SKF Reports 2015 9-Month Sales, Profits

"Entering the fourth quarter, we expect the macro-economic uncertainty to continue and, as a consequence, we expect demand in the fourth quarter to be slightly lower sequentially and lower year-over-year. We are adjusting our production levels accordingly,” commented Alrik Danielson, president and CEO of SKF.

SKF released its nine-month earnings report for 2015.

Alrik Danielson, president and CEO of SKF, commented on the report, “The expected weakening of market demand that we flagged for in July materialized and gathered pace during the quarter, especially in Asia and North America. As a result, sales in local currency declined by 5 percent. Production rates were reduced during the quarter and inventories were kept under control. Our financial performance was impacted by the lower sales volumes.

“Agreements have been reached with almost all of the 1,500 white-collar staff that is part of our cost reduction program. Given current market conditions, these actions alone are, however, not sufficient and we will continue our cost reduction activities across the Group,” he added. “In Europe, we saw growth in the railway sector but significantly weaker demand in both the energy and metals sectors. In North America and Asia, overall industrial demand was significantly lower, with the exception of the energy sector in Asia, which saw significant growth. Our automotive business grew in line with overall market development in Europe, but not in North America.

“The automotive market profit improvement program is progressing, with a more detailed update to be presented at our upcoming Capital Markets Day. Divestments of non-core businesses continued, with the sale of Canfield Technologies. The proceeds are being used to strengthen the balance sheet and to be reinvested in our core business.

“Entering the fourth quarter, we expect the macro-economic uncertainty to continue and, as a consequence, we expect demand in the fourth quarter to be slightly lower sequentially and lower year-over-year. We are adjusting our production levels accordingly.”

SKF also commented that the demand for SKF’s products and services is expected to be lower for the group, where demand for the automotive market is expected to be relatively unchanged. The company expects demand for the specialty business to be slightly lower and demand for the industrial market to be lower. Split by markets, demand is expected to be relatively unchanged in Europe and Latin America and significantly lower in North America and Asia.

The full earnings report, found in table format, can be found here:
skf.com/group/investors/reports/nine-month-report-2015.