End of year report SKF Q4 2024: Strong execution supporting the resilience of the margins

Göteborg, Sweden,, January 31, 2025 / Prnewswire / –

Q4 2024

Net sales: Dry 24 725 million (24,438)

Organic growth: −3.1% (−1.9%), caused by the drop in market demand mainly in Europe And Chinawhile the Americas and India & Southeast Asia show a positive development of sales.

Adjusted operating profit: Dry 2,735 million (2,929). A high contribution of prices / continuous mixture was offset by negative currency effects as well as lower volumes, which has also resulted in a drop in profitability.

Adjusted operating margin: 11.1% (12.0%)

Net cash flows of operating activities: Dry 3,283 million (3,937)

Rickard GustafsonChairman and Chief Executive Officer:

“”In 2024, we showed resilience in difficult market conditions thanks to a diligent strategic execution. In the fourth quarter, we maintained solid margins given the low demand and the headwind.

Solid margin in the markets of the week

I am happy that we have succeeded in the difficult market conditions which prevailed throughout 2024, have launched a separation process for our automotive activities and continued to strengthen our operational and innovation capacities. This positions us well to seize profitable growth opportunities while demand is recovered. For the whole year 2024, we have confirmed an adjusted operating margin resilient of 12.3% on a market which increased from organic growth in 2023 to an organic decline of -5.4%. The cash flow flows were solid to approximately Dry 11 billion.

The low demand environment also remained in the fourth quarter, partly compensated by a solid price / mixture thanks to effective pricing activities, diligent portfolio management and a high replacement focus. The drop in organic sales during the quarter was -3.1% with large variations between regions. Our industrial company in Americas and India & Southeast Asia has shown positive organic growth, partly due to the favorable delivery schedule before the end of the year. Require Europe And China remained weak, which was also the case for the automobile in general, with the exception of our EV activity China It worked well.

Our operating margin adjusted to the fourth quarter of 11.1% represents another point of proof of our improved resilience given the development of negative volume and a negative impact on the margin of the currency of -0.9 percentage points.

We continued to work hard on cost reduction activities and fully compensate for wage inflation. The fourth quarter, however, was the first since the low-demand environment began in mid-2023 when these activities were unable to fully compensate for the negative impact from low volumes. Due to the mixture of products, we have also seen an increase in the cost of materials. Our diligent cost reduction activities will continue, in particular by examining the configuration of our industrial and automotive companies to create a solid base for the future.

Our automotive activity has had a difficult quarter with volatile demand, affected by reducing customer factory results. It is therefore encouraging that its underlying commercial performance is on a positive trajectory entering new margin accreent companies. Our new hub bearing unit for electric vehicles, for example, provides significant customer value thanks to an increase in mileage per battery load by being 10% lighter than conventional wheel bearings and reducing the friction by 30% .

The cash flow flows were robust during the quarter 3.3 billion sevenSupported by the resilience of the margins and the reduction of the working capital.

Invest in the creation of a stronger SKF

Regionalization is a key element of our strategy. In 2024, we continued to invest in optimization more from our imprint and in the creation of competitive and resilient regional value chains. These efforts improved our regionalization rates over the year from 63% to 68% Asia and from 66% to 69% in the Americas. Increased regionalization brings several advantages of the market and operational. In China For example, he has shortened the deadlines for the order on delivery with 25% since 2019.

To position ourselves to benefit from the electrification megatend and the growing demand for high -speed rotation, we invest in our capacity and our ceramic capacities. To strengthen our competitiveness and guarantee the full value chain, we invest in increased access to raw materials as well as accelerate our manufacturing and R&D processes.

Separation update – Capital Markets Day on November 11

Our work to create two companies adapted to purposes, industrial and automobiles, is in an intensive phase. More information on progress will be shared during our capital market day that will be held November 11, 2025 In Stockholm.

Prospects

The world changes quickly, with markets affected by geopolitical uncertainty, and we expect continuous volatility. For the first quarter of 2025, we expect organic sales somewhat, from one year to the next.

In recognition of the solid solid financial situation of the group, the council decided to propose to the annual general meeting a dividend of SEK 7.75 by action. “”

¹⁾ Price, mixture and volume

¹⁾ Price, mixture and volume

Perspectives and advice

Prospects

• Q1 2025: We expect organic sales to weaken somewhat, from year to year.
• SKF has decided to stop issuing annual organic sales prospects.

Guidance Q1 2025

• The impact on currency on operating profit should be around Dry 200 million positive compared to the first quarter of 2024, based on exchange rates by December 31, 2024.

Guidance FY 2025

• Tax level excluding the effects linked to assigned companies: around 26%.
• Additions to property, factory and equipment: around 4.5 billion sek Excluding the separation of automotive activity.

A web said will be held on January 31, 2025 at 8:00 am (CET):

Suede +46 (0) 8 5051 0031

United Kingdom / International +44 (0) 207 107 0613

https://investors.skf.com

AKTIEBOLAGET SKF

(Publ)

The financial information of this press release contains interior information that AB SKF is forced to make public under the EU market abuse. The information was submitted for publication through the agency of the contact person stated below on January 31, 2025 at 7:00 am this.

For more information, please contact:

Press: Carl Bjernstam, responsible for media relations

Tel: 46 31-337 2517; Mobile: 46 722-201 893; e-mail: carl.bjernstam@skf.com



Investor relations: Sophie Arnius, head of investors relations

Tel: 46 31-337 8072; Mobile: 46 705-908 072; e-mail: sophie.arnius@skf.com

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