SKF AB Sponsored ADR Class B

Net sales were flat year over year, with 1.4% organic growth offset by currency and structure. Adjusted gross margin improved to 32.7% from 31.6%, and adjusted operating margin rose to 13.9% from 13.3%. EPS was SEK 2.8 and adjusted EPS was SEK 5. Cash flow was SEK 2.1 billion, EBITDA was SEK 3.5 billion, CapEx was SEK 700 million in Q2 and SEK 1.5 billion year to date, and one-off costs (IAC) were SEK 1 billion. For Q3, management expects organic sales to strengthen somewhat year over year, currency impact on operating profit to be about SEK +100 at end-June exchange rates, full-year tax rate to be about 29%, CapEx to be SEK 4 billion, and full-year IAC to remain at SEK -2.5 billion to SEK 3 billion.

Rickard Gustafson framed the quarter as solid, emphasizing that the company remained in positive organic growth territory, with improved profitability and cash generation despite mixed demand. He highlighted the main strategic themes: continued rightsizing benefits, a faster-than-planned Automotive separation, and a new humanoids venture focused on industrial applications. His tone was confident and forward-looking, stressing execution, leaner operations, and selective investment in growth areas like AI/data centers, aerospace, defense, and aftermarket.

Susanne Larsson walked through the financial bridge, saying adjusted gross margin improved 1.1 points to 32.7% and adjusted operating margin reached 13.9%, supported by price mix, rightsizing savings, and some tariff-reclaim effects. She quantified one-off costs at SEK 1 billion, including roughly half from Automotive separation and half from Americas footprint consolidation, with SEK 345 million of that tied to asset impairments. She also cited EBITDA of SEK 3.5 billion, operating cash flow before working capital of SEK 3.2 billion, net debt of SEK 7.3 billion, liquidity of SEK 12.5 billion, and explained that CapEx guidance was reduced to SEK 4 billion while full-year tax guidance moved to 29%.

Analysts pressed on the tariff reclaims, overproduction/support production, right-sizing savings, humanoids, CapEx, and pricing. Management said it would not quantify the tariff-reclaim impact, but confirmed most refunds were received in Q2 and that the customer payback would weigh on cash flow in Q3; the margin benefit was described as slight positive in Q2. On support production, Susanne said it will continue at a similar level in the second half due to channel transfers and Automotive stock buildup ahead of the spin, while rightsizing savings are expected to remain linear with negative synergies also staying broadly stable. On humanoids, Rickard said the Leaderdrive JV is not exclusive, SKF may form other partnerships, and the company will stay focused on bearings and other adjacent areas only as the market evolves.