SKF (SKF) CMD 2025 summary

Strategic transformation and business separation

• Announced the separation into two focused businesses, Industrial and Automotive, each with distinct strategies and market focuses to unlock value and sharpen strategic focus.

• Over 50% of sales and 70% of positions transferred to Automotive, with operational readiness for listing expected by mid-2026, pending board and shareholder approval.

• Both businesses will operate with decentralized models, tailored value chains, and dedicated management teams to enhance agility and competitiveness.

• Separation aims to unlock growth, efficiency, and speed, with leaner setups and focused management for both entities.

Industrial segment: growth, innovation, and operational excellence

• Industrial targets 4% organic growth (1 p.p. above market), >17% mid-term and >19% long-term adjusted operating margin, and 20% ROCE.

• Focus on high-growth industries, scaling recurring services, accelerating specialized solutions, and value-accretive M&A.

• Portfolio management has reduced product assortment by 25%, simplifying operations and improving resilience.

• Regionalization and automation are key, with a target of 70% regionalization per region and significant investments in China and India.

• Innovation leadership through customer-centric R&D, digitalization, and advanced technologies, with >90% of projects in targeted industries.

Automotive segment: focus, growth, and financial objectives

• Automotive targets organic growth above the market, high single-digit adjusted operating margin, and net leverage below 1x.

• Well positioned in EVs, commercial vehicles, and aftermarket, with strong global and local presence.

• Five strategic levers: win in leading segments, innovation leadership, expand addressable market, accelerate growth, and lean setup.

• Portfolio management and innovation drive profitability, especially in EMEA and EV segments.

• Over 70% of new Automotive positions and manufacturing channel transfers completed.