SKF (SKF) Q2 2024 earnings summary

Executive summary

• Achieved SEK 25.6 billion in Q2 2024 net sales, down 6.6% year-over-year, with a stable adjusted operating margin of 13.0% despite soft market conditions.

• Maintained profitability through strong price/mix management, cost control, and active portfolio optimization, even as demand remained soft across most geographies and verticals.

• Strategic focus on regionalization, innovation, and building resilient value chains continues, with investments in new capacity in Mexico and ongoing transformation in Germany.

• Significant restructuring in Germany led to SEK 800–835 million in one-off costs, impacting reported operating profit.

• Net cash flow from operations was SEK 2.2 billion, reflecting strong cost control and operational efficiency.

Financial highlights

• Q2 2024 net sales were SEK 25.6 billion, down from SEK 27–27.1 billion a year ago.

• Adjusted operating profit was SEK 3,324 million, down from SEK 3,614–3,600 million last year, with half the delta due to currency effects.

• Net cash flow from operations was SEK 2,152 million, down from SEK 3,664 million.

• Net debt (excluding pensions) stood at SEK 10.7 billion, with a dividend payment of SEK 3–3.4 billion and a SEK 3 billion bond repaid in the quarter.

• Adjusted ROCE (12-month rolling) improved to 14.7%.

Outlook and guidance

• Q3 2024 organic sales expected to be relatively unchanged year-over-year; full-year 2024 organic sales expected to decline low single digits.

• CapEx guidance for 2024 reduced to SEK 5–5.5 billion, reflecting completion of major regionalization investments.

• Q3 2024 currency impact on operating profit expected to be SEK 150 million negative.

• FY 2024 tax rate guidance: ~26%.

• Demand expected to remain at current levels, with no significant improvement anticipated in the second half.