SKF Clocks 8% Sales Growth In Q3, Warns On Cost Inflation, Constrained Logistics

SKF AB SKFRY reported third-quarter FY21 net sales growth of 8.3% year-over-year to SEK 20.15 billion with an organic increase of 8%.
Adjusted EPS was SEK 4.04 versus SEK 3.80 in 3Q20.
The industrial segment reported revenues of SEK 14.75 billion (+13.6% Y/Y) and an adjusted profit margin of 16.7%, up by 90 bps.
The automotive segment reported sales of SEK 5.4 billion (-3.9% Y/Y) and an adjusted operating margin of 3.9%, down by 380 bps.
The gross margin expanded by 160 bps to 27.6% for Q3. Q3 adjusted operating profit was SEK 2.67 billion compared to SEK 2.46 billion a year ago. The adjusted operating profit was positively impacted by sales and manufacturing volumes, sales prices, and customer mix.
The quarter's cash flow generation was SEK 1.47 billion, compared to SEK 2.23 billion, mainly driven by increased inventories due to logistics bottlenecks, customer shutdowns, and higher investments.
The company had cash and cash equivalents of SEK 13.04 billion as of 30 September 2021 and net debt of SEK 18.54 billion. The net debt/EBITDA ratio was 1.7.
Outlook: SKF expects organic sales for the fourth quarter to be relatively unchanged compared to the fourth quarter of 2020.
It anticipates continued challenging conditions from cost inflation and constrained logistics in Q4.
Price Action: SKFRY shares closed lower by 0.98% at $25.35 on Monday.

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