SKF Business Report FY2007
Business Highlights
Financial overview
in million Kronor | FY2007 | FY2006 | Rate of change | Factors |
Overall | ||||
Net Sales | 58,559 | 53,101 | 10.3% | - |
Operating profit | 7,539 | 6,707 | 12.4% |
- |
Automotive | ||||
Net Sales | 19,617 | 17,869 | 9.8% |
- The increase in net sales was
attributable to organic growth 8.3%, structure 3.8%, currency
effects -2.3%. |
Operating profit | 1,154 | 946 | 22.0% |
Contracts
New business during FY2007:
Car segment
- Wheel bearing solutions in China for two major car manufacturers.
The first was with the Chinese company Shanghai Automotive Industry
Cooperation for a new platform, the second was additional business
for two new Chery models.
- Wheel bearing solutions in Europe and North America, with Renault,
for the new Renault Master platform, Fiat for a new Alfa Romeo platform
and Ford for the new Ford Focus generation in North America.
- Wheel hub units for a four-wheeler light vehicle with Piaggio
in India
Truck segment
- The Company and Haldex jointly developed an integrated truck hub
unit for the truck industry, with a dual disc brake and fixed calliper.
The solution is designed for one million maintenance-free kilometres
and has a number of advantages like lower temperatures, lower brake
forces, longer maintenance intervals and less mounting space. The
first customer is GIGANT, the German trailer axle company.
- The recently launched SKF Wheel End Monitor for a trailer axle
manufacturer, Hendrickson in the US, which helps cut back on unplanned
stops and reduce preventive maintenance and unnecessary trailer
bearing replacements.
- New business was gained with leading truck manufacturers, such
as Tata Motors and Mahindra.
Acquisition
- In June 2007, the Company has acquired the remaining 40% shareholding
in SKF (Shanghai) Bearing Company Ltd., to become a fully owned
SKF production subsidiary in China. SKF (Shanghai) Bearings Company
Ltd., was originally set up in 2002 as a joint venture with the
Shanghai Electric Group Corporation to produce high quality small
deep groove ball bearings primarily for the Chinese domestic market.
The factory is fully operational and currently employs more than
200 people.
Restructuring
Car segment
In order to remain competitive in the North American market the
Company announced the closure of the manufacturing facility at Glasgow,
USA, and the transfer of production to a factory at Puebla, Mexico,
in December 2007.
Truck segment
The transfer of production of small tapered roller bearings from
Germany to existing factories in Brazil and India continued in 2007.
The Company is also continuing to make progress in increasing component
sourcing from Asia and Eastern Europe.
Divestitures
- In March 2007, the Company has signed an agreement to sell its
forging business at the Luchow plant in Germany to Hay Speed Umformtechnik
GmbH. The sales price is EUR 33 millions and the Company will make
a profit on the sale of some EUR 4 million. SKF's forging business
in Luchow has 222 employees and the sales for 2006 amounted to EUR
74 million. The sales of the forging business is fully in line with
the Group's manufacturing strategy to divest none-core component
manufacturing. This business was part of the Automotive Division.
R&D
R&D Expenditure
(mil. Swedish kronor) | 2007 | 2006 | 2005 | 2004 | 2003 |
R&D Expenditure | 900 | 875 | 837 | 784 | 750 |
Patents (No. of first filings) | 186 | 176 | 176 | 189 | 151 |
Product Development
Car segment
Energy-Efficient Bearings:
SKF launched a new range of energy-efficient bearings. These provide
at least 30% less friction in the bearing without compromising the
service life. They reduce the cost of ownership through energy savings
and benefit to the environment. An energy-efficient electric motor,
due to be launched by a customer in 2008 shows a saving of 50% in
reduced frictional loss in the bearing.
Hybrid Pinion Unit:
The Hybrid Pinion Unit consists of a tapered roller bearing and
angular contact ball bearing, which improves system stiffness, reduces
power loss and enhances bearing service life due to optimized raceway
profiles and more reliable lubrication conditions. This new solution
provides 30% friction reduction compared to existing solutions.
The first customer for its hybrid pinion unit is a major transmission
supplier.
Truck segment
Universal Joint:
The Company has developed a universal joint for heavy duty trucks,
which requires no maintenance during a driving distance of up to
one million kilometers. By taking measures to heighten air tightness
in the rotating and sliding portions of the joint, deterioration
in lubrication performance has been thoroughly contained. An interval
between checkups has been extended ten times longer than the level
in the case of conventional universal joints using existing type
bearings.
Technological Alliance
- Started ajoint project with Knorr-Bremse to develop condition
monitoring of brake control systems.
Investment Activities
India
- The Company, through its subsidiary SKF India Ltd., has decided to build a new manufacturing site in Haridwar, Uttarakhand, for the manufacturing of ball bearings. The investment amounts to approximately SEK 250 million. The new factory will have a covered area of some 11,000 sq. meters and will increase the Company's manufacturing capacity of ball bearings in India with more than one third. The factory is expected to be operational in March 2008 and will employ some 300 persons.
Austria
- The Company expanded the seal manufacturing facility in Judenburg, Austria.