the skf group year-end result 2003 tom johnstone president and ceo
DESCRIPTION
The SKF Group Year-end result 2003 Tom Johnstone President and CEO. SKF Group. Summary Q4, 2003. Good operational performance - Operating margin 10.3 % (ex restructuring and impairments) - Strong cash flow - Inventories down - Good sales growth in local currencies - PowerPoint PPT PresentationTRANSCRIPT
The SKF Group
Year-end result 2003
Tom JohnstonePresident and CEO
Summary Q4, 2003
SKF Group
Good operational performance - Operating margin 10.3 % (ex restructuring and impairments)
- Strong cash flow - Inventories down- Good sales growth in local currencies- Positive price/mix development
Key activities- 2 factories opened in China- New business
Restructuring and impairment activities in line with guidance
- Restructuring MSEK 282, Impairments MSEK 205- Booked MSEK 421 as COGS, MSEK 66 as Selling Expenses- Main areas announced
.
2003* 2003 2002
Net sales 10 245 10 245 10 665
Operating profit 1 056 569 1 121
Operating margin 10.3 % 5.6 % 10.5 %
Profit before taxes 966 479 979
Net profit 405 719
Earning per share 3.56 6.34
Cash flow ** 812 559
SKF Group
* excluding restructuring and impairment in Q4 2003
**after investments before financing
Fourth quarter 2003
2003* 2003 2002
Net sales 41 377 41 377 42 430
Operating profit 3 786 3 299 4 022
Operating margin 9.2 % 8.0 % 9.5 %
Profit before taxes 3 280 2 793 3 542
Net profit 2 039 2 466
Earning per share 17.91 21.67
Cash flow ** 2 351 2 644
SKF Group
* excluding restructuring and impairment in Q4 2003
**after investments before financing
Full year 2003
-6
-4
-2
0
2
4
6
8
10
% change y-o-ySales in local currency
SKF Group
2001 2002 2003
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
0.4 1.0 1.4 1.9 2.0 1.4 0.7 0.1 0.2 0.3
- 3.2 - 3.8 - 7.3 -0.5 3.3 3.9 6.2 3.2 4.2 3.1
1.6 2.1 1.5 1.4 1.2 1.7 1.2 0.6 1.2 0.1
- 1.2 - 0.7 - 4.4 2.8 6.5 7.0 8.1 3.9 5.6 3.5
8.9 6.7 2.2 -3.7 -8.3 -10.8 -9.3 -8.6 -5.5 -7.4
7.7 6.0 - 2.2 -0.9 -1.8 -3.8 -1.2 -4.7 0.1 -3.9
Structure
Volume
Price / Mix
Sales in local currency
Currency
Net sales development per quarter
2002
Net sales
2001Percent
y-o-y 2003
SKF Group
0
1
2
3
4
5
6
7
8
9
10
11%
SKF Group
2001 2002 2003
Operating marginAdjusted*
* excluding restructuring and impairment in Q4 2003
-2
0
2
4
6
8
10
12
14
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Operating margin per divisionAdjusted*
Industrial
Service
Aero andSteel
Electrical
Automotive
%
SKF Group
2001 2002 2003* excluding restructuring and impairment in Q4 2003
18
19
20
21
22
23
24
25
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
%
Inventories as % of annual salesTarget 20%
SKF Group
2001 2002 2003
Net cash*
-2000
-1000
0
1000
2000
3000
4000
5000MSEK
SKF Group
* Short-term financial assets - Loans
2001 2002 2003
Dividend paid:2003 Q2, MSEK 9112002 Q2, MSEK 683 2001 Q2, MSEK 598
Dividend proposal:2004 Q2, MSEK 1 138
SKF Group
Net interest bearing liabilities, 2003(Short-term financial assets - loans - net postemployment benefits)
-6000
-5000
-4000
-3000
-2000
-1000
0
1000
Q1 Q2 Q3 Q4
MSEK
0
2
4
6
8
10
12
1999 2000 2001 2002 2003*
Dividend development
SKF Group
SEK
* Board proposal for 2003 dividend
SKF B
Sweden SKF B, close daily
May Sep 00 May Sep 01 May Sep 02 May Sep 03 May Sep 0475
100
125
150
175
200
225
250
275
300
75
100
125
150
175
200
225
250
275
300
Volume trend
Europe 57%
22%
14%
4%
North America
Asia Pacific
Latin America
Externalsales 2003 Oct 2003 Jan 2004
SKF Group
Total
Volume trend
Automotive 32%
4%
32%
Electrical
Service
Externalsales 2003
23%Industrial
Aerospace 4%
Jan 2004Oct 2003
SKF Group
Outlook January 2004
The market demand for the Group's products and services is expected to improve during the first quarter 2004. In Europe it is expected to be slightly higher, while it will remain relatively flat in North America. Demand is expected to increase significantly in both Asia and Latin America.
Manufacturing will, as is normal during the first half of the year, be increased slightly ahead of market demand to ensure a good service level throughout the summer period.
SKF Group
SKF Group
Target
10 % operating margin level
10 BSEK additional annual net sales To be reached within the 2005/2006 time period
SKF GroupOperating margin - adjusted
0
2
4
6
8
10
12
2001 2002 2003
%
Sales growth in local currencies
SKF Group
0
2
4
6
2001 2002 2003
%
Examples of growth areas
2003 / 2002
SKF Group
China +35 %
Central and Eastern Europe +10 %
Examples of growth areas
2003 / 2002
SKF Group
Medical segment within
Linear Motion business 12%
Vehicle Service market 10%
SKF Railway segment 10 %
Areas in focus 2004
Operating margin level- maintain a positive price mix
- implement restructuring plan
Continued sales growth- maintain organic growth pace
- acquisitions
Cash flow in line with net profit
Launch Six Sigma throughout SKF Group
SKF Group
This report 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 20-F report on file with the SEC (United States Securities and Exchange Commission) under "Forward-Looking Statements" and "Risk Factors".
Cautionary Statement
SKF Group