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SKF's Q3 2025 Financial Report Overview

In its Q3 2025 financial report, SKF has showcased an improved operating margin despite the headwinds posed by adverse market conditions. With net sales reaching MSEK 22,482, down from MSEK 23,692 in the previous year, the company managed an organic growth rate of 2% compared to a significant decline of 4.4% in the same quarter last year. This improvement was principally driven by the Industrial segment, while the Automotive side continues to face challenges from a weaker market demand.

Financial Highlights

• - Net Sales: MSEK 22,482 vs. MSEK 23,692 (Last Year)
• - Organic Growth: 2.0% vs. −4.4% (Last Year)
• - Adjusted Operating Profit: MSEK 2,762 vs. MSEK 2,821 (Last Year)
• - Adjusted Operating Margin: 12.3% vs. 11.9% (Last Year)
• - Net Cash Flow from Operating Activities: MSEK 1,840 vs. MSEK 3,576 (Last Year)

Strong Performance in the Industrial Sector

The Industrial division of SKF has reported a notable growth of 4% in organic sales, which can be attributed to successful commercialization and an active agenda spread across all regions, with particularly impressive results from Asia and the Americas. The Chinese market, supported by policy-driven pre-buy effects within the Wind sector, contributed significantly to this growth, along with strong performance metrics from India.

Conversely, the Automotive segment encountered a decline of 2% in organic sales, primarily due to sluggish demand in North America. The ongoing geopolitical sentiment continues to create uncertainty, but SKF has managed to mitigate some of the increased tariff costs that have come into play.

Achievements and Strategic Moves

Rickard Gustafson, SKF’s President and CEO, commented on the quarter's performance, emphasizing the company's commitment to transforming its operations into a more streamlined entity. Despite the challenges, the effective management of pricing, portfolio optimization, and stringent cost controls led to a robust adjusted operating margin of 12.3%, which reflects restoration compared to last year's performance.

SKF is currently advancing with its strategic initiatives, including the complete separation of its Automotive business. Already, over 50% of the business volumes have transitioned to new legal entities. This move is expected to enhance operational efficiency and lay the groundwork for a successful stock market listing by mid-2026, as per previous communications.

Future Outlook

For Q4 2025, SKF anticipates that market demand will continue to mirror the levels observed in Q3. The outlook remains uncertain due to the broader economic conditions; however, the company reinforces its belief in sustaining organic sales close to the current levels. With expectations of a negative currency impact of approximately MSEK 650 in operating profits compared to the fourth quarter of 2024, SKF is also preparing for ongoing investments in its operational capabilities.

As part of its strategic focus, SKF has established a highly automated global Super-precision bearing center in Italy, aiming to capitalize on growth opportunities stemming from megatrends like electrification and automation, reinforcing the company’s commitment to innovation and future-ready solutions.

In summary, SKF's Q3 2025 report exemplifies resilience and a proactive approach to navigating complex market challenges, positioning itself for future growth while maintaining a steady operational focus amidst uncertain global economic developments.