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Skf internet presentation_q22010

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Skf internet presentation_q22010

  1. 1. 0 15 July 2010
  2. 2. The SKF Group Half-year results 2010 Tom Johnstone, President and CEO
  3. 3. Key points, Q2 report 2 • Record levels Operating profit: SEK 2,239 m (474). Q209 include SEK 500 m in restructuring Operating margin: 14.3% (3.4) • Organic sales development in local currency: Industrial Division: +7.1% Service Division: +17.0% Automotive Division: +23.6% Outlook for Q3 • Demand Significantly higher compared to Q3 2009 Slightly higher sequentially compared to Q2 2010, adjusted for normal seasonality • Manufacturing level Significantly higher year over year Relatively unchanged compared to Q2 2010, adjusted for normal seasonality 15 July 2010
  4. 4. Highlights 2010 3 • SKF inaugurated: − a new factory in Tver, Russia, to produce the new generation of SKF’s sealed and pre-lubricated compact tapered bearing units for railway customers. − a Global Technical Centre China in Shanghai. − three new SKF Solution Factories, one in Schweinfurt, Germany, one in Montigny, France and one in Moscow, Russia. • SKF signed a framework agreement with the State Forestry Administration in China to plant new forests. 15 July 2010
  5. 5. Highlights 2010 4 • SKF has assisted S-OIL, a large South Korean oil refinery, to increase productivity and reduce potential production downtime. • SKF was awarded an agreement with ZF Sachs Italy to supply 140,000 oil seals and wiper seals for motorcycle forks. • SKF signed a three-year contract with Valeo to supply SKF Rotor Positioning Bearings for the new i-StARS, Valeos stop-start system. • SKF received the “Golden Mousetrap” award in the 2010 “Best products awards” for the new SKF Machine Condition Advisor. 15 July 2010
  6. 6. Sales volume 5 % change y-o-y 20 15 10 5 0 -5 -10 -15 -20 -25 -30 -35 2008 2009 2010 15 July 2010
  7. 7. Sales in local currencies (excl. structural changes) 6 % change y-o-y 20 15 10 5 0 -5 -10 -15 -20 -25 -30 2008 2009 2010 15 July 2010
  8. 8. Growth in local currency 7 (Organic growth + acquisition/divestments) Long-term target level: 6-8% per annum % y-o-y 15 10.4% 10 7.1% 5 -19.0% 0 -5 -10 -15 -20 2008 2009 YTD June 2010 Organic growth Acquisitions/Divestments 15 July 2010
  9. 9. Growth development by geography 8 Local currency Q2 2010 vs Q2 2009 Europe +9% North America +11% Asia/Pacific +36% Latin America +24% Middle East & Africa +9% 15 July 2010
  10. 10. Growth development by geography 9 Local currency H1 2010 vs H1 2009 Europe +1% North America +6% Asia/Pacific +35% Latin America +23% Middle East & Africa +10% 15 July 2010
  11. 11. Components in net sales 10 2008 2009 2010 Percent y-o-y Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Volume 4.9 6.2 2.7 -13.0 -26.9 -30.8 -24.9 -14.1 5.3 16.6 Structure 1.0 1.3 0.5 2.4 1.4 1.1 1.2 0.4 0.0 0.0 Price / Mix 3.8 4.0 6.4 8.5 7.1 5.6 3.7 0.3 -0.3 -0.5 Sales in local 9.7 11.5 9.6 -2.1 -18.4 -24.1 -20.0 -13.4 5.0 16.1 currency Currency -1.2 -4.1 -0.9 10.3 13.6 12.2 6.6 -1.4 -7.7 -5.2 Net sales 8.5 7.4 8.7 8.2 -4.8 -11.9 -13.4 -14.8 -2.7 10.9 15 July 2010
  12. 12. Operating profit 11 SEKm 2 400 2 200 2 000 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 2008 2009 2010 Restructuring and one-time items 15 July 2010
  13. 13. Operating margin 12 Long-term target level: 12% % 16 14 12 10 8 6 4 2 0 2008 2009 2010 Restructuring and one-time items 15 July 2010
  14. 14. Operating margin 13 Long-term target level: 12% % 14 13.4* 12.7* 12 13.1 12.2 10 8.0* 8 6 5.7 4 2 0 2008 2009 YTD June 2010 Restructuring and one-time items * Excluding restructuring and one-time items 15 July 2010
  15. 15. Operating margin per division 14 % 18 16 14 Service 12 Industrial 10 8 Automotive 6 4 2 0 -2 -4 -6 -8 -10 -12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2008 2009 2010 Excluding one-off items (eg. restructuring, impairments, capital gains) 15 July 2010
  16. 16. Second quarter 2010 15 SEKm 2010 2009 Net sales 15,709 14,167 Operating profit 2,239 474 Operating margin, % 14.3% 3.4% Operating margin excl. restructuring, % 14.3% 6.9% Profit before taxes 2,047 312 Net profit 1,451 323 Basic earnings per share, SEK 3.09 0.69 Cash flow after investments before 1,160 2,425 financial items 15 July 2010
  17. 17. Half year 2010 16 SEKm 2010 2009 Net sales 30,155 29,016 Operating profit 3,941 1,242 Operating margin, % 13.1% 4.3% Operating margin excl. restructuring, % 13.4% 6.6% Profit before taxes 3,551 843 Net profit 2,521 717 Basic earnings per share, SEK 5.36 1.55 Cash flow after investments before 1,192 2,948 financial items 15 July 2010
  18. 18. Inventories as % of annual sales 17 % Long-term target level: 18% 25 24 23 22 21 20 19 18 2008 2009 2010 15 July 2010
  19. 19. Cash flow, after investments before financial items 18 SEKm 2 500 Cash out from 2 000 acquisitions* (SEKm): 1 500 2008 1,284 2009 241 1 000 500 0 -500 -1 000 2008 2009 2010 * including non-controlling interests. 15 July 2010
  20. 20. Return on capital employed 19 Long-term target level: 24% % 30 24.0 25 20 16.8 15 9.1 10 5 0 2008 2009 YTD June 2010 ROCE: Operating profit plus interest income, as a percentage of twelve months average of total assets less the average of non- interest bearing liabilities. 15 July 2010
  21. 21. Net debt 20 (Short-term financial assets minus loans and post-employment benefits) SEKm 0 AB SKF, -2 000 dividend paid (SEKm): -4 000 2008 Q2 2,277 -6 000 2009 Q2 1,594 -8 000 2010 Q2 1,594 -10 000 Redemption (SEKm): -12 000 2008 Q2 2,277 -14 000 -16 000 -18 000 2008 2009 2010 15 July 2010
  22. 22. Debt structure 21 Maturity years, EURm 500 400 450 300 200 100 130 100 100 55 0 2010 2011 2012 2013 2014 2015 2016 • Repaid eurobond EUR 132 m, due June 2010 • Repaid EUR 100 m on loan, due June 2013 • New eurobond EUR 100 m, due April 2015 15 July 2010
  23. 23. June 2010: Outlook for the third quarter 2010 22 Development compared to third quarter last year The demand for SKF products and services is expected to be significantly higher for the Group, the divisions and for the different geographical areas. Development compared to the second quarter 2010 and adjusted for normal seasonality The demand is expected to be slightly higher for the SKF Group in total. It is expected to be unchanged in Europe, slightly higher in North America and higher in Asia and Latin America. For the Automotive Division it is expected to be relatively unchanged and for the Industrial Division and Service Division it is expected to be slightly higher. Manufacturing level The manufacturing level will be significantly higher year on year and relatively unchanged compared to the second quarter, adjusted for normal seasonality. 15 July 2010
  24. 24. Volume trends, regions 23 (based on current assumptions and adjusted for seasonality) Net sales Daily volume trends for: Outlook Q3 2009 Q2 2010 Q3 2010 2010 vs 2009 Europe 51% +++ North America 17% +++ Asia Pacific 23% +++ Latin America 6% +++ Total +++ 15 July 2010
  25. 25. Volume trends, divisions 24 (based on current assumptions and adjusted for seasonality) Net sales Daily volume trends Outlook Q3 2009 for Q3 2010 2010 vs 2009 Industrial 34% +++ Service 35% +++ Automotive 29% +++ Total +++ 15 July 2010
  26. 26. Sequential volume trend main segments Q3 2010 25 (based on current assumptions) Net sales 2009 14% Cars 7% Aerospace 7% Energy 5% Railway 22% Industrial distribution 16% Industrial OEM, General+Special 12% Vehicle Service Market 11% Industrial OEM, Heavy + Off-highway 3% Electrical and two-wheeler 3% Trucks 15 July 2010
  27. 27. Guidance for the third quarter 2010 26 • Tax level: around 30% • Financial net for the third quarter: Around SEK -175 million • Exchange rates on operating profit versus 2009 Q3: +/- 0 Full year: SEK -250 million • Additions to PPE: Around SEK 1.5 billion for 2010 Guidance is approximate and based on current assumptions and exchange rates. 15 July 2010
  28. 28. Key focus areas ahead 2010 27 • Profit and cash flow • Adjustment of manufacturing output to new demand levels • Growing segments and geographies • Strengthening the platform/segment approach • Competence development SKF Care and Six Sigma as guiding lights 15 July 2010
  29. 29. SKF Care 28 Business Care Employee Care 14 12 10 8 6 4 2 0 2003 2004 2005 2006 2007 2008 2009 Operating margin BeyondZeroTM SKF Care Environmental Care Community Care 15 July 2010
  30. 30. SKF Group Vision 29 To equip the world with SKF knowledge 15 July 2010
  31. 31. Cautionary statement 30 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; “Important factors influencing the financial results", "Financial risks" and "Sensitivity analysis”. 15 July 2010
  32. 32. 31 15 July 2010

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