"Our first quarter performance marked another step towards a more resilient and competitive
The improved performance is explained by our active and ongoing focus on business cycle management, in combination with a continued execution of our ongoing strategic initiatives, such as supply chain and footprint optimization, portfolio management, and enhanced sustainability leadership. All in all, we are well-positioned to capture profitable growth opportunities once demand bounces back again.
Strong margin despite sales decline in Q1
Net sales in the first quarter were
Organic growth in
Organic growth in
In total, the adjusted operating profit was
Due to all these activities, our Industrial business continued to perform well in the first quarter and maintained an adjusted operating margin above 16%, while the margin for our Automotive business improved to above 6%.
Cash flow from operations was fairly normal for a first quarter and was
Continued execution of ongoing strategic initiatives
We continue to diligently work on implementing and executing our strategy, increasing our efficiency, and reducing fixed costs. Key focus areas in 2024 are further optimization of our supply chain and footprint, managing and restructuring our portfolio, and gearing up for intelligent and clean growth. A common theme across these priorities is innovation, where we, together with our customers, develop products and solutions that create significant value. This enables us to defend or increase our market share in many important industrial segments, and thereby re-enforce our position as a leader in the industry.
As a global leader within railway, representing 5% of our total sales and outgrowing the market in recent years, we constantly drive innovation in close cooperation and partnership with our customers, both OEMs and operators, to develop solutions for enhanced fleet efficiency and reliability. As an example, we recently developed new high speed ceramic deep groove ball bearings for railway drives.
To gear up for intelligent and clean growth, investments in decarbonization, high speed rotation and low-friction products and services are key. We have developed a bearing tailored for the robotics industry, with a reduced manufacturing CO2 footprint of 70%, enabling an additional 20% CO2 reduction in the end customer application. This is a great example of how
Our strong financial performance due to our ability to mitigate the impact from the economic slowdown, and in parallel effectively execute our strategic transformation, would not have been possible without our dedicated employees. I would like to take this opportunity to express my sincere appreciation to all colleagues and partners across the
Outlook
We expect to see continued market volatility and geopolitical uncertainty and the business is prepared to tackle different scenarios. Looking into the second quarter of 2024, we expect a mid single-digit organic sales decline. For the full year, we expect a low single-digit organic sales decline, compared to 2023."
Key figures, SEKm unless otherwise stated | Q1 2024 | Q1 2023 |
Net sales | 24,699 | 26,549 |
Adjusted operating profit | 3,303 | 3,478 |
Adjusted operating margin, % | 13.4 | 13.1 |
Operating profit | 2,993 | 3,379 |
Operating margin, % | 12.1 | 12.7 |
Adjusted profit before taxes | 3,032 | 3,041 |
Profit before taxes | 2,722 | 2,942 |
Net cash flow from operating activities | 1,781 | 2,747 |
Basic earnings per share | 4.15 | 4.55 |
Adjusted earnings per share | 4.83 | 4.77 |
Net sales, change y-o-y, %, Q1 | Organic1) | Structure | Currency | Total |
-7.0 | 0.1 | 0.0 | -6.9 | |
Industrial | -7.3 | 0.1 | -0.2 | -7.4 |
Automotive | -6.2 | 0.0 | 0.4 | -5.8 |
1)Price, mix and volume
Organic sales in local currencies, change y-o-y, %, Q1 | The | |||
-4.9 | -9.9 | -11.2 | 1.2 | |
Industrial | -- | --- | --- | +/- |
Automotive | -- | --- | +/- | ++ |
Outlook and Guidance
Demand for Q2 2024 compared to the Q2 2023
Looking into the second quarter of 2024, we expect a mid single-digit organic sales decline.
Guidance for Q2 2024
Currency impact on the operating profit is expected to be around
Guidance 2024
- For the full year, we expect a low single-digit organic sales decline, compared to 2023.
- Tax level excluding effects related to divested businesses: around 26%.
-
Additions to property, plant and equipment: around
SEK 5.5 billion .
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