0 29 January 2009. The SKF Group Year-end results 2008 Tom Johnstone, President and CEO.
SKF Group Tom Johnstone, President and CEO September 2012.
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Transcript of SKF Group Tom Johnstone, President and CEO September 2012.
SKF Group
Tom Johnstone, President and CEO
September 2012
Slide 2© SKF Group
SKF - A truly global company
Established: 1907
Sales 2011: SEK 66,216 million, (~ USD 10 bn)
Employees 2011: 46,039
Production sites: around 130 in 32 countries
SKF presence: in over 130 countries
Distributors/dealers: 15,000 locations
Global certificates: ISO 14001
OHSAS 18001 certification
Slide 3© SKF Group
8
3 4
1
8 9
1
86
10
6
0
28
37
19
24
7
13
38
28
42
North America
Latin Americ
a
WesternEurope
Eastern Europe
Middle East and
Africa
Asia/Pacific
Net sales*
Average number of employees Tangible asset
% of group total SKF 2011
(18)
(8)(13)
(26)(13)
(14)
(2002) (1998)
(25)(14)(19)
(10)(12)(9)
Sweden
(4) (4) (3)
(5)(12)(15)(3) (9)(3)
(2)(2) (0)
(47)(46)(53)
(6) (5)(4)
(5)(14)(12)(3) (9)(3)
(3)(2)(0)
(48)(44)(53)
* Previously published shares have been restated to reflect customer delivery locations.
Slide 4© SKF Group
5%
4%
4%
5%
13%8%
5%
10%
28%
3%
13%
Net sales by customer segment 2011
Aerospace
Railway
Off-highway
Trucks
Two-wheeler and Electrical
Industrial, general
Cars and light
vehicles
Industrial, heavy and
special
Vehicle Service Market
Industrial distribution
Energy
Previously published shares have been restated to reflect the new business structure from 2012.
Slide 5© SKF Group
Long-term financial targets
27%Return on
capital employed
8%Changes in sales in local currency
15%Operating
margin, level
-20
-15
-10
-5
0
5
10
15
20
0
5
10
15
05
1015202530
07 08 09 10 11
H1/12
Slide 6© SKF Group
SKF Group – operating margin development
-6
-4
-2
0
2
4
6
8
10
12
14
16%
Slide 7© SKF Group
How did we get there?
• 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
• Diversifying growth, faster growing segments and geographies
• Acquisitions supporting growth and profitability
SKF today – more robust, more diverse
Slide 8© SKF Group
Europe-2.3%
Asia/Pacific -8.0%
Latin America +13.8% Middle
East & Africa
+2.2%
North America +11.6%
Growth development by geography Local currencies H1 2012 vs H1 2011
Slide 9© SKF Group
SKF demand outlook Q3 2012, regions
Sequential trends for: Q2 2012 Q3 2012
Share of net sales2011*
Europe44%
Asia Pacific28%
North America
19%
Latin America
8%
Total
Q3 2012 vs Q3 2011
-
+/-
++
+
+/-
* Previously published shares have been restated to reflect the total Group business and customer delivery locations.
Slide 10© SKF Group
5%
5%
28%
13%
12%
10%
4%
3%
13%
5%
Energy
Aerospace
Industrial distribution
Industrial, general
Industrial, heavy, special and off-highway
Vehicle service market
Railway
Two-wheelers and electrical
Cars and light vehicles
Trucks
SKF sequential demand trend Q3 2012
Share of net sales 2011*
* Previously published shares have been restated to reflect the total Group business and customer delivery locations.
Slide 11© SKF Group
Main initiatives going forward
• Accelerate profitable growth
• Reduce cost and eliminate waste
• Invest in Growth
Slide 12© SKF Group
• Accelerate profitable growth- intensify the platform and industry approach- launch more new offerings – green and BZ portfolio- strengthen the service business- focus on faster growing regions/ industries- develop other brands
• Reduce cost and eliminate waste- Business Excellence throughout the Group- BCC manufcaturing and sourcing- integrated cost reduction activities (ICR)
• Invest in growth- Sales and engineering resources- Factories in growth markets- Solution factories- R&D- Acquisitions- New IT systems
Main initiatives going forward
Slide 13© SKF Group
Market SEK 320 bn~ USD 50 bn
Market SEK 75 bn~ USD 12 bn
Market SEK 30 bn~ USD 5 bn
Market SEK 70 bn~ USD 11 bn
Market > SEK 40 bn~ USD 6 bn
PT
Market SEK 100 bn~ USD 16 bn
SKF platforms – managing and reducing friction/energy
Slide 14© SKF Group
Market SEK 320 bn~ USD 50 bn
Market SEK 75 bn~ USD 12 bn
Market SEK 30 bn~ USD 5 bn
Market SEK 70 bn~ USD 11 bn
Market > SEK 40 bn~ USD 6 bn
PT
Market SEK 100 bn~ USD 16 bn
SKF platforms – managing and reducing friction/energy
Addressable market > USD 100 bn
Addressable market > USD 100 bn
Slide 15© SKF Group
R&D – investments and main areas
Investments
2008 +30%
2009 Same
2010 +10%
2011 +20%
Patents +30%
2012 +10%
Main areas
• Environment
• Core technologies
• New products
• Strengthen R&D activities in fast growing regions
• Strengthen links with universities and high schools
Slide 16© SKF Group
Examples of new products launched in 2012
SKF Nautilus
rangeextensions
Servo Actuator for industrial applications
Next generation SNL, SE housings
A hand-held, 18-volt,
lithium-ion grease gun
SKF SpeedSensor Unit
Integrated monotube seal
SKF Compact
Wire Steering Bearing
SKF Solar Hub
SKF Thruster Monitoring
SKF Bus Door Actuator
Slide 17© SKF Group
Investing for the future
Mysore, India
Dalian, China Jinan, China
Bengaluru, India
Slide 18© SKF Group
Acquisitions 2003-2012Identifying gaps and opportunities in all platforms
SealsBearingsand units
Lubrication systemsServices Mechatronics
Technologies/ Products
Geographies
Segments
SNFA (2006)
S2M (2007)
QPM (2008)
Economos (2006)
Macrotech (2006)
Baker (2007)
PMCI (2007)
PB&A (2006)
Monitek (2006)
Safematic (2006)
Vogel (2004)
ALS (2007)
Sommers (2005)
ABBA (2007)
Jaeger (2005)
PEER (2008)
GLO (2008)
TCM (2003)
Scandrive (2003)
Cirval (2008)
Lincoln Industrial (2010)
GBC (2012)
Focus on industrial and aftermarket business.
Slide 19© SKF Group
General Bearing Corporation
•Established in 1955, headquarter in West Nyack, NY, USA.
•Four factories in China, one ball bearing factory, two tapered roller bearing factories andone precision roller factory.
•1,750 employees, 140 are located in USA and 1,610 in China.
•Sales in 2011: around USD 155 million
•Focused to serve OEM and end-user customers within the transportation markets: Truck, Trailer, Automotive, and Industrial.
•Brands:
Slide 20© SKF Group
Strategy for second brands
• Capture mid-market growth
• Lower cost manufacturing
• Global market approach
• Segment focus- PEER, Industrial segments- GBC, Auto, HD segments
Slide 21© SKF Group
Branding strategy – to address the market
Second brands• Strong cost focus• Peer/General/Hyatt brands
• Application specific products
• Knowledge engineering• Documented value• Cost reduction• Brand
High
Middle
Low
Slide 22© SKF Group
BeyondZeroTM
0
-
+BeyondZero
Customers:SKF BeyondZero
portfolio
Innovate and offer our customersnew technologies, products andservices with enhanced environmentalperformance characteristics.
Suppliers TransportationSKF
Manufacturing
Reduce the negative environmentalimpact from our own operations andthose of our suppliers.
Scope 2 Scope 1 Scope 3
Slide 23© SKF Group
BeyondZero portfolio – how it works
DESIGNED FOR
• Total direct CO2 savings• Total revenue
APPLIED FOR
• Total enabled CO2 savings• Total revenue
Criteria• Life cycle trade off’s• Base line comparison• CO2 / environmental savings
Slide 24© SKF Group
BeyondZero portfolio - Industrial
SKF Solar Linear Actuator contributes to increasing the energy production from one solar panel which 4.4 tonnes CO2 /year
SKF Energy Monitoring Service for pump systems helped reduce 1,700 tonnes of CO2 emission per year.
SKF ConRo reduced CO2 emissions with 1.5 tonne per unit and year.
Slide 25© SKF Group
BeyondZero portfolio - Industrial
Replacement of hydraulic lifts with two SKF CASM electric cylinders produced a CO2 savings of 4.9 tonnes per year for one machine.
SKF products and solutions for renewable energy help display CO2
If SKF were to equip all new motors ranging from sizes 1-50 HP with its current SKF E2 bearing range, a yearly 290,000 tonnes of CO2 emissions would be avoided.
Slide 26© SKF Group
BeyondZero portfolio - Automotive
SKF bus door actuator saves 1,900 kg CO2/year compared using pressurized air for operating the doors.
SKF StopGo for two-wheelersReduces CO2 emissions by 5 g per kilometre.
SKF Rotor Positioning bearing reduces fuel consumption and CO2 emissions up to 15%.
Slide 27© SKF Group
BeyondZero portfolio - Automotive
SKF products and solutions for electric vehicles
A light commercial vehicle with four SKF Low Weight Hub Bearing Units reduces CO2 by 5.0 kg CO2 per year.
SKF Low Friction Seal reduces friction by up to 55%, which provides a CO2 savings of over 1 g per kilometre.
Slide 28© SKF Group
Climate strategy – BeyondZero – Targets
Transport anddistribution
Raw material and components
SKF’s own operations
Customer solutions
• 100% of SKF's energy intensive suppliers certified according to ISO 50001 Energy Management Standard by 2016.
• Reduce the total annual energy use of the SKF Group by 5 % below the 2006 level by 2016. • Reduce the energy use per production output (value added) by 5% year- over-year during the period (2012-2016). • Reducing CO2 emissions/ tonne-kilometre for all transports managed by SKF Logistics Services by 30% compared to 2011 by the end of 2016.
• Quadruple (x4) the revenue from the BeyondZero portfolio from 2.5 Billion SEK in 2011 to 10 Billion SEK by 2016.
Slide 29© SKF Group
Key focus areas ahead 2012
• Managing the uncertain and different demand environment- regions and segments
• Profit and cash flow- inventory management
• Initiatives and actions to support long-term financial targets
• Continue the integration of Lincoln
• Business Excellence and competence development
• Implement the new organization for the Industrial market
One SKF and SKF Care as guiding lights
Slide 30© SKF Group