Skf Ab Class A · OMXSTO:SKF_A
Skf Ab Class A — Investor Day (2012)
20 slides from Skf Ab Class A's investor day presentation, 2012
Slide 1: Tore Bertilsson, Executive Vice President and Chief Financial Officer
Tore Bertilsson Executive Vice President and Chief Financial Officer
Slide 2: Agenda
Agenda • Financial development • Cash flow, working capital • Financial position • Second brand strategy • Acquisitions
Slide 3: SKF Group – operating margin development
% -4 -2 0 2 4 6 8 10 12 14 16 18 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 SKF Group – operating margin development 20 10 20 11 20 12 Q1
Slide 4: How did we get there?
How did we get there? SKF today – more robust, more diverse • Divesting and outsourcing component manufacturing, reducing fixed cost and invested capital • Manufacturing footprint in best cost countries • Reducing working capital • Customized solutions, value added products, technology platforms • D
Slide 5: Business segment margins
Business segment margins On sales including On external net sales intra-Group sales approx. figures 2011 2011 Automotive business (~27%) Automotive 6.7% 8.2% Industrial business (~71%) 17.0% Strategic Industries 13.9% Regional Sales and Service 12.5%
Slide 6: Inventories as % of annual sales
Inventories as % of annual sales Long-term target level: 18% % 25 24 23 22 21 20 19 18 2010 2011 2012
Slide 7: Inventories through the Demand chain
Inventories through the Demand chain Sales & Operations planning – transparent end to end process Material & Components Work in process Finished products Suppliers lead time Factory planning Demand forecast Production frequencies/lot sizes Demand variability Through put time Service levels
Slide 8: Cash flow, after investments before financing
Cash flow, after investments before financing SEKm 2 000 1 000 * 0 -1 000 -2 000 Q1 2012 Strong cashflow for a -3 000 first quarter -4 000 -5 000 -6 000 2010 2011 2012 * SEK 798 million, excluding SEK 6,799 million for the acquisition of Lincoln.
Slide 9: History of strong cash flow generation and a shareholder friendly distribution policy
History of strong cash flow generation and a shareholder friendly distribution policy 2003-2011, accumulated rounded figures, SEKm __________________________________________________________________________________ EBITDA 74,000 Investments (23%) 17,000 Fin. Net, taxes, wc, others (36%) -27,000 Acqui
Slide 10: Financial position, Q1 2012
Financial position, Q1 2012 Net debt, incl pension liabilities 15,153 Key measures Gearing 47% Target level 50% Net debt/Equity 64% “ “ 80% Credit ratings: S&P A- Moody’s A3
Slide 11: Debt structure
Debt structure Maturity years, EURm 600 500 500 396 400 300 200 130 110 100 100 100 0 0 2012 2013 2014 2015 2016 2017 2018 • Credit facilities: • No financial covenants nor material EUR 500 million 2014 adverse change clause SEK 3,000 million 2017
Slide 12: Strategy for second brands
Strategy for second brands • Capture mid-market growth • Lower cost manufacturing • Global market approach • Segment focus - PEER, Industrial segments - GBC, Auto, HD segments
Slide 13: Business by industry
Business by industry Transmission Other Other Truck & Trailer Industrial distribution Agricultural Cars Electrical
Slide 14: Product Lines
Product Lines Radial Ball Bearings Shaft Seals Agricultural Mounted Units Bearings Miniature Bearings Tapered Bearings Casted Parts
Slide 15: Product Lines
Product Lines Tapered Bearings Deep Grove Ball Bearings
Slide 16: Acquisition strategy for profitable growth
Acquisition strategy for profitable growth • Acquisitions are seen as one important driver for growth and value creation. • Lincoln integration is going well so SKF is able to make additional larger acquisitions • SKF has the financial means and acquisition project resources in place to continue to
Slide 17: Acquisition 2003-2011 Identifying gaps and opportunities in all platforms
Acquisition 2003-2011 Identifying gaps and opportunities in all platforms Bearings Lubrication Seals Services systems Mechatronics and units Technologies/ SNFA (2006) Economos (2006) Baker (2007) Vogel (2004) ABBA (2007) Products GLO (2008) Macrotech (2006) Safematic (2006) Jaeger (2005) S2M (2007)
Slide 18: Acquisition criteria
Acquisition criteria • Strategic fit with clear potential synergies and ability to exploit these in a reasonable timeframe. • Strong commitment and ownership by acquiring Business Area. • Profitable high quality companies with strong management and preferably larger deals. • EPS accretive in the fir
Slide 19: Key business message
Key business message • Continued strong performance • Strong cash flow and financial position • Acquisition opportunities - in the SKF platforms - “normal performance” companies
Slide 20: Slide 20