? President and CEO Tom Johnston:
"Second quarter sales growth was mainly attributed to continued strong performance of the car business and continuous improvement of the industrial business. Sales performance improvement, higher production levels and cost reduction measures to make the SKF Group's operating profit and operating margin achieved achievements.
We look forward to the Group's third quarter revenue to continue to maintain a good momentum of growth greatly exceeded the level of last year. While the European car industry sales may be reduced, but the growth of all regions and sectors are more optimistic. Production levels will be flat with the second quarter,glue stick which means much higher than a year ago. "
Second quarter net sales growth of 10.9% (SEK), impact factors:
16.6% of sales, price / mix and currency effects -0.5% -5.2%.
First half of the growth was 3.9% (SEK), impact factors:
10.8% of the total price / mix and currency effects -0.4% -6.5%.
Looking third quarter of 2010 compared to last year development.
The demand for SKF products and services in the group, and different departments within the geographic area have shown a significant growth trend. The second quarter of 2010 compared with the normal seasonal adjustment and the development of the SKF Group, a slight increase of total demand. No change in Europe, North America,glue gun a slight increase in growth rate is slightly higher in Asia and Latin America. Automotive Division demand is relatively unchanged, the Department of the Ministry of Industry and services increased slightly.
Production levels.
Production levels showed a significant increasing trend in the year, but after the normal seasonal adjustment, compared with the second quarter of this year, basically flat.
The second quarter sales.
Group and all the different parts of the local currency sales increased significantly. Automotive Division and Services Division sales increased substantially. Industry sales also increased.
The level of production has improved over the first quarter, compared to last year significantly.
Investment in the second quarter of 2010 after the cash flow before financing was 11.6 (24.25) million SEK, corresponding to the first half of the cash flow 11.92 (29.48) million SEK. The second quarter, to SEK 1,594 million by way of bonus paid to the shareholders of SKF.
In local currency terms, inventory, compared with the first quarter of 2010 increased by about 700 million SEK. 2010 second quarter financial net -1.92 (-1.62) million SEK, the first half of the financial net -3.9 (-3.99) million SEK.
Compared to last year, exchange rates, the effect of discounting and the negative impact of trade flows to SKF second quarter operating loss of profits of 1.5 billion kronor, the loss of 350 million kronor in the first half. Based on current assumptions and exchange rates, compared to last year, these constraints estimated to result in the third quarter and full year loss of about 2.5 billion kronor.
Focus.
● SKF Tver in Russia, setting up a new plant, which manufactures a new generation of compact SKF sealed and pre-lubricated taper bearing units to supply Russian and international rail customers. The plant will be Russia and Europe, the first one with a LEED certified facility. Investment of approximately SEK 235 million, the factory will employ 100 employees.
● SKF in Shanghai, China launched the Global Technology Center (China). The Centre will be the SKF global network of technical centers, SKF can make more rapid and cost-effective way for local and global customers in product and solution development.
● SKF and ZF Sachs, the Italian branch of an agreement for its supply of 140,000 motorcycle fork oil seal and pressure seal.
● SKF and Valeo signed a three-year, worth about SEK 34 million contract for Valeo newly developed i-StARS stop start system supplies the rotor locating bearing SKF. When equipped with the i-StARS system, vehicle speed is less than 8km / h time, i-StARS system will automatically turn off your vehicle engine. For example, the case needs to stop when the red light system will play the effect. The system can further reduce carbon dioxide emissions.
● SKF Forestry Administration of China signed a framework agreement, planting trees in remote areas of China. The duration of the project about five years.
● SKF in 2010 DesignNews Magazine's "Best Product Award" competition, won the "Golden Mousetrap Award." Category E / inspection and testing, award-winning products for the new SKF condition monitoring instrument, which is a monitoring process to simplify the equipment and provide early warning of potential failure of hand-held tools. DesignNews annual Golden Mousetrap Awards is the engineering of product design innovation and creativity in the best recognition.
Each division.
Sales in local currency and the same period in 2009 as the base. Basis for calculating the operating profit margin for the sales, including intra-group sales.
Ministry of Industry.
Second quarter operating profit of 9.09 (3.44) billion kronor and sales (including intra-group sales) operating margin was 12.1% (4.8). In the first half operating profit of 16.22 (9.79) billion Swedish kronor, operating margin was 11.1% (6.4). Including intra-group sales, including sales for the second quarter of 75.14 (71.20) billion kronor, the first half of 146.19 (153.07) million SEK.
Net sales for the second quarter, 48.73 (48.44) billion kronor, the first half of 95.68 (106.46) million SEK. Quarter growth of 0.6%, the impact of factors: natural increase of 7.1%, exchange rate effects -6.5%.
First half of the growth of -10.1%, the impact factors:
Natural growth of -3.3%, the exchange rate of -6.8%.
The second quarter, sales in local currency, the European low, North America, higher, highest in Asia. Significantly lower first half sales in Europe, North America is slightly lower, a significant increase in Asia. The sale of some product areas showing a positive trend, such as construction equipment, fluid power, industrial gear boxes, agricultural and paper industry. Global sales of new energy stable, slightly below last year's level. Aerospace sales decreased, but began to become stable.
Services.
Second quarter operating profit of 7.45 (6.36) billion kronor, operating margin was 13% (12.7). In the first half operating profit of 13.92 (12.34) SEK billion, operating margin was 12.8% (12.2). The quarter with sales within the Group, including sales of 57.25 (50.28) billion kronor in the first half to 109.06 (101.46) million SEK. Net sales for the second quarter, 56.35 (49.44) billion kronor in the first half was 107.28 (99.55) million SEK. Quarter, an increase of 14%, the impact of factors: natural increase of 17.0%, the exchange rate of -3.0%.
7.8% first half growth, factors:
Natural growth of 12.6%, exchange rate effects -4.8%.
In the second quarter and first half, sales in local currencies, Europe, Asia, Latin America, Middle East and Africa in general has increased significantly. Distributors in North America continued to shrink as reserves, the second-quarter sales in the region decreased significantly in the first half sales also decreased.
SKF large oil refinery to help South Korea - Ssangyong Oil - production and improve productivity and reduce potential failure. This project makes Ssangyong oil in 11 months to produce results. SKF program includes the development of asset strategies, defect elimination and operators to enhance reliability.
SKF launched three new programs factories are located in Germany, Shiwei En Foote, Montigny-le-Bretonneux, France and Russia in Moscow.
Automotive Division.
Second quarter operating profit was 5.7 (-4.68) SEK billion, operating margin was 9.8% (-9.6). In the first half operating profit was 9.44 (-9.05) million SEK, operating margin was 8.5% (-9.6). The quarter with sales within the Group, including sales of 58.25 (48.84) billion kronor in the first half was 110.55 (94.39) million SEK.
Net sales for the second quarter, 48.50 (41.26) billion kronor in the first half was 92.12 (78.73) million SEK. Quarter growth of 17.6%, factors: natural increase of 23.6%, exchange rate effects -6.0%.
17.0% first half growth, factors:
Natural growth of 24.8%, exchange rate effects -7.8%.
In local currency terms, the quarterly European car and light truck industry sales growth, significant growth in the first half. North America, Asia and Latin America in the quarter and first half sales have grown significantly.
Europe, North America and Asia, sales of heavy-duty truck industry in the first half of the quarter and significant growth.
The vehicle service market in Europe in the quarter and first half sales have increased significantly. North American sales in the quarter remained the same level, first half sales decreased slightly. Quarter sales growth in Asia, sales increased significantly during the first half.
Electrical industry in Europe and Asia, industry sales of two-wheelers in the quarter and first half of the significant growth.
Group.
First half of 2010, pretax profit of 10.98 (18.58) million SEK, net sales of 7.97 (7.79) billion kronor, the investment amount of 0 (0) SEK. June 30 of current financial assets 20 (20) million SEK, 1 January to 20 million Swedish kronor. June 30 average of 220 employees (227) name.
Early prospects.
Prospect of the second quarter of 2010.
With the increase in sales compared to last year.
SKF Group's total demand for goods and services increased significantly. Increase in Europe and North America, Asia and Latin America increased significantly.
Slight increase in the Ministry of Industry, Services and Automotive Division increased significantly. The first quarter of 2010 compared with sales increase
SKF Group's total demand for products and services increased slightly. Increased slightly in Europe and North America, Asia and Latin America increased. Industry and Services increased slightly, Automotive Division increased.
Production levels.
Production levels showed a significant increasing trend in the year, higher than the first quarter of 2010 average.
The focus of the previous quarter.
● SKF started two factories in India. The factory is located in Ha Liwa deep groove ball bearings, located in Ahmedabad and medium-sized factories producing various types of bearings.
● 3 month in Gothenburg, Sweden adopted a resolution on the adjustment of production capacity. The total cost of these actions the resolution for the 90 million Swedish kronor, mainly focused on the Ministry of Industry, costs are included in the first quarter of the income statement. As to be fully implemented in the third quarter, its profit of approximately SEK 50 million per year.
SKF solutions ● ninth factory in Houston to start.
Business risks and uncertainties.
SKF Group operates a number of industrial, automotive and geographical distribution of different stages in the economic cycle. Global economic downturn or a downturn in the world's leading economies that may lead to a period of time on the Group's products, solutions and services demand. At the same time, terrorism and other hostile acts and worldwide turbulence in financial markets may also lead to demand for our products and services reduced. As the Group wide geographical distribution, there are also political and regulatory risks. Regulations, taxes, tariffs and other trade barriers, price controls or other government or trading decisions may limit the operation of the SKF Group.
SKF Group, but also by currency transactions and translation of exposure. In terms of commercial traffic, SKF Group is mainly concerned with the U.S. dollar by dollar and the impact of the currency. As the main part of the profit obtained outside Sweden, the Group is unable to avoid the risks of major currencies exchange. The role of head office to provide services as a general group. Corporation's financial condition depends on the subsidiary's financial development. Demand for our products and services for the general decline in dividend yield may lead to reduction in head office, but also may reduce the book value of subsidiary shares.
Cautionary Statement.
This report contains the SKF management expectations based on the current status of the forward-looking statements made. Management in this forward-looking statements made by the expectations are reasonable, but does not guarantee that this is expected to completely correct. Is also expected that the results may be due to other factors, there is a wide gap between reality, these factors include: economic, market and competitive changes in the environment, regulatory environment and changes in other government actions, currency fluctuations, and SKF's latest annual administrative report mentioned in the report and other factors (please log www.skf.com view); "an important factor affecting the financial performance", "financial risk" and "sensitivity analysis" and "business risks and uncertainties" in the annual report.
Board of Directors and Chief Executive Officer declare semi-annual report on the company and the Group's operating performance, position and profit or loss reflects the impartiality, and the company and the group's companies face the risks and uncertainties to describe.