SKF Q3 results Alrik Danielson, President and CEO. Picture: Evolution

Transcription

1 SKF Q3 results 2018 Alrik Danielson, President and CEO Picture: Evolution

2 Record result and strong cash flow Net sales of 21,341 M, organic growth 6.9% 6.9% Organic sales growth Operating profit 2,597 M (1,964) Operating margin improved to 12.2% (10.5) Cash flow 1,626 M (681) 2,597 M Operating profit 12.2% Operating margin

3 Industrial business performing well; significantly higher volumes in all three main markets, North America, Europe and Asia 9% organic growth and 14% operating margin

4 Automotive; 2% organic growth and 7% operating margin despite slightly lower car volumes in Europe due to new test cycle. Strong demand for trucks outside China

5 Improving performance towards our targets Targets set in 2016 and valid over a business cycle: Organic growth: 6.9% Target: 5% Operating margin: 12.2% Target: 12% Net debt / equity: 60% Target: <80% Net working capital: 29.0% Target: 25% Return on capital employed: 16.5% Target: 16%

6 Continued sales growth in Asia, North America & Europe Organic growth in local currency Q vs Q Europe +6% North America +8% Asia/Pacific +11% Latin America 0%

7 Cooperation on fiber optic sensing systems

8 New tapered roller thrust bearings optimised for the most demanding oil & gas applications

9 Q3 results the details Christian Johansson, CFO

10 Sales development Percent y-o-y Q3 Q4 Q1 Q2 Q3 Organic Structure Currency Net sales

11 Operating profit

12 Operating profit

13 Performance by customer group Industrial Net sales 15,208 M Organic sales +9.2% Operating margin 14.3%, (13.5) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q318 Automotive Net sales 6,133 M Organic sales +1.7% Operating margin 6.8%, (3.9) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q318

14 SKF Group Q Financial performance (SEKm) Net sales Cost of goods sold Gross profit Gross margin, % 24.4% 24.5% Selling and administrative expenses Other operating income/expense Operating profit Operating margin, % Financial income and expense, net Profit before taxes Taxes Net profit Basic earnings per share, SEK % Operating margin

15 Cash flow after investments before financing*

16 Net working capital finished goods inventories reduced in the quarter

17 Divestment of linear and actuation technology business announced in July SKF s linear and actuation technology business had approximately 1,200 employees and sales of SEK 2 billion in The total consideration of the deal is SEK 2.75 billion, on a cash- and debt free basis and it is expected to close during the end of The divestment is subject to regulatory approvals and involves consultation with employee representative bodies.

18 Net debt/equity ratio continues to improve

19 New EUR-bond issued in September Extending our maturity profile 7-year bond matures in million euros Issued at record low coupon rate of 1.25% Proceeds used to buy back outstanding bonds - maturing in 2019 and 1.875% and 2.375% coupon rates One time effect of -73 M on financial net in Q3

20 Guidance for 2018* Q4 2018: Financial net: around -225 million Currency impact on the operating profit is expected to be relatively unchanged compared with 2017, based on exchange rates per 30 September, : Tax level: around 28% for 2018, excluding effects from divestments Additions to property, plant and equipment: around 2,600 million for (Previous guidance around 2,400 million). * Guidance is approximate and based on current assumptions and exchange rates.

21 Summary record result and strong cash flow in Q3 Continued growth in Q3 Record-high sales and operating profit Strong cash flow Expect to see continued growth in Q4 slightly higher volumes year-over-year 2,597 M Operating profit 12.2% Operating margin 1,626 M Cash flow

22 October 2018: SKF demand outlook Q Demand compared to the fourth quarter 2017 The demand for SKF s products and services is expected to be slightly higher for the Group, including higher demand for Industrial and slightly lower demand for Automotive. Demand is expected to be significantly higher in North America, higher in Asia, relatively unchanged in Europe and slightly higher in Latin America.

23 SKF Q3 results 2018 Q & A

24 Financial calendar Q3 report Virtual roadshow Roadshow Asia Capital Markets Day Germany 25 October 26 October 6-7 November 29 November Q4 report 29 January 2019 US Roadshow February 2019 Annual Report March 2019

25 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; Risk management at SKF" and "Sensitivity analysis.

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