SKF AB (OTCPK:SKFRY)
$ 19.57 -0.9 (-4.4%) Market Cap: 8.91 Bil Enterprise Value: 10.15 Bil PE Ratio: 17.20 PB Ratio: 1.73 GF Score: 77/100

Q2 2024 SKF AB Earnings Call Transcript

Jul 18, 2024 / 06:00AM GMT
Release Date Price: $19.42 (-4.69%)

Key Points

Positve
  • SKF AB (SKFRY) reported a stable operating margin of 13% despite a 7% decline in organic growth.
  • The company has effectively managed price mix and cost measures, offsetting significant wage inflation.
  • Strong performance in the industrial segment with a slight improvement in operating margin to over 16%.
  • Continued investment in regionalization and innovation, positioning the company for future growth.
  • Solid cash flow of SEK2.2 billion and a strong balance sheet with a net debt of SEK10.7 billion.
Negative
  • Negative organic growth of 7% in Q2, with significant declines in key regions like China and EMEA.
  • Soft demand across most geographies and industrial verticals, particularly in the wind sector.
  • High items affecting comparability (IAC) costs of SEK800 million, primarily due to restructuring in Germany.
  • Lower volumes and sales compared to the previous year, with SEK25.6 billion in Q2 sales down from SEK27 billion.
  • Potential cost inefficiencies in the second half due to ongoing regionalization efforts and lower production volumes.
Sophie Arnius
SKF AB - Director - SKF Group Investor Relations

A warm welcome to SKF's Q2-2024 earnings call. I'm Sophie Arnius, and I'm heading up Investor Relations. Our CEO, Rickard Gustafson; and CFO, Niclas Rosenlew, will take us through the highlights of the quarter where the performance marked another step towards a more resilient and competitive SKF. (Event Instructions)

So without further ado, it's great to hand over to you, Rickard.

Rickard Gustafson
SKF AB - President, Chief Executive Officer, Director

Thank you, Sophie, and a warm welcome to all of you joining on this earnings call. As Sophie mentioned, the story continues. We are creating a more competitive company capable of delivering consistent margins regardless of demand fluctuations.

And to support this statement, I'd like to draw your attention to the right-hand side of this chart. The solid line represents our adjusted operating margin, albeit on a rolling 12-month basis. And as you can see, it actually holds up pretty well despite a rather volatile organic growth

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