GOTEBORG, Sweden, Oct. 15, 2002 (PRIMEZONE) -- The SKF Group (Nasdaq:SKFR) reports a profit before taxes for the third quarter 2002 of MSEK 877 (685). The profit for the first nine months of 2002 was MSEK 2,563 (2,296).
Earnings per share for the third quarter were SEK 5.11 (4.30), and SEK 15.33 (13.80) for the first nine months.
Total sales in the third quarter, calculated in local currencies, increased by 6.5% compared with the same period last year. Sales in Europe grew slightly in the third quarter. In North America, sales increased. The good growth in the Asian region continued.
Outlook
The overall demand for SKF's products and services is expected to continue to grow in the fourth quarter.
Summary:
- The operating profit for the third quarter was MSEK 950 (816). The figure for the first nine months of 2002 was MSEK 2,901 (2 703).
- The operating margin for the SKF Group for the third quarter of 2002 amounted to 9.5% (8.0), and for the first nine months to 9.1% (8.4).
- Cash flow after investments before financing for the third quarter was MSEK 1,368 (1 092), and for the first nine months MSEK 2,085 (2,838).
- Net sales for the third quarter amounted to MSEK 10,047 (10,228), and for the first nine months MSEK 31,765 (32,282).
- The decrease of 1.8% in net sales for the third quarter was attributable to:structure 2.0%, volume 3.3%, price/mix 1.2% and currency effect - 8.3%. For the first nine months the decrease of 1.6% was attributable to: structure 1.8%, volume -1.5%, price/mix 1.3% and currency effect -3.2%.
- Net profit for the third quarter amounted to MSEK 582 (489). Net profit for the nine months was MSEK 1,747 (1,571).
The Group's financial net for the third quarter was MSEK -73 (-131), and for the first nine months MSEK -338 (-407). Additions to tangible assets totalled MSEK 360 (365) for the third quarter and for the first nine months MSEK 971(1 041).
At the end of September, the Group's inventories amounted to 20.6% (22.5) of annual sales. The equity/assets ratio was 41.9% (39.4). Return on capital employed for the 12-month period ended September 30 was 16.0% (15.3). Return on equity was 14.8% (14.5). The registered number of employees was 39,796 (38,466).
Exchange rates for the third quarter of 2002, compared with the corresponding quarter of 2001, had a small negative effect on SKF's profit before taxes.
Divisions
The result by Division is based on SKF management reporting.
The Industrial Division's operating result for the third quarter of 2002 amounted to MSEK 360 (364), resulting in an operating margin of 9.7% (9.7) on total sales (sales and deliveries to external and internal customers). The result for the first nine months of 2002 amounted to MSEK 1 166 (1 206), resulting in an operating margin of 10.0% (10.2) on total sales including internal deliveries.
External sales for the third quarter of 2002 amounted to MSEK 2,339 (2,355), a decrease of 0.7%. External sales for the first nine months of 2002 amounted to MSEK 7,345 (7,511), a decrease of 2.2%. Total sales in the third quarter were MSEK 3,708 (3,761) and for the first nine months MSEK 11,698 (11,856).
Sales were fairly flat in Europe and Asia compared with the same period last year. Sales in North America were somewhat higher than last year.
The Automotive Division's operating result for the third quarter of 2002 amounted to MSEK 110 (65), resulting in an operating margin of 3.1% (1.8) on total sales including internal deliveries. The operating result for the first nine months of 2002 amounted to MSEK 430 (324), resulting in an operating margin of 3.8% (2.9) on total sales including internal deliveries.
External sales for the third quarter 2002 amounted to MSEK 3,194 (3,161), an increase of 1.0%. External sales for the first nine months of 2002 amounted to MSEK 10,255 (10,111), an increase of 1.4%. Total sales for the third quarter were MSEK 3,553 (3,540) and for the first nine months MSEK 11,363 (11,324).
Sales of bearing and seal products to the car and the light truck industry in Europe were higher compared with the third quarter last year. In North America, sales were significantly higher than for the same period a year ago.
Sales to the heavy truck industry in Europe were at the same level as for the third quarter last year. Sales to the heavy trucks industry in North America were higher than for the same period last year.
SKF's vehicle service business reported considerably higher sales figures for the third quarter this year compared with the same period last year.
The Electrical Division's operating result for the third quarter of 2002 amounted to MSEK 97 (56), resulting in an operating margin of 6.2% (3.4) on total sales including internal deliveries. The operating result for the first nine months of 2002 amounted to MSEK 284 (251), resulting in an operating margin of 5.7% (4.8) on total sales including internal deliveries.
External sales for the third quarter 2002 amounted to MSEK 459 (458). External sales for the first nine months of 2002 amounted to MSEK 1,454 (1,490), a decrease of 2.4%. Total sales for the third quarter were MSEK 1,568 (1,634) and for the first nine months MSEK 5,012 (5,257).
Sales were higher for the third quarter than for the same period a year ago. The improvement was due to the continued strong sales to the two- wheeler market in the Asian region.
After extensive technical tests in Japan of carbonitrided bearings for crankshaft application, sales started in Indonesia to a leading Japanese two-wheeler manufacturer during the quarter.
The Service Division's operating result for the third quarter of 2002 amounted to MSEK 357 (344), resulting in an operating margin of 10.0% (9.3) on total sales including internal deliveries. The operating result for the first nine months of 2002 amounted to MSEK 994 (914), resulting in an operating margin of 9.1% (8.1) on total sales including internal deliveries.
External sales for the third quarter 2002 amounted to MSEK 3,219 (3,333), a decrease of 3.4%. External sales for the first nine months of 2002 amounted to MSEK 9,857 (10,121), a decrease of 2.6%. Total sales for the third quarter were MSEK 3,582 (3,706) and for the first nine months MSEK 10,979 (11,298).
Sales in Europe were the same compared with the third quarter last year. Sales in North America were below last year's level while sales in Asia continued to grow and were higher than for the same period last year.
SKF's Dutch subsidiary, Delta Consult BV, has signed a long-term agreement with the Royal Netherlands Air Force (RNLAF) for support of their helicopter maintenance operations. The agreement covers a period of five years.
The first order for Windcon (a customized condition-monitoring system for wind turbines) was received in Germany for a leading windfarm operation. It includes equipment, installation and a service contract.
The Aero and Steel Division's operating result for the third quarter of 2002 amounted to MSEK 28 (39), resulting in an operating margin of 2.0% (2.6) on total sales including internal deliveries. The operating result for the first nine months of 2002 amounted to MSEK 147 (166), resulting in an operating margin of 3.1% (3.3) on total sales including internal deliveries.
External sales for the third quarter 2002 amounted to MSEK 832 (912), a decrease of 8.8%. External sales for the first nine months of 2002 amounted to MSEK 2,838 (3,006), a decrease of 5.6%. Total sales for the third quarter were MSEK 1,404 (1,501) and for the first nine months MSEK 4,766 (5,054).
Sales to the aerospace industry continued to decline in the third quarter and were significantly weaker than for the same period a year ago.
Ovako Steel, part of the Aero and Steel Division, reported for the third quarter an operating result of MSEK 1 (-30). Total sales were MSEK 649 (630) for the same period. The operating result for the first nine months amounted to MSEK 4 (-33) and total sales MSEK 2,260 (2,312).
During the third quarter, Ovako continued to report an increasingly higher demand from both SKF and external customers.
Previous outlook statement
Second quarter 2002: "The predicted recovery in market demand this year for the Group is progressing step by step in a number of segments and regions. Production will be increased to meet the expected higher market demand."
Overhead presentation from SKF
An overhead presentation will be published on SKF's website at the following address: http://investors.skf.com (choose presentations).
Enclosures:
Consolidated financial information Consolidated balance sheets Consolidated statements of cash flow Consolidated financial information -- yearly and quarterly comparisons (Group and Divisions)
The accounting principles and methods of calculation are those described in Note 1 in the Annual Report 2001. The report has not been audited by the Company's auditors.
SKFs report on the full-year 2002 will be published on Tuesday, January 28, 2003.
Further information can be obtained from: Lars G Malmer, Group Communication, tel: +46-705-371541 e-mail: lars.g.malmer@skf.com Marita Bjork, Investor Relations, tel: +46-705-181994 e-mail: marita.bjork@skf.com Aktiebolaget SKF, SE-415 50 Goteborg, Sweden tel: +46-31-3371000, fax +46-31-3372832 www.skf.com
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