Presentation on theme: "SKF Year-end results 2014 Alrik Danielson, President and CEO"— Presentation transcript:
1SKF Year-end results 2014 Alrik Danielson, President and CEO 28 January 201510 April 2017
2Examples of new business in Q4 2014 GE Aviation and Safran Group, Mainshaft and gearbox (Snecma & Hispano-Suiza) bearingsChongqing Gearbox Co., Ltd, China Bearing setsAndritz Hydro, Germany Special bearing and sealing solutionMazda, Mexico Low-friction wheel bearing unitsDaimler, Germany Wheel hub bearing unitsJiangsu Jintongling Fluid Machinery Co., Ltd, High-speed permanent China magnetic motor unit solutions
3Examples of new business in Q1 – Q3 2014 Hindustan Aeronautics Ltd, India Customized bearings for helicopter transmission and main rotorBell Helicopter Textron Inc.,USA Elastomeric bearingsTurbogaz, Ukraina Magnetic bearingsSCA, BillerudKorsnäs, Condition monitoring solutions Vattenfall, SwedenGeely Automobile, China Transmission sealsVolkswagen, Germany Energy efficient tapered roller and ball bearingsEnvision Energy, China Strategic long-term partnership
4Examples of new business in Q1 – Q3 2014 Dongfang Electric New Energy, China Main shaft bearings equipmentAurizon, Australia Service contractDoosan Heavy Industries and SKF Supergrip Bolts Construction, South Korea and SKF Nautilus bearingHSD SpA, Italy Super precision bearings and engineering supportTesla Motors, USA Bearing for the gearbox, e-motor and wheelsVolvo Cars, Sweden Wheel hub bearing unitsScania, Sweden Wheel bearing units and high pressure valve stem seals
5Customer awards Q4 2014Best supplier award – Kirloskar Pneumatic Company Ltd., IndiaBest supplier award – Nanjing Gearbox Company, ChinaTop runner-up ’Best Vendor’ – Tata Steel, IndiaWinner ’Cloud’ category – Software AG Innovation AwardsSupplier Quality Excellence awards 2014 – General Motors, USAQuality Silver Award 2014 – Bajaj Auto Limited, India
6Examples of new technologies, products and solutions 2014 SKF Wireless Machine Condition SensorSKF Mudblock cassette seals, MUD 11SKF Gear Bearing UnitSKF Wireless MicroVibeCompact tapered roller bearing unit for heavy freightTapered roller bearing unitfor passenger railway applicationsElectric grease transfer pumpSKF Oil Injection Sets - THKI seriesConnectSKF TachometerFloatingpistonPuraBreeze 100
7SKF Group – Q4 2014 Financial performance (SEKm) 2014 2013 Net sales 18 49916 430Operating profit1 608-1 547Operating margin, %8.7-9.4Operating margin excl. one-time items, %11.211.0Profit before tax1 293-1 760Basic earnings per share, SEK1.84-4.57Cash flow after investments before financing2 053-6 732Organic sales growth in local currency:SKF Group2.8%Europe1%Strategic Industries7.4%North America2%Regional Sales and Service2.2%Asia8%Automotive-0.5%Latin America4%Middle East and Africa-5%Key pointsSales volumes up by 1.8% y-o-y.Manufacturing was relatively unchanged compared to last year.
8SKF Group – 2014 Financial performance (SEKm) 2014 2013 Net sales 70 97563 597Operating profit7 8013 693Operating margin, %11.05.8Operating margin excl. one-time items, %11.711.9Profit before tax6 6682 821Basic earnings per share, SEK10.102.0Cash flow after investments before financing excl. EU payment4 6935 342Cash flow after investments before financing1 868Organic sales growth in local currency:SKF Group3.9%Europe1%Strategic Industries8.4%North America3%Regional Sales and Service1.8%Asia10%Automotive2.0%Latin AmericaMiddle East and Africa9%Key pointsSales volumes up by 3.3% y-o-y.Manufacturing was slightly higher compared to last year.
9Organic sales growth in local currency % changey-o-y201220132014
10Organic sales growth in local currency % y-o-y3.9%-0.7%-2.5%Structure in 2012: 0.4%Structure in 2013: 2.5%Structure in 2014: 3.7%
11Sales development by geography Organic growth in local currency Q4 2014 vs Q4 2013 Europe1%NorthAmerica2%Asia/Pacific8%LatinAmerica4%Middle East& Africa-5%
12Sales development by geography Organic growth in local currency 2014 vs 2013 Europe1%NorthAmerica3%Asia/Pacific10%LatinAmerica1%Middle East& Africa9%
13Components in net sales 201220132014Percent y-o-yQ1Q2Q3Q4Volume-0.8-2.8-5.0-5.9-8.7-220.127.116.11.18.104.22.168Structure-0.10.00.81.01.52.61.14.22.214.171.124.9Price/mix2.00.50.7-0.6-0.2-0.41.3Sales in local currency-3.7-4.2-126.96.36.199.710.58.48.63.7Currency-2.7-3.6-4.0-2.2-188.8.131.52Net sales1.42.8-6.4-7.8-10.5-4.69.610.49.513.912.6
21Net working capital as % of annual sales Target: 27%%201220132014
22Return on capital employed One-time items* Excluding one-time items%17.1*15.1*14.8*184.108.40.206ROCE: Operating profit plus interest income, as a percentage of twelve months rolling average of total assets less the average of non-interest bearing liabilities.
23Cash flow, after investments before financing SEKm1)5)4)3)2)201220132014Excl. acq. and div.: 1) Q SEK million2) Q SEK -69 million3) Q SEK 871 million4) Q SEK millionExcl. EU payment 5) Q SEK million
24Net debt AB SKF, dividend paid (SEKm): 2012 Q2 2 504 2013 Q2 2 530 Cash out from majoracquisitions (SEKm):2012 Q3 8292013 Q1 8232013 QEU payment (SEKm):2014 Q201220132014Net debt: Loans and net provisions for post-employment benefits less short-term financial assets excluding derivatives.
25Debt structure, maturity years 850500500200110100100Available credit facilities:EUR 500 million 2019SEK million 2016EUR 150 million 2017No financial covenants nor material adverse change clause
26January 2015: SKF demand outlook Q1 2015 Demand compared to the first quarter 2014The demand for SKF’s products and services are expected to be slightly higher for the Group, higher for Asia and relatively unchanged for Europe, North America and Latin America. It is expected to be relatively unchanged for Automotive Market and Specialty Business and slightly higher for Industrial Market.Demand compared to the fourth quarter 2014The demand for SKF’s products and services are expected to be relatively unchanged for the Group, Europe and Latin America, and slightly higher for Asia and North America. It is expected to be relatively unchanged for Industrial Market and Automotive Market and slightly higher for Specialty Business.ManufacturingManufacturing is expected to be higher year over year and compared to the fourth quarter.
27SKF demand outlook Q1 2015, main regions Share of net sales 2014Europe41%Asia Pacific25%North AmericaLatin America6%TotalSequential trend for Q1 2015Q1 2015vs Q1 2014+/-+++
28SKF demand outlook Q1 2015, main business areas Share of net sales 2014Industrial Market60%Automotive Market26%Specialty Business13%TotalSequential trend for Q1 2015Q1 2015vs Q1 2014++/-
29SKF sequential volume trend Q1 2015, Industries Share of net sales 201414%Cars and light vehicles6%Energy28%Industrial distributionIndustrial, heavy, special and off-highway11%Industrial, general9%Vehicle service marketAerospace5%RailwayTrucks2%Two-wheelers and Electrical
30Guidance for the first quarter 2015* Tax level: < 30%Financial net: around SEK -250 millionCurrency impact on operating profit vs Q1: SEK +300 millionFull year: SEK +900 millionAdditions to PPE: around SEK 1.7 billion for 2015* Guidance is approximate and based on current assumptions and exchange rates.
31SKF’s programme to improve efficiency and reduce cost RestructuringQ4 12Q1 13Q2 13Q3 13Q4 132013Q1 14Q2 14Q3 14Q4 142014TotalCost, SEKm20025019050490100202203401 030People affected530410320130860170303001 690Giving future gross savings:Full year gross savings SEKm15080405205575Realized gross savings from total programme, SEKmQ1 13Q2 13Q3 13Q4 132013Q1 14Q2 14Q3 14Q4 142014Restructuring153575200705010140S&APurchasing10040060360Total165185225800130150110500
32New productivity improvement programme Main activities: Productivity gain through merging the industrial businesses - merger between Strategic Industries & Regional Sales and Service worldwide - streamlining of supporting country organisations in all main countriesGeneral staff optimization and productivity improvements - in Group Headquarters and central staff functions in the Automotive businessReduction of annual cost by SEK 1.2 billion by the end of 2016Total cost for the programme around SEK 1.4 billion1 500 people impacted.Major part of the programme implemented within 2015.
33Cautionary statementThis 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; “Important factors influencing the financial results", "Financial risks" and "Sensitivity analysis”.