12) (15) (3) (9) (3) (3) (9) (3) (3) (2) (0) (2) (2) (0) North America Latin America Western Europe Sweden Eastern Europe Middle East and Africa Asia/Pacific Slide 3

5 Operating margin as reported % Slide 4

6 Return on capital employed % Slide 5

7 Growth in local currencies % Slide 6

8 Financial targets 15% Operating margin 8% Changes in sales in local currency incl. structure 20% Return on capital employed Q Q Q114 One-time items -20 One-time items for the individual year Slide 7

9 SKF s priorities Sustainable profitable growth Expand the platform concept Exploit the asset life cycle approach Develop new products and grow SKF BeyondZero portfolio Extend and grow second brands Acquisitions Capital efficiency Fixed capital Net working capital Investments & Innovation New and existing facilities Research and development IT systems and mobility Slide 8 Cost reduction Business Excellence Consolidation of manufacturing Optimization and productivity improvements Reduction in purchasing costs

10 SKF Group Vision To equip the world with SKF knowledge Slide 9

11 SKF BeyondZero SKF launched the BeyondZero TM portfolio with products and solutions, which will both improve energy efficiency and reduce the environmental impact. SKF revised targets for its climate strategy and also partnered with the WWF in their Climate Savers Programme. SKF s climate targets: Increase revenue from SKF BeyondZero portfolio from SEK 2.5 billion to SEK 10 billion by 2016 Reduce total annual energy use by 5% below the 2006 level by 2016 Reduce energy use per production output by 5% y-o-y from 2012 to 2016 Reduce CO 2 emissions per tonne-kilometre by 30% 2016 vs 2011 for transports managed by SKF Logistics Services Major suppliers certified according to ISO by 2016 Slide 10

12 28 SKF Solution Factory June 2014 Australia Brazil Canada Canada Columbia China China China Perth Cajamar Edmonton Toronto Bogota Shanghai Tianjin Urumqi France Montigny Germany Schweinfurt India Pune India Manesar Italy Turin Mexico Monterrey Netherlands Ridderkerk Netherlands Nieuwegein Poland Romania Russia United Arab Emirats South Africa Spain Sweden Katowice Bucharest Moscow Abu Dhabi Witfield Madrid Gothenburg Taiwan Turkey UK USA USA Taichung Istanbul Luton Cleveland Houston Slide 11

13 SKF Solution Factory Segments & Application Knowledge Platforms & Technology Competence SKF Solution Factory Capabilities Sealing Solutions Mechanical Services Lubrication Solutions Bearing Service Workshop Condition Monitoring Services Remote Monitoring Center MaPro/CoMo Product Repair A & MC Training Center Slide 12

14 Slab continuous caster metal industry Telescopic actuators for mould adjustment SKF ConRo Compact roll line units SKF ConRo Top roll line units SKF ConRo Low roll line units SKF DryLube Bearings and SNL Housings for roll out table SKF sealed selfaligning bearing system (CARB and spherical roller bearings) and centralized lubrication system for roll lines SKF Caster Analyst System for roll lines Slide 13

15 Wheel-loader Construction Central gear Hybrid pinion units Chassis lubrication Centralized lubrication systems Slide 14 Wheel end Integrated smart wheel bearing units with sensors SKF Mudblock cassette seals Motor hood Electromechanical actuators

16 Wind turbine - Energy New CRB-design with extra-high carrying capacity for wind-gearboxes. New pitch bearing design with improved corrosion protection SKF WindCon 3.0/Webcon Intranet supervised condition monitoring DRTRB-unit SKF Nautilus with segmented cage for minimized friction XL Hybrid bearings with ceramic balls for superior insulation Automatic centralized lubrication kits for reduced maintenance cost Slide 15

17 SKF s environmentally positive customer solutions SKF s solutions which realize significant environmental benefits Designed for environment E2-30% less energy compared to a standard bearing Stop-start system SKF sensor bearing Applied for environment Up to 15% better fuel economy of the car A solution that is primarily designed to improve environmental performance by itself A solution that enables improved environmental performance in a specific application Slide 16

18 SKF energy efficient (E2) bearings China India Peru Indonesia Conveyors used in mining industry. 130,000 E2 bearing Sangam Group Industria Textil Piura 60,000 E2 deep groove ball bearing Leuwijaya Textile 30,000 E2 bearing potential 325,000 for 3 different customers Slide 17

19 What is SKF knowledge? Slide 18

20 SKF technology platforms Bearings and units Slide 19

21 SKF technology platforms Seals Slide 20

22 SKF technology platforms Mechatronic Slide 21

23 SKF technology platforms Lubrication systems Slide 22

24 SKF technology platforms Service Slide 23

25 Acquisition Identifying gaps and opportunities in all platforms Bearings and units Seals Services Lubrication systems Mechatronics Products SNFA (2006) Economos (2006) Baker (2007) Safematic (2006) ABBA (2007) GLO (2008) S2M (2007) Macrotech (2006) Macrotech (2009) Jaeger (2005) Kaydon (2013) Technologies Vogel (2004) Lincoln Industrial (2010) Geographies QPM (2008) PMCI (2007) ALS (2007) TCM (2003) Scandrive (2003) PB&A (2006) Sommers (2005) Monitek (2006) Cirval (2008) Industries Peer (2008) BVI (2013) GBC (2012) Slide 24

26 SKF Half-year results 2014 Tom Johnstone, President and CEO

27 Examples of new business Envision Energy, China Strategic long-term partnership A customer in the automation industry Roller screw electromechanical cylinder Dongfang Electric New Energy Equipment Main shaft bearings Aurizon, Australia Service contract A customer in the oil and gas industry Asset management services Bosch Service, Brazil SKF s vehicle aftermarket product range Slide 26

28 Highlights Inauguration of SKF Campus and SKF North East Asia Distribution Centre in Shanghai. New SKF Solution Factory in Nieuwegein in the Netherlands. Events during the quarter: - SKF Wind Farm Management Conference in Berlin - SKF Life Cycle Management Conference in Buenos Aires - SKF Asset Management Conference in Prague Slide 27

29 Customer awards Best Technical and Service Award 2013 Envision Energy, China Supplier Excellence Award 2013 National Oilwell Varco (NOV), USA Premium Supplier Award Joy Global Underground Mining LLC, USA Marine Supplier of the year Award 2014 Rolls-Royce Marine Excellent Supplier Award ABB Marine, China Supplier Certification of Appreciation Nissan, China Quality Gold Award 2013 Yamaha Motor Company The Qualitas Award Fiat/Chrysler, Argentina Slide 28

30 New products and solutions SKF Gear Bearing Unit Floating piston SKF Tachometer SKF Shaft Alignment Tool Low torque operator valve solution Electric grease transfer pump SKF Wireless MicroVibe Low friction grease for hub bearing units Slide 29 SKF Wireless Machine Condition Sensor Turbulo BlueMon emission monitoring system Connect

31 SKF Group Q Financial performance (SEKm) Net sales 17,955 16,392 Operating profit 2,096 1,837 Operating margin, % Operating margin excl. one-time items, % Profit before tax 1,761 1,627 Basic earnings per share, SEK Cash flow after investments before financing excl. EU payment 1,423 1,147 Cash flow after investments before financing -1,402 1,147 Organic sales growth in local currency: SKF Group 4.6% Europe 1% Strategic Industries 11.1% North America 3% Regional Sales and Service 2.0% Asia 14% Automotive 1.3% Latin America 2% Middle East and Africa 14% Key points Sales volumes up by 3.6% y-o-y. Manufacturing was slightly higher compared to last year. Slide 30

32 SKF Group Half year 2014 Financial performance (SEKm) Net sales 34,689 31,544 Operating profit 4,120 3,317 Operating margin, % Operating margin excl. one-time items, % Profit before tax 3,548 2,864 Basic earnings per share, SEK Cash flow after investments before financing excl. EU payment 1, Cash flow after investments before financing -1, Organic sales growth in local currency: SKF Group 5.2% Europe 3% Strategic Industries 9.0% North America 3% Regional Sales and Service 2.2% Asia 13% Automotive 4.5% Latin America 1% Middle East and Africa 18% Key points Sales volumes up by 5.0% y-o-y. Manufacturing was higher compared to last year. Slide 31

33 Organic sales growth in local currency % change y-o-y Slide 32

34 Organic sales growth in local currency % y-o-y % % -2.5% YTD 2014 Slide 33 Structure in 2012: 0.4% Structure in 2013: 2.5% Structure in 2014: 4.2%

35 Sales development by geography Organic growth in local currency Q vs Q Europe 1% North America 3% Asia/Pacific 14% Latin America 2% Middle East & Africa 14% Slide 34

36 Sales development by geography Organic growth in local currency YTD 2014 vs YTD 2013 Europe 3% North America 3% Asia/Pacific 13% Latin America 1% Middle East & Africa 18% Slide 35

37 Components in net sales Percent y-o-y Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Volume Structure Price/mix Sales in local currency Currency Net sales Slide 36

38 Operating profit as reported SEKm Slide 37

39 Operating profit excluding one-time items SEKm Slide 38

40 Operating margin % * 11.9* One-time items * Excluding one-time items 11.9* YTD 2014 Slide 39

41 Operating margin per business area as reported % Specialty Business Strategic Industries Regional Sales and Service Automotive 0-3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Slide 40

42 Operating margin per business area excl. one-time items % Specialty Business Strategic Industries Regional Sales and Service Automotive Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Slide 41

43 SKF s programme to improve efficiency and reduce cost Restructuring, SEKm: Q4/12 Q1/13 Q2/13 Q3/13 Q4/ Q1/14 Q2/14 Total Cost taken People affected ,560 Giving future gross savings, SEKm: Full year gross saving Realized gross savings from total programme, SEKm: vs 2012 vs 2013 Q1/13 Q2/13 Q3/13 Q4/ Q1/14 Q2/ Restructuring S&A Purchasing Total Slide 42 Note: Run rate Q SEK 1,340 million vs 2012.

44 Operating profit bridge, Q SEKm , , Q Volumes Price/mix Specialty Savings One-time Currencies R&D, Q excl. Specialty Business Business items inflation etc. Slide 43

45 Operating profit bridge, half year 2014 SEKm , ,120 Q Volumes Price/mix Specialty Savings One-time Currencies R&D, Q excl. Specialty Business Business items inflation etc. Slide 44

46 Net working capital as % of annual sales % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Target: 27% Slide 45

47 Return on capital employed % One-time items * Excluding one-time items * * 14.6* YTD 2014 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. Slide 46

48 Cash flow, after investments before financing SEKm ) 3) 4) 5) 0 2) Slide 47 Excl. acq. and div.: 1) Q SEK 1,707 million 2) Q SEK -69 million 3) Q SEK 871 million 4) Q SEK 1,170 million Excl. EU payment 5) Q SEK 1,423 million

49 Net debt SEKm AB SKF, dividend paid (SEKm): 2012 Q2 2, Q2 2, Q2 2,530 Cash out from acquisitions (SEKm): 2012 Q Q Q4 7,900 EU payment (SEKm): 2014 Q2 2,825 Net debt: Loans and net provisions for post-employment benefits less short-term financial assets excluding derivatives. Slide 48

50 Debt structure, maturity years EURm Slide 49 Available credit facilities: EUR 500 million 2019 SEK 3,000 million 2016 SEK 3,000 million 2017 No financial covenants nor material adverse change clause

51 July 2014: SKF demand outlook Q Demand compared to the third quarter 2013 The demand for SKF s products and services is expected to be slightly higher for the Group and North America, higher for Asia, relatively unchanged for Europe and slightly lower for Latin America. It is expected to be higher for Strategic Industries and relatively unchanged for Regional Sales and Service and Automotive. 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 Europe. It is expected to be slightly higher for North America and Asia and slightly lower for Latin America. For Strategic Industries it is expected to be slightly higher and for Regional Sales and Service and Automotive it is expected to be relatively unchanged. Manufacturing Manufacturing is expected to be slightly higher year over year and relatively unchanged compared to the second quarter. Slide 50

52 SKF demand outlook Q3 2014, main regions Share of net sales 2013 Europe 42% Asia Pacific 24% North America 24% Latin America 7% Total Sequential trend for Q Q vs Q / Slide 51

53 SKF demand outlook Q3 2014, main business areas Share of net sales 2013 Sequential trend for Q Q vs Q Strategic Industries Regional Sales and Service 29% 39% ++ +/- Automotive 27% Total +/- + Slide 52

54 SKF sequential volume trend Q3 2014, Industries Share of net sales % Aerospace 5% Energy 4% Railway 2% Two-wheelers and Electrical 29% Industrial distribution 14% Cars and light vehicles 13% Industrial, heavy, special and off-highway 11% Vehicle service market 11% Industrial, general 5% Trucks Slide 53

55 Guidance for the third quarter 2014* Tax level: around 30% Financial net for the third quarter: Around SEK -230 million Currency impact on operating profit versus 2013 Q3: SEK +50 million Full year: SEK -70 million Additions to PPE: Around SEK 1.6 billion for 2014 * Guidance is approximate and based on current assumptions and exchange rates. Slide 54

56 SKF s priorities Sustainable profitable growth Expand the platform concept Exploit the asset life cycle approach Develop new products and grow SKF BeyondZero portfolio Extend and grow second brands Acquisitions Capital efficiency Fixed capital Net working capital Investments & Innovation New and existing facilities Research and development IT systems and mobility Slide 55 Cost reduction Business Excellence Consolidation of manufacturing Optimization and productivity improvements Reduction in purchasing costs

57 Cautionary statement 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. Slide 56

58 Welcome to the IR website > Investors Investor Relations function: Head: Marita Björk Tel: Mobile: Slide 57 Investor Relations: Anna Alte Tel: Mobile: Event and road shows coordinator: Helena Karlsson Tel: Mobile:

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