GOTEBORG, Sweden, April 18, 2002 (PRIMEZONE) -- The SKF Group reports, a profit before taxes of MSEK 761 (791) for the first quarter of 2002. Earnings per share for the first quarter were SEK 4.64 (4.94).
Sales in Europe decreased considerably in the first quarter 2002. In North America, sales to the automotive sector increased slightly, while sales to the industrial sector were weak. Sales in the Asian region increased steadily.
Outlook:
The overall market demand for the Group is expected to be weak also in the second quarter this year. However, in Asia the growth is expected to continue and in North America more signs of a recovery are seen.
Summary:
-- The operating profit for the first quarter 2002 was MSEK 903
(908).
-- The operating margin for the SKF Group for the first quarter
of 2002, amounted to 8.5% (8.3)
-- Cash flow after investments before financing was MSEK -112 (497)
-- Payment for acquired companies amounted to MSEK 388 and working
capital increased MSEK 272 more than the first quarter
last year.
-- Net sales amounted to MSEK 10 665 (10 906).
-- The decrease of 2.2% in net sales was attributable to: structure
+1.4%, volume
-- -7.3%, price/mix +1.5% and currency effect +2.2%.
-- Net profit amounted to MSEK 529 (562)
The Group's financial net for the first quarter was MSEK -142 (-117). The difference to last year is related to currency exchange differences.
Additions to tangible assets totaled MSEK 289 (339). At the end of March, the Group's inventories amounted to 21.0% (23.7) of annual sales.
The equity/assets ratio was 41.2% (38.7). Return on capital employed for the 12-month period ended March 31 was 14.8% (15.8). Return on equity was 13.7% (15.6). The registered number of employees was 38,205 (39,770).
Exchange rates for the first quarter 2002, compared with first quarter 2001, had a positive effect on SKF's profits before taxes to an estimated amount of MSEK 50.
During the quarter SKF acquired the Magnetic Group, Switzerland, Erin Engineering and Research Inc., USA and the bearing business of VMZ in Bulgaria.
During the quarter SKF sold the premises in Stuttgart, Germany, previously used for the textile machinery business. The profit from the sale has been set aside to finance restructuring measures during the year.
Divisions
The result by Division is based on SKF management reporting. As from the first quarter of 2002, there are five Divisions within SKF. These are: Industrial, Automotive, Electrical, Service and Aero and Steel. Previously published amounts have been restated to conform to current Group structure.
The new Aero and Steel Division became operative on January 1, 2002. It includes Aeroengine Bearings, Airframe Components, CR Aerospace, Forgings and Rings, and Ovako Steel.
As of January 2002, the Seals operation is organized in line with the Group's customer-oriented organization and the various operations have been transferred to the other Divisions.
The Industrial Division's external sales amounted to MSEK 2,493 (2,610), a decrease of 4.5%. Total sales for the quarter were MSEK 3,950 (4,119). The operating result for the first quarter amounted to MSEK 376 (413), resulting in an operating margin of 9.5% (10.0) on total sales including internal deliveries.
Sales in Europe, North America and Asia declined during the quarter. However, the sales figures were good to segments such as wind energy and railways.
During the quarter SKF acquired the Magnetic Group (Switzerland), which is a leading manufacturer of electromechanical actuators, motors, control units and complete actuation systems. With the addition of Magnetic's product range, SKF reinforces its position in the fast growing market for electromechanical actuators, linear drives and actuation systems.
The Automotive Division's external sales amounted to MSEK 3 457 (3,382), an increase of 2.2%. Total sales for the quarter were MSEK 3,831 (3,817). The operating result for the first quarter amounted to MSEK 123 (117), resulting in an operating margin of 3.2% (3.1) on total sales including internal deliveries.
Sales to the car and the light truck industry declined in Europe compared to the first quarter last year. In North America sales were slightly higher than in the same period a year ago.
Sales to the heavy trucks industry declined in both Europe and North America. However, the trend in North America indicates that the decline in sales is bottoming out.
SKF vehicle service business showed good sales growth in the quarter. SKF VSM signed a distribution contract for SKF automotive products with the Group Auto Union International (GAUI), one of the largest distributor groups in Europe.
The Electrical Division's external sales amounted to MSEK 492 (518), a decrease of 5.0%. Total sales for the quarter were MSEK 1,674 (1,808).
The operating result for the first quarter amounted to MSEK 75 (95), resulting in an operating margin of 4.5% (5.3) on total sales including internal deliveries.
Sales declined both in Europe and in North America. In Asia, however, mainly due to strong sales to the two-wheeler market, sales continued to grow strongly.
During the quarter SKF acquired the bearing business of VMZ, Bulgaria. Through this acquisition, SKF strengthens its position in the Central and East European markets.
The Service Division's external sales amounted to MSEK 3,176 (3,319), a decrease of 4.3%. Total sales for the quarter were MSEK 3,539 (3,713).
The operating result for the first quarter amounted to MSEK 275 (270), resulting in an operating margin of 7.8% (7.3) on total sales including internal deliveries.
Sales were down in both West Europe and North America. In Central and East Europe sales continued to grow as did sales in Asia.
SKF acquired Erin Engineering and Research, Inc. in the USA during the quarter. This company provides maintenance engineering and application expertise to enhance reliability and performance of clients' assets and concentrates on the power generation and hydrocarbon processing industries.
A Website, www.mapro.skf.com, was launched during the quarter. This site is offering the range of SKF maintenance products and lubricants.
The Aero and Steel Division reported external sales of MSEK 1,043 (1,055), a decrease of 1.1%. Total sales for the quarter were MSEK 1,733 (1,795). The operating result for the first quarter amounted to MSEK 58 (62), resulting in an operating margin of 3.3% (3.5) on total sales including internal deliveries.
The growth in the sales to the aerospace industry started to level off during the quarter.
SKF has signed a Letter of Intent with NSK to acquire its U.K. aerobearing business. This unit designs, manufactures and sells bearings for main shafts and gearboxes for jet engines.
Ovako Steel, previously the Steel Division, and today part of the Aero and Steel Division reported external sales of MSEK 442 (496). Total sales for the quarter were MSEK 822 (858). The operating result for the first quarter amounted to MSEK -9 (-9).
Previous Outlook statement
There are signs that a recovery in market demand could start already during the course of this year. The first quarter, however, is expected to be weak and the production volume will be considerably lower than that recorded for the same period last year.
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.
The SKF half-year report 2002 will be published on Monday, July 15, 2002.
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