SKF Half-year report 2021: Record operating profit

GOTHENBURG, Sweden, July 20, 2021

"The second quarter saw a record in adjusted operating profit of SEK 3,118 million (1,565 million) and an adjusted operating margin of 15.0% (9.4%).

The result was especially strong, given continued headwinds in the form of negative currency impact and rising input costs. Through mitigating actions we have been able to compensate for approximately 50% of this cost increase. We've done well to serve our customers under these circumstances, and we're doing our outmost to capture additional growth opportunities.

Organic sales development in the quarter was just above 33%, with net sales of SEK 20,735 million (SEK 16,599 million). Sales were significantly higher on all main geographical markets with organic growth of 91% in Latin America, 40% in EMEA, 27% in North America and 19% in APAC.

The Industrial business delivered a record set of results, with an adjusted operating margin of 18.0% (14.0%). The Automotive business delivered an adjusted operating margin of 7.6% (-7.6%).

Cash flow generation in the quarter was SEK 509 million (negative 838 million), an improvement compared to last year as well as the last quarter.

We continue to invest in and consolidate our manufacturing footprint. Since 2019 we have permanently closed six sites and are currently in the process of closing an additional 11. Regretfully, some of these initiatives have a negative impact on some employees which we try to mitigate to the extent possible. Nevertheless, they are necessary to align our presence and capabilities with customer demand and, thereby enabling growth opportunities.