"Review of the first quarter
I'm pleased to report a solid quarter with strong organic sales growth and a record high adjusted operating profit for a first quarter.
In the period, we delivered an organic sales growth of more than 10%, with continued robust demand across all our regions. Most of our targeted high-growth segments contributed with double-digit growth, e.g. railway, renewable energy and aerospace.
The adjusted operating profit improved to
Our Industrial business saw strong demand across all regions and most segments, with an especially high demand in
Our Automotive business delivered an organic growth of 11.9% and an adjusted operating margin of 3.6% (4.4%). Despite the profitability comparison to last year, it is encouraging to see that the underlying business performance is on a positive trajectory as we progress our ongoing portfolio shift and emphasis on electrical vehicles. Also in this quarter, we have several new customer wins supporting our strategic re-positioning.
Our focus on improving cash efficiency is continuing to show results, with net cash flow from operations exceeding
Delivering on our strategic transformation
We continue to diligently work on executing our strategy, increasing our efficiency and reducing fixed costs. During the quarter, the total workforce has been reduced by approximately 560 employees.
Our operating model has enabled an accelerated momentum in our prioritized industry segments within each business area. In high-speed machinery for example, our wide range of super precision bearings, with more than 50% of ceramic rolling elements, are growing rapidly. As an example, we won a sizeable contract with a Swiss producer of high-end motor spindles in the quarter.
The first quarter also marked an important milestone for
Another important achievement in the quarter was the approval and validation from the Science Based Targets initiative (SBTi) for our scope 1, 2 and 3 emissions reduction targets for 2030 and 2050. Sustainability is an integrated part of our strategic framework and a competitive advantage for
The strong financial development and business achievements during the quarter are to a large extent the result of hard work and dedication by our employees. I would like to express my sincere appreciation to all colleagues and partners across the
Outlook
Given our strong sales growth in the first quarter, we adjust our full year guidance upwards somewhat. Looking into the second quarter of 2023, as well as the full year, we now foresee high single-digit organic sales growth. However, we expect continued volatility and geopolitical uncertainty impacting the markets in which we operate."
Key figures, SEKm unless otherwise stated | Q1 2023 | Q1 2022 |
Net sales | 26,549 | 22,942 |
Adjusted operating profit | 3,478 | 3,058 |
Adjusted operating margin, % | 13.1 | 13.3 |
Operating profit | 3,379 | 2,953 |
Operating margin, % | 12.7 | 12.9 |
Adjusted profit before taxes | 3,041 | 2,990 |
Profit before taxes | 2,942 | 2,885 |
Net cash flow from operating activities | 2,747 | -271 |
Basic earnings per share | 4.55 | 4.36 |
Adjusted earnings per share | 4.77 | 4.59 |
Net sales, change y-o-y, %, Q1 | Organic1) | Structure | Currency | Total |
10.1 | -2.0 | 7.6 | 15.7 | |
Industrial | 9.5 | -2.0 | 7.4 | 14.9 |
Automotive | 11.9 | -2.1 | 8.3 | 18.1 |
1)Price, mix and volume
Organic sales in local currencies, change y-o-y, %, Q1 | The | |||
12.3 | 6.5 | 8.4 | 14.5 | |
Industrial | +++ | ++ | +++ | +++ |
Automotive | +++ | +++ | - | +++ |
Outlook and guidance
Demand for Q2 2023 compared to the Q2 2022
Looking into the second quarter of 2023, we expect high single-digit organic sales growth.
Guidance for Q2 2023
Currency impact on the operating profit is expected to be around
Guidance 2023
- For the full year, we expect high single-digit organic sales growth, compared to 2022.
- Tax level excluding effects related to divested businesses: around 28%.
-
Additions to property, plant and equipment: around
SEK 5 billion .
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