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AB SKF Reports Strong Q2 Results With 25% Revenue Growth

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AB SKF Reports Strong Q2 Results With 25% Revenue Growth
  • AB SKF ADR (OTCMKTS: SKFRY) reported second-quarter net sales growth of ~25% year-over-year to SEK 20.75 billion with organic growth of 33.2% year-over-year.
  • Adjusted earnings per share were SEK 5.11 for the quarter, compared to SEK 2.72 reported in Q2 2020.
  • The industrial segment reported revenues of SEK 14.89 billion (+13.8% Y/Y) and an adjusted profit margin of 18%, up by 400 bps.
  • The automotive segment reported sales of SEK 5.8 billion (+66.1% Y/Y) and an adjusted operating margin of 7.6%.
  • The gross margin expanded by 800 bps to 30.4% for Q2.
  • Q2 adjusted operating profit increased to SEK 3.12 billion from SEK1.56 billion a year ago, reflecting positive impact by sales and manufacturing volumes, sales prices, customer mix, and cost reductions.
  • Adjusted operating margin for the quarter expanded by 560 bps to 15%.
  • Net cash generated from operations year-to-date was SEK 1.5 billion, compared to SEK 2.41 billion a year ago.
  • The company had cash and cash equivalents of SEK 11.76 billion as of 30 June 2021 and net debt of SEK 19.81 billion. The net debt/EBITDA ratio was 1.5.
  • Guidance 3Q21: The company expects demand to continue to grow, resulting in organic growth of about 10% compared to Q3 2020. Currency impact on the operating profit is likely to be around SEK 150 million compared with Q3 2020, based on exchange rates per 30 June 2021.
  • Guidance FY21: Additions to property, plant, and equipment of ~SEK 3,800 million (prior SEK 3,600 million).
  • Price action: SKFRY shares closed lower by 0.97% at $24.56 on Monday.
 

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