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Tom Johnstone, President and CEO: “Sales overall developed in line with our expectations and excluding one-offs we had a good cash flow from operations and we saw a good sequential improvement in our operating margin and profit. While the business mix remained somewhat negative the steps we are taking to improve the price/mix gave positive results. Our cost reduction programme is also delivering the expected results and additional activities were announced in the quarter. We continue to take steps to strengthen SKF and to support our long-term targets. The new campus in Shanghai which hosts a new automotive factory, Global Technical Centre, SKF Solution Factory and SKF College was opened as was our new distribution centre also near Shanghai in the new government free trade zone. These will enable us to better support our customers in North East Asia, a region which is developing very well for us. In addition, based on our increased investment in research and development, a number of new products particularly focusing on energy savings and improved operating performance were launched. We also gained a number of important new businesses. Kaydon is developing well both from a sales and profitability viewpoint and the integration activities are going according to plan. The major order which was gained from a North American wind energy customer for business in both North America and Brazil is a great example of how the combination of SKF and Kaydon can bring real value to our customers. Looking forward and taking account of the continued uncertainty in the global market place we expect that in the third quarter overall demand for our products and services will stay on the same level.”
The operating profit was affected by one-time costs in the second quarter by around SEK 120 million (190) and in the half year by SEK 0 million (440). Additionally, the financial net in the second quarter and half year were affected by one-time costs of around SEK 100 million.
Sales in Q2 in local currency and excluding structure increased by 1% in Europe, 3% in North America, 2% in Latin America, 14% in Asia and 14% in Middle East and Africa. Manufacturing in the second quarter was slightly higher compared to last year. Sales in the first half year in local currency and excluding structure increased by 3% in Europe, 3% in North America, 1% in Latin America, 13% in Asia and 18% in Middle East and Africa. Manufacturing in the first half year was higher compared to last year. Outlook for the third quarter of 2014 Demand compared to the third quarter 2013 The demand for SKF’s products and services is expected to be slightly higher for the Group and North America, higher for Asia, relatively unchanged for Europe and slightly lower for Latin America. It is expected to be higher for Strategic Industries and relatively unchanged for Regional Sales and Service and Automotive. 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 Europe. It is expected to be slightly higher for North America and Asia and slightly lower for Latin America. For Strategic Industries it is expected to be slightly higher and for Regional Sales and Service and Automotive it is expected to be relatively unchanged. Manufacturing Manufacturing is expected to be slightly higher year over year and relatively unchanged compared to the second quarter. FAG HCS71916C.T.P4S.UL| FAG HCS71913E.T.P4S.UL | FAG HCS71914C.T.P4S.UL | FAG HCS71912E.T.P4S.UL | FAG HCS71911E.T.P4S.UL | FAG HCS7010C.T.P4S.UL | FAG HCS71906E.T.P4S.UL | FAG HCS7008C.T.P4S.UL | FAG HCS71906C.T.P4S.UL | FAG HCS71905E.T.P4S.UL |
