SKF 3Q Sales up 3%; Exploring Aerospace Divestments - Modern Distribution Management

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SKF 3Q Sales up 3%; Exploring Aerospace Divestments

The bearings maker said it's eyeing the sale of non-core Aerospace product lines, which include seals, rings and PEDs.

Gothenburg, Sweden-based bearings maker SKF reported its 2023 third quarter financial results on Oct. 27 while also stating its intentions to divest non-core product lines in its Aerospace division.

SKF posted 3Q total sales of $2.32 billion, up 3.2% year-over-year, with organic sales down 0.6%. Organic sales declined 3.6% in the Americas; increased 3.7% in EMEA; decreased 5.5% in China & Northeast Asia; and increased 4.6% in India & Southeast Asia.

By business group in 3Q:

  • Industrial sales of $1.63 billion increased 2.0% year-over-year, with organic sales down 2.1%. Operating margin was 11.6%, with adjusted operating margin of 13.7%.
  • Automotive sales of $689 increased 5.9% year-over-year, with organic sales up 3.1%. Operating margin was 6.1%, with identical adjusted operating margin.

SKF’s 3Q total operating profit of $231 million and margin of 10.0% topped the $173 million and 7.7% of a year earlier. 3Q adjusted operating margin was 11.5%.

The company posted a Q3 net profit of $156 million, topping the $110 million of a year earlier.

Looking forward, SKF expects a low single-digit organic sales decline for 4Q23, with a mid to low single-digit organic increase for the full year vs. 2022.

Aerospace Business Update

SKF shared that, following the completion of a strategic review of its Aerospace business, the company is further strengthening and investing in the unit’s core areas, but also exploring options to fully or partially exit non-core business lines.

SKF is refocusing its Aerospace business around core areas related to aeroengine and aerostructure bearings, the company said. The non-core product lines are in the company’s Hanover and Elgin facilities, which include mechanical seals, rings and precision elastomeric devices (PEDs). These businesses represent annual sales of about $90 million, SKF stated.

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