0




20 October 2009
The SKF Group



Nine-month results 2009




Tom Johnstone, President and CEO
Key points from Q3 report                                                   2




       •     Strong cash flow
          ...
Highlights Q3 2009                                                  3



       SKF
       • inaugurated its additional in...
Highlights Q3 2009                                                                            4


       SKF launched 11 n...
Third quarter 2009                                                                  5



           SEKm                  ...
First nine months 2009                                                               6



           SEKm                 ...
Growth in local currency                                                            7
        (Organic growth + Acquisitio...
Sales in local currencies (excl. structural changes)   8




      % change y-o-y
           15
                  10
     ...
Sales volume                         9




         % change y-o-y
             10
                  5
                  0...
Components in net sales                                                          10




                    2007          ...
Operating margin                                                                        11



                            ...
Operating margin                                                          12



                                          ...
Operating margin per division                                                                 13


            %
         ...
Activities to adapt to lower demand                                    14



         • Restructuring/impairment activitie...
Inventories as % of annual sales                             15




           %                              Long-term ta...
Return on capital employed                                                                  16




                       ...
Net debt                                                                           17
       (Short-term financial assets ...
AB SKF, debt structure                                               18




                                   Amount in m...
Cash flow, after investments before financial items                          19




        SEKm
         2 500
          ...
October 2009: Outlook for the fourth quarter 200920


                  Sales development compared to fourth quarter last ...
Volume trends                                                              21
        (based on current assumptions)




 ...
Sequential volume trend main segments Q4 2009   22
       (based on current assumptions)
       Net sales 2008

          ...
Guidance for the fourth quarter 2009                                            23




         • Tax level: around 30%
  ...
Key focus areas ahead 2009                                             24




                  • Profit and cash flow
   ...
SKF Care                                                                       25


                              Business...
SKF Group Vision                26




                  To equip the world
                  with SKF knowledge




20 Oc...
Cautionary statement                                                                              27




             This...
28




20 October 2009
Upcoming SlideShare
Loading in …5
×

Skf Internet Presentation Q3 2009

805 views

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
805
On SlideShare
0
From Embeds
0
Number of Embeds
94
Actions
Shares
0
Downloads
7
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Skf Internet Presentation Q3 2009

  1. 1. 0 20 October 2009
  2. 2. The SKF Group Nine-month results 2009 Tom Johnstone, President and CEO
  3. 3. Key points from Q3 report 2 • Strong cash flow Q3: SEK 1,359 m YTD September: SEK 4,307 m • Dramatic volume drop year over year. Trend indicates levelling off. Q3: -24.9% YTD September: -27.6% • Continued strong price/mix Q3: 3.7% YTD September: 5.5% • Cost reduction efforts in focus and giving results - annualised savings from all programmes, around SEK 800 million - significant short-time working being utilized. Now 14,000 people. • Demand outlook for Q4 - year over year: significantly lower - sequentially: slightly higher 20 October 2009
  4. 4. Highlights Q3 2009 3 SKF • inaugurated its additional investment in the factory for large size bearings in Dalian, China, which doubles the manufacturing capacity. • signed a Memorandum of Understanding with Sinovel Wind Co. Ltd for strategic partnership, and a series of contracts with a value exceeding SEK 330 m for main shaft bearings and sealing systems for 3MW wind turbines. • signed a service contract with Transocean. The contract is worth SEK 10 m and covers asset reliability services for 59 of Transocean's drilling rigs. • was selected as the sector leader for the IEQ Industrial Engineering sector in the 2009 Dow Jones Sustainability Indexes (DJSI). SKF was also included in the FTSE4Good Index Series, for the ninth year in succession. 20 October 2009
  5. 5. Highlights Q3 2009 4 SKF launched 11 new solutions to help customers increase equipment reliability, reduce maintenance costs and environmental impact: Sealed spherical Super precision Y-bearings roller bearings bearings Machine condition advisor Actuators Profile rail guides Telescopic pillar system Wind turbine blade Oil conditioning unit bearing grease Large diameter sealing solutions Sealing solutions for screw compressors 20 October 2009
  6. 6. Third quarter 2009 5 SEKm 2009 2008 Net sales 13,324 15,381 Operating profit 957* 2,085 Operating margin 7.2% 13.6% Operating margin excl. restructuring, % 8.7% 13.6% Profit before taxes 689 1,859 Net profit 483 1,257 Basic earnings per share, SEK 1.01 2.67 Cash flow after investments before financial items 1,359 -526 * Q3 restructuring around SEK 200 m Operating profit excl. restructuring activities SEK 1,157 m 20 October 2009
  7. 7. First nine months 2009 6 SEKm 2009 2008 Net sales 42,340 47,054 Operating profit 2,199* 6,260 Operating margin 5.2% 13.3% Operating margin excl. restructuring, % 7.3% 13.3% Profit before taxes 1,532 5,761 Net profit 1,200 3,922 Basic earnings per share, SEK 2.56 8.39 Cash flow after investments before financial items 4,307 215 * YTD September restructuring around SEK 875 m Operating profit excl. restructuring activities SEK 3,074 m 20 October 2009
  8. 8. Growth in local currency 7 (Organic growth + Acquisition/Divestments) Long-term target level: 6-8% per annum % y-o-y 15 13.2% 10 7.1% 5 -20.8% 0 -5 -10 -15 -20 -25 2007 2008 YTD September 2009 Organic growth Acquisitions/Divestments 20 October 2009
  9. 9. Sales in local currencies (excl. structural changes) 8 % change y-o-y 15 10 5 0 -5 -10 -15 -20 -25 -30 2007 2008 2009 20 October 2009
  10. 10. Sales volume 9 % change y-o-y 10 5 0 -5 -10 -15 -20 -25 -30 -35 2007 2008 2009 20 October 2009
  11. 11. Components in net sales 10 2007 2008 2009 Percent y-o-y Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Volume 7.9 6.9 9.0 6.3 4.9 6.2 2.7 -13.0 -26.9 -30.8 -24.9 Structure 4.0 4.6 3.7 1.0 1.0 1.3 0.5 2.4 1.4 1.1 1.2 Price / Mix 1.8 2.7 2.0 3.2 3.8 4.0 6.4 8.5 7.1 5.6 3.7 Sales in local 13.7 14.2 14.7 10.5 9.7 11.5 9.6 -2.1 -18.4 -24.1 -20.0 currency Currency -5.6 -2.3 -1.9 -2.0 -1.2 -4.1 -0.9 10.3 13.6 12.2 6.6 Net sales 8.1 11.9 12.8 8.5 8.5 7.4 8.7 8.2 -4.8 -11.9 -13.4 20 October 2009
  12. 12. Operating margin 11 Long-term target level: 12% % 14 13.3* 12.7* 12 12.9 10 12.2 7.3* 8 6 4 5.2 2 0 2007 2008 YTD September 2009 Restructuring and one-time items * Excluding restructuring and one-time items 20 October 2009
  13. 13. Operating margin 12 Long-term target level: 12% % 16 14 12 10 8 6 4 2 0 2007 2008 2009 Restructuring and one-time items 20 October 2009
  14. 14. Operating margin per division 13 % 18 16 14 12 Service 10 8 6 Industrial 4 2 Automotive 0 -2 -4 -6 -8 -10 -12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2009 Excluding one-off items (eg. restructuring, impairments, capital gains) 20 October 2009
  15. 15. Activities to adapt to lower demand 14 • Restructuring/impairment activities People Costs charged to operating profit Q4 2008 2,500 SEK 340 m Q1 2009 500 SEK 175 m Q2 2009 900 SEK 500 m Q3 2009 70 SEK 200 m 3,970 SEK 1,215 m At the end of September 2009, around 4,400 people have left the Group since the third quarter last year, of which around 2,500 people under the programmes. Total savings from these activities around SEK 800 m. • In addition, around 14,000 people in short-time working end of September 2009. 20 October 2009
  16. 16. Inventories as % of annual sales 15 % Long-term target level: 18% 25 24 23 22 21 20 19 18 2007 2008 2009 20 October 2009
  17. 17. Return on capital employed 16 Long-term target level: 24% % 30 24.9 24.0 25 20 15 10.2 10 5 0 2007 2008 YTD September 2009 ROCE: Operating profit plus interest income, as a percentage of twelve months average of total assets less the average of non- interest bearing liabilities. 20 October 2009
  18. 18. Net debt 17 (Short-term financial assets minus loans and post-employment benefits) SEKm 0 AB SKF, -2 000 dividend paid (SEKm): -4 000 2007 Q2 2,049 -6 000 2008 Q2 2,277 -8 000 2009 Q2 1,594 -10 000 Redemption (SEKm): -12 000 2007 Q2 4,554 -14 000 2008 Q2 2,277 -16 000 -18 000 2007 2008 2009 20 October 2009
  19. 19. AB SKF, debt structure 18 Amount in million Maturity Euro Bond EUR 132* 2010-06 SEK Bond SEK 1,500 2011-06 Term loan in euro EUR 150 2013-06 Euro Bond EUR 500 2013-12 Euro loans EUR 130 2014-03 Euro loan EUR 100 2016-06 * Was EUR 250 million, reduced by EUR 118 million in Q2. 20 October 2009
  20. 20. Cash flow, after investments before financial items 19 SEKm 2 500 Cash out from 2 000 acquisitions* (SEKm): 1 500 2007 1,209 2008 1,284 1 000 2009 239 500 0 -500 -1 000 2007 2008 2009 * including non-controlling interests. 20 October 2009
  21. 21. October 2009: Outlook for the fourth quarter 200920 Sales development compared to fourth quarter last year The demand for SKF products and services is expected to be significantly lower for the Group in total and in Europe and North America. In Asia it is expected to be unchanged and in Latin America slightly higher. It is expected to be unchanged for the Automotive Division but significantly lower for the Industrial Division and Service Division. Sales development compared to the third quarter this year The demand is expected to be slightly higher for the SKF Group in total. It is expected to be relatively unchanged in Europe and North America and slightly higher in Asia and Latin America. It is expected to be relatively unchanged for the Automotive Division and slightly higher for both the Service Division and the Industrial Division. Manufacturing level The manufacturing level will be significantly lower year on year and slightly higher compared to the third quarter. 20 October 2009
  22. 22. Volume trends 21 (based on current assumptions) Net sales Daily volume trends for: Outlook Q4 2008 Q3 2009 Q4 2009 2009 vs 2008 Europe 56% --- North America 17% --- Asia Pacific 19% = Latin America 5% + Total --- 20 October 2009
  23. 23. Sequential volume trend main segments Q4 2009 22 (based on current assumptions) Net sales 2008 5% Aerospace 13% Cars 12% Industrial OEM, Heavy+Off-highway 9% Vehicle Service Market 6% Energy 5% Trucks 23% Industrial distribution 20% Industrial OEM, General+Special 3% Railway 3% Electrical and two-wheeler 20 October 2009
  24. 24. Guidance for the fourth quarter 2009 23 • Tax level: around 30% • Financial net for the fourth quarter: Around SEK -200 million • Exchange rates on operating profit versus 2008 Q4: +0 - Full year: SEK 750 million • Additions to PPE: Around SEK 2 billion for 2009 Guidance is approximate and based on current assumptions and exchange rates. 20 October 2009
  25. 25. Key focus areas ahead 2009 24 • Profit and cash flow - maintain positive price/mix - drive operational efficiency and cost reduction - reduce working capital and investments • Adjustment of manufacturing output to new demand levels - restructuring - short-time working • Growing segments and geographies • Strengthening the platform/segment approach • Competence development SKF Care and Six Sigma as guiding lights 20 October 2009
  26. 26. SKF Care 25 Business Care Employee Care 14 12 10 8 6 4 2 0 2003 2004 2005 2006 2007 2008 Operating margin BeyondZeroTM SKF Care Environmental Care Community Care 20 October 2009
  27. 27. SKF Group Vision 26 To equip the world with SKF knowledge 20 October 2009
  28. 28. Cautionary statement 27 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 www.skf.com) under the Administration Report; "Most important factors influencing the financial results", "Financial risks" and "Sensitivity analysis”. 20 October 2009
  29. 29. 28 20 October 2009

×