AB SKF Business Report FY ended Dec. 2017

Financial Overview

(in million SEK)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 Rate of change (%) Factors
Net Sales 77,938 72,589 7.4 1)
Operating Profit 8,592 7,527 14.1 2)
Automotive Segment
-Net Sales 23,966 22,001 8.9 3)
-Operating Profit 1,321 1,419 (6.9) -


1) Net Sales
-The Company’s net sales in the fiscal year ended December 31, 2017 totaled SEK 77,938 million, an increase of 7.4% from the previous year. The change of the Swedish krona towards other currencies had a positive impact in 2017 of 0.8%. Structural changes accounted for -1.6%. Net sales in local currencies increased by 8.2% driven by higher sales volumes in all geographical areas.

2) Operating Profit
-The Company’s operating profit was SEK 8,592 million in the fiscal year ended December 31, 2017, an increase of 14.1% over the previous year. The operating profit was positively impacted by higher organic sales and manufacturing volumes as well as savings from cost reduction programmes.

3) Automotive Segment Sales
-Sales in the automotive business area increased by 8.9% in the fiscal year ended December 31, 2017 to SEK 23,966 million.

The BeyondZero portfolio

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

-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


-The Company announces that its third generation hub bearing units (HBU3) are selected for Fiat Chrysler Automobile (FCA) Group’s recently launched Alfa Romeo Stelvio SUV. The HBU3 features a double row angular contact ball bearing with matched rings and ball-sets to provide the required preload. SKF is supplying three different HBU3 for the Stelvio: one for the non-driven wheels and two for the driven wheels in both two-and four-wheel drive versions, with the hub bearing units being designed to meet the torque capacities up to 510hp. FCA is a strategic partner for SKF, and SKF supplies the business with a range of products including valve stem seals and rear cranckshaft seals for the 2.2L diesel engine. (From a press release on June 15, 2017)

-The Company announced that the sophisticated Jeep Compass, the new compact sport utility vehicle from FCA, is equipped with SKF’s third-generation, premium quality, front- and rear-wheel hub-bearing units (HBU3). HBU3 is a lightweight wheel bearing system combining high levels of performance with reduced friction. SKF is manufacturing the HBU3 for the Jeep Compass at its facilities in Busan, Korea, and Cajamar, Brazil. SKF will also supply engine and gearbox seals for the Jeep Compass.(From a press release on October 23, 2017)

Damage claims settlement

-The Company announced that SKF and BMW have settled their dispute pending before the High Court of Justice in London, United Kingdom, regarding damage claims resulting from SKF’s settlement with the European Commission for violation of European competition rules. BMW initiated this lawsuit against several bearing manufacturers, among them AB SKF, in November 2016. This settlement is not an admission of liability for damages, but is made in order to enable SKF and BMW to continue their long-standing commercial relationship. (From a press release on August 3, 2017)

Business alliance

- Changzhou Guangyang Bearing Co., Ltd. signed a strategic alliance framework agreement with SKF on July 20, 2017. Within this framework, the Sweden-based global manufacturer will use its existing third party supply chain to expand the supply of needle roller bearings, and Guangyang Bearing will provide needle roller bearings to the customers of SKF. The two companies will explore the new opportunity in the electric vehicle (EV) and new energy car market in the U.S., Europe and Asia. (From a corporate announcement on July 25, 2017)

Operations in India

-SKF India Limited net Sales for the year ended March 31, 2017 amounted to INR 28 billion as compared to INR 31.8 billion in the previous year. The Profit after tax for the period amounted to INR 2,438.9 million compared to INR 2,558.9 million during the previous year. The Company had changed its accounting year from calendar year to fiscal year in 2015-16. The current accounting period of the Company covered 12 months starting from 1 April 2016 to 31 March 2017 as compared to 15 month period of Jan 2015 to March 2016 and therefore previous year figures are not directly comparable. (From a press release on May 26, 2017)

R&D Expenditure

(in million SEK)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 FY ended Dec. 31, 2015
Overall 2,395 2,246 2,372
% of Sales 3.1 3.1 3.1

R&D Facilities

-The Company has a total 18 technical centers, with global technical centers in China and India. Its other technical centers are located in Japan, U.S., the Netherlands, Sweden, Germany, Italy, France and Austria.

Product Development

Rotary positioning bearings
-The Company announced that it has augmented its rotor positioning bearings range with a new and compact design that is suitable for all belt-driven starter/generator applications in both 12V and upcoming 48V formats. As the hybrid electric vehicle market is set to grow rapidly, newcomers are beginning to address the corresponding growth in demand for BSGs. SKF is currently gearing up to supply this market with a new universal RPB design that is both axially compact and robustly constructed, and which is also easily integrated into current and future BSG designs. (From a press release on December 11, 2017)

Belt driven starter generator (BSG) system
-The Company announced that it has developed belt driven starter generator (BSG) system, which formed part of a 48V powertrain system. For the latest version of the BSG, SKF developed a new design of rotor positioning bearing – which can be used either with synchronous or induction traction motors, used in electric and hybrid vehicles. The company also developed the compactness of a 48V belt alternator starter (BAS) – at increased speed, load and temperature. (From a press release on April 6, 2017)

High performance RSH seal
-The Company announced that it is making high performance RSH seal design available on a larger range of SKF Explorer deep groove ball bearings. RSH seal uses a highly optimised dual-lip configuration to provide additional protection in demanding environments. For users, the result is bearings that last longer, especially in wet, contaminated or dusty operating conditions, and that need to be replaced less frequently. (From a press release on March 13, 2017)


-In 2017, the Company registered for 192 first filings of patent applications.

Capital Expenditure

(in million SEK)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 FY ended Dec. 31, 2015
Overall 2,408 2,209 2,310
-Automotive Market 594 520 394

Investments Outside Sweden

-SKF India announced that it will be doubling its capital layout compared to previous three years average over the next three years. SKF also updates that there will be new product lines which will call for new CAPEX but also an expansion in capacity in the latter half of the three-year period. SKF is planning a CAPEX of INR one billion for these projects. SKF is working on a very unique product which is a tapered hub unit. SKF is also developing third-generation bearing for passenger vehicles and pinion bearing for the commercial vehicle segment. (Based on SKF India investor conference call Q4, FY 2016-17)

-The Company announced that it is investing SEK 45 million in expanding its spherical roller bearing (SRB) capacity in Nilai, Malaysia. This investment will further improve utilisation of the Group’s manufacturing capacity. The new SRB channel in Nilai is expected to be operational during the end of 2017. (From a press release on March 30, 2017)

-The Company announced that it invests SEK 70 million in developing roller manufacturing capabilities in Dalian, China. The investment in Dalian has already commenced and manufacturing of rollers will be ramped up during 2017. (From a press release on January 16, 2017)

-The Company announced that it is investing an additional SEK 145 million in improving the competitiveness of its large-size bearing production facility in Schweinfurt, Germany. As part of the investment, a new automatized hard machining channel will be installed that, combined with the latest connectivity solutions, will allow for shorter resetting times and greater flexibility in production batch sizes. The investment presently announced will be completed in 2018 and is expected to cut lead times by 50%. In the last three months, SKF has announced investments totaling SEK 295 million for the upgrading of production channels in Schweinfurt. (From a press release on January 16, 2017)