The SKF Group. Tom Johnstone President and CEO

Transcription

1 The SKF Group Tom Johnstone President and CEO SKF Capital Markets Day 2009

2 SKF - A truly global company Established: 1907 Sales 2008: SEK 63,361 million (EUR 6.5 billion) Employees: 44,799 Production sites: SKF presence: Distributors/dealers: 110 in 28 countries in over 130 countries 15,000 locations Global certificates: ISO OHSAS certification

3 2009 external environment Global, deep and very fast downturn in demand Financial markets are not stable yet Government incentives still to take effect Consumer and business confidence low Good demand continues in some areas Uncertain business environment - difficult to forecast

4 SKF today more robust, more diverse Divesting assets Reducing working capital Improving productivity Diversifying growth

5 Financial performance % Operating margin % Sales growth in local currency * 7.5* Q Q % Return on capital employed * Excluding effect from sale of Ovako: 2005: 10.4% 2006: 10.1% Long-term targets 12% Operating margin level 6-8% Growth per annum (local) 24% Return on capital employed Q1 2009

6 Sales volume % change y-o-y

7 Volume trends (based on current assumptions) Net sales 2008 Europe 56% North America 17% Asia Pacific 19% Latin America 5% Total Daily volume trends for: Q Q Outlook Q vs

8 Volume trend for main segment Q (based on current assumptions) Net sales % Trucks 20% Industrial OEM, General+Special 23% Industrial distribution 12% Industrial OEM, Heavy+Off-highway 13% Cars 3% Electrical and two-wheeler 9% VSM 5% Aerospace 3% Railway 6% Energy

9 Activities to adapt to lower demand Restructuring/impairment programmes Employees - announced Q ,500 SEK 340 m - announced Q SEK 175 m Costs charged to operating profit 3,018 SEK 515 m At the end of March 2009, 1,322 employees had left under the programmes. In total, 2,640 employees left the Group during H and Q Around 6,000 employees in short-time working (Q1 2009).

10 2009 an uncertain business environment OPPORTUNITIES ARE NOWHERE OPPORTUNITIES ARE NOWHERE

11 Agenda Tom Johnstone, Group overview Tore Bertilsson, Finance Tryggve Sthen, Automotive Division Lunch Henrik Lange, Industrial Division Vartan Vartanian, Service Division Movements and music Alan Begg - Research & development Dan Bradley - Delivering measurable value Coffe break Stefan Karlsson - SKF s capabilities in wind energy Edward Holweg - CO 2 reduction for automotive industry Movements and music Q & A Short break Alexander de Vries - Presentation/tour of SKF Business and Technology Park Tom Johnstone - Key message from the day and SKF going forward Dinner To the hotel

12 Leadership in todays uncertain environment Management has to have THREE modes of working: Ensure the day to day business keeps running - Focus on customers and distributors - Operations (incl. suppliers) Manage the overall corporation - Protect profit and cash flow - Communication internal and external - Prioritise do not compromise direction but vary speed Monitor/Anticipate the overall market development - Additional actions (+ve and ve) - Opportunities

13 SKF Group Vision To equip the world with SKF knowledge

14 Investing in R&D for staying in the forefront >30% increase in R&D spending in 2008 Main areas: Environment Core technologies New products Strengthen R&D activities in fast growing regions Strengthen links with universities and high schools.

15 Six Sigma 2009 Q1 status: 18 Master Black Belts 409 Black Belts 2,079 Green Belts 216 projects closed whereof 8 replicated 1,028 projects ongoing Hard savings 2005: SEK 150 m 2006: SEK 200 m 2007: SEK 302 m 2008: SEK 462 m 2009 Ytd: SEK 110 m 4 dimensions: Standard Six Sigma, Design for Six Sigma, Lean Six Sigma and Six Sigma for Growth

16 SKF Care Business Care Employee Care Operating margin BeyondZero TM SKF Care Environmental Care Community Care

17 SKF Internal Energy and CO 2 Strategy CO 2 from Energy Supply Supply Carbon Intensity CO 2 Target : 5% absolute reduction pa Energy Intensity Energy Demand Value added =standard cost, ps rate

18 Reducing energy usage and emissions at SKF Pune, India tonnes CO 2 St Cyr, France - 63 tonnes CO 2 Schweinfurt, Germany tonnes CO 2 Göteborg, Sweden -91 tonnes CO 2

19 SKF Internal Energy and CO 2 Strategy Target : 5% absolute reduction pa CO 2 from Energy Supply CO Result > -9% CO 2 emission Energy Demand Value added =standard cost, ps rate

20 Progress in Scope 3 Postgraduate study estimated SKF travel = tonnes SKF Global Car Policy not exceeding 185 g/km Training on Low carbon meetings - Manage more, travel less Video conference facilities in close 30 locations worldwide Started monitoring CO 2 emissions from air, ocean, road transportation (Europe) and express services Partner in Clean Shipping project, together with 11 other Swedish cargo owners SKF Logistics Services Centre (Schweinfurt) replaced its fleet of company vans with natural gas-driven. All Group major suppliers worldwide are require to report their CO 2 emissions in relation to SKF demand and submit a reduction plan

21 Energy efficient bearings and solutions

22 Key focus areas ahead 2009 Profit and cash flow Continuously adjust manufacturing output to new demand levels Growing segments and geographies Strengthen the platform/segment approach Competence development SKF Care and Six Sigma as guiding lights

23 Our care for the future is firmly rooted The Power of Knowledge Engineering

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