“Organic sales were relatively unchanged compared to last year. According to seasonality, organic sales were lower compared with the second quarter.
Net sales in the quarter were SEK 17.9 billion, operating profit was SEK 2 191 million and our operating margin was 12.2%. Excluding positive one-time items of SEK 380 million, operating profit was SEK 1 811 million and operating margin was 10.1%.
Our automotive business continues to improve its perform-ance, in line with the ambitions set out in the profit improvement programme which was launched last year, with an operating margin excluding one-time items of 6.6%. Organic sales increased by 4.4% in the quarter compared with the corres-ponding quarter last year, driven mainly by strong growth in Asia.
Our industrial business delivered an operating margin, excluding one-time items of 11.7%, a continued resilient per-formance. Although the rate of decline in demand in North America and Asia has diminished, market conditions continued to be challenging during the third quarter.
Cash flow generation was a solid SEK 1 816 million in the quarter, excluding the effects from divestments.
Investments in the implementation of world-class manufacturing technologies in our spherical roller bearing factories in Gothenburg and Flowery Branch are progressing as planned. Similar technologies and processes are to be introduced across other product lines as part of our strategy to improve the flexibility and cost-competitiveness of our factories.
Entering the fourth quarter of 2016, demand for our products and services is expected to be relatively unchanged both compared to the same period last year and sequentially.”
Net sales change y-o-y, %: Organic Structure Currency Total
Q3 2016 -0.6 -2.0 0.1 -2.5
YTD -2.5 -2.4 -1.6 -6.5
Organic sales change in local currencies, per region y-o-y, %: Europe North America Latin America Asia Middle East & Africa
Q3 2016 -0.6 -3.5 -6.5 3.8 0.3
YTD 2.0 -8.3 -4.1 -3.8 1.0
Outlook for the fourth quarter 2016
Demand compared to the fourth quarter 2015
The demand for SKF’s products and services is expected to be relatively unchanged for the Group and for Industrial. Demand for Automotive is expected to be slightly higher. Demand is expected to be relatively unchanged in Europe, lower in North America, slightly higher in Asia and higher in Latin America.
Demand compared to the third quarter 2016
The demand for SKF’s products and services is expected to be relatively unchanged for the Group including both Industrial and Automotive. Demand is expected to be slightly higher in Europe, lower in North America and relatively unchanged in Asia and in Latin America.
A teleconference will be held on 26 October at 14:00(CEST):
SE: +46 8 5065 3937
UK: +44 20 3427 1912
US: +1 646 254 3360
You will find all information regarding the SKF nine-month report 2016 on the Group’s IR website.
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