#SKF #Sweden #Gothenburg #Q4 2024 #financial report

SKF Year-End Report Q4 2024

In a recent announcement on January 31, 2025, SKF shared its Q4 2024 performance highlights, showcasing a mix of resilience and challenges in a fluctuating market environment. The financial figures reported a net sales of SEK 24,725 million, slightly up from SEK 24,438 million in the previous year. However, the organic growth saw a decline of 3.1%, compared to a lesser drop of 1.9% recorded in Q4 2023. This downturn was largely influenced by weaker market demand, particularly in Europe and China, despite positive sales trends observed in the Americas and Southeast Asia.

Rickard Gustafson, SKF's President and CEO, emphasized the company's strong strategic execution throughout 2024, navigating adverse conditions effectively while managing operational costs and maintaining solid operating margins. The adjusted operating profit for Q4 stood at SEK 2,735 million, albeit down from SEK 2,929 million a year earlier, with an adjusted operating margin of 11.1%.

Gustafson noted that the overall performance in 2024 reflected a resilient adjusted operating margin of 12.3%, despite the broader market shift from organic growth in 2023 to a reported decline of 5.4% this year. Solid cash flow from operations was also recorded at approximately SEK 11 billion throughout the year, reinforcing the company’s financial health.

In the fourth quarter, SKF faced various challenges, particularly within its Automotive segment, compounded by customers reducing factory output amidst a volatile demand landscape. Nevertheless, notable strength was recognized in its EV business in China, where the team reported promising growth opportunities. The introduction of the new Hub Bearing Unit for electric vehicles reflects SKF’s focus on innovation and customer value by significantly improving efficiency and reducing weight compared to traditional solutions.

The regional dynamics of sales were varied, demonstrating a notable organic decline in Europe and China, while robust growth was recorded in the Americas and Southeast Asia, driven by effective pricing strategies and strong aftermarket support. Specifically, organic sales in the Americas rose by 5.3%, contrasting with a 9.9% decline in Northeast Asia.

Looking ahead, SKF announced a strategy focused on regionalization to create competitive and resilient value chains, significantly improving delivery times in regions like China. The company is heavily investing in boosting its ceramic bearing capabilities and reinforcing its manufacturing processes to tap into the growing demand for electrification.

Recent changes aimed at separating and refining their Automotive and Industrial operations are progressing steadily, with further updates expected during the upcoming Capital Markets Day on November 11, 2025, in Stockholm. Despite a challenging outlook for the first quarter of 2025, wherein organic sales are anticipated to weaken slightly year-on-year, the Board has proposed paying a dividend of SEK 7.75 per share, reflecting the company’s sustained solid financial position.

The financial details provided illustrate SKF’s commitment to maintaining resilience through strategic investments and operational adjustments. As the global economic landscape continues to evolve asynchronously, SKF aims to position itself favorably to seize profitable growth opportunities amid fluctuating market conditions.