SKF's long-term targets

The long-term targets are to be achieved over a business cycle. 

  • Adjusted operating margin 14% 
  • Revenue growth1) 5% 
  • Net debt/Equity2) <40% 
  • Adjusted ROCE 16% 
  • Dividend payout ratio 50% 
  • Decarbonized Operations3)

1) Sales excluding effects of currency and divested businesses.
2)Excluding pension liabilities
3) 95% reduction in scope 1 and 2 emissions by 2030 vs. 2019.

 

Below is the outcome for 2024.

TARGET 14%

Adjusted operating margin 12.3%

Key levers to reach the target

• Optimizing the value chain including increased cost-competitiveness and regionalization of our manufacturing footprint
• Enhanced commercial excellence including portfolio and price management
• Shifting exposure to attractive markets as well as products and solutions underpinned by innovation leadership

2024 outcome

The adjusted operating margin was 12.3%. Positive impact from price and customer mix as well as from cost development. Negative impact from sales and manufacturing volumes and currency effects.

 

 

TARGET 5%

Revenue growth* -5.4%

Key levers to reach the target

• Shifting exposure to attractive markets, leveraging mega trends
• Enhanced commercial excellence including portfolio and price management
• Selected acquisitions

2024 outcome

Organic sales declined by –5.4% compared to 2023, driven by challenging market conditions. Sales grew in India and Southeast Asia and declined in all other geographies. Industrial sales declined by –5.7% and Automotive sales declined by –4.9%.

*Sales excluding effects of currency and divested businesses

TARGET <40%

Net debt*/equity 14.1%

2024 outcome

Net debt/equity increased from 13.9% to 14.1% in 2024. Financial assets decreased by SEK 2.4 billion driven by repayment of loans and financial liabilities decreased by SEK 2.1 billion.

 

*Excluding pension liabilities

TARGET 16%

Adjusted ROCE 14.2%

Key levers to reach the target

• Improved profitability
• More efficient working capital management through digitalized value chain and regionalization 

2024 outcome

Return on capital employed decreased to 14.2% in 2024. Capital employed decreased due to lower adjusted operating profit as well as higher tangible assets.

 

TARGET 50%

Dividend pay-out ratio 51.2%

Dividend policy

The ordinary dividend should amount to around one half of SKF’s average net profit

2024 outcome*

The pay-out ratio in 2024 was 51.2% and the five-year average was 55%.

 

*According to the Board’s proposal for the year 2024.

TARGET zero

Decarbonized Operations by 2030* -59%

How to reach the target

• Process improvements
• Energy efficient machinery
• Usage of renewable energy
• Phase out of fossil fuel use

2024 outcome

59% reduction vs 2019 base year – well ahead of the 2030 goal trajectory.

 

*95% reduction in scope 1 and 2 emissions by 2030 vs. 2019.

For more information, see skf.com/Sustainability