Alrik Danielson, President and CEO:
”Demand was in line with our expectations, with reported sales growth in local currencies of 1,4%. All three business areas showed an increase in sales in local currencies. Geographically, Asia continued to show a good growth followed by Europe and Latin America which were relatively unchanged while in North America the business slowed somewhat due to lower activity in some of our key industries. Cash flow from operations was strong, even though we built some working capital in the quarter due to seasonality.
There has been a high focus on implementing the already announced restructuring programme and I am pleased to see the good progress so far, around 40%.
The high focus on innovations is continuing throughout the organization and we have launched several new innovations to help our customers improve their productivity and reduce energy usage. For example, we introduced a new generalized bearing life concept enabling customers to much better account for real-life conditions when calculating SKF bearing life in their machines.
Looking forward, there is continued uncertainty from a macro perspective. Sequentially and year on year we expect the demand to be relatively unchanged for the Group.
I am also pleased to welcome a new Senior Vice President and CFO for the Group, Christian Johansson.’’
Key figures |
Q1 2015 | Q1 2014 |
| Net sales, SEKm | 19 454 | 16 734 |
| Operating profit, SEKm | 1 721 | 2 024 |
| Operating margin, % | 8.8 | 12.1 |
| One-time items (- costs, + income) | -655 | 117 |
| Operating profit excluding one-time items, SEKm | 2 376 | 1 907 |
| Operating margin excl. one-time items % | 12.2 | 11.4 |
| Profit before taxes, SEKm | 1 592 | 1 787 |
| Net profit, SEKm | 1 165 | 1 275 |
| Basic earnings per share, SEK | 2.46 | 2.72 |
One-time items in Q1 2015 include SEK -535 million for the ongoing cost-reduction programme, and the remainder relates to write-offs of assets.
| 31 March 2015 | 31 December 2014 | 31 March 2014 | |
| Net working capital, % of annual sales | 32.1 | 30.6 | 32.8 |
| ROCE for the 12-month period, % | 12.6 | 13.9 | 8.4 |
| Net debt/equity, % | 122.2 | 126.6 | 117.6 |
| Net debt/EBITDA, % | 3.2 | 3.0 | 4.2 |
| Net sales change y-o-y, %: | Organic | Structure | Currency | Total |
| Q1 2015 | 1.4 | 0 | 14.9 | 16.3 |
| Organic sales change in local currencies, per region y-o-y, %: | Europe | NorthAmerica | Latin America | Asia | Middle East & Africa |
| Q1 2015 | 1.0 | -2.4 | 0.4 | 5.6 | 14.2 |
Outlook for the second quarter of 2015
Demand compared to the second quarter 2014
The demand for SKF’s products and services is expected to be relatively unchanged for the Group and for Europe. For Asia it is expected to be higher and for North and Latin America slightly lower. Per business area, for both Industrial Market and Automotive Market it is expected to be relatively unchanged, and for Specialty Business to be slightly higher.
Demand compared to the first quarter 2015
The demand for SKF’s products and services is expected to be relatively unchanged for the Group, Europe and North America. For Asia it is expected to be higher and for Latin America slightly lower. Per business area, for both Industrial Market and Automotive Market it is expected to be relatively unchanged, and for Specialty Business to be slightly higher.
Manufacturing
Manufacturing is expected to be relatively unchanged year over year and compared to the first quarter.
