Swedish manufacturer AB SKF posted a 16.3% adjusted operating margin in its continuing industrial operations in the third quarter, as sales growth in selected markets preceded the planned separation of its Automotive business.
Net sales from continuing operations totaled SEK 17,467 million in the quarter ended Sept. 30, up from SEK 16,562 million a year earlier. Organic sales rose 4.3%. Adjusted operating profit increased to SEK 2,845 million from SEK 2,553 million, lifting the adjusted margin from 15.4%.
The year-earlier income and cash-flow figures used for comparison exclude Automotive, which SKF now reports as discontinued operations.
Specialized Industrial Solutions posted 8.3% organic sales growth, and its adjusted operating margin increased to 14.0% from 11.6% a year earlier. Bearing Solutions recorded 2.8% organic growth and an 18.8% adjusted margin, compared with 18.7%.
SKF cited demand in aerospace, defense, infrastructure and equipment tied to data centers. SKF reported 11.9% organic growth in India and Southeast Asia, followed by 9.9% in the Americas. Growth was 0.5% in each of its other two reported regions.
Price increases largely covered tariff costs, SKF said, while higher materials, logistics and wage expenses added pressure. Its cost reduction program delivered about SEK 350 million in savings during the quarter. SKF now expects annual savings of about SEK 2 billion by mid-2027, six months sooner than previously planned.
Net cash flow from operating activities rose to SEK 2,076 million from SEK 1,780 million. An inventory buildup, chiefly of materials and components for Specialized Industrial Solutions, partly offset the cash benefit of higher operating profit.
Automotive recorded a 4.0% organic sales decline and a 4.6% adjusted operating margin. Shareholders approved distributing the business as SKF Vertevo AB on Oct. 1. Under the approved terms, holders are due one SKF Vertevo share of the same class for every five SKF shares they hold.
SKF expects some year-over-year improvement in fourth-quarter organic sales from continuing operations. SKF President and CEO Rickard Gustafson said volatile markets make the outlook uncertain.
SKF Vertevo has a capital markets day scheduled for Nov. 17, ahead of an expected Dec. 1 start to trading on Nasdaq Stockholm.
