AB SKF Business Report FY ended Dec. 2015

Business Highlights

Financial Overview

(in million SEK)
  FY ended Dec. 31, 2015 FY ended Dec. 31, 2014 Rate of change (%) Factors
Net Sales 75,997 70,975 7.1 1)
Operating profit 6,968 7,801 (10.7) -
-Automotive Segment
-Net Sales 19,908 18,330 8.6 2)
-Operating profit 575 571 0.7 -

1) Net Sales
-In 2015, the Company's net sales increased by 7.1% from the previous year to SEK 75,997 million. Net sales in local currencies decreased by 2.6% driven by lower sales volumes primarily in North American and Asia.

2) Automotive Segment Sales
-Net sales in the fiscal year ended December 31, 2015 increased by 8.6% from 2014 to SEK 19,908 million. Net sales in local currencies increased by 0.3%. Sales of hub bearing units grew successfully, increasing market shares.

Group's financial target for 2016

  • Sales: Annual organic sales growth in local currency: +5.0%
  • Operating margin: 12% (in 2015: 9.2%)

The BeyondZero portfolio

-The Company focuses on products and solutions that help customers save energy, reduce carbon emissions.

-The Company plans to increase the revenue from the BeyondZero portfolio from SEK 2.500 million in 2011 to SEK 10,000 million in 2016.

-The total revenue of the portfolio in 2015 increased by 8.0% from 2014 to SEK 5,930 million.

-The BeyondZero portfolio includes the following automotive products;

  • Sealed Energy Efficient (E2) deep groove ball bearings
  • Tyre pressure monitoring systems for trucks, trailers and buses
  • Motor encoder sensor-bearing units
  • Rotor positioning bearing
  • Rotor positioning sensor-bearing units
  • Low friction engine seal
  • Low weight hub bearing units
  • eDrive ball bearings
  • Low friction hub bearing units
  • High pressure valve stem seal
  • Low friction driveline solutions
  • Low friction X-Trackers
  • Hub bearing unit seal
  • Turbocharger ball bearing units
  • Energy Efficient (E2) tapered roller bearings for trucks
  • Bus door actuators
  • Solutions to fully electric vehicles
  • Low friction grease

Business Alliances

-In August, 2015, Changzhou Guangyang Bearing Co., Ltd. and U.S.-based SKF's subsidiary General Bearing Corporation (GBC) have signed a framework agreement to collaborate on the designing and development of needle roller bearings. In accordance with this agreement, Changzhou Guangyang Bearing will offer GBC with its products for sale in the North American Free Trade Agreement (NAFTA) region. GBC will aid Changzhou Guangyang Bearing in designing and developing new products, which are expected to help GBC boost its sales in the NAFTA market. Products jointly developed by the two companies will be sold under the brand name of HYATT-CTC. GBC develops, produces, and sells tapered roller bearings, ball bearings, and other bearing products. (From an announcement on August 17, 2015)


-Major contracts won in 2015

Customers Models Products Start of supply
Geely Next generation models
Wheel hub bearing units, MacPherson suspension bearing units (MSBU) First half of 2017
MAN, Scania
Trucks Wheel-end units Sep. 2015
Volkswagen "Golf VII" made in Mexico
*Volkswagen's MQB Platform
Wheel hub bearing units, MacPherson suspension bearing units (MSBU) Q1 of 2015
Honda "Jazz" made in Indonesia Wheel hub bearing units Second half of 2015
SAIC-GM, SAIC-GM Wuling, Haima Motors
via Shanghai Automobile Gear Works Co., Ltd. (SAGW)

New gear boxes
Transmission bearings and seals -
Super cars: "Regera", "Agera RS", "ONE:1" Front and rear wheel hub bearing units -
PSA Citroen "C4 Cactus", Peugeot "2008" Front and rear wheel hub bearing units, MacPherson suspension bearing units (MSBU), Clutch bearing units, Engine seals, Gearbox bearings -
Next generation models Wheel hub bearing units -
Fiat "500X" Front and rear wheel hub bearing units, Seals for the shock absorber, engine and transmission


-Major awards won from OEMs in 2015

Presenter Awarded factory Name of award
PSA Saint-Cyr, France / Tudela, Spain Best Plant Award
Shanghai Automobile Gear Works Co., Ltd. (SAGW)
*In Strategic Partnership Agreement since 2014
China Best Supplier Award
Nanjing High Speed Gear Manufacturing Co., Ltd. China 2014 Best Supplier Award

R&D Expenditure

(in million SEK)
  FY ended Dec. 31, 2015 FY ended Dec. 31, 2014 FY ended Dec. 31, 2013
Overall 2,372 2,078 1,840
% of Sales 3.1 2.9 2.9

R&D Facilities

-The Company has 18 technical centers globally: in Shanghai, China, in Bengaluru, India, in Chicago, U.S., in Gothenburg, Sweden, in Nieuwegein, the Netherlands etc.


-In 2015, the Company registered for 461 first filings of patent applications (488 in 2014).

Participation in development project

-The Company's Automotive Development Centre in Goteborg, Sweden participates in Project EVE (Innovative Engineering of Ground VEhicles with Integrated Active Chassis Systems). EVE is an EU-funded project that will develop high-tech ground vehicle systems. The project partners will develop new vehicle components that target improvements in safety, energy efficiency and driving comfort. The development will also include new hardware subsystems for brakes, active suspension and tire pressure control for on-road and off-road mobility. A unique network-distributed vehicle testing program for integrated chassis systems will be set-up between all partners. The consortium consists of 11 institutions and companies. Project EVE is part of the European Commission's Horizon 2020 research and innovation program. (From a press release on March 31, 2015)

Direction of Development

-Low friction; Light weight; Smaller size; Use of new materials like polymer hub bearing; Integration of sensors

Product Development

Third generation hub bearing unit (HBU3)
-The Company has launched the latest version of its third generation hub bearing unit (HBU3), which features reduced preload range. This reduces friction by up to 10%, helping to minimize CO2 emissions and making the new unit ideal for use in cars and vans. The Company has achieved the reduction in preload range by revising the design of internal components and enhancing still further the manufacturing and assembly process. (From a press release on April 27, 2015)

Low noise steering column bearing
-The Company announced that it has developed a new customized bearing for steering columns, which exhibits significantly reduced noise levels. The pre-loaded wire steering column bearing (P-WSCB) is aimed at Tier One manufacturers, and will help them to meet the low-noise specifications of original equipment manufacturers (OEMs). Gaps in the wire raceway give flexibility to the bearing's outer ring, which allows for press fit mounting into the housing. Careful design of the gap helps to reduce bearing noise. Other important design features that reduce noise include: reduced roughness of the inner ring; a change of ball quality grade; and optimization of grease quantity. The new bearings are expected to find use in higher specification cars, as well as electric vehicles. (From a press release on March 10, 2015)

Capital Expenditure

(in million SEK)
  FY ended Dec. 31, 2015 FY ended Dec. 31, 2014 FY ended Dec. 31, 2013
Overall 2,063 1,852 1,746
-Automotive Market 559 635 630

Investments in Sweden

-The Company is investing SEK 190 million (approximately USD 21.9 million) in modernizing its spherical roller bearing production channels in Gothenburg, Sweden. The investment is part of the Group's focus on the development of world class manufacturing processes. The investments are expected to be completed by the end of 2016. (From a press release on April 17, 2015)

Investments Outside Sweden

-The Company has opened a hybrid production channel in its manufacturing facility in Jakarta, Indonesia. This production channel has been designed to be able to produce two different types of product families: single-row deep groove ball bearings and double-row angular contact ball bearings, i.e. hub bearing units. As a result of its flexible production capabilities and local presence, the Company has also secured a contract for the supply of wheel hub bearing units for the Honda "Jazz" model. The agreement is valid until 2017 and deliveries will commence during the second half of 2015. (From a press release on April 22, 2015)

Restructuring (Automotive Market)

  • In the US, a seals factory was closed with main parts of production moved to Mexico.
  • A kit operation in Sweden closed and its production moved to a kit operation in France.
  • A component factory in France was closed with production outsourced.