SKF Year-end report 2010

SKF Year-end report 2010

Tom Johnstone, President and CEO:

"SKF delivered a very good performance in 2010 with record operating
profit and operating margin and a strong cash flow. We took a number of
steps during the year to further strengthen the Group and opened three
new factories and announced two more to support our development in the
faster growing regions and segments. In addition, we completed the
acquisition of Lincoln Industrial which complements our existing
lubrication systems business. In the fourth quarter all regions and
divisions showed very good growth, as expected.

Entering 2011 we expect to see a continued positive volume development.
However, we will face headwinds due to currency and higher raw material
costs, adding to those already faced in the fourth quarter. To support
our long-term profit and growth targets we will step up our investments
in manufacturing, research and development and in additional sales and
engineering resources.”


                                         Q4      Q4      YTD     YTD
                                         2010    2009    2010    2009
Net sales, SEKm                          15,409  13,887  61,029  56,227
Operating profit, SEKm                   2,202   1,004   8,452   3,203
Operating margin, %                      14.3    7.2     13.8    5.7
Operating margin excl. one-off items, %  14.9    10.1    14.2    8.0
Profit before taxes, SEKm                2,048   765     7,549   2,297
Net profit, SEKm                         1,350   505     5,296   1,705
Basic earnings per share, SEK            2.87    1.05    11.28   3.61

The increase of 11.0% in net sales for the quarter, in SEK, was
attributable to: volume 16.3%, price/mix 0.9% and currency effects
-6.2%. For the full year, the increase of 8.6%, in SEK, was attributable
to: volume 14.1%, price/mix 0.1% and currency effects -5.6%.

The quarter included costs, affecting the operating profit, of around
SEK 100 million due to the acquisition of Lincoln Industrial. Total
one-off items impacting operating profit for the full-year amounted to
SEK 190 million.

Dividend proposal
Based on the strong performance, cash generation capacity and outlook,
the Board has decided to propose to the Annual General Meeting an
increase in the dividend of 43%, giving a dividend of SEK 5.00 (3.50)
per share.

Outlook for the first quarter of 2011

Development compared to the first quarter last year

The demand for SKF products and services is expected to be significantly
higher for the Group, the divisions and for the different geographical
areas.

Development compared to the fourth quarter 2010 and adjusted for normal
seasonality

The demand is expected to be slightly higher for the Group and for the
different geographical areas. The Industrial Division and the Service
Division are expected to be slightly higher and the Automotive Division
higher.

Manufacturing level

The manufacturing level will be significantly higher year on year and
slightly higher compared to the fourth quarter, adjusted for normal
seasonality.

 

Gothenburg, 1 February 2011

Aktiebolaget SKF
(publ.)

Tom Johnstone                                         
President and CEO

 

AB SKF is required to disclose the information provided herein pursuant
to the Securities Markets Act and/or the Financial Instruments Trading
Act. The information was submitted for publication at 12.00 CET on 1
February 2011.

For further information, please contact:
PRESS: Ingalill Östman, SKF Group Communication, tel: 46 31-337 3260,
mobile: 46 706-973260, e-mail: ingalill.ostman@skf.com
IR: Marita Björk, SKF Investor Relations, tel: 46 31-337 1994, mobile:
46 705-181994, e-mail: marita.bjork@skf.com