Tom Johnstone, President and CEO:
”We saw a weak development in our sales in the fourth quarter and particularly in December due to the uncertain macro situation and inventory reductions in the market. We reduced our manufacturing and inventories more than planned going into the quarter which enabled us to deliver a very good cash flow even if it impacted our result.
For the full year our sales were slightly down in local currencies with growth in North America and Latin America and lower sales in Europe, Asia and Middle East and Africa. We significantly reduced inventories in the year and delivered a very good cash flow, giving us a continued strong financial position.
At the start of this year we announced actions to accelerate and expand our activities to significantly reduce cost and strengthen our growth in the faster developing areas of our business. These are very important steps to enable us to deliver on our long term growth and profitability targets. We also announced the acquisition of Blohm + Voss Industries which is an important addition to our marine business and will further strengthen our offer to this industry.
The overall macro environment is difficult to read with still a lot of uncertainty. However, at this point we expect demand in the first quarter for the Group to continue at the same level as the fourth quarter but still lower year over year. We plan to run our manufacturing broadly in line with sales in the quarter.”
The operating profit in the fourth quarter was affected by one-time costs of around SEK 300 million, of which SEK 200 million was for restructuring and SEK 100 million for impairments and asset write-downs. The full-year results include one-time costs of SEK 440 million. Excluding these the operating margin was 10.2% in the fourth quarter and 12.0% for the full year.
Sales in the fourth quarter in local currencies and excluding structure decreased by 7% in Europe, by 11% in Asia and by 9% in Middle East and Africa. In North America they increased by 2% and in Latin America by 9%.
Manufacturing in the fourth quarter was significantly lower year over year.
Sales for the full year in local currencies and excluding structure decreased by 5% in Europe, by 10% in Asia and by 2% in Middle East and Africa. In North America they increased by 7% and in Latin America by 11%.
Manufacturing for the full year was significantly lower year over year.
Dividend proposal
The Board has decided to propose an unchanged dividend of SEK 5.50 per share to the Annual General Meeting.
Outlook for the first quarter of 2013
Demand compared to the first quarter 2012
The demand for SKF’s products and services is expected to be lower for the Group. For Europe it is expected to be significantly lower, for Asia slightly lower and for North America and Latin America relatively unchanged. The demand is expected to be lower for Industrial Market, Strategic Industries and SKF Automotive, for Industrial Market Regional, Sales and Services it is expected to be slightly lower.
Demand compared to the fourth quarter 2012
The demand for SKF’s products and services is expected to be relatively unchanged for the Group, for the business areas and for the regions.
Manufacturing
Manufacturing is expected to be lower year over year and higher compared to fourth quarter.
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
About the company
SKF is a leading global supplier of bearings, seals, mechatronics, lubrication systems, and services which include technical support, maintenance and reliability services, engineering consulting and training. SKF is represented in more than 130 countries and has around 15,000 distributor locations worldwide. Annual sales in 2012 were SEK 64,575 million and the number of employees was 46,775. www.skf.com
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