SKF Annual General Meeting 2011
Tom Johnstone
President and CEO
Organic growth in local currencies
-30-25-20-15-10-505
10152025
2008 2009 2010
% changey-o-y
Key focus areas ahead 2010
• Profit and cash flow
•
Adjustment of manufacturing output to new demand levels
• Growing segments and geographies
• Strengthening the platform/segment approach
• Competence development
Key focus areas ahead 2010
• Profit and cash flow
•
Adjustment of manufacturing output to new demand levels
• Growing segments and geographies
• Strengthening the platform/segment approach
• Competence development
Organic growth in local currencies
-30-25-20-15-10-505
10152025
2008 2009 2010 2011
Net
sales
SEK 61,029 m
Operating profit
SEK 8,452 m
Basic earnings
per share
SEK 11.28
AB SKF’s
Board
propose
a dividend of SEK 5.00
% changey-o-y
To equip the worldwith SKF knowledge
SKF Group Vision
SKF Care
Employee Care
Community CareEnvironmental Care
Business Care
BeyondZeroTM
0
2
4
6
8
10
12
14
2003 2004 2005 2006 2007 2008 2009 2010
SKF Care
Operating margin
Business Care
SKF Care
• Financial targets
• Shareholder value
• Customer satisfaction
• Quality –
product and processes
• Business ethics
• Responsible demand chain
Business care
Operating margin
0
2
4
6
8
10
12
14
2003 2004 2005 2006 2007 2008 2009 2010
Long-term financial targets
New targets
Operating margin level 15%
Annual sales growth in local currencies 8%
ROCE 27%
How
to reach
our
long
term goals
• Accelerate profitable growth
• Reduce
cost
and eliminate
waste
• Invest for growth
Examples of new businesses
•
CSR Zhuzhou
Electric Locomotive Co Ltd. (ZELC)
• Izuzu• Volkswagen• GM• Fuwa
Engineering
• Goldwind
• WinWinD
SKF Distributor College -
Number 100,000
Certificate 100,000: Self-aligning bearing systems
16 March 2011
Ronnie Yandle FLORIDA BEARINGS INC ORLANDO
Lincoln Industrial
•
A leading supplier of lubrication systems and tools
•
Headquartered in St. Louis, Missouri, USA
•
9 manufacturing
and engineering
centres
globally
•
Sales of around USD 400 m in 2010
•
About 2,000 employees
North America
Europe
Asia
Other
Geogaphic
sales
split
SKF Commutation Sensor-Bearing Unit
Four-row tapered roller bearing
SKF MetroCon
–
CBM for elevators and escalators SKF Cam Follower
UnitSKF SPEEDI-SLEEVE
SKF One Way Clutch
SKF Crane Asset Management
SKF Hydraulic driven lubricator
SKF Engineering Simulation
Services
SKF solutions for special pumps
SKF Overrunning Alternator
Pulley Unit
SKF Drum Support Unit
SKF Low Friction Engine
Seal
High performance seal
Examples
of new product
launches
in 2010
Low friction X-Tracker
Examples
of new product
launches
in 2010
SKF Commutation Sensor-Bearing Unit
Four-row tapered roller bearing
Low friction X-Tracker
SKF Cam Follower Unit
SKF SPEEDI-SLEEVE
SKF One Way Clutch
SKF Crane Asset Management
SKF Hydraulic driven lubricator
SKF Engineering Simulation
Services
SKF solutions for special pumps
SKF Overrunning Alternator
Pulley Unit
SKF Drum Support Unit
SKF Low Friction Engine
Seal
High performance seal
SKF MetroCon
–
CBM for elevators and escalators
Examples
of new product
launches
in 2010
SKF Commutation Sensor-Bearing Unit
Four-row tapered roller bearing
SKF MetroCon
–
CBM for elevators and escalators SKF Cam Follower
UnitSKF SPEEDI-SLEEVE
SKF One Way Clutch
SKF Crane Asset Management
SKF Hydraulic driven lubricator
SKF Engineering Simulation
Services
SKF solutions for special pumps
SKF Overrunning Alternator
Pulley Unit
SKF Drum Support Unit
SKF Low Friction Engine
Seal
High performance seal
Low friction X-Tracker
SKF energy efficient (E2) bearings
PeruIndustria
Textil
Piura•
60,000 E2 DGBB
IndiaSangam
GroupCalculated return on investment within 37 days.
ChinaConveyors used in mining industry. • 130,000 pcs E2 bearings
IndonesiaLeuwijaya Textile•
30,000 E2 bearing
•
potential 325,000 for 3 different customers
Stop-Start
function
for hybrids
SKF Rotor Positioning Bearing enables Stop-Start function•
Cuts CO2
up to 25% in dense urban traffic
•
New 3-year contract signed for the newly launched i-StARS
•
Existing contract for the first generation of Valeo’s
StARS
(Starter Alternator Reversible System)
How
to reach
our
long
term goals
• Accelerate profitable growth
• Reduce
cost
and eliminate
waste
• Invest for growth
The journey towards Business Excellence
SKF Business Excellence
SKF Bridge of Manufacturing
Excellence
SKF Six
Sigma
Zero
defect
concept
TQM and employee
involvement
The temple
of Manufacturing
Excellence
The SKF channel
concept
SKF quality
management system
How
to reach
our
long
term goals
• Accelerate profitable growth
• Reduce
cost
and eliminate
waste
• Invest for growth
Research and development
2010
+5%2011
+15%251 first filings
of patent applications
2 new Global Technical
Centre
4University Technology
Centre
Investments in R&D
New facilities
17 Solution Factories
–
more
to come…
3new
factories
3 under
construction
+
Responsible demand chain
SKF’s
requirements………addresses……......to ensure
Social / EHS issues
Working ethics
Business ethics
Total returns
-
SKF versus
OMX Index
27/12 2002 = Index 100
Updated: 1 April 2011
50
100
150
200
250
300
350
400
450
500
550
600
2003 2004 2005 2006 2007 2008 2009 2010 2011
SKF
OMX –Stockholm Allshares
Environmental Care
Environmental Care
SKF Care
• ISO 14001 EMS
• Climate change strategy
• REACH –
chemicals
• Water
• Material consumption
• Wastes and recycling
Reduce energy intensity
Compressed air management
Frequency control in honing oil pump motor
Waste heat recycling Building insulation
LED lighting
Energy Assessments fromSKF Energy Competence Center
LEED standard in new building constructions
SKF USA Inc. head office
SKF Tver
Factory, RussiaSKF Tver
factory, Russia
Employee
Care
Employee Care
• Human rights and labour standard
• Zero Accidents + OHSAS 18001
• Health and fitness
• Working Climate Analysis
• Training and development
SKF Care
SKF Zero Accidents performance
•
Reduced accident rates by close to 90% since 1994 (accident rate 13.78)
•
OHSAS 18001 global certification in 2005
•
Health and fitness programmes in different units
Zero Accidents rate for SKF Group
SKF College campus
Campus Buenos Aires
Campus Elgin
Campus Shanghai
Campus Pune
Campus Göteborg
Community Care
Community Care
• Education and vocational training
• Sports
• Health
• Helping underprivileged people
• Event/prize/award
SKF Care
Gothia
Cup & Meet the World
SKF Care
Employee Care
Community CareEnvironmental Care
Business Care
BeyondZeroTM
0
2
4
6
8
10
12
14
2003 2004 2005 2006 2007 2008 2009 2010
SKF Care
Operating margin
FTSE4Good Index Series 2001-2011
DJSI World Index 2000–2010Sector leader in Industrial Engineering
2003, 2005, 2009
Utmärkelser
Ethibel
PIONEER & Ethibel
EXCELLENCE Investment Registers 2005-2010
-20
-15
-10
-5
0
5
10
15
20
25
30
2008 2009 2010 Q1 2011
Sales growth in local currency%
7.1
-19.0
0
2
4
6
8
10
12
14
16
2008 2009 2010 Q1 2011
Operating margin%
12.2
5.7
0
5
10
15
20
25
2008 2009 2010 Q1 2011
Return on capital employed
% 24.0
9.1
14.3
24.0
14.2
SKF Group performance
15.026.4
25.6
Long-term targets• 15%
Operating margin
level• 8% Growth
per annum
(local)• 27%
Return
on capital
employed
Key focus areas ahead 2011
•
Develop the business in line with the long-term
financial targets
• Drive initiatives for profitable growth
• Integration of Lincoln Industrial
• Business Excellence and competencedevelopment
One SKF and SKF Care as guiding lights