GÖTEBORG, Sweden, Oct. 26, 2021 /PRNewswire/ -- Rickard Gustafson, President and
CEO:
"The third quarter saw continued solid demand. Our Industrial
business, which represents approximately 75% of sales, maintained
its strong momentum, despite challenges from logistics constraints
and cost inflation. Our Automotive business was significantly
impacted by reduced production amongst key customers, especially
in September. Throughout the whole business, we have worked hard
and diligently to mitigate the negative impact of these external
circumstances.
Organic growth in the quarter was 8%, with Industrial growing
by a strong 13% and Automotive down by -5%. Net sales were
SEK 20,146 million (18,596). We saw
growth in all regions, with some levelling off in Asia.
The adjusted operating profit was SEK
2,672 million (2,475) and the adjusted operating margin was
13.3% (13.3%).
Our Industrial business delivered a strong result, further
increasing its adjusted operating margin to 17% (16%), despite very
challenging conditions during the quarter, including cost inflation
and logistics availability. We are seeing particularly strong
growth in industrial drives, industrial distribution and
off-highway applications. On a regional basis, Europe, North
America and Latin America
saw the strongest growth levels.
Our Automotive business was impacted by reduced production at
key customers, often with short notice, resulting in lower sales,
reduced productivity and a build-up of inventories. Demand in the
automotive aftermarket stayed strong, however, due to the volatile
demand from car manufacturers, the adjusted operating margin came
in at 4% (7%). Whilst underlying demand for cars was strong, we are
meeting continued uncertainty with actions to protect our margins,
including reviewing commercial terms and manufacturing
capacity.
On a Group level, we continue to consolidate our manufacturing
footprint, with a further six sites to be closed by the end of the
year, taking the total since 2019 to 12.
Cash flow generation in the quarter was SEK 1,470 million (2,266), mainly driven by
increased inventories due to logistics bottlenecks, customer
shutdowns and higher investments.
The Group already has ambitious CO2 reduction targets for its
own operations, including a net zero objective for 2030. We're now
taking the next step, with an ambition to also have a net zero
greenhouse gas supply chain by 2050. Steel is the main source of
emissions in our supply chain, and we are working with suppliers
and partners, such as SteelZero, Responsible Steel and Luleå
University, to speed up the development of fossil-free bearing
steel.
Taking a more long-term view, I am convinced of our ability to
continue to build on our strong brand and technological leadership.
Our focus right now is articulating a roadmap for securing the
growth that will help us achieve our financial and operational
targets. Therefore, we have commenced a strategic review
initiative, which will help us identify how to maximize the full
potential of our current business as well as prioritize future
technology and footprint investments. The review will be completed
by the turn of the year and presented in conjunction with our full
year results in early 2022.
Looking into the fourth quarter, we expect to see continued
challenging conditions from cost inflation and constrained
logistics. In terms of sales, we expect a continued solid demand
across our Industrial business. Demand development in our
Automotive business will remain uncertain, with supply constraints
and production delays resulting in very different market conditions
than those experienced in the fourth quarter last year. Given the
uncertainties in the market, we expect organic sales for the fourth
quarter to be in-line with the previous year."
Key figures,
SEKm
|
Q3
2021
|
Q3
2020
|
Jan-Sep
2021
|
Jan-Sep
2020
|
Net sales
|
20,146
|
18,596
|
60,746
|
55,280
|
Adjusted operating
profit
|
2,672
|
2,475
|
8,578
|
6,612
|
Adjusted operating
margin, %
|
13.3
|
13.3
|
14.1
|
12.0
|
Operating
profit
|
2,588
|
1,922
|
8,165
|
4,859
|
Operating margin,
%
|
12.8
|
10.3
|
13.4
|
8.8
|
Adjusted profit
before taxes
|
2,524
|
2,273
|
8,150
|
5,909
|
Profit before
taxes
|
2,440
|
1,720
|
7,736
|
4,156
|
Net cash flow after
investments before financing
|
1,470
|
2,266
|
1,277
|
3,358
|
Basic earnings per
share
|
3.86
|
2.59
|
12.36
|
6.09
|
Adjusted earnings per
share
|
4.04
|
3.80
|
13.27
|
9.94
|
|
|
|
|
|
Net sales change
y-o-y, %, Q3
|
Organic
|
Structure
|
Currency
|
Total
|
SKF Group
|
7.7
|
–
|
0.6
|
8.3
|
Industrial
|
13.3
|
–
|
0.3
|
13.6
|
Automotive
|
-5.2
|
–
|
1.3
|
-3.9
|
|
|
|
|
|
Net sales change
y-o-y, %, Jan-Sep 2021
|
Organic
|
Structure
|
Currency
|
Total
|
SKF Group
|
15.6
|
–
|
-5.8
|
9.8
|
Industrial
|
13.1
|
–
|
-5.7
|
7.4
|
Automotive
|
22.4
|
–
|
-5.8
|
16.6
|
|
|
|
|
|
Organic sales
change in local currencies, per region y-o-y, %, Q3
|
EMEA
|
North
America
|
Latin
America
|
Asia
|
SKF Group
|
11.9
|
7.2
|
12.7
|
1.6
|
Industrial
|
+++
|
+++
|
+++
|
++
|
Automotive
|
-
|
---
|
+/-
|
--
|
|
|
|
|
|
Organic sales
change in local currencies, per region y-o-y, %, Jan-Sep
2021
|
EMEA
|
North
America
|
Latin
America
|
Asia
|
SKF Group
|
16.0
|
10.4
|
32.6
|
14.8
|
Industrial
|
+++
|
+++
|
+++
|
+++
|
Automotive
|
+++
|
+++
|
+++
|
+++
|
Outlook and guidance
Demand for Q4 2021 compared to Q4 2020
Looking ahead, uncertainty remains and in terms of sales, we
expect to see continued supply chain challenges among our
customers. We expect organic sales for the fourth quarter to be
relatively unchanged compared to the fourth quarter 2020.
Guidance Q4 2021
Currency impact on the operating profit is expected to be around
SEK 50 million compared with Q4 2020,
based on exchange rates per 30 September
2021.
Guidance 2021
- Tax level excluding effects related to divested businesses:
around 26%. Previous guidance was around 28%.
- Additions to property, plant and equipment: around SEK 3,800 million.
A teleconference will be held on 26
October 2021 at 09:00 (CEST):
Sweden +46 10 884 80 16
UK / International +44 203 936 2999
Passcode: 101419
https://investors.skf.com/en
Aktiebolaget SKF
(publ)
The financial 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
26 October 2021 at 08.00
CEST.
For further information, please contact:
PRESS: Carl Bjernstam, Corporate Communication
tel: 46 31-337 2517; mobile: 46 722-201 893; e-mail:
carl.bjernstam@skf.com
INVESTOR RELATIONS: Patrik
Stenberg, Head of Investor Relations
tel: 46 31-337 2104; mobile: 46 705-472 104;
patrik.stenberg@skf.com
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The following files are available for download:
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|
Q3_2021_Eng
|
https://news.cision.com/skf/i/skf-hq,c2972080
|
SKF HQ
|
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|
Rickard
Gustafson
|
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