"We have delivered another very strong operating result, despite sales falling by 25% during the second quarter. This performance allowed us to continue to build a stronger
Net sales fell organically by 25% to
Despite this significant drop in demand, we continued to improve our cost flexibility and were able to deliver an adjusted operating margin for the second quarter of 9.4% (12.7% last year), with an adjusted operating profit of
The Industrial business delivered an adjusted margin of 14.0% (15.7%), despite a drop in organic sales of 17%. The Automotive business, which continued to be impacted by customer closures and lower underlying demand, delivered an adjusted margin of -8.4%, largely driven by a 45% drop in organic sales.
We continued to reduce costs and adjusted the size of the business, with the ambition to be even more flexible and to support customers in an even better way. Investments in modernizing and automating our factories, as well as increasing our regional manufacturing capacity continued. During the quarter we announced a further
During the first six months of the year, our efforts to reduce fixed costs regrettably resulted in a reduction of 1,350 permanent employees and 750 temporary/agency employees. This contributed to restructuring costs of
Cash flow during the quarter was
Our colleagues around the world are doing a fantastic job keeping our factories and offices as safe as possible. "The new reality" brings a lot of challenges for our customers but it also makes the value of our connected monitoring and lubrication offers even more relevant. With our ability to offer remote analysis and AI-based maintenance, we continue to help customers' machines rotate, without the need for on-site support.
The uncertainty continues but we are taking action to make sure that we emerge as a stronger company. We continue to invest in innovation and automation, and we feel confident that we will be able to respond to different demand scenarios, continuing to support our customers and protecting our cash flow and financial strength."
Key figures, SEKm Q2 2020 Q2 2019 Half year 2020 Half year 2019
Net sales 16,599 22,488 36,684 43,766
Adjusted operating 1,565 2,856 4,137 5,576
profit
Adjusted operating 9.4 12.7 11.3 12.7
margin, %
Operating profit 669 2,539 2,937 5,197
Operating margin, % 4.0 11,3 8.0 11.9
Profit before taxes 580 2,261 2,436 4,703
Adjusted profit before 1,476 2,578 3,635 5,082
taxes
Net cash flow after -838 1,448 1,092 2,132
investments before
financing
Basic earnings per share 0.75 3.32 3.5 7.09
Adjusted earnings per 2.72 4.02 6.13 7.93
share
Net sales change y-o-y, %, Q2 Organic Structure Currency Total
Industrial -17.1 - -0.8 -17.9
Automotive -45.4 - -1.6 -47.0
Net sales change y-o-y, %, Half year Organic Structure Currency Total
Industrial -12.1 - 1.0 -11.1
Automotive -29.5 - 0.5 -29.0
Organic sales change in local Europe North Latin Asia Middle
currencies, per region y-o-y, %, America America East &
Q2
Industrial --- --- --- -- ---
Automotive --- --- --- --- ---
Organic sales change in local Europe North Latin Asia Middle
currencies, per region y-o-y, %, America America East &
Half year
Industrial --- --- --- -- --
Automotive --- --- --- --- ---
Outlook and guidance
Demand for Q3 2020 compared to Q3 2019
The industries and regions in which
As a result of this significant level of uncertainty, it is not feasible to provide a reliable demand guidance for the third quarter.
Guidance Q3 2020
·
Financial net:
Guidance 2020
·
Tax level excluding effects related to divested businesses: around 29%
· Additions to property, plant and equipment: around
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https://news.cision.com/skf/r/skf-half-year-report-2020--continued-very-strong-operating-result--despite-sharp-fall-in-demand,c3157424
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