SKF has reported first half net sales falling 25% organically to SEK16.6bn (US$1.9bn).
“We have delivered another very strong operating result, despite sales falling by 25% during the second quarter,” said SKF president and CEO, Alrik Danielson.
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“This performance allowed us to continue to build a stronger SKF, maintaining high levels of investments in our factories and new customer offerings whilst at the same time capitalising on new ways of working. In June, we also announced our manufacturing operations will be carbon neutral by 2030.”
Net sales fell organically by 25% to SEK16.6bn. Sales in both Europe and North America decreased by around 30% while sales in Asia were 10% lower compared to last year. Sales continued to be impacted by both government-imposed restrictions and lower underlying demand.
“We continued to reduce costs and adjusted the size of the business, with the ambition to be even more flexible and to support customers in an even better way,” added Danielson. “Investments in modernising and automating our factories, as well as increasing our regional manufacturing capacity continued. During the quarter we announced a further SEK400m investment in our Xinchang ball bearing factory in China.
“During the first six months of the year, our efforts to reduce fixed costs regrettably resulted in a reduction of 1,350 permanent employees and 750 temporary/agency employees. This contributed to restructuring costs of SEK 657m. These efforts will continue and, as a result, we expect to see a continued elevated level of restructuring costs during the second half of 2020.
“These are difficult but necessary steps we need to take to protect the business and make sure we have the foundations in place from which to emerge from this crisis as an even stronger SKF.
“Our colleagues around the world are doing a fantastic job keeping our factories and offices as safe as possible. “The new reality” brings a lot of challenges for our customers but it also makes the value of our connected monitoring and lubrication offers even more relevant.
“With our ability to offer remote analysis and AI-based maintenance, we continue to help customers’ machines rotate, without the need for on-site support.”
