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SKF Group sees success in first quarter, especially in North American market

Gothenburg, Sweden – The SKF Group delivered a very good result and cash flow in the first quarter of 2012, according to Tom Johnstone, president and CEO, SKF Group. “As planned we took steps to reduce inventories and ran production...


Gothenburg, Sweden – The SKF Group delivered a very good result and cash flow in the first quarter of 2012, according to Tom Johnstone, president and CEO, SKF Group. “As planned we took steps to reduce inventories and ran production significantly lower than sales,” he said.

“From a sales viewpoint, we saw a very different development between the regions. There was very strong growth in both North America and Latin America and this was quite broad-based across many of the industries we serve. In Europe our industrial businesses developed well while the automotive business, as expected, was significantly down.

“In Asia we had a weak development, but the trend improved during the quarter and we expect that to continue,” said Johnstone.

During the quarter, SKF signed an agreement to acquire General Bearings Corporation, which is expected to be finalized it in the second quarter. It opened two new University Technical Centres in Sweden, launched a number of new products and gained some important new business.

“We also introduced a new organisation to better serve the industrial market through a more industry-focussed structure and a full asset life cycle approach.”

Looking at the second quarter, Johnstone said he sees an improving business environment for the Group and expect sales to be slightly up both sequentially and year on year. “Again the main growth will be in the Americas but we also expect a continued improvement in Asia and a stable development in Europe. All three Business Areas are expected to show sequential growth.”

Sales in local currency in the first quarter compared to the same period last year (excl. structure) for the Group increased by 1.1%. In Europe they decreased by 1.2% and in Asia by 8.1%. In North America they increased by 14.7 %, in Latin America by 11.1% and in Middle East and Africa by 2.5%. The manufacturing level was significantly lower than in the first quarter last year.

The demand for SKF’s products and services is expected to be slightly higher for the Group in the second quarter of 2012. It is expected to be relatively unchanged in Europe and Asia, and significantly higher in North America and Latin America. The demand is expected to be slightly higher for Strategic Industries and Regional Sales and Service and relatively unchanged for the Automotive.

Compared to the first quarter of 2012, the demand for SKF’s products and services is expected to be slightly higher for the Group. It is expected to be relatively unchanged in Europe, slightly higher in North America and higher in Asia and Latin America. The demand is expected to be slightly higher for all business areas. The manufacturing level is expected to be lower year on year but higher compared to the first quarter.

Key figures

Q1 2012

Q1 2011

Net sales, SEKm

16,931

16,702

Operating profit, SEKm

2,140

2,504

Operating margin, %

12.6

15.0

Profit before taxes, SEKm

1,981

2,318

Net profit, SEKm

1,341

1,620