SKF First-quarter result slide show
- 2. The SKF Group First-quarter results 2009 Tom Johnstone, President and CEO
- 3. Highlights in the first quarter 2009 2 SKF • gained an order from CSR Zhuzhou Electric Locomotive Co., Ltd. ZELC. 500 electric locomotives, for Chinese railways, will be equipped with SKF axleboxes and drive system bearings. Order value: EUR 14 m. Photo: CSR Zhuzhou Electric Locomotive • won a new contract for the supply of tapered roller bearings to Guangdong Fuwa Engineering Manufacturing Co Ltd. Order value: USD 14 m. 21 April 2009
- 4. First quarter 2009 3 SEKm 2009 2008 Net sales 14,849 15,596 Operating profit 768 2,040 Operating margin 5.2 13.1 Profit before taxes 531 1,924 Net profit 394 1,296 Basic earnings per share, SEK 0.86 2.77 Cash flow after investments before financial items 523 -131 21 April 2009
- 5. Growth in local currency 4 Long-term target level: 6-8% per annum % y-o-y 15 13.2 10 7.1 5 - 18.4 0 -5 -10 -15 -20 2007 2008 YTD March 2009 Acquisitions/Divestments Organic growth 21 April 2009
- 6. Sales in local currencies (excl. structural changes) 5 % change y-o-y 12 8 4 0 -4 -8 -12 -16 -20 2007 2008 2009 21 April 2009
- 7. Sales volume 6 % change y-o-y 10 5 0 -5 -10 -15 -20 -25 -30 2007 2008 2009 21 April 2009
- 8. Components in net sales 7 2007 2008 2009 Percent y-o-y Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Volume 7.9 6.9 9.0 6.3 4.9 6.2 2.7 -13.0 -26.9 Structure 4.0 4.6 3.7 1.0 1.0 1.3 0.5 2.4 1.4 Price / Mix 1.8 2.7 2.0 3.2 3.8 4.0 6.4 8.5 7.1 Sales in local 13.7 14.2 14.7 10.5 9.7 11.5 9.6 -2.1 -18.4 currency Currency -5.6 -2.3 -1.9 -2.0 -1.2 -4.1 -0.9 10.3 13.6 Net sales 8.1 11.9 12.8 8.5 8.5 7.4 8.7 8.2 -4.8 21 April 2009
- 9. Operating margin 8 Long-term target level: 12% % 13.3* 14 12.7* 12 12.9 12.2 10 8 6.4* 6 4 5.2 2 0 2007 2008 YTD March 2009 Restructuring and one-time items 21 April 2009 * Excluding restructuring and one-time items
- 10. Operating margin 9 Long-term target level: 12% % 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 2007 2008 2009 21 April 2009
- 11. Operating margin per division 10 % 20 15 Service 10 Industrial 5 0 -5 Automotive -10 -15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2007 2008 2009 Excluding one-off items (eg. restructuring, impairments, capital gains) 21 April 2009
- 12. Activities to adapt to lower demand 11 • Restructuring/impairment programmes People Costs charged to operating profit - announced Q4 2008, around 2,500 SEK 340 m - announced Q1 2009, around 500 SEK 175 m 3,000 SEK 515 m At the end of March 2009, around 1,300 people had left under the programmes. • In total, around 2,600 people left the Group during H2 2008 and Q1 2009. • Around 6,000 people in short-time working (Q1 2009). 21 April 2009
- 13. Inventories as % of annual sales 12 % Long-term target level: 18% 25 24 23 22 x excl. currency effects 21 20 19 18 2007 2008 2009 Inventories versus Q4 2008, in local currencies, 21 April 2009 were reduced by around SEK 500 million.
- 14. Return on capital employed 13 Long-term target level: 24% % 30 24.9 24.0 25 18.7 20 15 10 5 0 2007 2008 YTD March 2009 ROCE: Operating profit plus interest income, as a percentage of twelve months average of total assets less the average of non-interest bearing liabilities. 21 April 2009
- 15. Net debt 14 (Short-term financial assets minus loans and post-employment benefits) SEKm 0 AB SKF, -2 000 dividend paid (SEKm): -4 000 2006 Q2 1,821 -6 000 2007 Q2 2,049 -8 000 2008 Q2 2,277 -10 000 Redemption (SEKm): -12 000 2007 Q2 4,554 -14 000 2008 Q2 2,277 -16 000 -18 000 2007 2008 2009 21 April 2009
- 16. AB SKF, long-term debt structure 15 Amount in million Maturity Euro Bond EUR 250 2010-06 SEK Bond SEK 1,500 2011-06 Term loan in euro EUR 150 2013-06 Euro Bond EUR 500 2013-12 Euro loan EUR 100 2016-06 Euro loan EUR 100 2014-03 21 April 2009
- 17. Cash flow, after investments before financial items 16 SEKm 1 400 1 200 Cash out from 1 000 acquisitions (SEKm): 800 2007 1,209 600 2008 1,284 400 200 0 -200 -400 -600 -800 2007 2008 2009 21 April 2009
- 18. April 2009: Outlook for the second quarter 2009 17 The demand for SKF products and services is expected to be significantly lower in the second quarter compared to the second quarter last year for the Group in total, for all the Divisions and for all regions. Compared to the first quarter, demand is expected to be slightly lower for the SKF Group in total and lower in Europe, slightly lower in North America and relatively unchanged in Asia and Latin America. Demand is expected to be relatively unchanged for the Automotive Division and slightly lower for both the Industrial and Service Division. The manufacturing level will be significantly lower year on year and relatively unchanged compared to the first quarter. 21 April 2009
- 19. Volume trends 18 (based on current assumptions) Net sales Daily volume trends for: Outlook Q2 2008 Q1 2009 Q2 2009 2009 vs 2008 Europe 56% --- North America 17% --- Asia Pacific 19% --- Latin America 5% --- Total --- 21 April 2009
- 20. Volume trend for main segment Q2 2009 19 (based on current assumptions) Net sales 2008 5% Trucks 20% Industrial OEM, General+Special 23% Industrial distribution 12% Industrial OEM, Heavy+Off-highway 13% Cars 3% Electrical and two-wheeler 9% VSM 5% Aerospace 3% Railway 6% Energy 21 April 2009
- 21. Guidance for the second quarter 2009 20 • Tax level: around 30% • Financial net for the second quarter: SEK -220 million • Exchange rates on operating profit versus 2008 Q2: SEK 300 million Full year: SEK 1 billion • Additions to PPE: Around SEK 2 billion for 2009 Guidance is approximate and based on current assumptions and exchange rates 21 April 2009
- 22. Key focus areas ahead 2009 21 • Profit and cash flow - maintain positive price/mix - drive operational efficiency and cost reduction - reduce working capital and investments • Adjustment of manufacturing output to new demand levels - restructuring - short-time working • Growing segments and geographies • Strengthening the platform/segment approach • Competence development SKF Care and Six Sigma as guiding lights 21 April 2009
- 23. SKF Care 22 Business Care Employee Care 14 12 10 8 6 4 2 0 2003 2004 2005 2006 2007 2008 Operating margin BeyondZeroTM SKF Care Environmental Care Community Care 21 April 2009
- 24. SKF Group Vision 23 To equip the world with SKF knowledge 21 April 2009
- 25. Cautionary statement 24 This presentation contains forward-looking statements that are based on the current expectations of the management of SKF. Although management believes that the expectations reflected in such forward- looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those implied in the forward-looking statements as a result of, among other factors, changes in economic, market and competitive conditions, changes in the regulatory environment and other government actions, fluctuations in exchange rates and other factors mentioned in SKF's latest annual report (available on www.skf.com) under the Administration Report; "Most important factors influencing the financial results", "Financial risks" and "Sensitivity analysis”. 21 April 2009
- 26. 25 21 April 2009