The SKF Group. SKF Investor Relations

Transcription

1 The SKF Group SKF Investor Relations October 2012

2 SKF - A truly global company Established: 1907 Sales 2011: SEK 66,216 million Employees 2011: 46,039 Production sites: SKF presence: Distributors/dealers: around 130 in 32 countries in over 130 countries 15,000 locations Global certificates: ISO OHSAS certification SKF Group Slide 1 17 October 2012

3 Net sales by customer segment 2011 Cars and light vehicles Industrial distribution 28% 13% 5% 4% Aerospace Railway 4% Off-highway Vehicle Service Market 10% Energy 5% 8% Industrial, heavy and special 15% 5% 3% Industrial, general Trucks Two-wheeler and Electrical Previously published shares have been restated to reflect the new business structure from SKF Group Slide 2 17 October 2012

4 SKF 2011 (2002) (1998) % of group total (48)(44)(53) (47)(46)(53) Net sales* Average number of employees Tangible asset (10)(12) (9) (13)(14)(8) (25)(14)(19) (26)(13)(18) (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 * Previously published shares have been restated to reflect customer delivery locations. SKF Group Slide 3 17 October 2012

5 SKF Group Vision To equip the world with SKF knowledge SKF Group Slide 4 17 October 2012

6 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 strategy targets: Increase revenue from SKF BeyondZero portfolio from SEK 2.5 bn to SEK 10 bn 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 CO2 emissions per tonne-kilometre by 30% 2016 vs 2011 for transports managed by SKF Logistics Services Major suppliers certified according to ISO by 2016 SKF Group Slide 5 17 October 2012

7 20 SKF Solution Factories 2012 Edmonton Nordic (Gothenburg) UK France Rumania Germany Moscow Cleveland Italy Istanbul Tianjin Monterrey Mexico Houston Pune Shanghai Taiwan Colombia Opened Planned Brasil IXION Johannesburg Perth SKF Group Slide 6 17 October 2012

8 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 SKF Group Slide 7 17 October 2012

9 Slab continuous caster metal industry Telescopic actuators for mould adjustment SKF ConRo Top roll line units SKF ConRo Compact 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 SKF Group Slide 8 17 October 2012

10 Wheel-loader Construction Central gear Hybrid pinion units Chassis lubrication Centralized lubrication systems SKF Group Slide 9 17 October 2012 Wheel end Integrated smart wheel bearing units with sensors SKF Mudblock cassette seals Motor hood Electromechanical actuators

11 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 SKF Group Slide October 2012

12 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 Applied for environment Stop-start system SKF sensor bearing 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 SKF Group Slide October 2012

13 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 SKF Group Slide October 2012

14 What is SKF knowledge? SKF Group Slide October, 2012

15 SKF technology platforms Bearings and units SKF Group Slide October, 2012

16 SKF technology platforms Seals SKF Group Slide October, 2012

17 SKF technology platforms Mechatronics SKF Group Slide October, 2012

18 SKF technology platforms Lubrication systems SKF Group Slide October, 2012

19 SKF technology platforms Services SKF Group Slide October, 2012

20 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) 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) Segments Peer (2008) GBC (2012) SKF Group Slide October 2012

21 SKF Nine-month results 2012 Tom Johnstone, President and CEO 17 October 2012

22 Strong performance in a challenging market Weaker sales during the quarter, impacted by overall economy Significantly lower manufacturing and inventories reduced Good operating margin Strong cash flow Further investments to support long-term growth and profitability SKF Group Slide October 2012

23 Highlights Q Acquisition and divestments completed - acquisition of General Bearing Corporation (GBC) - divestment of the SKF distributor businesses in Australia and New Zealand New businesses - magnetic bearings to two new major gas projects in Australia - five-year contract with LKAB for maintenance services - third strategic partnership agreement with Baosteel Group Corporation - SKF Bus Door Actuator to Volvo Buses - SKF s bonded piston seals to Mazda Motor Corporation Three new SKF Solution Factories - USA, Romania and Italy SKF Distributor College - awarded its 160,000th certificate SKF Group Slide October 2012

24 Highlights Q SKF celebrated 100 years of business in China - inaugurated a new bearing and truck hub unit factory in Jinan - broke ground on a new regional distribution centre in Shanghai - announced the establishment of a new SKF Campus in Jiading, Shanghai, containing a new factory for automotive and the Global Technical Centre China, SKF Solution Factory and SKF College Debt structure - new eurobond of 500m with maturity revolving credit facility of EUR 500m extended to 2017 Dow Jones Sustainability Indexes and FTSE4Good - member of DJSI indexes for the 13th successive year - included for the 12th successive year in the FTSE4Good Index Series SKF Group Slide October 2012

25 New products Q New temperature monitoring system for railway Self powered wireless sensor for railway Device for monitoring freight car mileage and maintenance history New range of freight bearings, tapered roller bearing units SKF ChainLube oil projection system for food processing New low friction bearing seal for railway SKF Group Slide October 2012

26 SKF Group Q Financial performance Q Q Net sales, SEKm 15,486 16,545 Operating profit, SEKm 1,913 2,479 Operating margin, % Profit before tax, SEKm 1,734 2,345 Cash flow, SEKm 1,097 1,323 Organic sales growth in local currency: SKF Group: -4.5% Industrial market, Strategic Industries: -5.6% Regional Sales and Service: -4.7% Automotive: -3.5% Europe: -7% North America: +5% Asia: -11% Latin America: +8% Key points Sales volumes down by 5.0% y-o-y Manufacturing significantly lower y-o-y Inventories down to 20% of sales SKF Group Slide October 2012

27 Organic sales growth in local currency % change y-o-y SKF Group Slide October 2012

28 Growth development by geography Organic growth in local currency Q vs Q Europe -7% North America 5% Asia/Pacific -11% Latin America 8% Middle East & Africa -4% SKF Group Slide October 2012

29 Growth development by geography Organic growth in local currency YTD 2012 vs YTD 2011 Europe -4% North America 8% Asia/Pacific -9% Latin America 12% Middle East & Africa 0% SKF Group Slide October 2012

30 Components in net sales Percent y-o-y Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Volume Structure Price/mix Sales in local currency Currency Net sales SKF Group Slide October 2012

31 Growth in local currency, including structure % y-o-y % 16.3% % YTD 2012 Structure in 2011: 4.8% Structure in 2012: 0.2% SKF Group Slide October 2012

32 Operating profit SEKm One-time items SKF Group Slide October 2012

33 Operating margin % One-time items SKF Group Slide October 2012

34 Operating margin % * * * YTD 2012 One-time items * Excluding one-time items SKF Group Slide October 2012

35 Operating margin per business area % Regional Sales and Service Strategic Industries 6 3 Automotive 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q SKF Group Slide October 2012 Excluding one-off items (eg. restructuring, impairments, capital gains)

36 Third quarter 2012 SEKm Net sales 15,486 16,545 Operating profit 1,913 2,479 Operating margin, % Profit before taxes 1,734 2,345 Net profit 1,266 1,656 Basic earnings per share, SEK Cash flow, after investments before financing 1,097 1,323 SKF Group Slide October 2012

37 Nine month 2012 SEKm Net sales 49,591 49,959 Operating profit 6,106 7,606 Operating margin, % Profit before taxes 5,516 7,109 Net profit 3,867 5,019 Basic earnings per share, SEK Cash flow, after investments before financing 2,479 2,995 SKF Group Slide October 2012

38 Inventories as % of annual sales % SKF Group Slide October 2012

39 Return on capital employed % YTD 2012 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. SKF Group Slide October 2012

40 Cash flow, after investments before financing SEKm * ** * SEK 798 million, excluding SEK 6,799 million for the acquisition of Lincoln. ** SEK 1,707 million, excluding acquisitions and divestments. SKF Group Slide October 2012

41 Net debt SEKm AB SKF, dividend paid (SEKm): 2010 Q2 1, Q2 2, Q2 2,504 Net debt: Loans and net provisions for post-employment benefits less short-term financial assets excluding derivatives. SKF Group Slide October 2012

42 Debt structure on 30 September, maturity years EURm Available credit facilities: EUR 500 million 2017 SEK 3,000 million 2017 No financial covenants nor material adverse change clause SKF Group Slide October 2012

43 October 2012: SKF demand outlook Q Demand compared to the fourth quarter last year The demand for SKF s products and services is expected to be lower for the Group and for Europe. For Asia it is expected to be slightly lower and for North America and Latin America relatively unchanged. The demand is expected to be lower for Industrial Strategic Industries and Industrial Regional Sales and Service and relatively unchanged for Automotive. Demand compared to the third quarter 2012 The demand for SKF s products and services is expected to be slightly lower for the Group, for all the business areas and for Europe, Asia and North America. For Latin America demand is expected to be relatively unchanged. Manufacturing Manufacturing is expected to be lower year on year and slightly lower compared to third quarter. SKF Group Slide October 2012

44 SKF demand outlook Q4 2012, regions (based on current assumptions) Share of net sales 2011* Europe 44% Asia Pacific 28% North America 19% Latin America 8% Total Sequential trend for Q Q vs Q /- +/- -- * Previously published shares have been restated to reflect the total Group business and customer delivery locations. SKF Group Slide October 2012

45 SKF demand outlook Q4 2012, business areas (based on current assumptions) Share of net sales 2011 Strategic Industries Regional Sales and Service 31% 39% Automotive 27% Total Sequential trend for Q Q vs Q /- -- SKF Group Slide October 2012

46 SKF sequential volume trend Q4 2012, main segments (based on current assumptions) Share of net sales 2011* 5% 13% 4% 28% 13% 12% 10% 5% 5% 3% Aerospace Cars and light vehicles Railway Industrial distribution Industrial, general Industrial, heavy, special and off-highway Vehicle service market Energy Trucks Two-wheelers and electrical SKF Group Slide October 2012 * Previously published shares have been restated to reflect the total Group business and customer delivery locations.

47 Guidance for the fourth quarter 2012 Tax level: around 30% Financial net for the fourth quarter: Around SEK 200 million Exchange rates on operating profit versus 2011 Q4: SEK -50 million Full year: SEK 200 million Additions to PPE: Around SEK 2.0 billion for 2012 Guidance is approximate and based on current assumptions and exchange rates SKF Group Slide October 2012

48 Key focus areas ahead 2012 Managing the uncertain and different demand environment - regions and segments Profit and cash flow - inventory management Initiatives and actions to support long-term financial targets Continue the integration of Lincoln Business Excellence and competence development Implement the new organization for the Industrial market One SKF and SKF Care as guiding lights SKF Group Slide October 2012

49 Long-term financial targets 15% Operating margin, level 8% Annual sales growth in local currencies 27% Return on capital employed SKF Group Slide October 2012

50 Main initiatives going forward Accelerate profitable growth - intensify the platform and industry approach - launch more new offerings green and BZ portfolio - strengthen the service business - focus on faster growing regions/ industries - develop other brands Reduce cost and eliminate waste - Business Excellence throughout the Group - BCC manufcaturing and sourcing - integrated cost reduction activities (ICR) Invest in growth - Sales and engineering resources - Factories in growth markets - Solution factories -R&D - Acquisitions - New IT systems SKF Group Slide October 2012

51 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. SKF Group Slide October 2012

52 Welcome to the IR website > Investors Investor Relations function: Head: Marita Björk Tel: Mobile: SKF Group Slide October 2012 Investor Relations: Anna Alte Tel: Mobile: Event coordinator and assistant: Helena Karlsson Tel: Mobile:

53 SKF Group Slide October 2012