Tom Johnstone, President and CEO:
"SKF delivered a very good performance in 2010 with record operating profit and operating margin and a strong cash flow. We took a number of steps during the year to further strengthen the Group and opened three new factories and announced two more to support our development in the faster growing regions and segments. In addition, we completed the acquisition of Lincoln Industrial which complements our existing lubrication systems business. In the fourth quarter all regions and divisions showed very good growth, as expected.
Entering 2011 we expect to see a continued positive volume development. However, we will face headwinds due to currency and higher raw material costs, adding to those already faced in the fourth quarter. To support our long-term profit and growth targets we will step up our investments in manufacturing, research and development and in additional sales and engineering resources."
Q4
Q4
YTD
YTD
2010
2009
2010
2009
Net sales, SEKm
15,409
13,887
61,029
56,227
Operating profit, SEKm
2,202
1,004
8,452
3,203
Operating margin, %
14.3
7.2
13.8
5.7
Operating margin excl. one-off items, %
14.9
10.1
14.2
8.0
Profit before taxes, SEKm
2,048
765
7,549
2,297
Net profit, SEKm
1,350
505
5,296
1,705
Basic earnings per share, SEK
2.87
1.05
11.28
3.61
The increase of 11.0% in net sales for the quarter, in SEK, was attributable to: volume 16.3%, price/mix 0.9% and currency effects -6.2%. For the full year, the increase of 8.6%, in SEK, was attributable to: volume 14.1%, price/mix 0.1% and currency effects -5.6%.
The quarter included costs, affecting the operating profit, of around SEK 100 million due to the acquisition of Lincoln Industrial. Total one-off items impacting operating profit for the full-year amounted to SEK 190 million.
Dividend proposal
Based on the strong performance, cash generation capacity and outlook, the Board has decided to propose to the Annual General Meeting an increase in the dividend of 43%, giving a dividend of SEK 5.00 (3.50) per share.
Outlook for the first quarter of 2011
Development compared to the first quarter last year
The demand for SKF products and services is expected to be significantly higher for the Group, the divisions and for the different geographical areas.
Development compared to the fourth quarter 2010 and adjusted for normal seasonality
The demand is expected to be slightly higher for the Group and for the different geographical areas. The Industrial Division and the Service Division are expected to be slightly higher and the Automotive Division higher.
Manufacturing level
The manufacturing level will be significantly higher year on year and slightly higher compared to the fourth quarter, adjusted for normal seasonality.
Gothenburg, 1 February 2011
Aktiebolaget SKF
(publ.)
Tom Johnstone
President and CEO
AB SKF is required to disclose the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 12.00 CET on 1 February 2011.
Further information can be obtained from:
Ingalill Östman, Group Communication, tel: +46-31-3373260, mobile: +46-706-973260, e-mail: ingalill.ostman@skf.com
Marita Björk, Investor Relations, tel: +46-31-3371994, mobile: +46-705-181994, e-mail: marita.bjork@skf.com
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