Skf q1 2012_presentation
- 2. SKF First-quarter results 2012 Tom Johnstone, President and CEO 19 April 2012
- 3. Highlights Q1 2012 2 Acquisition: • SKF signed an agreement to acquire the US-based General Bearing Corporation for around USD 125 million on a cash and debt free basis. New businesses: • SKF received an order worth around SEK 350 million from Vestas for the delivery of main shaft solutions to the Vestas V112-3.0 MW turbine. • SKF was awarded two contracts totaling around SEK 50 million from Siemens Rail Systems for railway projects in Europe. SKF will deliver axle boxes and wheel set bearing units. • SKF received orders from one major metal industry customer for SKF ConRo Compacts worth EUR 1.8 million. • SKF signed a three-year contract with Scania. The contract includes bearings for truck wheel end units and transmissions to Scania production facilities in Brazil. 19 April 2012
- 4. Highlights Q1 2012 3 SKF: • inaugurated two SKF University Technology Centres: Chalmers University of Technology, Luleå University of Technology, for sustainability and environment for condition monitoring and asset management Foto: Robin Olsson Foto: Karl William • held the SKF North American Distributor convention in Florida, and participated in a maintenance fair in Sweden. • awarded the 140,000 certificate from the SKF Distributor College • launched a range of informational and calculation-focused apps for iPhone and iPad. 19 April 2012
- 5. Examples of new products launched in 2012 4 Servo Actuator for A hand-held, Next generation SNL, SKF Solar Hub industrial applications 18-volt, SE housings lithium-ion grease gun SKF Compact SKF Speed Wire Steering Sensor Unit Bearing SKF Thruster Monitoring Integrated monotube seal SKF Nautilus SKF Bus Door Actuator range extensions 19 April 2012
- 6. SKF Group Q1 2012 5 Financial performance 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 tax, SEKm 1,981 2,318 Cash flow, SEKm 696 372 Organic sales growth in local currency: SKF Group: +1.1% Europe: -1.2% Industrial market, Strategic Industries: +2.5% North America: +14.7% Industrial market, Regional Sales and Service: +3.0% Asia: -8.1% Automotive: -4.2% Latin America: +11.1% Key points Sales were relatively unchanged y-o-y Manufacturing was significantly lower y-o-y Inventories were reduced to 20.5% of sales 19 April 2012
- 7. Organic sales growth in local currency 6 % change y-o-y 25 20 15 10 5 0 2010 2011 2012 19 April 2012
- 8. Sales volume 7 % change y-o-y 25 20 15 10 5 0 -5 2010 2011 2012 19 April 2012
- 9. Growth development by geography 8 Organic growth in local currency Q1 2012 vs Q1 2011 Europe -1.2% North America +14.7% Asia/Pacific -8.1% Latin America +11.1% Middle East & Africa +2.5% 19 April 2012
- 10. Growth in local currency 9 Long-term target: 8% per annum Total growth 14.2% 16.3% 1.0% % y-o-y 15 14.2% 11.5% 10 4.8% 5 1.1% 0.0% -0.1% 0 -5 2010 2011 Q1 2012 Organic growth 19 April 2012 Acquisitions/Divestments
- 11. Components in net sales 10 2010 2011 2012 Percent y-o-y Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Volume 5.3 16.6 19.0 16.3 20.1 12.6 6.2 0.0 -0.8 Structure 0.0 0.0 0.0 0.0 5.0 4.4 5.1 4.8 -0.1 Price/mix -0.3 -0.5 0.3 0.9 1.3 1.6 2.0 2.8 1.9 Sales in local 5.0 16.1 19.3 17.2 26.4 18.6 13.3 7.6 1.0 currency Currency -7.7 -5.2 -3.2 -6.2 -10.8 -12.2 -6.3 -2.1 0.4 Net sales -2.7 10.9 16.1 11.0 15.6 6.4 7.0 5.5 1.4 19 April 2012
- 12. Operating profit 11 SEKm 2 700 2 400 2 100 1 800 1 500 1 200 900 600 300 0 2010 2011 2012 Restructuring and one-time items 19 April 2012
- 13. Operating margin 12 Long-term target level: 15% % 16 14 12 10 8 6 4 2 0 2010 2011 2012 Restructuring and one-time items 19 April 2012
- 14. Operating margin 13 Long-term target level: 15% % 16 14.7* 14.2* 14 12.6 13.8 14.5 12 10 8 6 4 2 0 2010 2011 Q1 2012 Restructuring and one-time items * Excluding restructuring and one-time items 19 April 2012
- 15. Operating margin per business area 14 % 18 15 Regional Sales and Service 12 Strategic Industries 9 6 Automotive 3 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2011 2012 19 April 2012
- 16. First quarter 2012 15 SEKm 2012 2011 Net sales 16,931 16,702 Operating profit 2,140 2,504 Operating margin, % 12.6 15.0 Profit before taxes 1,981 2,318 Net profit 1,341 1,620 Basic earnings per share, SEK 2.84 3.44 Cash flow, after investments before financing 696 372 19 April 2012
- 17. Inventories as % of annual sales 16 % Long-term target level: 18% 25 24 23 22 21 20 19 18 2010 2011 2012 19 April 2012
- 18. Cash flow, after investments before financing 17 SEKm 2 000 1 000 * 0 -1 000 -2 000 -3 000 -4 000 -5 000 -6 000 2010 2011 2012 * SEK 798 million, excluding SEK 6,799 million for the acquisition of Lincoln. 19 April 2012
- 19. Return on capital employed 18 Long-term target: 27% % 30 24.0 23.6 25 21.9 20 15 10 5 0 2010 2011 Q1 2012 ROCE: Operating profit plus interest income, as a percentage of twelve months rolling average of total assets less the average of non-interest bearing liabilities. 19 April 2012
- 20. Net debt 19 SEKm 0 AB SKF, -2 000 dividend paid (SEKm): -4 000 2010 Q2 1,594 -6 000 2011 Q2 2,277 -8 000 -10 000 Cash out from -12 000 acquisitions (SEKm): -14 000 2010 6,799 -16 000 -18 000 2010 2011 2012 Net debt: Loans and net provisions for post- employment benefits less short-term financial assets excluding derivatives. 19 April 2012
- 21. Debt structure 20 Maturity years, EURm 600 500 500 396 400 300 200 130 100 100 110 100 0 0 2012 2013 2014 2015 2016 2017 2018 • Credit facilities: • No financial covenants nor material EUR 500 million 2014 adverse change clause SEK 3,000 million 2017 19 April 2012
- 22. Dividend proposal 21 AB SKF’s Board proposes to the Annual General Meeting an increase of the dividend by 10%, giving a dividend of SEK 5.50 (5.00) per share. The Annual General Meeting will be held on 25 April. 19 April 2012
- 23. April 2012: Outlook for the second quarter 2012 22 Demand compared to the second quarter last year 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 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. Demand compared to the first quarter 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. Manufacturing level The manufacturing level is expected to be lower year on year but higher compared to the first quarter. 19 April 2012
- 24. Demand outlook Q2 2012, regions 23 (based on current assumptions) Share of net sales Sequential trends for: Q2 2012 2011 Q1 2012 Q2 2012 vs Q2 2011 Europe 46% +/- Asia Pacific 26% +/- North America 19% +++ Latin America 6% +++ Total + 19 April 2012
- 25. Demand outlook Q2 2012, business areas 24 (based on current assumptions) Share of net sales Sequential trends for Q2 2012 2011 Q2 2012 vs Q2 2011 Strategic Industries 31% + Regional Sales and Service 39% + Automotive 27% +/- Total + 19 April 2012
- 26. Sequential volume trend Q2 2012, main segments 25 (based on current assumptions) Share of net sales 2011* 5% Trucks 26% Industrial Distribution 18% Industrial OEM, General + Special 13% Cars 10% Vehicle Service Market 10% Industrial OEM, Heavy + Off-highway 6% Energy 3% Two-wheelers and Electrical 5% Aerospace 4% Railway 19 April 2012 * excluding Lincoln
- 27. Guidance for the second quarter 2012 26 • Tax level: around 30% • Financial net for the second quarter: Around SEK -175 million • Exchange rates on operating profit versus 2011 Q2: SEK 125 million Full year: SEK 200 million • Additions to PPE: Around SEK 2.0 billion for 2012 Guidance is approximate and based on current assumptions and exchange rates 19 April 2012
- 28. Key focus areas ahead 2012 27 • Managing the uncertain and different demand environment -regions and segments • Profit and cash flow - inventory management • Initiatives and actions to support long-term financial targets • Continue the integration of Lincoln • Business Excellence and competence development • Implement the new organization for the Industrial market One SKF and SKF Care as guiding lights 19 April 2012
- 29. Cautionary statement 28 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; “Important factors influencing the financial results", "Financial risks" and "Sensitivity analysis”. 19 April 2012
- 30. 29 19 April 2012