"The SKF Group had a very strong performance in 2011 with record sales, operating profit and operating margin.
The integration of Lincoln is going according to plan and SKF has also made important progress on the initiatives they announced last year to support their long-term financial targets.
A number of new products
SKF launched a number of new products, gained significant business and opened their new bearing factory in China. Spending on Research and Development increased significantly as planned, and their new Global Technical Centre in India was opened.
Q4 - demand softened
In the fourth quarter overall demand softened as expected but with a somewhat better demand in USA and weaker in Asia. As planned SKF ran their production lower than sales to reduce inventories and this had the expected impact on their results.
Looking into the first quarter SKF still sees uncertainty in demand in Europe and in their automotive business. Demand for the Group in total is expected to be lower than in the first quarter last year and similar to the fourth quarter. SKF will continue to drive their initiatives to strengthen SKF and to invest in the faster growing regions and markets. Their new structure for the industrial market is under implementation and will improve their ability to even better support their customers in each industry."
Sales for the Group increased by 2.8%. In Europe they increased by 0.5%, in North America by 5.6%, in Latin America by 11.0%, in Asia by 0.8% and in the Middle East and Africa by 19.9%.
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The manufacturing level was lower than in the fourth quarter last year.
The quarter included one-off costs of around SEK 100 million. Around SEK 40 million are related to impairment of assets and have no impact on cash flow. The remaining costs are related to various restructuring activities.
Outlook for the first quarter of 2012
The demand for SKF's products and services is expected to be slightly lower for the Group. It is expected to be lower in Europe, higher in North America, relatively unchanged in Asia and slightly higher in Latin America.
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The demand is expected to be relatively unchanged for the Industrial Division and the Service Division and significantly lower for the Automotive Division.
Demand compared to the fourth quarter 2011: The demand for SKF's products and services is expected to be relatively unchanged for the Group. It is expected to be slightly lower for Europe, relatively unchanged for Asia and Latin America, and higher for North America. The demand is expected to be relatively unchanged for all divisions.
The manufacturing level is expected to be significantly lower year on year and relatively unchanged compared to the fourth quarter.