Q4 2023
Net sales:
Full year 2023
Net sales:
"We have diligently executed on our strategy throughout 2023 to further strengthen us as a company. This strategic transformation has made us more resilient and competitive also in the weaker demand environment that we faced in the second half of 2023. This is also reflected in our results for the full year 2023 where we, for the first time ever, delivered net sales over
Strong fourth quarter results despite lower demand
Net sales in the fourth quarter was
In the fourth quarter, the adjusted operating profit was
Our Industrial business continued to perform well in the quarter and delivered a strong adjusted operating margin above 15% (12%) despite lower demand. Our efforts to prune the portfolio partly explains the lower growth, but it has also helped to improve our profitability as we continue to focus on higher margin businesses. The adjusted operating margin for our Automotive business in the fourth quarter came in at 4% (5%), with Q4 typically being a lower margin quarter. We feel confident that our underlying Automotive business performance is on a positive trajectory as we shift the portfolio towards electrification and lower friction solutions.
The continued activities to improve our net working capital, mainly through reducing our inventories, has brought NWC below 28% of sales in the fourth quarter, contributing to the very strong cash flow from operations of
Rapid execution of our strategy in 2023
Last year, our performance was tested both in a strong demand economy in the first half, as well as in an economic slowdown in the second half. We can conclude that our strategy has helped us to navigate in both types of environments and made us more resilient and competitive.
Thanks to our investments in innovation and technology development, we have a strong product and services pipeline with several new products being launched in 2023, bringing significant customer value and thereby fueling profitable growth. This has enabled us to defend or increase our market share in many important industrial segments. The strong progress and double-digit growth in several of our targeted high-growth segments was maintained throughout 2023, with e.g. railway and aerospace businesses growing around 20%.
Regionalization and optimization of our manufacturing footprint are important parts of our strategy to be closer to our customers and thus shorten delivery times and reducing need for transportation. In 2023 we took some major steps in all our regions, for example the inauguration of our factory in
By providing solutions to our customers to minimize friction and energy waste in their operations, we continue to contribute to the needed sustainability transformation. For our own operations, we decided last year to allocate a total of
All these, and other, achievements would not have been possible without the great work and dedication from our employees throughout the year. I'm very grateful for their commitment and how they support each other, our customers, and our business.
Outlook
In 2024, we will focus on successfully implementing our ongoing strategic initiatives. This includes, for example, continued activities related to optimizing our supply chain and footprint, managing and restructuring our portfolio, and strengthening our leadership position within sustainability and low-friction products and services.
In 2024, we expect to see continued market volatility and geopolitical uncertainty and the business is prepared to tackle different scenarios. Looking into the first quarter of 2024, we expect a mid-single-digit organic sales decline. For the full year, we expect a low single-digit organic sales decline, compared to 2023.
In recognition of the Group's solid financial position, the Board has decided to propose to the Annual General Meeting a dividend of
Financial overview, SEKm unless otherwise stated | Q4 2023 | Q4 2022 | 2023 | 2022 |
Net sales | 24,438 | 25,361 | 103,881 | 96,933 |
Adjusted operating profit | 2,929 | 2,542 | 12,977 | 10,204 |
Adjusted operating margin, % | 12.0 | 10.0 | 12.5 | 10.5 |
Operating profit | 1,925 | 2,069 | 11,084 | 8,532 |
Operating margin, % | 7.9 | 8.2 | 10.7 | 8.8 |
Adjusted profit before taxes | 2,220 | 2,166 | 11,074 | 8,965 |
Profit before taxes | 1,216 | 1,693 | 9,181 | 7,293 |
Net cash flow from operating activities | 3,937 | 3,351 | 13,783 | 5,641 |
Basic earnings per share | 1.37 | 1.96 | 14.04 | 9.81 |
Adjusted earnings per share | 3.57 | 3.00 | 18.20 | 13.49 |
Net sales, change y-o-y, %, Q4 | Organic1) | Structure | Currency | Total |
-1.9 | 0.1 | -1.8 | -3.6 | |
Industrial | -3.0 | 0.1 | -1.2 | -4.1 |
Automotive | 0.7 | 0.0 | -3.2 | -2.5 |
1) Price, mix and volume
Net sales, change y-o-y, %, 2023 | Organic1) | Structure | Currency | Total |
3.7 | -0.5 | 3.9 | 7.1 | |
Industrial | 2.3 | -0.4 | 4.0 | 5.9 |
Automotive | 7.1 | -0.5 | 3.7 | 10.3 |
1) Price, mix and volume
Organic sales in local currencies, change y-o-y, %, Q4 | The | |||
0.4 | -5.3 | -1.9 | -1.0 | |
Industrial | +/- | -- | -- | - |
Automotive | + | -- | ++ | ++ |
Organic sales in local currencies, change y-o-y, %, 2023 | The | |||
6.7 | 0.0 | 2.0 | 6.7 | |
Industrial | ++ | +/- | +/- | ++ |
Automotive | +++ | + | ++ | +++ |
Outlook and guidance
Demand for Q1 2024 compared to Q1 2023
Looking into the first quarter of 2024, we expect a mid-single-digit organic sales decline.
Guidance for Q1 2024
Currency impact on the operating profit is expected to be around
Guidance 2024
- For the full year, we expect a low single-digit organic sales decline, compared to 2023.
- Tax level excluding effects related to divested businesses: around 26%.
-
Additions to property, plant and equipment: around
SEK 5,5 billion .
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