Swedish ball-bearing maker SKF has announced that it will be exploring strategic options to either fully or partially exit non-core parts of its aerospace business. The company intends to refocus on core areas related to aeroengine and aerostructure bearings, with plans to strengthen these areas through investments in digitalization, automation, and modernization. By doing so, SKF aims to unlock the full potential of its core business.
Refocusing on Core Business
SKF's Chief Executive, Rickard Gustafson, emphasized the importance of focusing on the core business and seeking strategic options for areas outside of it. According to Gustafson, this approach will allow the company to fully realize the potential of its business.
Exploring Options for Aerospace Businesses
SKF is currently considering options to exit certain business lines related to its aerospace operations. Specifically, the company is looking at its Hanover and Elgin facilities, which generate approximately 1 billion Swedish kronor ($89.6 million) in annual sales. This move is part of SKF's strategic realignment and its commitment to prioritize its core competencies.
Due to weakening economic sentiment and reduced customer inventories, SKF has witnessed a slowdown in demand throughout the quarter. As a result, the company has revised its sales guidance for the full-year. It now expects mid to low single-digit organic sales growth in 2023 compared to 2022, instead of the previously anticipated high single-digit growth. Additionally, SKF forecasts a low single-digit organic sales decline for the fourth quarter of 2023.
In the third quarter, SKF reported a net profit of SEK1.66 billion, up from SEK1.1 billion the previous year. Sales also increased by 3.2% to SEK25.77 billion. However, analysts had expected a higher net profit of SEK1.71 billion on sales of SEK26.55 billion.