AB SKF Business Report FY2011

Business Highlights

Financial Overview

(in million Kronor)
  FY2011 FY2010 Rate of change(%) Factors
Net Sales 66,216 61,029 8.5 -
Operating profit 9,612 8,452 13.8 -
Net Sales 17,771 18,231 (2.5) 1)
Operating profit 1,362 1,855 (26.6) -


-Net sales in FY2011 decreased by 2.5% year-on-year. The decrease in net sales was attributable to organic growth of 6.1%, the impact from divesting production facility -0.9% and currency effects of -7.7%.



-In April 2011, the Company acquired the remaining 50% of the International Component Supply (ICS) for 6 million Sweden Kronor, net of cash acquired. The Company's initial 50% investments in ICS was made in 2001. ICS is located in Brazil and manufactures forged and turned steel rings for bearings and is part of the Automotive Division.


-The Company has entered into an agreement to sell its bearing cage production facility in Gothenburg, Sweden to Nakanishi Metal Works Co., Ltd. (NKC). NKC is a supplier of bearing retainers based in Japan. The factory in Gothenburg supplies bearing cages for SKF's bearing production facilities in Gothenburg; Luton, UK; Hanover, Pennsylvania, U.S.; Nilai, Malaysia; and Schweinfurt, Germany. (From a press release on February 3, 2011)

-The Company announced the agreement of a long-term contract with China National Heavy Duty Truck Group Co., Ltd, (CNHTC). The contract, with an estimated value of around 5.2 billion SEK (approximately 577 million euros), calls for SKF to supply SKF Truck Hub Units, tapered roller bearings, and seals for CNHTC's truck models. The bearings and units will be manufactured in the new SKF factory currently under construction in Jinan, Shandong Province, China, which will be fully operational by the first half of 2012. The seals will be produced in the Company's factory in Wuhu, Anhui Province, China. (From a press release on December 19, 2011)

-The Company announced that is has supplied its technological products and solutions to the Bollore Group for use in their electric cars. The SKF solution is based on bearings with ceramic balls and on SKF sensor technology. It is developed to fit the electric powertrain application and to reach the high standards of efficiency and reliability in the new traction system. These cars will be used in the car sharing program, Autolib, to be launched in Paris, France and the surrounding area. The program calls for 3,000 cars on the road by mid-2012 and is anticipated to reduce carbon dioxide emissions by 22,000 tons a year. (From a press release on November 28, 2011)

-The Company announced that it will corporate with Volvo Group aimed at taking the flywheel kinetic energy recovery system (KERS) to mass production. KERS has high potential to reduce fuel consumption and CO2 emissions. The Company will deliver critical components to the flywheel systems. The project has received a grant of 6.57 million Swedish kronor (approximately 744 thousand euros) from the Swedish Energy Agency. This autumn, Volvo Car Corporation will test the potential of this flywheel technology in passenger vehicles. (From a press release on May 27, 2011)


-SKF Sealing Solutions Korea Co. Ltd has received the GM Supplier of the Year award. The Company has been supplying bonded piston seals to GM Korea and China for the GF6 transmission since 2009. (From a press release on May 10, 2011)


R&D Expenditure

(in million Kronor)
  FY2011 FY2010 FY2009



Patents (No. of first filings) 325



R&D Facilities

-The Company announced that it has inaugurated its Global Technical Centre in Bengaluru, India (GTCI) to develop product innovations across its five technology platforms such as bearings, seals, mechatronics, lubrication systems and services. The Company invested around 75 million SEK (approximately 8.2 million euros) in GTCI. GTCI will have a focus on serving customers in India and South East Asia, as well as global projects for the Company. The new Global Technical Center will incorporate the existing Global Testing Center, opened in 2009 and the Automotive Development Centre, opened in 2004, both of which are located in Bengaluru. (From a press release on December 14, 2011)

Product Development

-The Company developed new low friction engine seal that lowers CO2 emissions and improves fuel economy, via friction levels up to 55% lower than conventional seals. (From a press release on May 18, 2011)

-The Company developed a new low weight hub bearing unit that contributes to a significant weight reduction and thereby reduces fuel consumption and CO2 emissions. By combining steel, which provides the expected rolling bearing performance, with aluminium, as the flanged structural component, the overall weight can be reduced by up to 30% compared to the standard unit. This new bearing type will give increased mileage to a wide range of vehicles, including electric vehicles, while for the light commercial vehicles it will also offer a load capacity increase. (From a press release on May 17, 2011)

Investment Activities

Capital Expenditure

(in million Kronor)
  FY2011 FY2010 FY2009
Overall 1,839 1,651 1,975


Investment Activities Outside Sweden
-The Company announced the opening of their extension to its factory in Cajamar, Brazil which will manufacture the second generation hub bearing unit (HBU2) with integrated ABS. The factory will support the Brazilian automotive market and safety regulations which require that by 2014 all cars manufactured in Brazil must have ABS systems fitted. The Company's HBU2 technology is widely applied in Europe, U.S. and Asia. (From a press release on October 24, 2011)


-The Company is building a new factory in Jinan, Shandong Province, China. The factory will mainly manufacture tapered roller bearings and truck hub units. The investment amounts to around 590 million SEK (67 million euros). The 16,000 square meters factory will be fully operational by the first half of 2012 and will initially employ about 500 people. (From a press release on March 8, 2011)