AB SKF Business Report FY ended Dec. 2019

Financial Overview

(in million SEK)
  FY ended Dec. 31, 2019 FY ended Dec. 31, 2018 Rate of change (%) Factors
Net Sales 86,013 85,713 0.4 1)
Operating Profit 9,395 11,049 (15.0) 2)
Automotive business area
-Net Sales 24,416 25,009 (2.4) -
-Operating Profit 731 1,584 (53.9) -

1) Net Sales
-The Company’s net sales in the fiscal year ended December 31, 2019 totaled SEK 86,013 million, an increase of 0.4% over the previous year. The change of the Swedish krona towards other currencies had a positive impact in 2019 of 4.7%. Structural changes accounted for –2.3%. Net sales in local currencies decreased with –2.0%, driven by lower sales volumes in North America and Europe whereas sales volumes in Latin America, Asia-Pacific and Middle East & Africa was positive.

2) Operating Profit
-The Company’s operating profit was SEK 9,395 million in the fiscal year ended December 31, 2019, a decrease of 15.0% over the previous year. Operating profit was negatively impacted by sales and manufacturing volumes, general inflation, material cost increases and divested companies.


-The Company announced that it has signed an agreement to acquire Presenso Ltd., a company that develops and deploys artificial intelligence (AI)-based predictive maintenance software. Presenso’s AI capability enables production plants to find and act on anomalies that were previously difficult to detect, automatically and without the need to employ data scientists. Presenso’s competence will be used to strengthen SKF’s Rotating Equipment Performance offer. Presenso is based in Haifa, Israel. The acquisition is subject to certain regulatory approvals and is expected to be completed during Q4 2019. (From a press release on October 7, 2019)

R&D Expenditure

(in million SEK)
  FY ended Dec. 31, 2019 FY ended Dec. 31, 2018 FY ended Dec. 31, 2017
Overall 2,691 2,591 2,395
% of Sales 3.1 3.0 3.1


R&D Facilities

-The Company has a total of 15 technical centers.

R&D Activities

-The Company informed that it is investing in new technological developments and adapting or redesigning conventional bearings. By redesigning elements such as the polymer cage, rolling components and using special lubricating grease for example, customised and hybrid bearings are already solving some of the fundamental issues that can affect reliability in electric vehicles. In terms of electrical discharge, ceramic ball bearings are currently the most attractive solution given that ceramics are typically electrically insulating materials. Although currently only around 5% of bearings in EV applications are hybrids featuring ceramic elements, this is beginning to change. Another solution that is being explored is carbonitriding bearing raceways for applications where bearings are exposed to contamination or poor lubricants. Carbonitriding increases the surface hardness and consequently, as with ceramics, increases the in-service lifetime. As the global EV market continues to expand, many more advanced ways of dealing with all the specific conditions required for EVs are also under development. These include special greases that maintain a stable viscosity at higher speeds and temperatures. (From a press release on January 23, 2020)

-The Company informed that it is developing low-friction tapered roller bearings (TRBs) for gearboxes, reducer gears and differentials to reduce power losses by up to 50% in comparison with conventional TRBs. For electric vehicle application, it is developing designs for bearings - and their associated polymer cages and lubricants - that ensure they can withstand the higher speeds, acceleration and temperatures generated by these motors. In powertrains, OEMs are developing oils with lower viscosity and special additives in order to reduce power losses. What is under investigation is the impact of these new lubricants on bearings. One solution could be the carbonitriding treatment on bearing components. Certainly, we are using the technology to increase the service lifetime of bearings exposed to contaminated environment and poor lubricants. (From a press release on September 30, 2019)

-The Company announced that it created a new bearing package with a major European OEM that significantly reduces losses from friction in a balancing shaft application. The new solution allowed the manufacturer to replace its traditional journal bearings with SKF rolling bearings. That change has reduced powertrain friction and cut CO2 emissions by more than 1 percent. In this application, carbonitrided heat treatment was used to increase the subsurface fatigue resistance of the bearings, allowing a longer operating life without any increase in bearing size. Another OEM was looking for ways to improve efficiency of its camshaft architecture without impacting too much the packaging. Working with SKF, the OEM replaced its existing plain bearing solution with a thin section ball bearing. This change helped them to meet the latest European standards for CO2 and emissions.  (From a press release on July 2, 2019)

-The Company informed that it is developing ceramic ball bearing to address high speed of the electric motors used in EV&HEV powertrains. The electric motor, in combination with an inverter, ensures high efficiency, but it causes current leakage which cause problems such as surface pitting, and subsequent catastrophic failure. Switching conventional steel balls for their ceramic equivalent, to make a so-called hybrid bearing, is a recognized way of solving this problem, because the ceramic balls are naturally insulating. In addition to their insulative properties, ceramic balls have other advantages: they are 40% less dense than their steel equivalents, they can have up to 10 times the life expectancy. They require less lubrication. It also ensured higher efficiency, due to their lighter weight and greater hardness. SKF is also developing a way of solving the problem of electrical damage to bearing, but without using ceramic balls. Ceramic balls do not completely solve the problem of current leakage. While they resist the effects of surface damage, the current can still work its way to the gearbox and cause damage there. (From a press release on May 17, 2019)

-The Company announced that it will reveal its latest developments for improving the efficiency of electric powertrains at the upcoming 32nd International Electric Vehicle Symposium (EVS 32). SKF will present new designs for bearings and their associated polymer cages that ensure they can withstand the higher speeds, acceleration and temperatures generated by electric motors, and lubricants that are able to maintain their effectiveness under these conditions. SKF will highlight its insulating solutions that are immune to the current leakage, caused by the high-frequency voltage switching of the inverter, that occurs when electric motors run at high speeds. SKF will also exhibit low-friction tapered roller bearings (TRBs) for use in automotive powertrains that reduce power losses caused by friction by around 50% in comparison with conventional TRBs. (From a press release on May 14, 2019)



-During 2019, the Company registered for 201 first filings of patent applications.

Capital Expenditure

(in million SEK)
  FY ended Dec. 31, 2019 FY ended Dec. 31, 2018 FY ended Dec. 31, 2017
Overall 4,183 2,831 2,408
-Automotive Market 647 527 632

-The Company announced that it is investing approximately SEK 450 million in improving the competitiveness of its deep groove ball bearing (DGBB) offering. This includes shifting some production from Bari, Italy to Asia and Eastern Europe. In-line with this ambition, an investment totaling approximately SEK 370 million is being made in a new DGBB factory in Xinchang, China. The new factory is expected to be fully operational during the first half of 2020. The investment in the Bari factory totals approximately SEK 50 million and will lead to the automation of manual operations and a flexible and more competitive manufacturing process. Associated staff reductions will result in restructuring costs of approximately SEK 140 million. The automated production channel in Bari is expected to be completed during the second half of 2020. Approximately SEK 30 million is being invested in technology and capacity upgrades in existing factories in Asia and Eastern Europe. (From a press release on June 19, 2019)


Investments Outside Sweden

-The Company announced that it has inaugurated its tapered roller bearing factory in Changshan, China. Following an investment of approximately SEK 200 million, the new factory will improve the Group’s competitiveness in the industrial drives and automotive segments in China. The Changshan factory employs approximately 600 staff. Previously operating across three sites in China, development and manufacturing of the SKF, PEER and GBC brands are being consolidated into a more modern and efficient site. (From a press release on April 17, 2019)