A “Solid” 2019 for Swedish Bearings

For SKF Italia, the national group leader of the Swedish multinational, 2019 economic performance was better than expected. The results for 2019 can be summed up as “solid”. This was the view from the press conference held in February at Unione Industriale, Turin, where SKF group and SKF Italia financial results were presented.

by Silvia Crespi

At the Unione Industriale, Turin, in February this year, the financial results for SKF group and SKF Italia 2019 were presented. Ezio Miglietta, CEO of the Italian arm began by presenting the data, describing 2019 as a “solid” year with the first semester being in line with 2018, but the second showing a clear slowing of growth with an especially marked drop in sales in the fourth quarter. Net sales dropped by 2.9% in organic terms.
The industrial and automotive sectors fared differently, the former much better than the latter. Industrial margins stood at 13.3%, above that of the previous year (12.9%), despite the drop in organic sales of 1.2%.
In geographical terms, sales were up in Asia, unchanged in Europe and Latin America, and substantially lower in North America.
Automotive margins were 2.4% (3.8% the previous year) due to an organic sales dip of 7.5%; sales were well down in Europe and North America, but up in Latin America. The trend of reduced demand is expected to continue for the first quarter 2020 for both sectors, especially automotive.
Positive signals are coming through investment in plant modernization, as had been planned over recent years.

A better 2019 than expected for the Italian company
Let’s take a look at the SKF Italia results: in 2019 revenues topped €1bn, above forecasts. “At the end of 2018 – Miglietta confirmed – forecasts for 2019 erred on the side of conservatism. There was indeed an inversion of trends across the market, but less felt than some had feared”.

Compared to 2018, overall billing was down 3%.
Analyzing the two sectors, performance is opposite to that of the group as a whole. Automotive & Aerospace replicated the previous year’s performance; the slow-down in the Automotive sector was compensated by a significant increase in Aerospace. Industrial suffered a great deal and shrank by 2%. “The drop in sales – said Miglietta – impacted the operating profit which fell from 9.2% in 2018 to 8.6% in 2019”. The CEO was, however, optimistic for the future where he sees promising prospects in the Automotive sector too. “Innovation is fundamental in this field – he said – SKF is working on new projects both in traditional and hybrid models”.

The movers and shakers in 2019
Encouragement comes from investment levels, well up on 2018 levels, above all in terms of digitalization and Industry 4.0. Ezio Miglietta summarized the main features of the SKF Italy year for 2019. Investment, not only in digital, concerned a number of projects across a number of plants: the Digital2win in Cassino (Frosinone), the jewel in the crown of digital transformation; the renewing of the logistics hub in Airasca where 8 new automatic lifting machines have been installed as well as the creation of a highly automized packing and shipping area; the new Life Test Centre, for SKF bearing testing, again in Airasca, and the Remote Diagnostic Center in the SKF Solution Factory in Moncalieri (Torino), a plant where remote monitoring of rotating machinery performance takes place. Finally, who could forget the celebration for the 100th anniversary of the self aligning roller bearing organized at the Sheraton Hotel San Siro, in Milan.