Capital Market Day 10th May 2007 Tom Johnstone President and CEO

Transcription

1 SKF Group Capital Market Day 10th May 2007 Tom Johnstone President and CEO

2 The SKF vision To equip the world with SKF knowledge

3 SKF's Platforms

4 Bearings and units - recent activities Acquisitions: New factories: SNFA SAS, France Dalian, China Shanghai, China Jakarta, Indonesia Busan, South Korea Uttarakhand, India Bearings and units Significant manufacturing expansion: India Brazil Mexico Sweden Restructuring: North America France South Africa Setting new standards: New SKF Energy Efficient bearings

5 Seals/ Mechatronics/ Services/ Lubrication systems - recent activities Seals Mechatronics Acquisitions: New factories: Restructuring: Significant expansion: Macrotech Polyseal Inc., USA Economos Austria GmbH Taegu, Korea USA Bulgaria India Mexico ABBA, Taiwan Shanghai, China Acquisitions: Services Precision Balancing & Analyzing, USA Monitek Australia PMCI, USA Lubrication systems Safematic lubrication, Finland ALS, Canada

6 SKF Group Working towards a sustainable future through: Innovations in products and services The application engineering knowledge of our people.

7 SKF Energy Efficient bearings Introducing a family of Energy Efficient bearings Deep groove ball bearings Taper roller bearings

8 SKF Energy Efficient DGBB and TRB > 30% reduction in energy consumption Life Energy Consumption Life Energy Consumption SKF DGBB & TRB SKF Energy Efficient DGBB & TRB

9 Energy Efficient solutions Actuators spot welding Actuators window facade Client Energy and Environmental Analysis Automatic throttle control unit Gas compressors Magnetic bearings

10 Selected factory initiatives - implemented Installation of energy efficient pumps and motors Waste heat recovery from cooling tower to rooms New heating and recovery system Low energy lights Reduce compressed air pressure in central system New exhaust system

11 BeyondZero TM Focus: To reduce the negative impact within SKF and to increase the external positive effects of energy savings for customers using SKF products, solutions and services so the net is positive - BeyondZero TM Total

12 The SKF vision To equip the world with SKF knowledge

13 SKF Group financial targets Operating margin, level 12% Growth in local currencies, per annum 6-8% Return on capital employed 24% Gearing around 50% Inventories, by end %

14 SKF Group financial targets Operating margin level 12% Focus on positive price mix - new products and solutions - eliminate loss making business Operational efficiency, utilisation and flexibility Increased production in best cost countries Reduced purchasing cost Six Sigma

15 Six Sigma 4 dimensions: Standard Six Sigma, Design for Six Sigma, Lean Six Sigma and Six Sigma for Growth 2007 Q1 status: 232 Black Belts 1,205 Green Belts 118 projects closed, 721 ongoing Hard Savings in 2006: MSEK Q1: MSEK 65

16 Operating margin - a longer perspective % Target level Excluding income from Ovako

17 SKF Group financial targets Growth in local currencies 6-8% * Platform/segment approach to continue to be strengthened - organic investments - acquisitions - increased R&D spending - new products/solutions Focus on fast growing regions and segments - BRIC economies - industrial segments * Growth target 2/3 rd organic, 1/3 rd acquisition

18 Growth a longer perspective % Target level

19 SKF Group financial targets ROCE 24% Continued focus on operating capital reduction in % of sales - inventory and accounts receivables - fixed assets Improved profit

20 ROCE a longer perspective % Target level As from 2003, restated according to IFRS except for financial instruments As from 2005, financial instruments accounted for in accordance with IFRS

21 SKF Group financial targets Operating margin, level 12% Growth in local currencies, per annum 6-8% Return on capital employed 24% Gearing around 50% Inventories, by end %

22 Operating margin % * * Q1 * excluding income from the jointly controlled company Oy Ovako Ab

23 Operating margin per division % Service Industrial Automotive Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q

24 Growth development / local currency % Y-o-Y Q1 Acquisitions / Divestments Organic growth

25 Return on capital employed % % 24.7% 24.9% % % Q1

26 Inventories as % of annual sales % Target, end %

27 First quarter 2007 MSEK Net sales 14,371 13,289 Operating profit 1,886 1,609 Operating margin 13.1% 12.1% Profit before taxes 1,825 1,599 Net profit 1,214 1,138 Basic earnings per share, SEK Cash flow after investments before financing Cash flow after operating investments before financial items

28 April 2007: Outlook for the second quarter 2007 (compared to the first quarter 2007) The market demand for SKF's products and services in the second quarter of 2007 is expected to be higher for the Group. The demand is expected to be higher in Europe and Latin America, significantly higher in Asia and relatively unchanged in North America. The demand is expected to be higher in the Industrial and Service Division and slightly higher in the Automotive Division. The manufacturing level for the second quarter will be unchanged compared to the first quarter 2007 and significantly higher compared to the second quarter last year.

29 Volume development Net sales 2006 Daily volume trend for: Q Q Outlook Q vs 2006 Europe 54% ++ North America 20% = Asia Pacific 18% +++ Latin America 5% ++ Total * ++ * Updated in March 2007 from slightly higher to higher.