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Skf in brief_2009_en

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Skf in brief_2009_en

  1. 1. SKF in brief 2009 Vision Mission Drivers Values To equip the world with To strengthen SKF’s global leadership • Profitability • Empowerment SKF knowledge and sustain profitable growth by being • Quality • High ethics the preferred company: • Innovation • Openness • for our customers, distributors • Speed • Teamwork and suppliers • Sustainability • for our employees • for our shareholders This is SKF SKF Group is the leading global supplier of Three divisions, 40 segments Research and development products, solutions and services within rolling SKF does business mainly through three divisions: Technical development, quality and marketing bearings, seals, mechatronics, services and Industrial Division and Service Division, servicing have been in focus at SKF since the very start. lubrication systems. Services include technical industrial original equipment manufacturers The Group’s efforts in research and development support, maintenance services, condition (OEMs) and aftermarket customers respectively, have resulted in numerous innovations, forming monitoring and training. and Automotive Division, servicing automotive bases for new standards, products and solutions OEMs and aftermarket customers. SKF operates in the bearing world. In 2009, the number of The SKF Group in around 40 customer segments, whereof first filings of patent applications was 218. SKF was founded in 1907 and grew at a rapid examples include cars and light trucks, wind rate to become a global company. As early as energy, railway, machine tool, medical, food SKF Care 1920, the company was well established in and beverage and paper industries. SKF defines sustainability as SKF Care, compris- Europe, North and Latin America, Asia and ing Business Care, Environmental Care, Employee Africa. Today, SKF is represented in more than Certification Care and Community Care. Within each of these 130 countries. The company has more than The Group has global certification to IS0 14001 four cornerstones, key focus areas and targets 100 manufacturing sites and also sales com- (environmental management systems) and are defined to drive continuous performance panies supported by about 15,000 distributor OHSAS 18001 (health and safety) standards. Its improvement. locations. SKF also has a widely used e-business operations are also certified to either ISO 9001 marketplace and an efficient global distribution or applicable customer industry standards, e.g. system. ISO/TS 16949 (automotive), AS9100 (aviation) or IRIS (railway) for quality management systems. Geographic distributions 2009 of net sales, average number of employees and property, plant and equipment (per cent) Net sales Average number of employees Property, plant and equipment 51 43 43 23 24 21 17 10 8 8 10 8 6 6 5 3 5 5 3 1 0 North America Latin America Western Europe Sweden Eastern Europe Middle East Asia / Pacific and Africa Key data 2009 2008 Net sales, SEKm 56,227 63,361 Operating profit, SEKm 3,203 7,710 Profit before taxes, SEKm 2,297 6,868 Basic earnings per share, SEK 3.61 10.14 Diluted earnings per share, SEK 3.61 10.13 Dividend per share, SEK 3.50 1) 3.50 Cash flow after operating investments before financial items, SEKm 5,752 65 Return on capital employed, % 2) 9.1 24.0 Equity/assets ratio, % 2) 35.8 35.1 Additions to tangible assets, SEKm 1,975 2,531 Registered number of employees, 31 December 41,172 44,799 Number of shares 31 December 2009: 455,351,068, of which 45,421,004 A shares and 409,930,064 B shares. 1) Dividend according to the Board’s proposed distribution of surplus. 2) 2008 has been restated for change in accounting principle IAS 19 ”Employee benefits”.
  2. 2. SKF – the knowledge engineering company The SKF vision is “To equip the world with SKF knowledge”. To take the knowledge from over 100 years of operation to develop and deliver products, services and solutions which enable customers to develop their business successfully and profitably. SKF knowledge can be defined as the combination of the following three dimensions. The geographic dimension – global and local presence SKF is a global company with a local presence which has primarily been in place since the early years of the SKF Group. Wherever customers are located local expertise, supported by global industrial specialists and technical experts, combine the required SKF skills to be able to make a specific offer for customers which meets their local needs. The global experts draw upon knowledge and successes from similar industries worldwide. The customer dimension – industries and segments SKF’s customers can be found in very many industries and industry segments, currently defined as around 40 specialized segments. Each customer and segment has different technical and commercial challenges. Working in so many different industries enables SKF to develop specific products and services for each industry and take knowledge from one industry and apply it to another industry. The competence dimension – technology platforms SKF’s five technology platforms are Bearings and units, Seals, Mechatronics, Services, and Lubrication Systems. SKF’s specialist teams in each platform work closely with the segments and sales organization to provide advanced integrated solutions for meeting the customers’ needs in developing new products, to improve their production efficiency and improve their competitiveness and profitability. Using all three dimensions to build customer value is what SKF call “The power of knowledge engineering”. Financial objectives and strategy Financial targets SKF’s long-term financial targets are: • operating margin level of 12% Operating margin Changes in sales Return on capital • annual sales growth in local currencies of 6-8% in local currency employed • return on capital employed of 24% Aquisitions /Divestments Organic growth Strategy % % Y-o-Y % SKF’s business strategy for achieving long-term profitable growth 12.9 12.6 24.9 20 12.2 24.0 15 30 23.0 and attaining financial targets includes: 21.9 10.4* 10.8 13.2 15 • keeping a clear and dedicated customer focus 10 20 11.3* 7.5* 7.3* 10 5.7 7.1 • developing new products, solutions and services with higher 9.1 5 10 -19.0 added value which enable customers to improve their efficiency 5 and performance while lowering their total cost 0 0 0 05 06 07 08 09 05 06 07 08 09 05 06 07 08 09 • improving price quality by applying the SKF platform and segment * Excluding income from the * Excluding effect approach to deliver value to customers previously jointly controlled from sale of • strengthening the product portfolio through greater investment company Oy Ovako Ab Oy Ovako Ab 2005: 10.4% in R&D and through acquisitions 2006: 10.1% • focusing on rapidly expanding segments and regions • reducing capital employed and fixed costs • attracting, retaining and developing the right people Shares and shareholders SKF Geographic ownership SKF’s A and B shares have been quoted on the NASDAQ OMX Europe excl. Sweden Stockholm AB since 1914. The total number of shares traded in 2009 Sweden was 1,151,265,590. SKF’s ADRs are traded on the OTC market. USA Rest of the world A shares, unrestricted 45,421,004 B shares, unrestricted 409,930,064 Price trend of SKF’s shares Total 455,351,068 SEK 2009 160 140 120 The five largest shareholders 100 as of 31 December 2009 200,000 In percent of In percent of 80 voting rights share capital 150,000 Foundation Asset Management 28.5 12.0 60 100,000 Skandia 4.8 1.3 50,000 Alecta 4.6 4.3 Swedbank Robur Funds 4.5 3.7 40 05 06 07 08 09 © NASDAQ OMX AFA Sickness Insurance 2.2 1.5 B share A share OMX Stockholm_PI Number of A shares traded, thousands Number of B shares traded, thousands
  3. 3. Net sales by customer segment Industrial distribution 22% Cars and light Vehicle service market 12% trucks 14% Special industrial machinery 5% Aerospace 7% Railway 5% Energy 7% Off-highway 3% Heavy industry 8% Trucks 3% General industry 11% Two-wheelers and Electrical 3% SKF’s divisions SKF’s business is mainly divided into three divisions, each focusing on specific customer groups worldwide. The divisions are interdependent and provide each other with products, services and know-how, so that each division can fully serve its final customers. Industrial Division Net sales by customer segment The Industrial Division serves industrial Original Net sales by customer segment 2009 2008 Equipment Manufacturer (OEM) customers in Net sales, SEKm 19,301 22,862 some 30 global industry customer segments Special industrial machinery 11% Net sales with a wide range of energy-efficient offerings. Energy 16% incl. intra-Group sales, SEKm 33,730 28,368 These solutions and know-how are also based General industry 18% on the manufacturing of a wide range of bearings Operating profit, SEKm 1,551 4,043 Off-highway 7% – such as spherical and cylindrical roller bearings, Operating margin* 5.5% 12.0% angular contact ball bearings, medium deep Railway 11% Assets and liabilities, net, SEKm 15,825 18,098 groove ball bearings and super-precision Heavy industrial machinery 10% Aerospace 20% Registered number of employees 17,604 19,166 bearings – as well as lubrication systems, linear Other 7% motion products, magnetic bearings, by-wire * Operating margin is calculated on sales incl. intra-Group sales. systems and couplings. Service Division Net sales by customer segment The Service Division serves the global industrial Net sales by customer segment 2009 2008 aftermarket providing products and knowledge- Net sales, SEKm 19,832 21,907 based services to increase customers’ plant Net sales asset efficiency. Solutions are based on SKF’s Service and service- related products 17% incl. intra-Group sales, SEKm 20,190 22,318 knowledge of bearings, seals, lubrication systems, mechatronics and services, and customers are Operating profit, SEKm 2,610 3,326 served by SKF and its network of over 7,000 Bearings and units, Operating margin* 12.9% 14.9% power transmission authorized distributors. The division runs three products, seals, Assets and liabilities, net, SEKm 4,834 5,668 Condition Monitoring Centres, who design and lubrication systems, linear motion and Registered number of employees 5,726 6,018 produce world-leading hardware and software. actuation systems 83% Service Division is also responsible for all SKF’s * Operating margin is calculated on sales incl. intra-Group sales. sales in certain markets. The expanding network of SKF Solution Factories will be the future infra- structure for delivering complete, integrated solutions incorporating all SKF’s technology platforms. Automotive Division Net sales by customer segment The Automotive Division serves manufacturers Net sales by customer segment 2009 2008 of cars, light trucks, heavy trucks, buses, two- Net sales, SEKm 16,051 17,886 wheelers and the vehicle service market, Other 9% Net sales supporting them in bringing innovative and incl. intra-Group sales, SEKm 19,279 21,850 Two-wheelers 4% sustainable solutions to global markets. In addition, the division provides energy-saving Operating profit, SEKm -809 546 solutions for home appliances, power tools and Vehicle service market 33% Operating margin* -4.2% 2.5% electric motors. Within the Automotive Division, Assets and liabilities, net, SEKm 8,122 10,070 Cars 45% SKF develops and manufactures bearings, seals Registered number of employees 13,746 15,256 and related products and services. Products Trucks 9% include wheel hub bearing units, tapered roller * Operating margin is calculated on sales incl. intra-Group sales. bearings, small deep groove ball bearings, seals, and automotive specialty products for engine, steering and driveline applications. For the vehicle service market, the division provides complete repair kits, including a range of drive shafts and constant velocity joints.
  4. 4. Sustainability Sustainability is one of SKF’s key business drivers together with Profitability, Quality, Innovation Business Care Employee Care and Speed. SKF’s approach to sustaining growth while meeting environmental and social challenges is to work determinedly to integrate the long-term sustainable development approach into its BeyondZero SKF Care business practices, processes as well as product and solution offerings to the market and industry. Sustainability at SKF centres on the SKF Care approach to business, the environment, employees and the community. Environmental Community Care Care Business Care • As a result of SKF’s drive in reducing energy in 2000. Apart from that, health and fitness, • SKF endorses the Global Compact Ten Principles. intensity at manufacturing operations and the HIV/Aids programmes, skills and competence The SKF Code of Conduct is applicable to all carbon intensity of the energy used, an absolute training continued to be a focus area under employees worldwide and compliance audit is reduction of Scope 1 and 2 carbon dioxide Employee Care. carried out biennially at all units. emissions (according to the GHG Protocol) of • SKF employees provide their feedback on SKF’s • The SKF Code of Conduct for Suppliers and 90,000 tonnes was achieved. This is equivalent performance in relation to company values Sub-Contractors as well as the SKF Code of to a 18% reduction compared to the 2008 and key focus areas annually through the Conduct for Authorized Distributors have been total, surpassing the Group’s target by some global Working Climate Analysis. The analysis released with the aim to enforce an ethical 13 percentage points. also measures the working climate in different demand chain. • A new target for solvent reduction was defined, departments and individual teams in terms of • In continuing its launch of new bearing famlies to achieve an absolute 50% reduction by 2012, trust, co-operation, personal development and offering energy-efficient solutions, SKF released compared to 2007. A total of 25% reduction continuous improvement. the SKF Energy Efficient (E2) spherical and was achieved in 2009. cylindrical roller bearings. The SKF E2 bearing • SKF also aims for a minimum 80% recycling Community Care family outperforms standard ISO products, rate for grinding swarf by 2012. The 2009 • SKF encourages its local management to be providing a minimum 30% energy saving for recycling percentage of grinding swarf Group- actively involved in communities not only by customers, and is intended for a wide range of wide was at 70%. providing financial means but also commitment applications, such as industrial and wind through viable voluntary work and sports activ- energy transmissions. Employee Care ities, education, training, and helping under- • 120 out of 211 SKF units worldwide achieved privileged society. SKF has more than 200 Environmental Care zero recordable accidents for four quarters or Community Care activities in forty countries • The SKF Group-wide ISO 14001 Environmental more in 2009 and the number of recordable around the world. Please visit www.skf.com Management certificate comprised 97 sites in accidents has fallen by 89% per working hour for more information. 28 countries at the end of 2009. since the Zero Accidents target was established Management Board of Directors Tom Johnstone* President and Chief Executive Officer Elected by the Annual General Meeting Tore Bertilsson* Executive Vice President and Leif Östling, Chairman Chief Financial Officer Tom Johnstone, President and CEO Henrik Lange* President, Industrial Division Ulla Litzén Vartan Vartanian* President, Service Division Winnie Kin Wah Fok Tryggve Sthen* President, Automotive Division Hans-Olov Olsson Alan Begg Senior Vice President, Group Technology Lena Treschow Torell Development and Quality Peter Grafoner Carina Bergfelt General Counsel Lars Wedenborn Giuseppe Donato Senior Vice President and Advisor Joe Loughrey Eva Hansdotter Senior Vice President, Group Human Resources and Sustainability Employee representatives Magnus Johansson Senior Vice President, Group Business Kennet Carlsson Development and Government Relations Lennart Larsson Phil Knights Senior Vice President, Global Relations Jeanette Stenborg Rakesh Makhija President, Asia Marie Petersson Manfred Neubert President, SKF GmbH Bo-Inge Stensson Senior Vice President, Group Demand Chain and IT Ingalill Östman Senior Vice President, Group Communications * member of the Group Executive Committee The following topics related to the SKF Annual Report 2009 including Sustainability Report are to be found at www.skf.com, choose Investors and Reports. • Articles of Association • Environmental performance data • SKF Code of Conduct • Zero Accidents awards • The SKF Environmental, Health and Safety (EHS) Policy • Productions sites as of 31 December 2009 • Carbon dioxide emission data • The compliance table to GRI G3 Guidelines (GRI Index Table).

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