Tom Johnstone, President and CEO:
"The macro economic development and increasing uncertainty which was evident during the last few months has clearly influenced our business. Our sales weakened as we went through the quarter and this was mainly seen in many of our industrial markets as well as in the European and particularly in the Asian region. We took additional steps to reduce our production to both meet this lower demand and to reduce our inventories. With the background of the challenging market environment the Group delivered a very good performance and particularly a very strong cash flow. We managed to adjust our cost base in the quarter and will further increase our actions on this going forward. In addition we took some important steps to strengthen SKF in supporting the longer term growth markets and industries. We completed the acquisition of GBC, which widens our ability to serve our markets. In conjunction with celebrating 100 years of business in China, we opened our new factory in Jinan, had the ground breaking for our new warehouse near Shanghai and also announced a new campus close to Shanghai. We also opened three new SKF Solution Factories, in USA, Romania and Italy. For the Group overall we expect the weaker demand trend to continue in the fourth quarter and demand to be lower year over year. We will run our production below sales to enable us to reduce our inventories and to support our cash flow."
Sales for the Group in the third quarter were lower year over year (in local currency excluding structure). In Europe they decreased by 7% and in Asia by 11%. In North America they increased by 5% and in Latin America by 8%. In Middle East and Africa they were relatively unchanged.
Manufacturing in the third quarter was significantly lower year over year.
Outlook for the fourth quarter of 2012
Demand compared to the fourth quarter last year
The demand for SKF's products and services is expected to be lower for the Group and for Europe. For Asia it is expected to be slightly lower and for North America and Latin America relatively unchanged. The demand is expected to be lower for Industrial Strategic Industries and Industrial Regional Sales and Service and relatively unchanged for Automotive.
Demand compared to the third quarter 2012
The demand for SKF's products and services is expected to be slightly lower for the Group, for all the business areas and for Europe, Asia and North America. For Latin America demand is expected to be relatively unchanged.
Manufacturing
Manufacturing is expected to be lower year on year and slightly lower compared to third quarter.
Gothenburg, 17 October 2012
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 13.00 on 17 October 2012.
_____________________________________________________________
A teleconference will be held on 17 October 2012 at 14.00 CET, 13.00 (UK), 08.00 (US):
SE: +46 (0)8 506 307 79
UK: +44 (0)844 571 8957
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You will find all information regarding SKF Nine-month results 2012 on the IR website.
investors.skf.com/quarterlyreporting
Further information can be obtained from:
Ingalill Östman, Group Communications
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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