SKUFF - AB SKF (publ) (SKFRY) Q2 2024 Earnings Call Transcript
2024-07-18 09:39:03 ET
AB SKF (publ) (SKFRY)
Q2 2024 Earnings Conference Call
July 18, 2024, 02:00 AM ET
Company Participants
Sophie Arnius - Head of Investor Relations
Rickard Gustafson - President & CEO
Niclas Rosenlew - CFO
Conference Call Participants
Daniela Costa - Goldman Sachs
Max Yates - Morgan Stanley
Benjamin Heelan - Bank of America
John Kim - Deutsche Bank
Andrew Wilson - JPMorgan
James Moore - Redburn Atlantic.
Erik Golrang - SEB
Timothy Lee - Barclays.
Andre Kukhnin - UBS
Andreas Koski - Exane BNP Paribas
Klas Bergelind - Citi
Presentation
Sophie Arnius
A warm welcome to SKF's Q2 2024 Earnings Call. I'm Sophie Arnius, and I'm heading up Investor Relations. Our CEO, Rickard Gustafson; and CFO, Niclas Rosenlew will take us through the highlights of the quarter where the performance marked another step towards a more resilient and competitive SKF. [Operator Instructions] So without further ado, it's great to hand over to you, Rickard.
Rickard Gustafson
Thank you, Sophie, and a warm welcome to all of you joining on this earnings call. As Sophie mentioned, the story continues. We are creating a more competitive company, capable of delivering consistent margins regardless of demand fluctuations. And to support this statement, I'd like to draw your attention to the right-hand side of this chart.
The solid line represents our adjusted operating margin on a rolling 12-month basis. And as you can see, it actually holds up pretty well despite a rather volatile organic growth quarter-by-quarter. And the reason for this is found on the left hand of this chart, our continued diligent execution of our strategy. We have talked about it before.
We have a decentralized organizational model, getting us close to our customers and providing more agility in our operations. We are driving effective cost measures across our businesses, and we constantly drive an active portfolio management also across all parts of our business. And at the same time, we are investing into our future.
We are driving regionalization and building strong and competitive value chains in all of the geographies where we operate, and we continue to drive innovation. And I will come back to innovation later in this presentation. But all in all, we believe that we're creating a company that is very well positioned to take advantage of profitable growth while once demand turns back into the growth again.
But with that said then, let's take a look at the quarter in isolation. We report some SEK 25.6 billion in net sales. That equates to a rather stable operating margin, adjusted operating margin of 13%. This is a strong performance given that we have had a rather negative organic growth of almost 7% in the quarter to be compared with a positive growth of 8% the same quarter a year ago.
And the reason for this are the same reasons as described on the previous page. Clearly, we have been able to drive price mix effectively in the quarter. We continue to drive our portfolio management activities and dare to walk away from unprofitable business. So some of this decline in organic growth is actually self-inflicted, but for the right reasons.
And we have also been able to drive effective cost management. Later in this presentation, you will hear Niclas share some more insights to this. But we have been able to offset a rather significant wage inflation in the quarter through other cost measures. So all in all, I think it's a decent and strong performance in the quarter....
AB SKF (publ) (SKFRY) Q2 2024 Earnings Call Transcript