SKF Year-end Report 2016

News provided by

SKF

02 Feb, 2017, 12:31 GMT

GÖTEBORG, Sweden, Feb 02, 2017 /PRNewswire/ --

Alrik Danielson, President and CEO:

"In 2016 we have seen market conditions gradually improve and SKF is now growing again. In the fourth quarter, organic sales increased by 1.2% compared to last year. Sequentially, sales were slightly higher, mainly driven by Asia. Net sales in the quarter were SEK 18.8 billion. We saw a gradual strengthening in demand during the quarter and less of the seasonal pre-buying which is otherwise associated with that time of year.

Operating profit, excluding one-time items, was SEK 1 741 million, which was slightly higher than last year. Our operating margin, excluding one-time items, was 9.3%. The cost in the quarter for our new ERP-system amounted to SEK 280 million and impacted the margin negatively by 1.5 percentage points.

Our industrial business delivered an operating margin, excluding one-time items, of 11.0%. We saw higher demand in Asia, especially in industrial distribution, but also in industrial drives. Total demand in Europe was relatively unchanged but we saw growth in our distribution business as well as in the rail and industrial general industries. In North America, market conditions continue to be challenging, but the development in the market is stabilizing.

Our automotive business delivered an operating margin, excluding one-time items, of 5.3%. Organic sales increased by 3.3% in the quarter, compared to the corresponding quarter last year, driven mainly by strong growth in Asia for both cars and trucks.

Our cash flow continued to be strong, at SEK 1 428 million in the fourth quarter. Net debt decreased by SEK 3 billion and strengthened the balance sheet and brought us close to our net debt/equity target of 80%.

In the past month, we have announced further strategic investments in our factories in Schweinfurt, Germany and Dalian, China. During the last 18 months, investments have been announced in our manufacturing facilities and distribution centres across the world. The first of the investments to be completed is the new spherical roller bearing channel in Gothenburg, where the first customer trial orders are now being produced.

Our new ERP-system went live in Sweden and Finland on 4 January. This is a significant investment for the Group and I am pleased to say that the launch went according to plan.

For the first quarter 2017, demand for our products and services is expected to be slightly higher compared to last year and relatively unchanged compared to the fourth quarter of 2016."

 

Key figures, SEKm

 

Q4
2016

 

Q4
2015

 

FY
2016

 

FY
2015

 

Net sales

 

18 785

 

18 215

 

72 787

 

75 997

 

Operating profit excl. one-time items

 

1 741

 

1 726

 

7 544

 

8 655

 

Operating margin excl. one-time items, %

 

9.3

 

9.5

 

10.4

 

11.4

 

One-time items in operating profit

 

-155

 

-687

 

-17

 

-1 687

 

Operating profit

 

1 586

 

1 039

 

7 527

 

6 968

 

Operating margin, %

 

8.4

 

5.7

 

10.3

 

9.2

 

Financial one-time items

 

-

 

-286

 

-

 

-336

 

Profit before taxes excl. operating and financial one-time items

 

1 531

 

1 626

 

6 756

 

7 857

 

Profit before taxes

 

1 376

 

653

 

6 739

 

5 834

 

Net cash flow after investments before financing

 

1 428

 

1 966

 

7 717

6 416





 

Net sales change y-o-y, %

 

Organic

 

Structure

 

Currency

 

Total

 

Q4 2016

 

1.2

 

-1.8

 

3.7

 

3.1

 

FY 2016

 

-1.6

 

-2.2

 

-0.4

 

-4.2











Organic sales change in local currencies, per region y-o-y, %:

Europe

North America

Latin America

Asia

Middle East and Africa

 

Q4 2016

 

0.9

 

-4.4

 

-4.5

 

8.1

 

6.6

 

FY 2016

 

1.7

 

-7.3

 

-4.1

 

-0.9

 

2.3






Dividend Proposal

The Board has decided to propose an unchanged dividend of SEK 5.50 per share to the Annual General Meeting.

Outlook for the first quarter 2017

Demand compared to the first quarter 2016

The demand for SKF's products and services is expected to be slightly higher for the Group and for Industrial. Demand for Automotive is expected to be higher. Demand is expected to be slightly higher in Europe, North America and in Latin America and higher in Asia.

Demand compared to the fourth quarter 2016

The demand for SKF's products and services is expected to be relatively unchanged for the Group and for Industrial. Demand for Automotive is expected to be higher. Demand is expected to be higher in Europe and North America, slightly lower in Latin America and significantly lower in Asia.

A teleconference will be held on 2 February 2017 at 14:00 (CEST):

SE: +46-8-5352-6408
UK: +44-20-7136-2051
US: +1-718-354-1158

You will find all information regarding the SKF Year-end report 2016 on the IR website.

Aktiebolaget SKF
      (publ)

The information in this press release is information which AB SKF is required to disclose under the EU Market Abuse Regulation (EU) No 596/2014. The information was provided by the above contact persons for publication on 2 February 2017 at 13.00 CET.

For further information, please contact:

PRESS:

Theo Kjellberg,
Director, Press Relations
Tel: 46-31-337-6576,
Mobile: 46-725-776576,
E-mail: theo.kjellberg@skf.com

INVESTOR RELATIONS:

Patrik Stenberg,
Head of Investor Relations
Tel: 46 31-337 2104; 46 705-472 104
E-mail: patrik.stenberg@skf.com

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SOURCE SKF