AI assistant
SKF Interim / Quarterly Report 2022
2973_ir_2022-07-20_1260b1ec-0667-4946-851f-d40fa282cae7.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
SKF
Half-year report 2022
Press release 20 July
Q2 2022
- Net sales of SEK 23,655 million (20,735).
- Organic growth 5.4%.
- Adjusted operating profit of SEK 2,473 million (3,118).
- Operating profit SEK 1,581 million (2,878).
- Adjusted operating margin 10.5% (15.0%).
- Industrial 13.8% (17.4%).
- Automotive 1.7% (9.1%).
- Operating margin 6.7% (13.9%).
- Industrial 9.9% (15.6%).
- Automotive -1.7% (9.6%).
- Net cash flow from operations SEK 1,293 million (1,372).
- Basic earnings per share SEK 1.08 (4.59).
Half year 2022
- Net sales of SEK 46,597 million (40,600).
- Organic growth 6.1%.
- Adjusted operating profit of SEK 5,531 million (5,907).
- Operating profit SEK 4,534 million (5,577).
- Adjusted operating margin 11.9% (14.5%).
- Industrial 15.3% (16.9%).
- Automotive 3.0% (8.8%).
- Operating margin 9.7% (13.7%).
- Industrial 13.0% (15.8%).
- Automotive 1.1% (8.9%).
- Net cash flow from operations SEK 1,022 million (1,503).
- Basic earnings per share SEK 5.44 (8.50).
Financial overview
| MSEK unless otherwise stated | Q2 2022 | Q2 2021 | Half year 2022 | Half year 2021 |
|---|---|---|---|---|
| Net sales | 23,655 | 20,735 | 46,597 | 40,600 |
| Adjusted operating profit | 2,473 | 3,118 | 5,531 | 5,907 |
| Adjusted operating margin, % | 10.5 | 15.0 | 11.9 | 14.5 |
| Operating profit | 1,581 | 2,878 | 4,534 | 5,577 |
| Operating margin, % | 6.7 | 13.9 | 9.7 | 13.7 |
| Adjusted profit before taxes | 1,990 | 3,040 | 4,979 | 5,626 |
| Profit before taxes | 1,097 | 2,801 | 3,982 | 5,296 |
| Net cash flow from operating activities | 1,293 | 1,372 | 1,022 | 1,503 |
| Basic earnings per share | 1.08 | 4.59 | 5.44 | 8.50 |
| Adjusted earnings per share | 2.90 | 5.11 | 7.49 | 9.23 |
Operating margin¹)
Revenue growth²)
Net debt/Equity³)
ROCE¹)
Net zero by 2030⁴)
SKF's long-term targets shall be achieved over a business cycle
1) Adjusted for items affecting comparability.
2) Including acquisitions, adjusted for divestments.
3) Excluding pension liabilities.
4) Scope 1 & 2 CO₂e from all SKF manufacturing and logistics units.
SKF Half-year report 2022
Solid growth and increasing price realization helping to mitigate high cost inflation
Review of the second quarter
In the second quarter we saw organic revenue growth above 5%, driven by a general strong demand in most regions, especially within targeted high-growth segments, a somewhat higher automotive sales than anticipated and continued price realization.
Growth in Industrial was 6%, with Automotive delivering growth of 3%. Sales to targeted high-growth segments including railway, automation, agriculture, food and beverage continue to develop at a fast pace, with double-digit organic growth.
Net sales were SEK 23,655 million (20,735), on relatively flat sales volumes.
Our adjusted operating profit fell to SEK 2,473 million (3,118), with an adjusted operating margin of 10.5% (15.0%). The Industrial margin was 13.8% (17.4%) and the Automotive margin was 1.7% (9.1%).
The margin development in the quarter was largely a consequence of exceptionally challenging circumstances in April and May. In these two months, the war in Ukraine and the Chinese lockdown impacted our earnings negatively. As a result of these circumstances, material, utilities and logistics costs increased by approximately SEK 600 million compared to Q1. Market conditions in June were more normalized. This, in combination with further price increase realization, resulted in more stable earnings towards the end of the quarter.
Going forward, we maintain our emphasis on controlling costs and increasing prices, delivering continued stronger price realization quarter by quarter.
Cash flow from operations improved sequentially and was SEK 1,293 million (1,372).
Delivering on our strategy
We continue to focus on creating a more customer centric profitable, faster growing and leaner SKF. In addition to investing in our targeted growth areas and increasing the pace of automation of our factories, we are also making progress in pruning our portfolio. As an example, within Automotive, we have already decided to exit margin-dilutive business with total sales of over SEK 1,200 million, with further pruning to take place as long-term contracts come up for renewal.
The second quarter saw the launch of the RecondOil Box, making our technology available to a wider market. We have already recorded sales of 400 units, with a fast-growing orderbook, especially within heavy industries and energy.
When it comes to factory consolidation, we have announced a further two site closures during the first half of the year. We also completed our previously announced controlled exit from Russia.
To further strengthen and complement our existing industrial seals offer, we have signed an agreement to acquire Tenute, an Italian seals manufacturer.
As we move to the next phase of executing on our strategy, two changes to Group Management have been announced this morning. Patrick Tong (President, Industrial Sales China and Northeast Asia) and Kent Viitanen (President, Industrial Sales EMEA), both of whom have played significant roles in SKF's development in recent years, will be leaving SKF during the third quarter. On behalf of everyone in SKF, I wish them well in the future.
Outlook
Looking into the third quarter of 2022, we expect a high single-digit organic sales growth, with an expected recovery in Automotive demand compared to the same quarter last year.
We expect that the high level of volatility in the markets continues with the ongoing war in Europe, high inflation, a risk for Covid-19 related restrictions across many geographies, supply chain bottlenecks and a volatile demand. For the full year 2022, we maintain our outlook of an organic sales growth of about 4–8%.
Rickard Gustafson
President and CEO
SKF Half-year report 2022
Financial performance
Second quarter 2022
Operating profit for the second quarter was SEK 1,581 million (2,878). Operating profit included items affecting comparability of SEK -892 million (-238), whereof SEK -675 million related to the divestment of the business in Russia, SEK -191 million (-238) related to ongoing restructuring and cost reduction activities mainly in Europe and SEK -27 million (0) related to customer settlements and impairments.
The adjusted operating profit for the second quarter was SEK 2,473 million (3,118). The adjusted operating profit was positively impacted by sales volumes, price, customer mix and currency effects. Operating profit was negatively impacted by cost increases, mainly related to material, logistics and energy costs.
| Adjusted operating profit bridge, MSEK | Q2 |
|---|---|
| 2021 | 3,118 |
| Currency impact | 241 |
| Divested businesses | -71 |
| Organic sales & Manufacturing volumes | 1,259 |
| Cost development | -2,074 |
| 2022 | 2,473 |
- Financial income and expense, net was SEK -484 million (-77). Exchange rate fluctuations had a negative effect in the second quarter 2022, while it was positive in 2021.
- Taxes in the quarter was SEK -511 million (-661) resulting in an effective tax rate of 46.6% (23.6%). The tax rate was negatively impacted by the loss from divestment of the business in Russia. Tax rate excluding the impact from the divestment was 28.9%.
- Net cash flow from operating activities in the second quarter was SEK 1,293 million (1,372). The change is mainly driven by the lower operating profit offset by lower increase in working capital.
- Net working capital in percent of annual sales was 35.7% in the second quarter compared to 30.7% in the second quarter 2021. The ratio was negatively affected by higher inventory levels and currency effects.
- Provisions for post-employment benefits, net decreased by SEK -2,146 million (-251) driven by actuarial gains on gross obligation due to increased discount rates.
Half year 2022
Operating profit for the half year was SEK 4,534 million (5,577). Operating profit included items affecting comparability of SEK -997 million (-329), whereof SEK -675 million related to the divestment of the business in Russia, SEK -296 million (-329) related to ongoing restructuring and cost reduction activities mainly in Europe and SEK -27 million (0) related to customer settlements and impairments.
The adjusted operating profit for the first half year was SEK 5,531 million (5,907). The adjusted operating profit was positively impacted by sales volumes, price, customer mix and currency effects. Operating profit was negatively impacted by cost increases, mainly related to material, logistics and energy costs.
| Adjusted operating profit bridge, MSEK | 2022 |
|---|---|
| 2021 | 5,907 |
| Currency impact | 529 |
| Divested businesses | -71 |
| Organic sales & Manufacturing volumes | 2,635 |
| Cost development | -3,469 |
| 2022 | 5,531 |
- Financial income and expense, net was SEK -552 million (-281). Exchange rate fluctuations had a more negative effect in 2022 compared to 2021.
- Taxes in the first half year was SEK -1,335 million (-1,307) resulting in an effective tax rate of 33.5% (24.7%). The tax rate was negatively impacted by the loss from divestment of the business in Russia. Tax rate excluding the impact from the divestment was 28.7%.
- Net cash flow from operating activities was SEK 1,022 million (1,503). The change is mainly driven by the lower operating profit.
- Net working capital in percent of annual sales was 35.7% in June 2022 compared to 30.7% in June 2021. The ratio was negatively affected by higher inventory levels and currency effects.
- Provisions for post-employment benefits, net decreased by SEK -3,491 million (-1,955) driven by actuarial gains on gross obligation due to increased discount rates.
| Key figures | 30 June 2022 | 31 March 2022 | 30 June 2021 |
|---|---|---|---|
| Net working capital, % of 12 months rolling sales | 35.7 | 34.3 | 30.7 |
| ROCE for the 12-month period, %^{1)} | 13.7 | 15.0 | 15.4 |
| Net debt/equity, % | 37.7 | 45.0 | 50.1 |
| Net debt/equity, excluding post-employment benefits, % | 21.8 | 22.5 | 16.8 |
| Net debt/EBITDA, % | 1.5 | 1.4 | 1.5 |
1) Adjusted for items affecting comparability.
SKF Half-year report 2022
Sales
| Net sales, change y-o-y, % | Q2 | Half year | ||||||
|---|---|---|---|---|---|---|---|---|
| Organic^{1)} | Structure | Currency | Total | Organic^{1)} | Structure | Currency | Total | |
| SKF Group | 5.4 | -1.9 | 10.6 | 14.1 | 6.1 | -1.2 | 9.8 | 14.7 |
| Industrial | 6.4 | -1.9 | 10.5 | 15.0 | 8.7 | -1.3 | 9.9 | 17.3 |
| Automotive | 2.7 | -1.9 | 11.1 | 11.9 | 0.0 | -1.0 | 9.7 | 8.7 |
1) Price, mix and volume
| Organic sales in local currencies, change y-o-y, % | Q2 | Half year | ||||||
|---|---|---|---|---|---|---|---|---|
| Europe, Middle East & Africa | The Americas | China & North-East Asia | India & South-East Asia | Europe, Middle East & Africa | The Americas | China & North-East Asia | India & South-East Asia | |
| SKF Group | 5.6 | 8.7 | -8.3 | 34.7 | 8.9 | 8.1 | -8.4 | 24.7 |
| Industrial | +++ | ++ | -- | +++ | +++ | +++ | - | +++ |
| Automotive | - | ++ | --- | +++ | +/- | ++ | --- | +++ |
| Customer industries | Q2 | Half year | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Europe, Middle East & Africa | The Americas | China & North-East Asia | India & South-East Asia | Europe, Middle East & Africa | The Americas | China & North-East Asia | India & South-East Asia | |
| Organic sales in local currencies, change y-o-y: | ||||||||
| Industrial distributors | +++ | +++ | + | +++ | +++ | +++ | +++ | +++ |
| High-speed machinery & electrical drives | +++ | +++ | - | +++ | +++ | +++ | + | +++ |
| Other | +++ | +++ | -- | +++ | +++ | +++ | - | +++ |
| Renewable energy | --- | --- | --- | ++ | --- | --- | --- | +/- |
| Heavy industries | +++ | -- | +++ | +++ | +++ | -- | +++ | +++ |
| Aerospace | -- | +/- | --- | +/- | -- | -- | --- | +/- |
| Railway | ++ | +++ | +++ | +++ | + | +++ | +++ | +++ |
| Agriculture, food and beverage | +++ | +++ | +++ | +++ | +++ | +++ | +++ | -- |
| Off-highway | +/- | --- | --- | +++ | + | -- | --- | +++ |
| Marine | +++ | +++ | --- | +++ | +++ | +++ | --- | +++ |
| Material handling | +++ | +++ | --- | + | +++ | +++ | --- | --- |
| Automation | +++ | +++ | ++ | +/- | +++ | +++ | --- | +++ |
| Traditional energy | --- | +++ | +++ | +/- | --- | +++ | +++ | --- |
| Light vehicles | --- | +/- | ++ | +++ | --- | +/- | + | +++ |
| Vehicle aftermarket | ++ | ++ | -- | +++ | +++ | +++ | ++ | +++ |
| Commercial vehicles | - | ++ | --- | +++ | - | + | --- | +++ |
Net sales by customer industry for Industrial Q2 2022
Net sales by region for Industrial Q2 2022
Net sales by customer industry for Automotive Q2 2022
Net sales by region for Automotive Q2 2022
SKF Half-year report 2022
Segment information¹)
MSEK unless otherwise stated
| Industrial | Automotive | |||||||
|---|---|---|---|---|---|---|---|---|
| Q2 2022 | Q2 2021 | Half year 2022 | Half year 2021 | Q2 2022 | Q2 2021 | Half year 2022 | Half year 2021 | |
| Net sales | 17,114 | 14,889 | 33,634 | 28,677 | 6,541 | 5,846 | 12,963 | 11,923 |
| Adjusted operating profit | 2,360 | 2,588 | 5,145 | 4,859 | 113 | 530 | 386 | 1,048 |
| Adjusted operating margin, % | 13.8 | 17.4 | 15.3 | 16.9 | 1.7 | 9.1 | 3.0 | 8.8 |
| Operating profit | 1,689 | 2,319 | 4,385 | 4,520 | -108 | 559 | 149 | 1,057 |
| Operating margin, % | 9.9 | 15.6 | 13.0 | 15.8 | -1.7 | 9.6 | 1.1 | 8.9 |
¹) Previously published figures for 2020, 2021 and Q1 2022 have been restated to reflect change in responsibilities for factories and Group functions in accordance with new organizational structure.
Industrial
Comments on organic sales in local currencies in the second quarter 2022, compared to second quarter 2021
Europe, Middle East & Africa
Overall, sales were significantly higher in the quarter. By industry, sales to most industrial segments were significantly higher. The exceptions were, railway where it was higher, off-highway that was relatively unchanged, renewable and traditional energy, where it was significantly lower and aerospace where sales were lower compared to Q2 2021.
The Americas
Sales were higher in the quarter. By industry, sales to most industrial segments were significantly higher. Except for aerospace where sales were relatively unchanged, heavy industries where it was lower and to renewable energy and off-highway where sales were significantly lower compared to Q2 2021.
China & North-East Asia
Overall, sales were lower in the quarter. It was significantly higher to heavy industries, railway, agriculture, food and beverage and traditional energy. To automation it was higher and to industrial distributors it was slightly higher. To renewable energy, aerospace, off-highway, marine and material handling it was significantly lower. To other it was lower and to high-speed machinery & electrical drives it was slightly lower compared to Q2 2021.
India & South-East Asia
Overall, sales were significantly higher in the quarter. By industry, sales to most industrial segments were significantly higher. The exceptions were renewable energy with higher sales and aerospace, automation and traditional energy with relatively unchanged sales compared to Q2 2021.
Automotive
Comments on organic sales in local currencies in the second quarter 2022, compared to second quarter 2021
Europe, Middle East & Africa
Sales in the quarter were slightly lower compared to last year with higher sales to the vehicle aftermarket, slightly lower sales to commercial vehicles and significantly lower sales to light vehicles.
The Americas
Sales in the quarter were higher compared to last year, with higher sales to the vehicle aftermarket and commercial vehicles and to light vehicles it was relatively unchanged.
China & North-East Asia
Sales were significantly lower in the quarter with higher sales to light vehicles, lower sales to the vehicle aftermarket and significantly lower sales to commercial vehicles.
India & South-East Asia
Sales in the quarter were significantly higher compared to last year with significantly higher sales to all automotive segments.
SKF Half-year report 2022
Industrial
Comments on operating profit 2022, compared to 2021
Second quarter 2022
The adjusted operating profit for the second quarter was SEK 2,360 million (2,588). The adjusted operating profit was positively impacted by sales volumes, price, customer mix and currency effects. Operating profit was negatively impacted by material cost and logistics.
| Adjusted operating profit bridge, MSEK | Q2 |
|---|---|
| 2021 | 2,588 |
| Currency | 178 |
| Divested businesses | -51 |
| Organic sales & Manufacturing volumes | 1,057 |
| Cost development | -1,412 |
| 2022 | 2,360 |
Half year 2022
The adjusted operating profit for the first half year was SEK 5,145 million (4,859). The adjusted operating profit was positively impacted by sales volumes, price, customer mix and currency effects. Operating profit was negatively impacted by material cost and logistics.
| Adjusted operating profit bridge, MSEK | 2022 |
|---|---|
| 2021 | 4,859 |
| Currency | 391 |
| Divested businesses | -51 |
| Organic sales & Manufacturing volumes | 2,360 |
| Cost development | -2,414 |
| 2022 | 5,145 |
Automotive
Comments on operating profit 2022, compared to 2021
Second quarter 2022
The adjusted operating profit for the second quarter was SEK 113 million (530). The adjusted operating profit was positively impacted by price, customer mix and currency effects. Operating profit was negatively impacted by sales volumes, material cost and logistics.
| Adjusted operating profit bridge, MSEK | Q2 |
|---|---|
| 2021 | 530 |
| Currency | 63 |
| Divested businesses | -20 |
| Organic sales & Manufacturing volumes | 202 |
| Cost development | -662 |
| 2022 | 113 |
Half year 2022
The adjusted operating profit for the first half year was SEK 386 million (1,048). The adjusted operating profit was positively impacted by price, customer mix and currency effects. Operating profit was negatively impacted by sales volumes, material cost and logistics.
| Adjusted operating profit bridge, MSEK | 2022 |
|---|---|
| 2021 | 1,048 |
| Currency | 138 |
| Divested businesses | -20 |
| Organic sales & Manufacturing volumes | 275 |
| Cost development | -1,055 |
| 2022 | 386 |
SKF Half-year report 2022
8 SKF Half-year report 2022
Outlook and Guidance
Demand for Q3 2022 compared to Q3 2021
Looking into the third quarter of 2022, we expect a high single-digit organic sales growth, with an expected recovery in Automotive demand compared to the same quarter last year.
We expect that the high level of volatility in the markets continues with the ongoing war in Europe, high inflation, a risk for Covid-19 related restrictions across many geographies, supply chain bottlenecks and a volatile demand.
Guidance for Q3 2022
Currency impact on the operating profit is expected to be around SEK 350 million positive compared with the third quarter 2021, based on exchange rates per 30 June 2022.
Guidance 2022
- For the full year 2022, we expect an organic sales growth of about 4-8%.
- Tax level excluding effects related to divested businesses: around 28%.
- Additions to property, plant and equipment: around SEK 5 billion.
Significant events
22 April 2022 – SKF to exit Russia
SKF announced the decision to cease all business and operations in Russia. The Russian business was divested in the second quarter.
26 April 2022 – Collaboration with Amazon Web Services
SKF and Amazon Web Services, Inc. (AWS), an Amazon.com, Inc. company have announced a collaboration to reinvent the field of industrial machine reliability and predictive maintenance with a joint solution. The engagement will deliver an easy-to-use and easy-to-scale condition monitoring and analysis solution that makes the ability to collect and analyze data using machine learning technologies available to a wider range of applications and customers.
Previous outlook and guidance statement
Demand for Q2 2022 compared to Q2 2021
We expect organic sales for the second quarter to be relatively unchanged compared to previous year. However, there are significant uncertainties in the market including Covid-related lock-downs in China.
Guidance for Q2 2022
Currency impact on the operating profit is expected to be around SEK 200 million positive compared with the second quarter 2021, based on exchange rates per 31 March 2022.
Guidance 2022
- For the full year 2022, we expect an organic sales growth of about 4-8%.
- Tax level excluding effects related to divested businesses: around 26%.
- Additions to property, plant and equipment: around SEK 5 billion.
Subsequent events
7 July 2022 – SKF and ABB increase collaboration
SKF and ABB have entered into a Memorandum of Understanding (MoU) to explore the possibilities for a collaboration in the automation of manufacturing processes. The MoU was signed at ABB's Robotics Experience Center in Västerås, Sweden, by SKF CEO Rickard Gustafson and ABB CEO Björn Rosengren.
19 July 2020 – Acquisition
SKF has signed an agreement to acquire Tenute, an Italian seals manufacturer. The acquisition is subject to certain regulatory approvals and is expected to be completed during 2022
20 July 2022 – Changes to Group Management
Patrick Tong, President Industrial Region China and North-East Asia and Kent Viitanen, President, Industrial Region Europe Middle East and Africa, will be leaving SKF during the third quarter 2022.
Sustainability performance
SKF has been publicly reporting on sustainability performance for many years in the Group's annual report, on skf.com and in various other forums. Reflecting the increasing operational and strategic importance of these issues, the Group is now including certain related KPI's also in the quarterly report.
Cleantech revenues
Cleantech revenues are the aggregated sales to acknowledged cleantech sectors such as renewable energy, electric vehicles, recycling industry and bearing remanufacturing. The decline in clean-tech revenues is due to a general decline in the wind industry.
1) Previously published figures for 2020 have been restated to reflect a change in classification.
2) 2022 figures relate to the latest 12 months period.
Accident rate
The accident rate measures the number of recordable accidents per 100 employees per year. There has been a considerable reduction in the accident rate over the past 5 years.
1) 2022 figures relate to the latest 12 months period.
CO₂ emissions, Equivalent energy
CO₂ emissions¹) for SKF's operations (Scope 1 and 2 according to the Greenhouse Gas protocol) and total energy use for the same scope are presented in the graph. SKF continues to make good progress towards the Group's goal to be net zero for these aspects by 2030.
1) Due to external reporting constraints, this data is presented for the end of the previous quarter.
9 SKF Half-year report 2022
Notes
Note 1 Accounting principles
The consolidated financial statements of the SKF Group were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The interim report was prepared in accordance with IAS 34 Interim Financial Reporting.
Disclosure as required by IAS 34 p. 16 A is provided in the notes to the financial statements as well as in other parts of the interim report. The financial statements of the Parent Company were prepared in accordance with the "Annual Accounts Act" and the RFR 2 "Accounting for legal entities". SKF Group and the Parent Company applied the same accounting principles and methods of computation in the interim financial statements as compared with the latest annual report. IASB issued several amended accounting standards that were endorsed by EU, effective date 1 January 2022. None of these have a material effect on the SKF Group's financial statements.
Valuation principles and classifications of the financial instruments, as described in SKF Annual report 2021, have been consistently applied throughout the reporting period. There are no major changes in fair value during the period.
Note 2 Transactions with relates parties
No significant change is present for transactions with related parties in relation to disclosure provided in Annual Report 2021.
Note 3 Risks and uncertainties in the business
The SKF Group operates in many different industrial and geographical areas that are at different stages of the economic cycle. A general economic downturn at global level, for example caused by a pandemic, or in one of the world's leading economies, could reduce the demand for the Group's products, solutions and services for a period of time. In addition, terrorism and other hostilities, as well as disturbances in worldwide financial markets and natural disasters, could have a negative effect on the demand for the Group's products and services. There are also political and regulatory risks associated with the wide geographical presence.
The SKF Group is subject to both transaction and translation of currency exposure. For commercial flows the SKF Group is primarily exposed to the EUR, USD and CNY. As the major part of the profit is made outside Sweden, the Group is also exposed to translational risks in all the major currencies. The financial position of the parent company is dependent on the financial position and development of the subsidiaries. A general decline in the demand for the products and services provided by the Group could mean lower residual profits and lower dividend income for the parent company, as well as a need for writing down values of the shares in the subsidiaries.
SKF is subject to an investigation in Brazil by the General Superintendent of the Administrative Council for Economic Defense, regarding an alleged violation of antitrust rules by several companies active on the automotive aftermarket in Brazil.
SKF's operations are affected by the ongoing conflict in Ukraine. SKF operates in Ukraine with approximately 1,100 employees. Sales in Ukraine amounted to less than 0.5% of SKF's total sales in 2021. SKF's factory in Lutsk, Ukraine, accounted for a production volume of approximately 1% of SKF's total production volume in 2021. The factory in Ukraine has been producing whenever possible due to prevailing circumstances however at lower level than normal.
For a more detailed description of risks and uncertainties, please see the Risk Management section on pages 42-44 in the SKF Annual Report 2021.
Note 4 Divestment of business
As previously announced, SKF decided to cease all business and operations in Russia.
The Russian business was divested in the second quarter and a loss of SEK 675 million was recognized. The loss from the divestment is included in the operating profit as other operating expense and has been allocated between the Industrial and Automotive segments based on the business exposure. The majority has been reported in the Industrial segment. The difference between the previously communicated amount of SEK 500 million and SEK 675 million is due to currency. The business was sold to the local management in Russia.
SKF Half-year report 2022
The Board of Directors and the CEO declare that the half-year report gives a true and fair view of the performance of the business, position and profit or loss of the company and the Group, and describes the principal risks and uncertainties that the company and the companies in the Group face.
Gothenburg, 20 July 2022
Aktiebolaget SKF
(publ)
Rickard Gustafson
President and CEO,
Board member
Hans Stråberg
Chair
Hock Goh
Board member
Colleen Repplier
Board member
Geert Follens
Board member
Håkan Buskhe
Board member
Susanna Schneeberger
Board member
Jonny Hilbert
Board member
Zarko Djurovic
Board member
The half-year report has been reviewed by the company's auditor.
SKF Half-year report 2022
Auditor's report
Introduction
We have reviewed the interim report of AB SKF (publ) for the period January 1-June 30, 2022. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Scope of Review
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit
conducted in accordance with ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.
Gothenburg, 20 July 2022
Deloitte AB
Hans Warén
Authorized Public Accountant
SKF Half-year report 2022
Condensed consolidated income statements
| MSEK | Apr-Jun 2022 | Apr-Jun 2021 | Jan-Jun 2022 | Jan-Jun 2021 |
|---|---|---|---|---|
| Net sales | 23,655 | 20,735 | 46,597 | 40,600 |
| Cost of goods sold | -17,777 | -14,441 | -34,230 | -28,565 |
| Gross profit | 5,878 | 6,294 | 12,367 | 12,035 |
| Research and development cost | -806 | -683 | -1,571 | -1,336 |
| Selling and administrative expenses | -3,094 | -2,706 | -5,873 | -5,129 |
| Other operating income/expenses, net | -397 | -27 | -389 | 7 |
| Operating profit | 1,581 | 2,878 | 4,534 | 5,577 |
| Financial income and expense, net | -484 | -77 | -552 | -281 |
| Profit before taxes | 1,097 | 2,801 | 3,982 | 5,296 |
| Taxes | -511 | -661 | -1,335 | -1,307 |
| Net profit | 586 | 2,140 | 2,647 | 3,989 |
| Net profit attributable to: | ||||
| Shareholders of AB SKF | 493 | 2,089 | 2,477 | 3,871 |
| Non-controlling interests | 93 | 51 | 170 | 118 |
| Basic earnings per share (SEK)^{1)} | 1.08 | 4.59 | 5.44 | 8.50 |
1) Shares from the Performance Share Programme are not considered dilutive, therefore diluted earnings per share is equal to basic earnings per share.
Condensed consolidated statements of comprehensive income
| MSEK | Apr-Jun 2022 | Apr-Jun 2021 | Jan-Jun 2022 | Jan-Jun 2021 |
|---|---|---|---|---|
| Net profit | 586 | 2,140 | 2,647 | 3,989 |
| Items that will not be reclassified to the income statement: | ||||
| Remeasurements (actuarial gains and losses) | 2,681 | 74 | 4,211 | 2,164 |
| Income taxes | -690 | -15 | -1,084 | -550 |
| 1,991 | 59 | 3,127 | 1,614 | |
| Items that may be reclassified to the income statement: | ||||
| Exchange differences arising on translation of foreign operations | 2,610 | -504 | 3,429 | 1,114 |
| Assets at fair value through other comprehensive income | 41 | 6 | 18 | 17 |
| Income taxes | 2 | 21 | 3 | 1 |
| 2,653 | -477 | 3,450 | 1,132 | |
| Other comprehensive income, net of tax | 4,644 | -418 | 6,577 | 2,746 |
| Total comprehensive income | 5,230 | 1,722 | 9,224 | 6,735 |
| Shareholders of AB SKF | 5,039 | 1,713 | 8,939 | 6,584 |
| Non-controlling interests | 191 | 9 | 285 | 151 |
SKF Half-year report 2022
Condensed consolidated balance sheets
| MSEK | June 2022 | December 2021 |
|---|---|---|
| Goodwill | 11,997 | 10,924 |
| Other intangible assets | 6,334 | 6,018 |
| Property, plant and equipment | 23,238 | 20,723 |
| Right of use asset leases | 2,778 | 2,661 |
| Deferred tax assets | 3,020 | 3,839 |
| Other non-current assets | 1,761 | 1,674 |
| Non-current assets | 49,128 | 45,839 |
| Inventories | 25,885 | 20,997 |
| Trade receivables | 17,529 | 13,972 |
| Other current assets | 5,831 | 5,163 |
| Other current financial assets | 8,737 | 13,657 |
| Current assets | 57,982 | 53,789 |
| Total assets | 107,110 | 99,628 |
| Equity attributable to shareholders of AB SKF | 49,581 | 43,645 |
| Equity attributable to non-controlling interests | 1,993 | 1,720 |
| Long-term financial liabilities | 16,399 | 15,472 |
| Provisions for post-employment benefits | 8,296 | 11,781 |
| Provisions for deferred taxes | 1,359 | 1,040 |
| Other long-term liabilities and provisions | 1,101 | 1,445 |
| Non-current liabilities | 27,155 | 29,738 |
| Trade payables | 12,090 | 9,881 |
| Short-term financial liabilities | 4,153 | 3,864 |
| Other short-term liabilities and provisions | 12,138 | 10,780 |
| Current liabilities | 28,381 | 24,525 |
| Total equity and liabilities | 107,110 | 99,628 |
Condensed consolidated statements of changes in shareholders' equity
| MSEK | Apr-Jun 2022 | Apr-Jun 2021 | Jan-Jun 2022 | Jan-Jun 2021 |
|---|---|---|---|---|
| Opening balance 1 April/1 January | 46,221 | 40,713 | 45,364 | 35,712 |
| Net profit | 586 | 2,140 | 2,647 | 3,989 |
| Hyperinflation adjustments | 108 | 27 | 161 | 53 |
| Components of other comprehensive income | ||||
| Currency translation adjustments | 2,609 | -503 | 3,427 | 1,114 |
| Change in FV OCI assets and cash flow hedges | 41 | 6 | 18 | 17 |
| Remeasurements | 2,681 | 74 | 4,211 | 2,164 |
| Income taxes | -687 | 6 | -1,080 | -549 |
| Other | -1 | -3 | -1 | -23 |
| Transactions with shareholders | ||||
| Non-controlling interest | - | - | - | - |
| Cost for Performance Share Programmes, net | 17 | 20 | 26 | 3 |
| Dividends | -1 | -2,972 | -3,199 | -2,972 |
| Closing balance 30 June | 51,574 | 39,508 | 51,574 | 39,508 |
SKF Half-year report 2022
Condensed consolidated statements of cash flow
| MSEK | Apr-Jun 2022 | Apr-Jun 2021 | Jan-Jun 2022 | Jan-Jun 2021 |
|---|---|---|---|---|
| Operating activities: | ||||
| Operating profit | 1,581 | 2,878 | 4,534 | 5,577 |
| Non-cash items: | ||||
| Depreciation, amortization and impairment | 898 | 972 | 1,758 | 1,768 |
| Net loss/gain (-) on sales of PPE and businesses | 615 | -33 | 614 | -33 |
| Other non-cash items | 245 | 119 | 433 | -557 |
| Income taxes paid | -764 | -583 | -1,253 | -1,036 |
| Interest received | 3 | -1 | 4 | -4 |
| Interest paid | -33 | -29 | -98 | -92 |
| Other | -770 | -226 | -1,027 | -606 |
| Changes in working capital: | -482 | -1,725 | -3,943 | -3,514 |
| Inventories | -1,358 | -1,658 | -3,271 | -2,256 |
| Accounts receivable | -404 | -399 | -2,614 | -2,442 |
| Accounts payable | 937 | 156 | 1,648 | 622 |
| Other operating assets/liabilities | 343 | 176 | 294 | 562 |
| Net cash flow from operating activities | 1,293 | 1,372 | 1,022 | 1,503 |
| Investing activities: | ||||
| Payments for intangible assets, PPE, businesses and equity securities | -1,481 | -903 | -2,591 | -1,738 |
| Sales of PPE, businesses and equity securities | -51 | 40 | -48 | 42 |
| Net cash flow used in investing activities | -1,532 | -863 | -2,639 | -1,696 |
| Net cash flow after investments before financing | -239 | 509 | -1,617 | -193 |
| Financing activities: | ||||
| Proceeds from short- and long-term loans | 12 | 1 | 28 | 3,080 |
| Repayments of short- and long-term loans | -40 | -23 | -92 | -2,134 |
| Repayment leases | -206 | -173 | -386 | -356 |
| Cash dividends | -1 | -2,972 | -3,199 | -2,972 |
| Other financing items: | ||||
| Investments in short-term financial assets | -79 | -9 | -95 | -29 |
| Sales of short-term financial assets | 38 | 34 | 61 | 86 |
| Net cash flow used in financing activities | -276 | 3,142 | -3,683 | -2,325 |
| Net cash flow | -515 | -2,633 | -5,300 | -2,518 |
| Change in cash and cash equivalents: | ||||
| Cash and cash equivalents at 1 April/1 January | 8,454 | 14,455 | 13,219 | 14,050 |
| Cash effect excl. acquired/sold businesses | -368 | -2,633 | -5,161 | -2,518 |
| Cash effect of acquired/sold businesses | -147 | - | -139 | - |
| Exchange rate effect | 228 | -66 | 248 | 224 |
| Cash and cash equivalents at 30 June | 8,167 | 11,756 | 8,167 | 11,756 |
| Change in Net debt | Closing balance 30 June 2022 | Other non-cash changes | Acquired/sold businesses | Cash changes |
| --- | --- | --- | --- | --- |
| Loans, long- and short-term | 16,915 | 7 | 8 | -64 |
| Post-employment benefits, net | 8,220 | -3,689 | - | -372 |
| Lease liabilities | 2,904 | 349 | -44 | -386 |
| Financial assets, others | -428 | 1 | - | -60 |
| Cash and cash equivalents | -8,167 | - | 139 | 5,161 |
| Net debt | 19,444 | -3,332 | 103 | 4,279 |
SKF Half-year report 2022
Condensed consolidated financial information
MSEK unless otherwise stated
| Q3/20 | Q4/20 | Q1/21 | Q2/21 | Q3/21 | Q4/21 | Q1/22 | Q2/22 | |
|---|---|---|---|---|---|---|---|---|
| Net sales | 18,596 | 19,572 | 19,865 | 20,735 | 20,146 | 20,986 | 22,942 | 23,655 |
| Cost of goods sold | -13,759 | -14,118 | -14,124 | -14,441 | -14,582 | -15,310 | -16,453 | -17,777 |
| Gross profit | 4,837 | 5,454 | 5,741 | 6,294 | 5,564 | 5,676 | 6,489 | 5,878 |
| Gross margin, % | 26.0 | 27.9 | 28.9 | 30.4 | 27.6 | 27.0 | 28.3 | 24.9 |
| Research and development cost | -553 | -660 | -653 | -683 | -648 | -766 | -765 | -806 |
| Selling and administrative expenses | -2,317 | -2,659 | -2,423 | -2,706 | -2,385 | -2,736 | -2,779 | -3,094 |
| - as % of sales | 12.5 | 13.6 | 12.2 | 13.1 | 11.8 | 13.0 | 12.1 | 13.1 |
| Other, net | -45 | 75 | 34 | -27 | 57 | 420 | 8 | -397 |
| Operating profit | 1,922 | 2,210 | 2,699 | 2,878 | 2,588 | 2,594 | 2,953 | 1,581 |
| Operating margin, % | 10.3 | 11.3 | 13.6 | 13.9 | 12.8 | 12.4 | 12.9 | 6.7 |
| Adjusted operating profit | 2,475 | 2,582 | 2,789 | 3,118 | 2,672 | 2,260 | 3,058 | 2,473 |
| Adjusted operating margin, % | 13.3 | 13.2 | 14.0 | 15.0 | 13.3 | 10.8 | 13.3 | 10.5 |
| Financial net | -202 | -66 | -204 | -77 | -148 | -266 | -68 | -484 |
| Profit before taxes | 1,720 | 2,144 | 2,495 | 2,801 | 2,440 | 2,328 | 2,885 | 1,097 |
| Profit margin before taxes, % | 9.2 | 11.0 | 12.6 | 13.5 | 12.1 | 11.1 | 12.6 | 4.6 |
| Taxes | -487 | -541 | -646 | -661 | -618 | -559 | -824 | -511 |
| Net profit | 1,233 | 1,603 | 1,849 | 2,140 | 1,822 | 1,769 | 2,061 | 586 |
| Net profit attributable to | ||||||||
| Shareholders of AB SKF | 1,179 | 1,527 | 1,782 | 2,089 | 1,756 | 1,705 | 1,984 | 493 |
| Non-controlling interests | 54 | 76 | 67 | 51 | 66 | 64 | 77 | 93 |
Reconciliation of profit before taxes for the Group
| MSEK | Q3/20 | Q4/20 | Q1/21 | Q2/21 | Q3/21 | Q4/21 | Q1/22 | Q2/22 |
|---|---|---|---|---|---|---|---|---|
| Operating profit: | ||||||||
| Industrial1) | 1,607 | 1,706 | 2,201 | 2,319 | 2,384 | 2,386 | 2,696 | 1,689 |
| Automotive1) | 315 | 504 | 498 | 559 | 204 | 208 | 257 | -108 |
| Financial net | -202 | -66 | -204 | -77 | -148 | -266 | -68 | -484 |
| Profit before taxes for the Group | 1,720 | 2,144 | 2,495 | 2,801 | 2,440 | 2,328 | 2,885 | 1,097 |
1) Previously published figures for 2020, 2021 and Q1 2022 have been restated to reflect change in responsibilities for factories and Group functions in accordance with new organizational structure.
Number of shares
| Apr-Jun 2022 | Apr-Jun 2021 | Jan-Jun 2022 | Jan-Jun 2021 | |
|---|---|---|---|---|
| Total number of shares: | 455,351,068 | 455,351,068 | 455,351,068 | 455,351,068 |
| - whereof A shares | 29,403,933 | 30,819,375 | 29,403,933 | 30,819,375 |
| - whereof B shares | 425,947,135 | 424,531,693 | 425,947,135 | 424,531,693 |
| Weighted average number of shares in: | ||||
| - basic earnings per share | 455,351,068 | 455,499,097 | 455,351,068 | 455,469,634 |
SKF Half-year report 2022
Key figures
Definitions, see page 19
| Q3/20 | Q4/20 | Q1/21 | Q2/21 | Q3/21 | Q4/21 | Q1/22 | Q2/22 | |
|---|---|---|---|---|---|---|---|---|
| EBITDA, MSEK | 2,734 | 3,059 | 3,494 | 3,852 | 3,239 | 3,479 | 3,814 | 2,478 |
| EBITA, MSEK | 2,069 | 2,369 | 2,841 | 3,024 | 2,733 | 2,742 | 3,104 | 1,741 |
| Adjusted operating profit | 2,475 | 2,582 | 2,789 | 3,118 | 2,672 | 2,260 | 3,058 | 2,473 |
| Adjusted operating margin, % | 13.3 | 13.2 | 14.0 | 15.0 | 13.3 | 10.8 | 13.3 | 10.5 |
| Basic earnings per share, SEK | 2.59 | 3.36 | 3.91 | 4.59 | 3.86 | 3.74 | 4.36 | 1.08 |
| Adjusted earnings per share, SEK | 3.80 | 4.17 | 4.11 | 5.11 | 4.04 | 3.01 | 4.59 | 2.90 |
| Dividend per share, SEK | - | - | - | 6.50 | - | - | 7.00 | - |
| Net worth per share, SEK | 77 | 75 | 86 | 83 | 89 | 96 | 98 | 109 |
| Share price at the end of the period, SEK | 185.7 | 213.4 | 248.2 | 217.9 | 207.6 | 214.5 | 153.9 | 150.5 |
| NWC, % of 12 months rolling sales | 28.7 | 26.1 | 30.2 | 30.7 | 30.5 | 30.7 | 34.3 | 35.7 |
| ROCE for the 12-month period, % | 9.3 | 9.8 | 10.5 | 13.6 | 14.5 | 14.8 | 14.8 | 12.7 |
| ROE for the 12-month period, % | 10.6 | 12.1 | 13.7 | 18.4 | 19.3 | 18.8 | 18.3 | 13.8 |
| Gearing, % | 50.2 | 48.0 | 44.4 | 44.7 | 43.1 | 40.5 | 39.0 | 35.2 |
| Equity/assets ratio, % | 38.1 | 39.4 | 42.4 | 41.6 | 43.2 | 45.5 | 45.7 | 48.2 |
| Additions to property, plant and equipment, MSEK | 796 | 949 | 819 | 895 | 969 | 1,138 | 1,023 | 1,372 |
| Net debt/equity, % | 59.8 | 51.7 | 43.2 | 50.1 | 44.0 | 38.3 | 45.0 | 37.7 |
| Net debt, MSEK | 21,868 | 18,460 | 17,576 | 19,809 | 18,541 | 17,360 | 20,787 | 19,444 |
| Net debt/EBITDA | 2.1 | 1.8 | 1.6 | 1.5 | 1.4 | 1.2 | 1.4 | 1.5 |
| Registered number of employees | 41,174 | 40,963 | 41,151 | 41,433 | 42,139 | 42,602 | 42,763 | 42,602 |
SKF applies the guidelines issued by ESMA (European Securities and Markets Authority) on APMs (Alternative Performance Measures). These key figures are not defined or specified in IFRS but provide complementary information to investors and other stakeholders on the company's performance. The definition of each APM is presented at the end of the interim report. For the reconciliation of each APM against the most reconcilable line item in the financial statements, see investors.skf.com/en.
Segment information – quarterly figures
MSEK unless otherwise stated
| Industrial | Q3/20 | Q4/20 | Q1/21 | Q2/21 | Q3/21 | Q4/21 | Q1/22 | Q2/22 |
|---|---|---|---|---|---|---|---|---|
| Net sales | 12,979 | 13,489 | 13,788 | 14,889 | 14,747 | 15,135 | 16,520 | 17,114 |
| Adjusted operating profit | 2,058 | 2,006 | 2,271 | 2,588 | 2,430 | 2,166 | 2,785 | 2,360 |
| Adjusted operating margin, % | 15.8 | 14.9 | 16.5 | 17.4 | 16.5 | 14.0 | 16.9 | 13.8 |
| Operating profit | 1,607 | 1,706 | 2,201 | 2,319 | 2,384 | 2,386 | 2,696 | 1,689 |
| Operating margin, % | 12.4 | 12.6 | 16.0 | 15.6 | 16.2 | 15.8 | 16.3 | 9.9 |
| Assets and liabilities, net | 46,813 | 38,681 | 42,430 | 42,489 | 42,417 | 44,127 | 46,385 | 48,974 |
| Registered number of employees | 34,766 | 34,590 | 34,890 | 35,124 | 35,797 | 36,136 | 36,342 | 36,556 |
| Automotive | Q3/20 | Q4/20 | Q1/21 | Q2/21 | Q3/21 | Q4/21 | Q1/22 | Q2/22 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Net sales | 5,617 | 6,083 | 6,077 | 5,846 | 5,399 | 5,851 | 6,422 | 6,541 |
| Adjusted operating profit | 417 | 576 | 518 | 530 | 242 | 144 | 273 | 113 |
| Adjusted operating margin, % | 7.4 | 9.5 | 8.5 | 9.1 | 4.5 | 2.5 | 4.2 | 1.7 |
| Operating profit | 315 | 504 | 498 | 559 | 204 | 208 | 257 | -108 |
| Operating margin, % | 5.6 | 8.3 | 8.2 | 9.6 | 3.8 | 3.6 | 4.0 | -1.7 |
| Assets and liabilities, net | 8,805 | 8,776 | 10,374 | 10,857 | 11,106 | 10,885 | 12,436 | 14,340 |
| Registered number of employees | 3,479 | 3,399 | 3,409 | 3,400 | 3,359 | 3,392 | 3,341 | 3,316 |
1) Previously published figures for 2020, 2021 and Q1 2022 have been restated to reflect change in responsibilities for factories and Group functions in accordance with new organizational structure.
SKF Half-year report 2022
Parent Company condensed income statements
| MSEK | Apr-Jun 2022 | Apr-Jun 2021 | Jan-Jun 2022 | Jan-Jun 2021 |
|---|---|---|---|---|
| Revenue | 1,751 | 1,485 | 3,654 | 3,017 |
| Cost of goods sold | -1,474 | -1,339 | -2,988 | -2,554 |
| General management and administrative expenses | -445 | -374 | -834 | -734 |
| Other operating income/expenses, net | -3 | -2 | 12 | -1 |
| Operating result | -171 | -230 | -156 | -272 |
| Financial income and expense, net | 152 | 231 | 159 | 226 |
| Profit before taxes | -19 | 1 | 3 | -46 |
| Taxes | 60 | 69 | 33 | 81 |
| Net profit | 41 | 70 | 36 | 35 |
Parent Company condensed statements of comprehensive income
| MSEK | Apr-Jun 2022 | Apr-Jun 2021 | Jan-Jun 2022 | Jan-Jun 2021 |
|---|---|---|---|---|
| Net profit | 41 | 70 | 36 | 35 |
| Items that may be reclassified to the income statement: | ||||
| Assets at fair value through other comprehensive income | 41 | 6 | 18 | 17 |
| Other comprehensive income, net of tax | 41 | 6 | 18 | 17 |
| Total comprehensive income | 82 | 76 | 54 | 52 |
Parent Company condensed balance sheets
| MSEK | June 2022 | December 2021 |
|---|---|---|
| Intangible assets | 1,291 | 1,371 |
| Investments in subsidiaries | 21,946 | 22,074 |
| Receivables from subsidiaries | 13,558 | 13,022 |
| Other non-current assets | 992 | 891 |
| Non-current assets | 37,787 | 37,358 |
| Receivables from subsidiaries | 5,900 | 6,958 |
| Other receivables | 377 | 273 |
| Current assets | 6,277 | 7,231 |
| Total assets | 44,064 | 44,589 |
| Shareholders' equity | 22,548 | 25,683 |
| Provisions | 582 | 445 |
| Non-current liabilities | 13,556 | 13,023 |
| Current liabilities | 7,378 | 5,438 |
| Total shareholders' equity, provisions and liabilities | 44,064 | 44,589 |
SKF Half-year report 2022
Alternative performance measures and definitions
Adjusted operating profit
Operating profit excluding items affecting comparability.
Adjusted operating margin
Operating profit margin excluding items affecting comparability.
Adjusted earnings/loss per share in SEK
Basic earnings per share excluding items affecting comparability.
Basic earnings/loss per share in SEK (as defined by IFRS)
Profit/loss after taxes less non-controlling interests divided by the ordinary number of shares.
Currency impact on operating profit
The effects of both translation and transaction flows based on current assumptions and exchange rates compared to the corresponding period last year.
Debt
Loans and net provisions for post-employment benefits.
EBITA
(Earnings before interest, taxes and amortization). Operating profit before amortizations.
EBITDA
(Earnings before interest, taxes, depreciation and amortization)
Operating profit before depreciations, amortizations, and impairments.
Equity/assets ratio
Equity as a percentage of total assets.
Gearing
Debt as a percentage of the sum of debt and equity.
Items affecting comparability
Significant income/expenses that affect comparability between accounting periods. This includes, but is not limited to, restructuring costs, impairments and write-offs, currency exchange rate effects caused by devaluations and gains and losses on divestments of businesses.
Net debt
Debt less short-term financial assets excluding derivatives.
Net debt/EBITDA
Net debt, as a percentage of twelve months rolling EBITDA.
Net debt/equity
Net debt, as a percentage of equity.
Net worth per share (Equity per share)
Equity excluding non-controlling interests divided by the ordinary number of shares.
Net working capital as % of 12 month rolling sales (NWC)
Trade receivables plus inventory minus trade payables as a percentage of twelve months rolling net sales.
Operating margin
Operating profit/loss, as a percentage of net sales.
Operational performance
Operational performance includes the effects on operating profit related to changes in organic sales, changes in manufacturing volumes and manufacturing costs and changes in selling and administrative expenses.
Revenue growth
Sales excluding effects of currency and divested businesses.
Registered number of employees
Total number of employees included in SKF's payroll at the end of the period.
Return on capital employed (ROCE)
Operating profit/loss plus interest income, as a percentage of twelve months rolling average of total assets less the average of non-interest bearing liabilities.
Return on equity (ROE)
Profit/loss after taxes as a percentage of twelve months rolling average of equity.
SKF demand outlook
The demand outlook for SKF's products and services represents management's best estimate based on current information about the future demand from our customers. The demand outlook is the expected volume development in the markets where our customers operate.
For reconciliations of other Key Ratios, see investors.skf.com/en.
Cautionary statement
This report 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 investors.skf.com/en), including under the Administration Report; "Risk management" and in this report under "Risks and uncertainties in the business."
SKF Half-year report 2022
RecordOil Box launched in spring 2022, suitable for a broader range of industries and applications. It separates nano-sized impurities and reduces CO2 emissions by up to 96% compared with conventional air cycles.
This is SKF
SKF is a leading global supplier of bearings, seals, lubrication systems and services, which include technical support, maintenance and reliability services, engineering consulting and training.
Quick facts
Founded 1907
Represented in more than 130 countries
Net sales in 2021: SEK 81,732 million
42,602 employees
15 technical centers
87 manufacturing sites
More than 17,000 distributors
AB SKF (publ)
Postal address: SE-415 50 Gothenburg, Sweden
Visiting address: Sven Wingquists Gata 2
tel. +46 31 337 10 00
www.skf.com
Company reg.no. 556007-3495
For further information, please contact:
INVESTOR RELATIONS: Patrik Stenberg, Director,
SKF Group Investor Relations and Mergers & Acquisitions
tel: 46 31 337 2104 mobile: 46 705 472 104
e-mail: [email protected]
PRESS: Carl Bjernstam, Corporate Communication
tel: 46 31 337 2517 mobile: 46 722 201 893
e-mail: [email protected]
Webcast
20 July at 09:00 (CEST), 08.00 (UK)
https://investors.skf.com/en
Sweden +46 10 884 80 16
UK / International +44 203 936 2999
Passcode: 371618
Calendar 2022
25 October, Q3 report
2 February 2023, Q4 report
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 20 July 2022 at 08.00 CEST.
SKF is a registered trademark of the SKF Group. © SKF Group 2022 - The contents of this publication are the copyright of the publisher and may not be reproduced (even extracts) unless prior written permission is granted. Every care has been taken to ensure the accuracy of the information contained in this publication but no liability can be accepted for any loss or damage whether direct, indirect or consequential arising out of the use of the information contained herein. July 2022.