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SKF Interim / Quarterly Report 2023
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Interim / Quarterly Report
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SKF
Half-year report 2023
19 July 2023
SKF HALF-YEAR REPORT 2023
Q2 2023
- Net sales SEK 27,123 million (23,655)
- Organic growth 7.9% (5.4%)
- Adjusted operating profit SEK 3,614 million (2,473)
- Operating profit SEK 3,213 million (1,581)
- Adjusted operating margin 13.3% (10.5%)
- Industrial 15.9% (13.9%)
- Automotive 7.1% (1.5%)
- Operating margin 11.8% (6.7%)
- Industrial 13.8% (9.9%)
- Automotive 7.0% (-1.8%)
- Net cash flow from operations SEK 3,664 million (1,293)
- Basic earnings per share SEK 4.48 (1.08)
Half year 2023
- Net sales SEK 53,672 million (46,597)
- Organic growth 9.0% (6.1%)
- Adjusted operating profit SEK 7,093 million (5,531)
- Operating profit SEK 6,592 million (4,534)
- Adjusted operating margin 13.2% (11.9%)
- Industrial 16.4% (15.3%)
- Automotive 5.4% (3.0%)
- Operating margin 12.3% (9.7%)
- Industrial 15.2% (13.0%)
- Automotive 5.2% (1.1%)
- Net cash flow from operations SEK 6,411 million (1,022)
- Basic earnings per share SEK 9.03 (5.44)
Financial overview
| MSEK unless otherwise stated | Q2 2023 | Q2 2022 | Half year 2023 | Half year 2022 |
|---|---|---|---|---|
| Net sales | 27,123 | 23,655 | 53,672 | 46,597 |
| Adjusted operating profit | 3,614 | 2,473 | 7,093 | 5,531 |
| Adjusted operating margin, % | 13.3 | 10.5 | 13.2 | 11.9 |
| Operating profit | 3,213 | 1,581 | 6,592 | 4,534 |
| Operating margin, % | 11.8 | 6.7 | 12.3 | 9.7 |
| Adjusted profit before taxes | 3,231 | 1,990 | 6,272 | 4,979 |
| Profit before taxes | 2,830 | 1,097 | 5,772 | 3,982 |
| Net cash flow from operating activities | 3,664 | 1,293 | 6,411 | 1,022 |
| Basic earnings per share | 4.48 | 1.08 | 9.03 | 5.44 |
| Adjusted earnings per share | 5.36 | 2.90 | 10.13 | 7.63 |
Operating margin¹)
Revenue growth²)
Net debt/Equity³)
RECE¹)
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 C0,e from all SKF manufacturing and logistics units.
2
Strong sales, profit, and cash flow
I'm pleased to report that our strategic transformation continues at a high pace, clearly reflected by a strong set of numbers in the second quarter. In the quarter, we saw record high net sales, adjusted operating profit, and cash flow.
Strong results in the second quarter
Net sales were SEK 27.1 billion (23.7), which is a record high quarterly number. The organic sales growth came in at 8%, representing the ninth consecutive quarter with an organic growth rate above 5%.
We saw strong demand in Europe and Asia with an organic growth of around 10%. Demand was particularly strong in several of our targeted high-growth segments, for example aerospace, electrical vehicles, and railway. In our railway business, we have secured orders from three large OEMs covering the wide range of our portfolio on various train platforms.
We delivered a record strong result with an adjusted operating profit of SEK 3.6 billion (2.5). The adjusted operating margin was 13.3% (10.5%), which is another step towards our target of 14%. The main drivers behind the profitability uplift are the relentless pricing and portfolio management activities conducted in all business areas.
For our Industrial business, the adjusted operating profit came in significantly stronger than last year at SEK 3,047 million (2,372) corresponding to an adjusted operating margin of 15.9% (13.9). The Automotive adjusted operating profit was SEK 568 million (101), which represents an adjusted operating margin of 7.1% (1.5%), demonstrating our progress towards the 8% annual target in 2025 from the ongoing portfolio re-positioning.
Cash flow from operations was SEK 3.7 billion (1.3). This record strong performance was, besides the operating profit, driven by active work across all business areas to further improve net working capital performance with special focus on inventory reduction.
Progressing our strategic transformation
Naturally, rapid execution of our strategy is crucial, and we are making good progress across key operational levers, such as innovation, efficiency, and portfolio management.
Ceramic bearings is one of several interesting technology and innovation areas where we see a strong demand from customers in many industries, such as aircraft engines, electrical vehicles, cleantech, hydrogen and green energy. To strengthen our offering and to meet a rapidly growing demand, we are further investing in our supply chain. One example being the recently announced joint venture with Sinoma Nitride that we signed to secure long-term access to high quality ceramic rolling elements.
We are relentlessly working on improving the productivity and efficiency in our operations and way of working. As part of our strive towards lean, clean, and digital manufacturing, we intend to consolidate our spherical roller bearing manufacturing in Europe, by proposing to move the current production from Luton, UK, to our factory in Poznan, Poland.
We are also continuing our portfolio management efforts to further strengthen our business and market position. An example from our Industrial business is the recently announced divestment of our coolant pumps operations Spandau Pumpen. In our Automotive business, we have now completed the previously communicated decision to exit SEK 1.2 billion of unprofitable customer contracts. In half of these we have concluded to step out of the business, while the other half of the contracts have been renegotiated on favorable terms.
In addition, we have also made some significant progress in our sustainability journey. One example is the Virtual Power Purchase Agreement (VPPA) that we signed to secure and accelerate access to renewable energy in our operations. In the agreement we will purchase guarantees of origin for a period of 15 years from an upcoming solar plant in Spain. This commitment is, on a yearly basis, equivalent to the electricity used by one third of our European operation in 2022. Another example is our decision to phase out fossil gas use in our own operations, backed by a SEK 3 billion investment frame over 6 years, to meet our energy and decarbonization goals by 2030.
The rapid progress in our strategic transformation and our strong results in the second quarter would not have been possible without the efforts from our employees and partners throughout the organization. I would like to take this opportunity to thank them all for their hard work and contribution during the first half of 2023. Together, we re-imagine rotation for a better tomorrow!
Outlook
Going into the second half of the year, we expect the normal third quarter seasonality pattern in our results. We also expect continued volatility and geopolitical uncertainty impacting the markets in which we operate. Looking into the third quarter of 2023, we expect mid single-digit organic sales growth. For the full year, we maintain our outlook of high single-digit organic sales growth, compared to 2022.
Rickard Gustafson
President and CEO
SKF HALF-YEAR REPORT 2023
Financial performance
Second quarter 2023
Operating profit for the second quarter was SEK 3,213 million (1,581). Operating profit included items affecting comparability of SEK -401 million (-892), mainly related to ongoing restructuring and cost reduction activities in Europe (-191) and for 2022 it also included SEK -675 million related to the divestment of the business in Russia and SEK -27 million related to customer settlements and impairments.
The adjusted operating profit for the second quarter was SEK 3,614 million (2,473). The adjusted operating profit was positively impacted by sales volumes, price and customer mix. Adjusted operating profit was negatively impacted by cost increases, mainly related to wages and salaries and material costs.
| Adjusted operating profit bridge, MSEK | Q2 |
|---|---|
| 2022 | 2,473 |
| Currency impact | -4 |
| Divested businesses | 5 |
| Organic sales & Manufacturing volumes | 1,928 |
| Cost development | -788 |
| 2023 | 3,614 |
- Financial income and expense, net, was SEK -383 million (-484). Exchange rate fluctuations had a less negative effect in 2023 compared to the second quarter 2022.
- Taxes in the quarter was SEK -668 million (-511) resulting in an effective tax rate of 23.6% (46.6%). The tax rate last year was negatively impacted by the loss from divestment of the business in Russia.
- Net cash flow from operating activities in the second quarter was SEK 3,664 million (1,293). The improved cash flow is mainly driven by higher operating profit as well as positive changes in working capital where the most positive impact is coming from changes in inventories.
- Net working capital in percent of annual sales was 32.7% in the second quarter compared to 35.7% in the second quarter 2022. The ratio was positively affected by lower accounts receivable and inventory levels in relation to sales, compared to last year.
- Provisions for post-employment benefits, net, increased by SEK 159 million (-2,146) in the second quarter.
Half year 2023
Operating profit for the first half year was SEK 6,592 million (4,534). Operating profit included items affecting comparability of SEK -501 million (-997) related to ongoing restructuring and cost reduction activities mainly in Europe (-295) and for 2022 it also included SEK -675 million related to the divestment of the business in Russia and SEK -27 million related to customer settlements and impairments.
The adjusted operating profit for the first half year was SEK 7,093 million (5,531). The adjusted operating profit was positively impacted by sales volumes, price, customer mix and currency effects. Adjusted operating profit was negatively impacted by cost increases, mainly related to wages and salaries and material costs.
| Adjusted operating profit bridge, MSEK | 2023 |
|---|---|
| 2022 | 5,531 |
| Currency impact | 131 |
| Divested businesses | 10 |
| Organic sales & Manufacturing volumes | 4,202 |
| Cost development | -2,781 |
| 2023 | 7,093 |
- Financial income and expense, net, was SEK -820 million (-552). Exchange rate fluctuations had a more negative effect in 2023 compared to 2022 and interest expenses was significantly higher during 2023.
- Taxes in the first half year was SEK -1,451 million (-1,335) resulting in an effective tax rate of 25.1% (33.5%). The tax rate in 2022 was negatively impacted by the loss from divestment of the business in Russia.
- Net cash flow from operating activities was SEK 6,411 million (1,022). The improved cash flow is mainly driven by higher operating profit as well as positive changes in working capital where the most positive impact is coming from changes in inventories.
- Net working capital in percent of annual sales was 32.7% in June 2023 compared to 35.7% in June 2022. The ratio was positively affected by lower accounts receivable and inventory levels in relation to sales, compared to last year.
- Provisions for post-employment benefits, net, increased by SEK 4 million (-3,491) in the first half year.
| Key figures | 30 June 2023 | 31 March 2023 | 30 June 2022 |
|---|---|---|---|
| Net working capital, % of 12 months rolling sales | 32.7 | 32.4 | 35.7 |
| ROCE for the 12-month period, %^{1)} | 14.1 | 13.0 | 13.7 |
| Net debt/equity, % | 35.4 | 39.8 | 37.7 |
| Net debt/equity, excluding post-employment benefits, % | 20.4 | 24.0 | 21.8 |
| Net debt/EBITDA, % | 1.4 | 1.7 | 1.5 |
1) Adjusted for items affecting comparability.
SKF HALF-YEAR REPORT 2023
Sales
| Net sales, change y-o-y, % | Q2 | Half year | ||||||
|---|---|---|---|---|---|---|---|---|
| Organic^{1)} | Structure | Currency | Total | Organic^{1)} | Structure | Currency | Total | |
| SKF Group | 7.9 | -0.1 | 6.9 | 14.7 | 9.0 | -1.0 | 7.2 | 15.2 |
| Industrial | 5.7 | 0.0 | 6.4 | 12.1 | 7.5 | -1.0 | 6.9 | 13.4 |
| Automotive | 13.8 | -0.2 | 7.8 | 21.4 | 12.9 | -1.1 | 8.0 | 19.8 |
1) Price, mix and volume
| Organic sales in local currencies, change y-o-y, % | Q2 | Half year | ||||||
|---|---|---|---|---|---|---|---|---|
| Europe, Middle East & Africa | The Americas | China & Northeast Asia | India & Southeast Asia | Europe, Middle East & Africa | The Americas | China & Northeast Asia | India & Southeast Asia | |
| SKF Group | 10.5 | 2.9 | 9.5 | 10.0 | 11.5 | 4.6 | 9.0 | 12.2 |
| Industrial | +++ | + | ++ | +++ | +++ | + | +++ | +++ |
| Automotive | +++ | ++ | +++ | +++ | +++ | +++ | +++ | +++ |
| Customer industries | Q2 | Half year | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Europe, Middle East & Africa | The Americas | China & Northeast Asia | India & Southeast Asia | Europe, Middle East & Africa | The Americas | China & Northeast Asia | India & Southeast Asia | |
| Organic sales in local currencies, change y-o-y: | ||||||||
| Industrial distribution | +/- | +++ | +++ | ++ | ++ | ++ | +++ | ++ |
| 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 2023
Net sales by region for Industrial Q2 2023
Net sales by customer industry for Automotive Q2 2023
Net sales by region for Automotive Q2 2023
SKF HALF-YEAR REPORT 2023
Industrial
Comments on organic sales in local currencies in the second quarter 2023, compared to the second quarter 2022
Europe, Middle East & Africa
Overall, sales were significantly higher in the quarter. By industry, sales to most industrial segments were significantly higher with some exceptions. Sales to industrial distribution and agriculture, food & beverage were relatively unchanged. Sales to high-speed machinery & electrical drives, material handling and automation were lower compared to Q2 2022.
The Americas
Overall, sales were slightly higher in the quarter. By industry, sales to industrial distribution, heavy industries, railway and traditional energy were significantly higher. To off-highway it was higher and to renewable energy, aerospace and automation it was relatively unchanged. Sales to material handling were lower and to high-speed machinery & electrical drives, agriculture, food & beverage and marine it was significantly lower compared to Q2 2022.
China & Northeast Asia
Overall, sales were higher in the quarter. By industry, sales were significantly higher to industrial distribution, renewable energy, railway, marine and material handling. To aerospace and automation it was higher. Sales to traditional energy were lower while sales to high-speed machinery & electrical drives, heavy industries, agriculture, food & beverage and off-highway were all significantly lower compared to Q2 2022.
India & Southeast Asia
Overall, sales were significantly higher in the quarter. By industry, sales to railway, agriculture, food & beverage, off-highway, material handling and automation were significantly higher. To industrial distribution and renewable energy it was higher while it was slightly higher to heavy industries. Sales to high-speed machinery & electrical drives, aerospace, marine and traditional energy were relatively unchanged compared to Q2 2022.
Automotive
Comments on organic sales in local currencies in the second quarter 2023, compared to the second quarter 2022
Europe, Middle East & Africa
Sales in the quarter were significantly higher compared to last year with significantly higher sales to all automotive segments.
The Americas
Sales in the quarter were higher compared to last year, with significantly higher sales to light vehicles, higher sales to the vehicle aftermarket while sales to commercial vehicles were significantly lower.
China & Northeast Asia
Sales in the quarter were significantly higher compared to last year with significantly higher sales to all automotive segments.
India & Southeast Asia
Sales in the quarter were significantly higher compared to last year with significantly higher sales to light vehicles. Sales to the vehicle aftermarket were slightly lower while sales to commercial vehicles were significantly lower.
Segment information
MSEK unless otherwise stated
| Industrial | Automotive | |||||||
|---|---|---|---|---|---|---|---|---|
| Q2 2023 | Q2 2022 | Half year 2023 | Half year 2022 | Q2 2023 | Q2 2022 | Half year 2023 | Half year 2022 | |
| Net sales | 19,179 | 17,114 | 38,148 | 33,634 | 7,943 | 6,541 | 15,524 | 12,963 |
| Adjusted operating profit | 3,047 | 2,372 | 6,255 | 5,147 | 568 | 101 | 838 | 384 |
| Adjusted operating margin, % | 15.9 | 13.9 | 16.4 | 15.3 | 7.1 | 1.5 | 5.4 | 3.0 |
| Operating profit | 2,655 | 1,702 | 5,789 | 4,386 | 558 | -121 | 803 | 147 |
| Operating margin, % | 13.8 | 9.9 | 15.2 | 13.0 | 7.0 | -1.8 | 5.2 | 1.1 |
1) Previously published figures for 2022 have been restated to reflect change in responsibilities for factories and Group functions in accordance with new organizational structure.
SKF HALF-YEAR REPORT 2023
Industrial
Comments on adjusted operating profit 2023, compared to 2022
Second quarter 2023
The adjusted operating profit for the second quarter was SEK 3,047 million (2,372). The adjusted operating profit was positively impacted by price and customer mix. Adjusted operating profit was negatively impacted by wages and salaries and material costs.
| Adjusted operating profit bridge, MSEK | Q2 |
|---|---|
| 2022 | 2,372 |
| Currency | -3 |
| Divested businesses | 4 |
| Organic sales & Manufacturing volumes | 1,156 |
| Cost development | -482 |
| 2023 | 3,047 |
Half year 2023
The adjusted operating profit for the first half year was SEK 6,255 million (5,147). The adjusted operating profit was positively impacted by sales volumes, price, customer mix and currency effects. Adjusted operating profit was negatively impacted by wages and salaries and material costs.
| Adjusted operating profit bridge, MSEK | 2023 |
|---|---|
| 2022 | 5,147 |
| Currency | 124 |
| Divested businesses | 8 |
| Organic sales & Manufacturing volumes | 2,685 |
| Cost development | -1,709 |
| 2023 | 6,255 |
Automotive
Comments on adjusted operating profit 2023, compared to 2022
Second quarter 2023
The adjusted operating profit for the second quarter was SEK 568 million (101). The adjusted operating profit was positively impacted by sales volumes, price and customer mix. Adjusted operating profit was negatively impacted by wages and salaries and material costs.
| Adjusted operating profit bridge, MSEK | Q2 |
|---|---|
| 2022 | 101 |
| Currency | -1 |
| Divested businesses | 1 |
| Organic sales & Manufacturing volumes | 772 |
| Cost development | -305 |
| 2023 | 568 |
Half year 2023
The adjusted operating profit for the first half year was SEK 838 million (384). The adjusted operating profit was positively impacted by sales volumes, price and customer mix. Adjusted operating profit was negatively impacted by wages and salaries and material costs.
| Adjusted operating profit bridge, MSEK | 2023 |
|---|---|
| 2022 | 384 |
| Currency | 7 |
| Divested businesses | 2 |
| Organic sales & Manufacturing volumes | 1,517 |
| Cost development | -1,072 |
| 2023 | 838 |
SKF HALF-YEAR REPORT 2023
SKF HALF-YEAR REPORT 2023
Outlook and Guidance
Demand for Q3 2023 compared to Q3 2022
Looking into the third quarter of 2023, we expect mid single-digit organic sales growth.
Guidance for Q3 2023
Currency impact on the operating profit is expected to be around SEK 150 million negative compared with the third quarter 2022, based on exchange rates per 30 June 2023.
Guidance 2023
- For the full year, we expect high single-digit organic sales growth, compared to 2022.
- Tax level excluding effects related to divested businesses: around 27%.
- Additions to property, plant and equipment: around SEK 5,5 billion.
Previous outlook and guidance statement
Demand for Q2 2023 compared to Q2 2022
Looking into the second quarter of 2023, we expect high single-digit organic sales growth.
Guidance for Q2 2023
Currency impact on the operating profit is expected to be around SEK 100 million negative compared with the second quarter 2022, based on exchange rates per 31 March 2023.
Guidance 2023
- For the full year, we expect high single-digit organic sales growth, compared to 2022.
- Tax level excluding effects related to divested businesses: around 28%.
- Additions to property, plant and equipment: around SEK 5 billion.
8
Significant events
22 May
SKF invests in magnetic bearing manufacturing
To meet increasing demand, SKF is increasing its technical and manufacturing capabilities within magnetic bearings through an investment totaling SEK 50 million in a new manufacturing site in Tangier, Morocco.
25 May
Changes to Group Management
Three new appointments are made in SKF Group Management aiming to further strengthen its commercial focus. A new position is also created to drive strategic sales and portfolio management.
SKF has announced the appointments of David Johansson as President, Industrial Region Europe, Middle East & Africa, Kerstin Enochsson as President, Automotive, and Hans Landin as Senior Vice President, Group Commercial Excellence Bearings.
31 May
SKF consolidates manufacturing in Europe, proposes to close factory in Luton
SKF has announced a consolidation of its spherical roller bearing manufacturing to secure the long-term competitiveness on the European markets. Consequently, SKF proposes to cease its bearing manufacturing site in Luton, UK. The proposal is subject to consultation with employees and union representatives. The Luton factory currently employs approximately 300 people.
9 June
SKF to phase out its own fossil gas use
SKF has decided to allocate SEK 3 billion to meet its energy and decarbonization goal by 2030, which is a key element of the Group's strategy. The Group has also decided to ban any fossil fuel investments in its own operations, as well as to replace direct fossil gas use with renewable energy or approved non-fossil fuel alternatives by 2029.
16 June
EUR 800 million credit facility
SKF has successfully signed a EUR 800 million multicurrency revolving credit facility. The facility has a tenor of five years with two one-year extension options, and it will serve as a back-up liquidity facility for general corporate purposes.
22 June
Virtual Power Purchase Agreement to support renewable energy in Europe
SKF has signed a Virtual Power Purchase Agreement (VPPA) in the next step towards its target of 100% renewable electricity by 2030. Under the long-term agreement with the global energy company Enel, SKF will purchase guarantees of origin for a period of 15 years, equivalent to the electricity used by one third of its European operation in 2022, from Enel's upcoming solar project in Spain.
29 June
SKF and Sinoma Nitride accelerate large-scale application of hybrid ceramic ball bearings
SKF and Sinoma Nitride, an industry-leading developer and producer of silicon nitride materials and ceramic balls, have entered into a Joint Venture contract to deepen their cooperation within hybrid ceramic ball bearings.
SKF HALF-YEAR REPORT 2023
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 includes revenues from key areas, such as: renewable energy, electric vehicles, electric railway, recycling industry, bearing remanufacturing, RecondOil and magnetic bearing solutions.
1) Previously published figures have been restated based on adaptation of the scope to better reflect and align with the sectors in the EU Taxonomy.
2) 2023 figures relate to the latest 12 months period.
Accident rate
The accident rate measures the number of recordable accidents per 100 employees per year.
1) 2023 figures relate to the latest 12 months period.
CO₂ emissions, Equivalent energy
CO₂ emissions¹¹ 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 have decarbonized operations by 2030.
1) Due to external reporting constraints, this data is presented for the end of the previous quarter.
SKF RecondOil Double Separation Technology is a patented combination of chemical and mechanical filtration that removes nano-size particles without damaging oils or their additives.
SKF HALF-YEAR REPORT 2023
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, 19 July 2023
Aktiebolaget SKF
(publ)
| Rickard Gustafson
President and CEO
Board member | Hans Stråberg
Chair | Håkan Buskhe
Board member |
| --- | --- | --- |
| Hock Goh
Board member | Geert Follens
Board member | Susanna Schneeberger
Board member |
| Beth Ferreira
Board member | Therese Friberg
Board member | Richard Nilsson
Board member |
| Niko Pakalén
Board member | Jonny Hilbert
Board member | Zarko Djurovic
Board member |
The half-year report has been reviewed by the company's auditor.
Auditor's report
Independent Auditor's Report on the review of half-year financial information. To the Board of Directors of AB SKF (publ) Corp. ID No. 556007-3495.
Introduction
We have reviewed the interim report of AB SKF (publ) for the period January 1-June 30, 2023. 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, 19 July 2023
Deloitte AB
Hans Warén
Authorized Public Accountant
SKF HALF-YEAR REPORT 2023
Condensed consolidated income statements
| MSEK | Apr-Jun 2023 | Apr-Jun 2022 | Jan-Jun 2023 | Jan-Jun 2022 |
|---|---|---|---|---|
| Net sales | 27,123 | 23,655 | 53,672 | 46,597 |
| Cost of goods sold | -20,058 | -17,777 | -39,486 | -34,230 |
| Gross profit | 7,065 | 5,878 | 14,186 | 12,367 |
| Research and development cost | -864 | -806 | -1,670 | -1,571 |
| Selling and administrative expenses | -3,077 | -3,094 | -6,018 | -5,873 |
| Other operating income/expenses, net | 89 | -397 | 94 | -389 |
| Operating profit | 3,213 | 1,581 | 6,592 | 4,534 |
| Financial income and expense, net | -383 | -484 | -820 | -552 |
| Profit before taxes | 2,830 | 1,097 | 5,772 | 3,982 |
| Taxes | -668 | -511 | -1,451 | -1,335 |
| Net profit | 2,162 | 586 | 4,321 | 2,647 |
| Net profit attributable to: | ||||
| Shareholders of AB SKF | 2,042 | 493 | 4,115 | 2,477 |
| Non-controlling interests | 120 | 93 | 206 | 170 |
| Basic earnings per share (SEK)1) | 4.48 | 1.08 | 9.03 | 5.44 |
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 2023 | Apr-Jun 2022 | Jan-Jun 2023 | Jan-Jun 2022 |
|---|---|---|---|---|
| Net profit | 2,162 | 586 | 4,321 | 2,647 |
| Items that will not be reclassified to the income statement: | ||||
| Remeasurements (actuarial gains and losses) | 162 | 2,681 | 372 | 4,211 |
| Income taxes | -39 | -690 | -80 | -1,084 |
| 123 | 1,991 | 292 | 3,127 | |
| Items that may be reclassified to the income statement: | ||||
| Exchange differences arising on translation of foreign operations | 1,774 | 2,610 | 1,889 | 3,429 |
| Assets at fair value through other comprehensive income | -4 | 41 | 14 | 18 |
| Income taxes | - | 2 | - | 3 |
| 1,770 | 2,653 | 1,903 | 3,450 | |
| Other comprehensive income, net of tax | 1,893 | 4,644 | 2,195 | 6,577 |
| Total comprehensive income | 4,055 | 5,230 | 6,516 | 9,224 |
| Shareholders of AB SKF | 3,845 | 5,039 | 6,226 | 8,939 |
| Non-controlling interests | 210 | 191 | 290 | 285 |
SKF HALF-YEAR REPORT 2023
Condensed consolidated balance sheets
| MSEK | June 2023 | December 2022 |
|---|---|---|
| Goodwill | 12,855 | 12,351 |
| Other intangible assets | 5,769 | 5,842 |
| Property, plant and equipment | 27,706 | 24,897 |
| Right of use asset leases | 3,200 | 3,084 |
| Deferred tax assets | 3,254 | 3,173 |
| Other non-current assets | 1,897 | 1,781 |
| Non-current assets | 54,681 | 51,128 |
| Inventories | 26,814 | 26,052 |
| Trade receivables | 19,726 | 16,905 |
| Other current assets | 6,443 | 5,614 |
| Other current financial assets | 10,731 | 11,224 |
| Current assets | 63,714 | 59,795 |
| Total assets | 118,395 | 110,923 |
| Equity attributable to shareholders of AB SKF | 55,240 | 51,927 |
| Equity attributable to non-controlling interests | 2,407 | 2,116 |
| Long-term financial liabilities | 19,205 | 21,219 |
| Provisions for post-employment benefits | 8,764 | 8,748 |
| Provisions for deferred taxes | 1,266 | 1,365 |
| Other long-term liabilities and provisions | 1,524 | 1,108 |
| Non-current liabilities | 30,759 | 32,440 |
| Trade payables | 12,483 | 11,594 |
| Short-term financial liabilities | 3,965 | 916 |
| Other short-term liabilities and provisions | 13,541 | 11,930 |
| Current liabilities | 29,989 | 24,440 |
| Total equity and liabilities | 118,395 | 110,923 |
Condensed consolidated statements of changes in shareholders' equity
| MSEK | Apr-Jun 2023 | Apr-Jun 2022 | Jan-Jun 2023 | Jan-Jun 2022 |
|---|---|---|---|---|
| Opening balance 1 April/1 January | 53,460 | 46,221 | 54,043 | 45,364 |
| Net profit | 2,162 | 586 | 4,320 | 2,647 |
| Hyperinflation adjustments | 138 | 108 | 275 | 161 |
| Components of other comprehensive income | ||||
| Currency translation adjustments | 1,774 | 2,609 | 1,890 | 3,427 |
| Change in FV OCI assets and cash flow hedges | -4 | 41 | 14 | 18 |
| Remeasurements | 162 | 2,681 | 372 | 4,211 |
| Income taxes | -39 | -687 | -80 | -1,080 |
| Other | - | -1 | - | -1 |
| Transactions with shareholders | ||||
| Non-controlling interest | - | - | - | - |
| Cost for Performance Share Programmes, net | -6 | 17 | - | 26 |
| Dividends | - | -1 | -3,187 | -3,199 |
| Other | - | - | - | - |
| Closing balance 30 June | 57,647 | 51,574 | 57,647 | 51,574 |
SKF HALF-YEAR REPORT 2023
Condensed consolidated statements of cash flow
| MSEK | Apr-Jun 2023 | Apr-Jun 2022 | Jan-Jun 2023 | Jan-Jun 2022 |
|---|---|---|---|---|
| Operating activities: | ||||
| Operating profit | 3,213 | 1,581 | 6,592 | 4,534 |
| Non-cash items: | ||||
| Depreciation, amortization and impairment | 941 | 898 | 1,939 | 1,758 |
| Net loss/gain (-) on sales of PPE and businesses | – | 615 | -29 | 614 |
| Other non-cash items | 378 | 245 | 726 | 433 |
| Income taxes paid | -972 | -764 | -1,608 | -1,253 |
| Interest received | 77 | 3 | 132 | 4 |
| Interest paid | -139 | -33 | -293 | -98 |
| Other | 39 | -770 | -216 | -1,027 |
| Changes in working capital: | 127 | -482 | -832 | -3,943 |
| Inventories | 230 | -1,358 | 172 | -3,271 |
| Accounts receivable | -517 | -404 | -2,281 | -2,614 |
| Accounts payable | -88 | 937 | 510 | 1,648 |
| Other operating assets/liabilities | 502 | 343 | 767 | 294 |
| Net cash flow from operating activities | 3,664 | 1,293 | 6,411 | 1,022 |
| Investing activities: | ||||
| Payments for intangible assets, PPE, businesses and equity securities | -1,643 | -1,481 | -3,145 | -2,591 |
| Sales of PPE, businesses and equity securities | – | -51 | 68 | -48 |
| Net cash flow used in investing activities | -1,643 | -1,532 | -3,077 | -2,639 |
| Net cash flow after investments before financing | 2,021 | -239 | 3,334 | -1,617 |
| MSEK | Apr-Jun 2023 | Apr-Jun 2022 | Jan-Jun 2023 | Jan-Jun 2022 |
| --- | --- | --- | --- | --- |
| Financing activities: | ||||
| Proceeds from short- and long-term loans | 50 | 12 | 77 | 28 |
| Repayments of short- and long-term loans | -28 | -40 | -94 | -92 |
| Repayment leases | -220 | -206 | -410 | -386 |
| Cash dividends | – | -1 | -3,187 | -3,199 |
| Other financing items: | ||||
| Investments in short-term financial assets | -187 | -79 | -416 | -95 |
| Sales of short-term financial assets | 203 | 38 | 306 | 61 |
| Net cash flow used in financing activities | -182 | -276 | -3,724 | -3,683 |
| Net cash flow | 1,839 | -515 | -390 | -5,300 |
| Change in cash and cash equivalents: | ||||
| Cash and cash equivalents at 1 April/1 January | 7,954 | 8,454 | 10,255 | 13,219 |
| Cash effect excl. acquired/sold businesses | 1,839 | -368 | -390 | -5,161 |
| Cash effect of acquired/sold businesses | – | -147 | – | -139 |
| Exchange rate effect | 85 | 228 | 13 | 248 |
| Cash and cash equivalents at 30 June | 9,878 | 8,167 | 9,878 | 8,167 |
| Change in Net debt | Closing balance 30 June 2023 | Other non-cash changes | Acquired/ sold businesses | Cash changes |
| --- | --- | --- | --- | --- |
| Loans, long- and short-term | 19,243 | -8 | – | -17 |
| Post-employment benefits, net | 8,625 | 90 | – | -480 |
| Lease liabilities | 3,048 | 424 | – | -410 |
| Financial assets, others | -645 | 12 | – | -114 |
| Cash and cash equivalents | -9,878 | – | – | 390 |
| Net debt | 20,393 | 518 | – | -631 |
SKF HALF-YEAR REPORT 2023
Condensed consolidated financial information
MSEK unless otherwise stated
| Q3/21 | Q4/21 | Q1/22 | Q2/22 | Q3/22 | Q4/22 | Q1/23 | Q2/23 | |
|---|---|---|---|---|---|---|---|---|
| Net sales | 20,146 | 20,986 | 22,942 | 23,655 | 24,975 | 25,361 | 26,549 | 27,123 |
| Cost of goods sold | -14,582 | -15,310 | -16,453 | -17,777 | -19,223 | -19,012 | -19,428 | -20,058 |
| Gross profit | 5,564 | 5,676 | 6,489 | 5,878 | 5,752 | 6,349 | 7,121 | 7,065 |
| Gross margin, % | 27.6 | 27.0 | 28.3 | 24.9 | 23.0 | 25.0 | 26.8 | 26.0 |
| Research and development cost | -648 | -766 | -765 | -806 | -779 | -827 | -806 | -864 |
| Selling and administrative expenses | -2,385 | -2,736 | -2,779 | -3,094 | -2,831 | -3,319 | -2,941 | -3,077 |
| - as % of sales | 11.8 | 13.0 | 12.1 | 13.1 | 11.3 | 13.1 | 11.1 | 11.3 |
| Other, net | 57 | 420 | 8 | -397 | -213 | -134 | 5 | 89 |
| Operating profit | 2,588 | 2,594 | 2,953 | 1,581 | 1,929 | 2,069 | 3,379 | 3,213 |
| Operating margin, % | 12.8 | 12.4 | 12.9 | 6.7 | 7.7 | 8.2 | 12.7 | 11.8 |
| Adjusted operating profit | 2,672 | 2,260 | 3,058 | 2,473 | 2,131 | 2,542 | 3,478 | 3,614 |
| Adjusted operating margin, % | 13.3 | 10.8 | 13.3 | 10.5 | 8.5 | 10.0 | 13.1 | 13.3 |
| Financial net | -148 | -266 | -68 | -484 | -311 | -376 | -437 | -383 |
| Profit before taxes | 2,440 | 2,328 | 2,885 | 1,097 | 1,618 | 1,693 | 2,942 | 2,830 |
| Profit margin before taxes, % | 12.1 | 11.1 | 12.6 | 4.6 | 6.5 | 6.7 | 11.1 | 10.4 |
| Taxes | -618 | -559 | -824 | -511 | -394 | -709 | -783 | -668 |
| Net profit | 1,822 | 1,769 | 2,061 | 586 | 1,224 | 984 | 2,159 | 2,162 |
| Net profit attributable to: | ||||||||
| Shareholders of AB SKF | 1,756 | 1,705 | 1,984 | 493 | 1,099 | 893 | 2,073 | 2,042 |
| Non-controlling interests | 66 | 64 | 77 | 93 | 125 | 91 | 86 | 120 |
SKF HALF-YEAR REPORT 2023
Reconciliation of profit before taxes for the Group
| MSEK | Q3/21 | Q4/21 | Q1/22 | Q2/22 | Q3/22 | Q4/22 | Q1/23 | Q2/23 |
|---|---|---|---|---|---|---|---|---|
| Operating profit: | ||||||||
| Industrial^{1)} | 2,439 | 2,433 | 2,685 | 1,702 | 1,716 | 1,771 | 3,134 | 2,655 |
| Automotive^{1)} | 149 | 161 | 268 | -121 | 213 | 298 | 245 | 558 |
| Financial net | -148 | -266 | -68 | -484 | -311 | -376 | -437 | -383 |
| Profit before taxes for the Group | 2,440 | 2,328 | 2,885 | 1,097 | 1,618 | 1,693 | 2,942 | 2,830 |
1) Previously published figures for 2021 and 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 2023 | Apr-Jun 2022 | Jan-Jun 2023 | Jan-Jun 2022 | |
|---|---|---|---|---|
| Total number of shares: | 455,351,068 | 455,351,068 | 455,351,068 | 455,351,068 |
| - whereof A shares | 29,383,933 | 29,403,933 | 29,383,933 | 29,403,933 |
| - whereof B shares | 425,967,135 | 425,947,135 | 425,967,135 | 425,947,135 |
| Weighted average number of shares in: | ||||
| - basic earnings per share | 455,351,068 | 455,351,068 | 455,351,068 | 455,351,068 |
SKF HALF-YEAR REPORT 2023
Key figures
Definitions, see page 21
| Q3/21 | Q4/21 | Q1/22 | Q2/22 | Q3/22 | Q4/22 | Q1/23 | Q2/23 | |
|---|---|---|---|---|---|---|---|---|
| EBITDA, MSEK | 3,239 | 3,479 | 3,814 | 2,478 | 2,906 | 3,118 | 4,377 | 4,154 |
| EBITA, MSEK | 2,733 | 2,742 | 3,104 | 1,741 | 2,094 | 2,234 | 3,541 | 3,377 |
| Adjusted operating profit, MSEK | 2,672 | 2,260 | 3,058 | 2,473 | 2,131 | 2,542 | 3,478 | 3,614 |
| Adjusted operating margin, % | 13.3 | 10.8 | 13.3 | 10.5 | 8.5 | 10.0 | 13.1 | 13.3 |
| Basic earnings per share, SEK | 3.86 | 3.74 | 4.36 | 1.08 | 2.41 | 1.96 | 4.55 | 4.48 |
| Adjusted earnings per share, SEK | 4.04 | 3.01 | 4.59 | 2.90 | 2.86 | 3.00 | 4.77 | 5.36 |
| Dividend per share, SEK | – | – | 7.00 | – | – | – | 7.00 | – |
| Net worth per share, SEK | 89 | 96 | 98 | 109 | 117 | 114 | 113 | 121 |
| Share price at the end of the period, SEK | 207.6 | 214.5 | 153.9 | 150.5 | 150.3 | 159.2 | 204.0 | 187.6 |
| NWC, % of 12 months rolling sales | 30.5 | 30.7 | 34.3 | 35.7 | 35.6 | 32.4 | 32.4 | 32.7 |
| ROCE for the 12-month period, % | 14.5 | 14.8 | 14.8 | 12.7 | 11.5 | 10.6 | 11.0 | 12.7 |
| ROE for the 12-month period, % | 19.3 | 18.8 | 18.3 | 13.8 | 11.7 | 9.5 | 9.4 | 12.0 |
| Gearing, % | 43.1 | 40.5 | 39.0 | 35.2 | 36.6 | 35.6 | 35.9 | 34.9 |
| Equity/assets ratio, % | 43.2 | 45.5 | 45.7 | 48.2 | 47.7 | 48.7 | 47.9 | 48.7 |
| Additions to property, plant and equipment, MSEK | 969 | 1,138 | 1,023 | 1,372 | 1,288 | 1,347 | 1,498 | 1,608 |
| Net debt/equity, % | 44.0 | 38.3 | 45.0 | 37.7 | 35.2 | 35.2 | 39.8 | 35.4 |
| Net debt, MSEK | 18,541 | 17,360 | 20,787 | 19,444 | 19,441 | 19,034 | 21,303 | 20,393 |
| Net debt/EBITDA, % | 1.4 | 1.2 | 1.4 | 1.5 | 1.5 | 1.5 | 1.7 | 1.4 |
| Registered number of employees | 42,139 | 42,602 | 42,763 | 42,602 | 42,885 | 42,641 | 42,083 | 41,675 |
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.
SKF HALF-YEAR REPORT 2023
Segment information – quarterly figures
MSEK unless otherwise stated
| Industrial | Q3/21 | Q4/21 | Q1/22 | Q2/22 | Q3/22 | Q4/22 | Q1/23 | Q2/23 |
|---|---|---|---|---|---|---|---|---|
| Net sales | 14,747 | 15,135 | 16,520 | 17,114 | 17,735 | 18,147 | 18,968 | 19,180 |
| Adjusted operating profit | 2,485 | 2,164 | 2,775 | 2,372 | 1,907 | 2,159 | 3,208 | 3,047 |
| Adjusted operating margin, % | 16.9 | 14.3 | 16.8 | 13.9 | 10.8 | 11.9 | 16.9 | 15.9 |
| Operating profit | 2,439 | 2,433 | 2,685 | 1,702 | 1,716 | 1,771 | 3,134 | 2,655 |
| Operating margin, % | 16.5 | 16.1 | 16.3 | 9.9 | 9.7 | 9.8 | 16.5 | 13.8 |
| Assets and liabilities, net | 41,893 | 43,410 | 47,426 | 49,450 | 52,016 | 50,469 | 53,584 | 56,318 |
| Registered number of employees | 35,215 | 35,539 | 35,700 | 35,845 | 36,166 | 35,991 | 35,571 | 35,443 |
| Automotive | Q3/21 | Q4/21 | Q1/22 | Q2/22 | Q3/22 | Q4/22 | Q1/23 | Q2/23 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Net sales | 5,399 | 5,851 | 6,422 | 6,541 | 7,240 | 7,214 | 7,581 | 7,943 |
| Adjusted operating profit | 187 | 96 | 283 | 101 | 224 | 383 | 270 | 568 |
| Adjusted operating margin, % | 3.5 | 1.6 | 4.4 | 1.5 | 3.1 | 5.3 | 3.6 | 7.1 |
| Operating profit | 149 | 161 | 268 | -121 | 213 | 298 | 245 | 558 |
| Operating margin, % | 2.8 | 5.0 | 4.2 | -1.8 | 2.9 | 4.1 | 3.2 | 7.0 |
| Assets and liabilities, net | 10,828 | 10,591 | 12,236 | 14,852 | 15,951 | 15,177 | 15,288 | 15,948 |
| Registered number of employees | 3,941 | 3,989 | 3,983 | 4,027 | 4,063 | 4,023 | 4,002 | 3,919 |
1) Previously published figures for 2021 and 2022 have been restated to reflect change in responsibilities for factories and Group functions in accordance with new organizational structure.
SKF HALF-YEAR REPORT 2023
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.
Disclosures as required by IAS 34 p. 16 A are 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 2023. 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 2022, 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 2022.
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 Superintendence 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 1,000 employees. Sales in Ukraine amounted to less than 0.1% of SKF's total sales in 2022. SKF's factory in Lutsk, Ukraine, accounted for a production volume of approximately 0.5% of SKF's total production volume in 2022. The factory in Ukraine has been producing whenever possible due to prevailing circumstances however at a lower level than normal.
For a more detailed description of risks and uncertainties, please see the Risk Management section on pages 37-39 in the SKF Annual Report 2022.
SKF HALF-YEAR REPORT 2023
Parent Company condensed income statements
| MSEK | Apr-Jun 2023 | Apr-Jun 2022 | Jan-Jun 2023 | Jan-Jun 2022 |
|---|---|---|---|---|
| Revenue | 2,380 | 1,751 | 4,339 | 3,654 |
| Cost of goods sold | -1,499 | -1,474 | -3,150 | -2,988 |
| General management and administrative expenses | -606 | -445 | -1,017 | -834 |
| Other operating income/expenses, net | -5 | -3 | -1 | 12 |
| Operating result | 270 | -171 | 171 | -156 |
| Financial income and expense, net | 9 | 152 | 13 | 159 |
| Profit before taxes | 279 | -19 | 184 | 3 |
| Appropriations | - | - | - | - |
| Taxes | -41 | 60 | -37 | 33 |
| Net profit | 238 | 41 | 147 | 36 |
Parent Company condensed statements of comprehensive income
| MSEK | Apr-Jun 2023 | Apr-Jun 2022 | Jan-Jun 2023 | Jan-Jun 2022 |
|---|---|---|---|---|
| Net profit | 238 | 41 | 147 | 36 |
| Items that may be reclassified to the income statement: | ||||
| Assets at fair value through other comprehensive income | -5 | 41 | 13 | 18 |
| Other comprehensive income, net of tax | 233 | 82 | 160 | 54 |
| Total comprehensive income | 233 | 82 | 160 | 54 |
Parent Company condensed balance sheets
| MSEK | June 2023 | December 2022 |
|---|---|---|
| Intangible assets | 1,130 | 1,234 |
| Investments in subsidiaries | 22,437 | 22,441 |
| Receivables from subsidiaries | 16,324 | 18,388 |
| Other non-current assets | 977 | 927 |
| Non-current assets | 40,868 | 42,990 |
| Receivables from subsidiaries | 5,188 | 5,555 |
| Other receivables | 358 | 358 |
| Current assets | 5,546 | 5,913 |
| Total assets | 46,414 | 48,903 |
| Shareholders' equity | 23,084 | 26,117 |
| Provisions | 768 | 666 |
| Non-current liabilities | 16,320 | 18,386 |
| Current liabilities | 6,242 | 3,734 |
| Total shareholders' equity, provisions and liabilities | 46,414 | 48,903 |
SKF HALF-YEAR REPORT 2023
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.
Gross margin
Gross income as a percentage of net sales.
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.
Organic growth
Sales excluding effects of currency and acquired and divested businesses.
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 2023
SKF's climate targets are approved by the Science Based Targets initiative. In its targets, SKF has committed to reducing its absolute scope 1 and 2 GHG emissions by 95% by 2030 from a 2019 base year and to reduce its scope 3 emissions by at least 31% by 2030. SKF has also committed to reach net-zero GHG emissions across the value chain by 2050.
Webcast
19 July at 08:15 (CEST), 07.15 (UK BST)
https://investors.skf.com/en
Sweden +46 10 884 80 16
UK / International +44 20 3936 2999
Passcode: 466190
Calendar 2023
27 October Q3 report
This is SKF
SKF is a world-leading provider of innovative solutions that help industries become more competitive and sustainable. By making products lighter, more efficient, longer lasting, and repairable, we help our customers improve their rotating equipment performance and reduce their environmental impact. Our offering around the rotating shaft includes bearings, seals, lubrication management, condition monitoring, and services.
Quick facts
Founded 1907
Represented in more than 129 countries
Net sales in 2022: SEK 96,933 million
42,641 employees
15 technical centers
77 manufacturing sites
>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, Head of Media Relations
tel: 46 31 337 2517 mobile: 46 722 201 893
e-mail: [email protected]
This half year report contains financial and inside information that AB SKF is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication through the agency of the contact person set out in the press release concerning this report, on 19 July 2023 at 07.00 CEST.
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