Annual Report 2022
Intelligent and
clean growth
Did you know that
20% of all energy is used
to overcome friction?
Our aim is to minimize
that waste.
FINANCIAL STATEMENTS, PARENT COMPANY
Parent Company, AB SKF ........................................................................... 80
Parent Company income statements ....................................................... 80
Parent Company statements of
comprehensive income ............................................................................... 80
Parent Company balance sheets ............................................................... 81
Parent Company statements of cash flow ................................................ 82
Parent Company statements of changes in equity ................................... 82
Notes to the financial statements of the Parent Company ................... 83
Proposed distribution of surplus ............................................................... 89
Auditor’s Report ........................................................................................... 90
SUSTAINABILITY STATEMENTS ............................................................. 92
Sustainability governance .......................................................................... 93
SKF’s material topics ................................................................................... 99
Economic category ........................................................................................ 99
Environmental category ........................................................................... 102
Social category ........................................................................................... 110
GRI content index ....................................................................................... 121
The EU Taxonomy ...................................................................................... 126
Auditor’s Limited Assurance Report on the Sustainability Report
and statement regarding the Statutory Sustainability Report .......... 130
CORPORATE GOVERNANCE REPORT .................................................. 131
Board of Directors ..................................................................................... 136
Auditor’s Report on the Corporate Governance Report ...................... 139
Group Management ................................................................................... 140
GROUP DATA .................................................................................................. 142
Seven-year review ...................................................................................... 142
Three-year review ..................................................................................... 143
Per-share data ........................................................................................... 143
Distribution of shareholding .................................................................... 143
Definitions ................................................................................................... 144
Alternative performance measures ....................................................... 145
General information .................................................................................. 146
REMUNERATION REPORT ........................................................................ 147
Contents
THIS IS SKF
2022 in brief ..................................................................................................... 4
This is the SKF Group ...................................................................................... 6
Industrial and Automotive businesses ........................................................ 8
We are SKF ..................................................................................................... 10
President’s letter .......................................................................................... 11
VALUE CREATION AND STRATEGY .......................................................... 14
Invest and join our journey .......................................................................... 15
Trends and drivers ....................................................................................... 17
Strategic value creation ............................................................................... 18
Sustainability framework ........................................................................... 25
Long-term targets ....................................................................................... 26
Sustainability targets .................................................................................. 28
THE BEARING MARKET ................................................................................ 30
Preferred brand in the global bearing market ........................................ 31
The bearing market, SKF’s regions ........................................................... 32
SKF’s global presence .................................................................................. 33
RISKS AND THE SHARE ............................................................................... 36
Risk management ......................................................................................... 37
The SKF share................................................................................................ 40
Capital structure, financing, credit rating and
dividend policy .............................................................................................. 42
Nomination of Board members and
notice of Annual General Meeting .............................................................. 42
FINANCIAL STATEMENTS ........................................................................... 43
Consolidated income statements .............................................................. 44
Consolidated statements
of comprehensive income ........................................................................... 44
Consolidated balance sheets ....................................................................... 46
Consolidated statements of cash flow ....................................................... 48
Consolidated statements of changes in equity ....................................... 51
Notes to the consolidated financial statements ...................................... 52
SUSTAINABILITY REPORT
Sustainability disclosures in the Annual Report have undergone limited
assurance engagement by SKF’s auditors. See the Auditor’s Limited
Assurance Report on the Sustainability Report and statement regarding
the Statutory Sustainability Report on page 130.
The definition of the Statutory Sustainability Report is presented on page98.
CORPORATE GOVERNANCE REPORT
The Corporate Governance Report examined by the auditors can be found
onpages 131–138. TheAuditor’s Report on the Corporate Governance
Report can be found on page 139.
REMUNERATION REPORT
The Remuneration Report can be found on pages 147–149.
ADMINISTRATION REPORT
The Administration Report has been audited by SKF’s external auditors.
Seethe Auditor’s Report on pages 90–91.
3SKF ANNUAL REPORT 2022
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IS SKF
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PRE SIDEN T’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
2022 in brief
SKF’s long-term targets
• A new strategic framework, including a decen-
tralized operating model and organizational
structure, was presented and implemented.
• Decision to cease all business and operations
inRussia. The Russian business was divested
inthe second quarter.
• Issued a second Green Bond, which raised
EUR400 million to fund eligible green projects in
accordance with our Green Finance Framework.
• Acquisition of Tenute, an Italian seals manufac-
turer that develops and manufactures sealing
solutions for various industrial applications.
• Investments of a total of SEK 1.25 billion to
increase our regional capabilities and competi-
tiveness across China, India and Southeast Asia.
• Awarded top sustainability ratings, including
a Platinum medal from EcoVadis, and an
A– Climate Change rating from the CDP.
Operating
margin
1)
Revenue
growth
3)
Net debt
4)
/equity
ROCE
1)
Dividend
pay- out ratio
Net zero
by 2030
emissions
5)
Target
14% 5% <40% 16% 50% zero
2022
outcome
10.5% 8.1% 19.3% 12.6% 65.7% –46.5%
The long-term targets shall be achieved over a business cycle.
1) Adjusted for items affecting comparability. 2) Net cash flow from operating activities. 3) Including acquisitions, adjusted for
divestments. 4)Excluding pension liabilities. 5) Absolute reduction in scope 1 and2 emissions since 2015 base year.
0
20
40
60
80
212019 22
Net sales
81.7
96.9
86.0
75.0
100
SEK billion
0
3
6
15
9
12
22212019
%
12.3
13.3
11.8
10.5
Operating margin
1)
0
6
4
2
8
212019 22
Cash flow
2)
10
5.2
8.3
9.4
5.6
SEK billion
4SKF ANNUAL REPORT 2022
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LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
Filtration system
boosts oil lifetime
SKF with Scuderia Ferrari,
75 years of win-win!
SKF RecondOil’s technology, which
removes eventhe smallest impurities
from circulating oil, is now available in
acompact form. RecondOil Box is a
smaller version of SKF’s industrial scale
DST systems, which have previously been
applied inlarge applications in metal
working and quenching. The smaller
system is suitable for abroader range of
industries and applications, helping a
wider range of users to reap the benefits
of cleaner oil. Read more about our lubri-
cation customer solutions on page 106.
We have been a technical partner of Scuderia
Ferrari since the F1 championship was founded
in 1947. The high speeds and power density
requirements inF1 have spurred us to push
the boundaries for ever better performance
and reliability. Today, theScuderia Ferrari car
is fitted with 300 customized SKF hybrid bear-
ings and solutions. The light, ceramic bearings
that we developed for Scuderia Ferrari also
benefit road cars and other applications with
apositive impact on safety and sustainability.
SKF and Ovako
reach milestone
We reached a milestone on our jour-
ney towards a net zero value chain.
Together with Swedish steel producer
Ovako, we produced a Spherical
Roller Bearing (SRB) with 90% less
emissions than our standard SRB
bearing. The bearing is manufactured
in our net zero factory in Gothenburg
and uses re cycled steel from Ovako’s
Hofors mill. It is already in use at the
mill, one of hundreds of connected
bearings.
More power from
smaller motors
We developed a new hybrid deep groove ball
bearing for high-speed applications. The new
bearing is aimed at applications such as rail
industry traction motors, as well as electric
machines and drives. Byimproving the effi-
ciency of electric machines and drives, the
new bearing can cut energy consumption.
5SKF ANNUAL REPORT 2022
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IS SKF
BACK TO
START
PRE SIDEN T’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
6SKF ANNUAL REPORT 2022
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IS SKF
BACK TO
START
PRE SIDEN T’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
Clean, renewable and connected
– it’s the business we make
SKF’s business model and strategy are designed
to maximize value creation for our stakeholders.
Wherever there is rotation, there is a good
chance that our products, capabilities and skilled
colleagues are providing value in the form of
improved operational performance and reduced
emissions.
Our strategy is based on two concepts:
intelligent and clean. These will guide us on
ourjourney to become an even more focused,
innovative and profitable industrial player.
77
MANUFACTURING SITES
4
INDUSTRIAL
REGIONS
15
TECHNOLOGY CENTERS
42,641
EMPLOYEES
40
CUSTOMER INDUSTRIES
129
COUNTRIES
29
REMANUFACTURING
CENTRES
>17,000
DISTRIBUTORS
Our broad business reach gives us a platform
todrive profitable growth, as it allows us to
continuously target the most attractive oppor-
tunities. Our strength lies in theability to keep
developing new technologies that are used to
create value- adding solutions offering competi-
tive advantages to customers and, at the same
time, contributing to asustain able global society.
Asset
Supply
chain 4.0
Remanu -
facturing
Application
(re)engineering
Data analytics &
Machine learning
Remote
monitoring
Lubrication
management
R
e
d
u
c
e
R
e
u
s
e
R
e
c
y
c
l
e
Redesign
and
improve
More about our
EV strategy and
customer NIO
on page 23.
More about our
railway offering
on page 20.
More about our
magnetic bear ing
technology on
page 21.
More about
one of our
service
partnerships
on page 22.
SOME EXAMPLES OF WHAT WE DO
7SKF ANNUAL REPORT 2022
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DATA
FINANCIAL
STATEMENTS
Our Industrial business
0
6
18
12
202220212020
%
Net sales and operating profit
1)
MSEK
0
25,000
75,000
50,000
Net sales
Operating margin
1)
Development 2022
A leading position in industries such as
railway, heavy industries and industrial
distribution market, and a prominent
position in other industries.
• Supplying more than 40 industries globally
with products and services, both directly and
indirectly through a network of more than
7,000 distributors.
• Broad product range of bearings, seals and
lubricationsystems.
• Rotating shaft services and solutions for
machine health assessment, reliability
engineering and remanufacturing.
Organic growth was 8.5%, with solid demand
in most segments and regions. The adjusted
operating margin was 13.3%, impacted by
high cost inflation, which was not fully offset
by the positive trend of price/mix compensa-
tion. Our leading position in our most
significant and profitable business area con-
tinues to support our growth ambitions.
BY CUSTOMER INDUSTRY
Industrial distribution, 35%
1
High speed machinery
and electrical drives, 10%
2
Heavy industries, 8%
3
Aerospace, 7%
4
5
Other industrial, 7%
Renewable energy, 7%
6
Railway, 7%
7
Agriculture, food and
beverage, 6%
Off-highway, 3%
8
9
Marine, 3%
10
Material handling, 3%
11
Automation, 2%
12
Traditional energy, 2%
13
Net sales by geographic area
Industrial
China and
Northeast Asia, 22%
India and
Southeast Asia, 9%
The Americas, 27%
Europe, Middle East
and Africa, 42%
BY REGION
Net sales by geographic area
Industrial
China and
Northeast Asia, 22%
India and
Southeast Asia, 9%
The Americas, 27%
Europe, Middle East
and Africa, 42%
Our offering Our position
Net sales
290
–
310
MARKET VALUE
2)
, SEK BILLION
8% to 10%
BEARINGS MARKET DEVELOPMENT 2022
72%
SHARE OF
NET SALES
92%
SHARE OF
OPERATING PROFIT
1)
1) Adjusted for items affecting comparability
2) Total value of accessible bearings market
2
3
4
5
7
1
6
13
10
11
12
8
9
8SKF ANNUAL REPORT 2022
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DATA
FINANCIAL
STATEMENTS
Our Automotive business
0
3
9
6
%
202220212020
MSEK
Net sales
Operating margin
1)
0
10,000
30,000
20,000
One of the leaders in e.g. the development of
components for automotive electrification
andwheel-end solutions. A strong position in
application-driven powertrain solutions, and
a strong global position in the aftermarket
with an extensive distribution network.
• Customized bearings, seals and related prod-
ucts for e-powertrain, wheel-end, driveline,
engine, suspension and steering applications
to manufacturers of electrical vehicles and
commercial vehicles.
• Supplying the vehicle aftermarket with spare
parts, both directly and indirectly through a
network of more than 10,000 distributors.
Net sales by geographic area
Automotive
China and
Northeast Asia, 16%
India and
Southeast Asia, 10%
The Americas, 32%
Europe, Middle East
and Africa, 42%
Net sales
Light vehicles, 50%
1
Vehicle aftermarket, 32%
2
Commercial vehicles, 18%
3
BY CUSTOMER INDUSTRY
Net sales by geographic area
Automotive
China and
Northeast Asia, 16%
India and
Southeast Asia, 10%
The Americas, 32%
Europe, Middle East
and Africa, 42%
BY REGION
Demand rebounded strongly from last year
with an organic growth of 7.2%, driven by light
vehicles. The adjusted operating margin was
3.6%, mainly impacted by material and energy
costs, which was not fully offset by a positive
price/mix. Our ceramic bearings offer to the
EVindustry continues to strengthen, with
signi ficant new OEM contracts signed in both
China and Europe.
Development 2022
1
2
3
Our offering Our position
130
–
150
MARKET VALUE
2)
, SEK BILLION
4% to 6%
BEARINGS MARKET DEVELOPMENT 2022
28%
SHARE OF
NET SALES
8%
SHARE OF
OPERATING PROFIT
1)
1) Adjusted for items affecting comparability
2) Total value of accessible bearings market
9SKF ANNUAL REPORT 2022
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We are SKF
Kristine Ahlborg Delvin
Global Graduate Sustainability, Sweden
“My MSc in Industrial Ecology has given me the tools to apply
asystem perspective considering people, the environment and
society that helps me contribute to the projects I am involved in
through SKF’s Global Graduate Programme. For example, I am
managing a project onbiodiversity aiming to understand SKF’s
ability to make a positive contribution to this global issue.”
Yair Zeinberg
Automotive Business Development Manager, Latin America
“SKF is one of the top-of-mind brands by mechanics. Develop-
ment and engineering teams are therefore always working with
aone-stop shop strategy to deliver a complete product portfolio
to meet the market needs. But this challenge is only possible
thanks to our teamwork and integration.”
Sangho Kim
Senior Buyer, Republic of Korea
“In our pull-oriented production system, eliminating waste is very
important. The best way to do this is to improve my own skills and
understanding of the whole process. For example, byhaving a good
understanding of the procurement process and knowing exactly
where the costs occur, I can reduce the unnecessary costs.”
Bogdan Volchok
Managing Director SKF Ukraine
“Naturally, 2022 was a very difficult year for us and what we
experienced is something that you cannot prepare for. In this
difficult external environment, family, our local team and our
common purpose helped us to stay up and keep the business
going. When you run a business in such conditions, you don’t
have time for analysis, you just make immediate decisions
driven by customer demand and needs. All the time, we have
received strong support from SKF as a company, from various
local units and employees. This support was, and still is, in-
credibly important and does not make us feel alone. For 2023,
we hope that peace will come and that we will be able to con-
tinue the development of our business.”
Being able to successfully implement a strategy that will change SKF in the long-
term depends on having people in the company with the necessary skills. We need
to develop people who know the business and context of SKF, but also bringing
new people on-board with new sets of skills and mindsets.
10SKF ANNUAL REPORT 2022
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“We have an
outstanding position
in our industry”
2022 was a year in which we accelerated our
strategic development in earnest. But our
journey has only started, and we will continue
to work hard on delivering on our promises
and to further strengthen our company.
CEO Rickard Gustafson
11SKF ANNUAL REPORT 2022
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PRESIDENT’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
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THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
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Looking back at 2022, what are your
reflections on what happened inside SKF,
aswell as externally?
“It has for sure been a very special year with a lot
ofexciting and energizing opportunities, but also
ayear with very difficult external circumstances.
Themain milestone for me was our new Intelligent
and Clean strategy that we launched in February.
Since then, we have worked diligently on executing
the strategy, including the implementation of a new
organization and a new operating model. Ourcon-
tinued focus is on creating a more customer centric,
profitable, faster growing and leaner SKF.
In hindsight, 2022 also brought significant un -
foreseen disruptions in the world around us where
we have had to navigate challenges associated with
the war in Ukraine, the pandemic and related lock
downs, particularly in China, as well as a high and
accelerating global cost inflation.
The war in Ukraine has of course had a massive
impact on many societies, organizations and busi-
nesses. For SKF, it caused significant challenges
toour supply chain and production robustness,
buteven more alarming, to the safety and well-
being of our 1,100 colleagues in Ukraine. Natu rally,
people safety has maintained our top priority
throughout the crisis. I’m both proud and impressed
by our colleagues’ ability to keep our Lutsk factory
operational given the extreme conditions. To see
the continuous support with numerous local initia-
tives from colleagues across SKF’s global opera-
tions to help people in need really warmed my
heart. The war also meant that we had to take
aregretful, but necessary, decision to exit Russia.
The entire exit process was swiftly executed in
acontrolled manner and was completed within
asix-month period.
When it comes to our financial results for 2022,
we delivered strong organic growth at 8.1%.
Despite all our efforts, the external headwinds had
a substantial effect on our earnings bringing the
adjusted operating margin for the year to 10.5%.”
How have you worked with implementing
the strategy during 2022?
“In addition to addressing these macro challenges,
we have worked hard on delivering on our promises
and to further strengthen our offering and com-
petitiveness. Acceleration of our strategy is key
tothis, and I’m pleased to say that we made some
good progress in 2022.
Following the launch of our strategy in February,
our new organization became operational in March
and our new operating model with six business
areas with full end-to-end accountability was
effective as of May. We also have a new manage-
ment team in place to drive the continued trans-
formation. All-in-all this brings us closer to our
customers, it brings transparency and accounta-
bility, and it improves speed in decision making.”
What else has been done to drive profitable
growth?
“Our targeted high growth segments represent a
significant part of our sales and, in 2022, we saw
double-digit growth in most of these industries.
Byinvesting in these growth areas, we are also
delivering on our strategic transformation.
We are also making progress in transforming
and pruning our portfolio. Portfolio management
is an important piece in our work to create an
evenstronger and sharper SKF. There are many
dimensions to portfolio management where our
Our continued focus is on
creating a more customer
centric, profitable, faster
growing, and leaner SKF.
12SKF ANNUAL REPORT 2022
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PRESIDENT’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
continued focus is on creating a more customer
centric, profitable, faster growing and leaner SKF.
This includes looking at our portfolio from industry,
business and customer perspectives. One example
is the strategic review of our Aerospace business
which we announced in 2022.
In addition, we are increasing the pace of auto-
mation in our factories, as well as reducing fixed
costs. With all these activities and more, both in
2022 and onwards, I’m confident that we are on
our way towards reaching our long-term targets.”
20% of all energy is used to overcome friction.
How can SKF minimize that waste?
“Sustainability is an integral part of SKF and has
been for many years. We have come a long way in
terms of making our own operations more energy
efficient, and in combination with the use of green
energy, we strive for zero emissions in our own
operations by 2030. In 2022, we reached another
major milestone on our 2030 journey. For the first
time, more than half of all the electricity used in
our operations around the world was generated
from renewable energy sources like wind and
solar. Wealso continue to support the UNGlobal
Compact initiative and its principles and the Global
Goals for 2030.
The fact that 20% of all energy used in the world
is wasted in overcoming friction is truly astonish-
ing. As combatting friction is crucial in reducing
energy waste in any operation, we are instru mental
in helping our customers to achieve this.
In fact, process efficiency and elimination of
energy losses are becoming even more important
to customers. As is the environmental footprint
of their suppliers. Our own efforts and remanufac-
turing capabilities, in combination with our leading
ability to share CO
2
e footprint per bearing transpar-
ently with our customers is already acompetitive
advantage to win business.
In addition to reducing energy waste, we are
also an integral part of new and rapidly growing
emerging clean-tech industries. This means that
the general mega trend to strive for a more
sustain able future further amplifies our growth
potential.”
What will be most important for SKF in 2023?
“It’s all about delivering, operationally as well as
financially. The continued implementation of our
strategy will be focused on several key operational
levers for profitable growth. These include activi-
ties related to the targeted growth areas, portfolio
management, pricing, technology and innovation,
and efficiency.
In addition, we will address various areas to
further strengthen our commercial excellence, for
example by improving processes and governance,
as well as upgrading analytical capabilities and
tools to ensure data driven decisions and leading
indicators.”
What makes SKF unique and why will
you succeed?
“We have an outstanding position in our industry.
Our customers appreciate our consistent and
excellent quality, the performance of our products
and services, our broad customer offering and our
global presence and wide reach. I see our leading
position in many industrial niches and segments
asa proof point of the significant customer value
that we provide.
At the same time, there are a lot of things
thatare changing in this great company of ours.
Weareon a cultural transformation, and with
ourneworganization with clear ownership and
account ability, combined with a data-driven and
decentralized operating model, we have several
important building blocks in place to accelerate
our transformation.
Finally, at SKF, we have great people! In a year
such as 2022 with very difficult external circum-
stances, I’m impressed and proud of all the hard
work from our employees in all geographies in
supporting each other, our customers and safe-
guarding our business. This makes me absolutely
convinced that our exciting journey will continue
in2023.”
We have come a long way
in terms of making our
own operations more
energy efficient.
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PRESIDENT’S
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MARKET
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THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
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DATA
FINANCIAL
STATEMENTS
Financial
statements
FINANCIAL STATEMENTS OF THE PARENT COMPANY
Parent Company income statements and statements
of comprehensive income ..................................................................... 80
Parent Company balance sheets ........................................................ 81
Parent Company statements of cash flow ........................................ 82
Parent Company statements of changes in equity ......................... 82
NOTES TO THE FINANCIAL STATEMENTS
OF THE PARENT COMPANY
Note 1 Accounting policies ............................................................ 83
Note 2 Revenues and operating expenses ................................. 83
Note 3 Financial income and financial expenses ...................... 83
Note 4 Appropriations .................................................................... 84
Note 5 Taxes ..................................................................................... 84
Note 6 Intangible assets ................................................................ 84
Note 7 Property, plant and equipment ....................................... 85
Note 8 Investments in subsidiaries ............................................. 85
Note 9 Investments in equity securities ..................................... 87
Note 10 Provisions for post-employment benefits .................... 88
Note 11 Loans..................................................................................... 88
Note 12 Salaries, wages, other remunerations, average
number of employees and men and women in
Management and Board ................................................... 88
Note 13 Contingent liabilities .......................................................... 88
Consolidated income statements and consolidated statements
of comprehensive income .................................................................... 44
Comments on the consolidated income statements ..................... 45
Consolidated balance sheets .............................................................. 46
Comments on the consolidated balance sheets ............................. 47
Consolidated statements of cash flow ............................................... 48
Comments on the consolidated statements of cash flow .............. 49
Consolidated statements of changes in equity and comments ... 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Accounting policies ........................................................... 52
Note 2 Segment information ........................................................ 53
Note 3 Acquisitions ......................................................................... 55
Note 4 Divestment of businesses ................................................ 55
Note 5 Research and development .............................................. 55
Note 6 Expenses by nature ........................................................... 56
Note 7 Other operating income and expenses .......................... 56
Note 8 Financial income and financial expenses ...................... 56
Note 9 Taxes ..................................................................................... 57
Note 10 Intangible assets ................................................................ 58
Note 11 Property, plant and equipment ....................................... 60
Note 12 Right-of-use assets ........................................................... 62
Note 13 Inventories ........................................................................... 63
Note 14 Financial assets .................................................................. 64
Note 15 Other short-term assets .................................................. 65
Note 16 Share capital ....................................................................... 66
Note 17 Earnings per share ............................................................. 66
Note 18 Provisions for post-employment benefits .................... 66
Note 19 Other provisions and contingent liabilities ................... 70
Note 20 Financial liabilities .............................................................. 71
Note 21 Other short-term liabilities .............................................. 72
Note 22 Related parties including associated companies......... 72
Note 23 Remuneration to key management ................................ 72
Note 24 Fees to the auditors ........................................................... 76
Note 25 Average number of employees ........................................ 76
Note 26 Financial risk management ............................................. 77
Note 27 Non-controlling interests ................................................. 79
Contents
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LETTER
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AND STRATEGY
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SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
| January–December | |||
MSEK | Note | 2022 | 2021 |
Net sales | 2 | ||
Cost of goods sold | 6 | – | – |
Gross profit | |||
Research and development expenses | 5 | – | – |
Selling expenses | 6 | – | – |
Administrative expenses | 6 | – | – |
Other operating income | 7 | ||
Other operating expenses | 7 | – | – |
Income from associated companies | 7 | ||
Operating profit | |||
Financial income | 8 | ||
Financial expenses | 8 | – | – |
Profit before taxes | |||
Income tax | 9 | – | – |
Net profit | |||
| Net profit attributable to: | |||
Shareholders of AB SKF | |||
Non-controlling interests | |||
Basic earnings per share (SEK) | 17 | ||
| January–December | |||
MSEK | Note | 2022 | 2021 |
Net profit | |||
Items that will not be reclassified to the income statement | - | ||
Remeasurements of post-employment benefits | 18 | ||
Income tax | 9 | – | – |
Items that may be reclassified to the income statement | - | ||
Currency translation adjustments | |||
Assets at fair value through other comprehensive income | 14 | – | |
Income tax | 9 | ||
Other comprehensive income, net of tax | |||
Total comprehensive income | |||
Total comprehensive income attributable to Shareholders of AB SKF | |||
Non-controlling interests | |||
Consolidated
income statements
Consolidated statements
of comprehensive income
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REMUNERATION
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GROUP
DATA
FINANCIAL
STATEMENTS
Comments on the consolidated
income statements
General
The Group’s income statement for 2022 included
the result of one smaller acquired business in
Belgium for the period 10 January–31 December.
It also included the result from the divested busi-
ness in Russia for the period 1 January–30 April
and the divested business in Mozambique for the
period 1 January–30 November.
Net sales
In 2022, net sales amounted to MSEK 96,933
(81,732) corresponding to an increase of 18.5%
compared to 2021. The change of the Swedish
krona towards other currencies had a positive
impact in 2022 of +11.9%. Structural changes
accounted for –1.5%. Net sales in local currencies
increased with 8.1%, driven by higher sales vol-
umes in all regions.
Sales development
y-o-y, % Q1 Q2 Q3 Q4
Full
year
Organic 6.5 5.4 11.0 9.7 8.1
Structure — –1.9 –2.0 –1.8 –1.5
Currency 9.0 10.6 15.0 13.0 11.9
Total 15.5 14.1 24.0 20.9 18.5
Operating profit
Operating profit for the year was MSEK 8,532
(10,758). Operating profit was positively impacted
by sales volumes, price, customer mix and cur-
rency effects. Operating profit was negatively
impacted by cost increases, mainly related to
202020192018 20222021
Operating profit
0
2.5
5.0
7.5
10.0
12.5 SEK billion
2021 2022
Operating profit development y-o-y
Organic sales &
manufacturing volumes
Cost development
Currency impact
Items affecting comparability
at 2021 years exchange rates
Divested businesses
0
5,000
10,000
15,000
20,000 SEK million
915
8,532
10,758
6,647 –8,111
–1,541 –136
material, energy, and logistics. Operating profit
included items affecting comparability of MSEK –1,672
(–81) whereof MSEK –675 related to the divestment
of the business in Russia, MSEK –851 (–466) related
to restructuring and cost reduction program mainly in
Europe and MSEK –146, net (+385) related to impair-
ments, customer settlements and gain from sale of
business in 2022 and gain on sales of assets and
impairments in 2021.
Financial income and expenses, net
The financial income and expenses, net for 2022 was
MSEK –1,239 (–695). Exchange rate fluctuations had
amore negative effect in 2022 compared to 2021 and
interest expenses was higher in 2022. For more infor-
mation about the changes year-over-year, see Note 8.
Taxes
The effective tax rate for the year was 33% (25). The
tax rate in 2022 was negatively impacted by the loss
from divestment of business in Russia. Adjusted for
this the tax rate would have been 31%. For more infor-
mation, see Note 9.
Values by quarter
MSEK Q1 Q2 Q3 Q4
Full
year
Net sales 22,942 23,655 24,975 25,361 96,933
Operating
profit 2,953 1,581 1,929 2,069 8,532
Profit before
taxes 2,885 1,097 1,618 1,693 7,293
Basic earnings
per share (SEK) 4.36 1.08 2.41 1.96 9.81
SKF ANNUAL REPORT 2022 45
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CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
0
5
10
15
20 %
202220212020
Return on capital employed
0
10
20
40
30
50 %
202220212020
Gearing
0
10
20
30
40
50 %
202220212020
Equity/assets
| Consolidated balance sheets | |||
| As of 31 December | |||
MSEK | Note | 2022 | 2021 |
| ASSETS | |||
Non-current assets | - | ||
Goodwill | 10 | ||
Other intangible assets | 10 | ||
Property, plant and equipment | 11 | ||
Right-of-use assets | 12 | ||
Long-term financial assets | 14 | ||
Deferred tax assets | 9 | ||
Other long-term assets | |||
Current assets | - | ||
Inventories | 13 | ||
Trade receivables | 14 | ||
Other short-term assets | 15 | ||
Other short-term financial assets | 14 | ||
Cash and cash equivalents | 14 | ||
Total assets | |||
EQUITY AND LIABILITIES | - | ||
Equity attributable to shareholders of AB SKF | |||
Equity attributable to non-controlling interests | 27 | ||
Non-current liabilities | - | ||
Long-term financial liabilities | 20 | ||
Long-term lease liabilities | 12, 20 | ||
Provisions for post-employment benefits | 18 | ||
Deferred tax provisions | 9 | ||
Other long-term provisions | 19 | ||
Other long-term liabilities | |||
Current liabilities | - | ||
Trade payables | 20 | ||
Short-term provisions | 19 | ||
Short-term lease liabilities | 12, 20 | ||
Other short-term financial liabilities | 20 | ||
Other short-term liabilities | 21 | ||
Total equity and liabilities | |||
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STATEMENTS
Comments on the
consolidated balance sheets
Net working capital
On 31 December 2022, net working capital as
percentage of sales was 32.4% (30.7) consisting of
the following components:
• Inventories amounted to MSEK 26,052 (20,997)
being 26.9% (25.7) of annual sales. The increase
in inventories was attributed to currencies by
MSEK 1,957 and to volumes by MSEK 3,098 net
of divestments and acquisitions.
• Trade receivables amounted to MSEK 16,905
(13,972) which is 17.4% (17.1) of annual sales.
The change in trade receivables was attribut-
able to currencies with MSEK 1,136 and to
volume increase with MSEK 1,797, net of
divestments and acquisitions. The average
daysof outstanding trade receivables were
64days (64).
• Trade payables amounted to MSEK 11,594
(9,881) corresponding to 12.0% (12.1) of annual
sales. The change attributable to currencies
was MSEK 824 and the remaining MSEK 889
was due to volume increase, net of divestments
and acquisitions.
Plant and property
On 31 December 2022, plant and property
amounted to MSEK 24,897 (20,723). This was
as a percentage of annual sales 25.7% (25.4).
Thechange attributable to currencies was
MSEK1,516.
Net debt
Net debt amounted to MSEK 19,034 (17,360)
atthe end of 2022.
Post-employment benefit provisions totalled
MSEK 8,621 (11,711) at year end, representing
a net decrease of MSEK 3,090 (net decrease of
3,425), which was attributable to:
• Cash payments of MSEK –1,080 (–1,740)
• Actuarial gains and losses of MSEK –3,674
(–2,751)
• Expenses of MSEK +736 (+684)
• Acquired/divested businesses of MSEK 0 (0)
• The remainder was attributable to currency
translation differences.
Loans totalled MSEK 18,346 (16,454), at the end
of 2022, representing an increase of MSEK 1,892.
The change was primarily attributable to a net
increase between the repayment of a bond due
and a new bond issued during the year of
MSEK1,044 and currency translation effects
ofMSEK 862.
Equity
During the year, equity increased from MSEK
45,365 to MSEK 54,043. Net profit amounted
toMSEK 4,855 (7,579) and dividends paid were
MSEK 3,249 (3,012). Currency translation had
anegative effect of MSEK –3,846 (–2,759).
Remeasurements had a positive net of tax effect
of MSEK2,780 (2,059). The capital structure target
is a net debt/ equity ratio, excluding pension
liabilities, below 40%. This together with the self-
funding principle in the new strategic framework,
operating cash flow to fund investments and
shareholder distribution, underpins the Group’s
financial flexibility and its ability to execute on the
strategy, while maintaining a strong credit rating.
On 31 December 2022, the net debt/equity ratio,
excluding pension liabilities was 19.3% (12.5).
0
40
80
120
% 160
2018
2019 2020 2021 2022
Net debt/equity
0
10
20
30
40 SEK billion
Net debt
Net debt/Equity ratio
0
10
20
30
% 50
40
2018 20222019 2020 2021
Plant and property % of net sales
0
5
10
15
20
25 SEK billion
Plant and property
Plant and property % of net sales
0
10
20
30
40%
Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3 Q4 Q1
2022
Q2 Q3 Q4
Net working capital in % of annual sales
Total trade payables
Total trade receivables
Inventories
Target
Net working capital
SKF ANNUAL REPORT 2022 47
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REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
| January–December | |||
MSEK | Note | 2022 | 2021 |
| Operating activities | |||
Operating profit | |||
Adjustments for Depreciation, amortization and impairment | 6 | ||
Net gain on sales of businesses and property, plant and equipment | – | ||
Other non-cash items | – | ||
Income taxes paid | – | – | |
| Contributions to and payments under post-employment | |||
defined benefit plans | 18 | – | – |
Associated companies | – | ||
| Changes in working capital | |||
Inventories | – | – | |
Trade receivables | – | – | |
Trade payables | |||
Other operating assets and liabilities, net | |||
Interest and other financial items | – | – | |
Net cash flow from operating activities | |||
| Investing activities | |||
Additions to intangible assets | 10 | – | – |
Additions to property, plant and equipment | 11 | – | – |
Sales of property, plant, equipment, and intangible assets | 10, 11 | ||
Acquisitions of businesses, net of cash and cash equivalents | 3 | – | – |
Divestments of businesses, net of cash and cash equivalents | 4 | – | |
Investment in/sale of equity securities | – | – | |
Net cash flow used in investing activities | – | – | |
Net cash flow after investments before financing | |||
| January–December | |||
MSEK | Note | 2022 | 2021 |
| Financing activities | |||
Proceeds from medium- and long-term loans | |||
Repayments of medium- and long-term loans | – | – | |
Payments of leases | – | – | |
Cash dividends to shareholders of AB SKF and non-controlling interests | – | – | |
Funding of post-employment benefits | – | – | |
Investments in financial assets | – | – | |
Sales of financial assets | |||
Net cash flow used in/from financing activities | – | – | |
Net cash flow | – | – | |
Cash and cash equivalents at 1 January | |||
Cash effect excluding acquired/sold businesses | – | – | |
Cash effect from acquired/sold businesses | – | – | |
Translation effect | |||
Cash and cash equivalents on 31 December | |||
Consolidated statements of cash flow
SKF ANNUAL REPORT 2022 48
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GROUP
DATA
FINANCIAL
STATEMENTS
20212020 2022
Cash flow from
operating activities
0
2,000
4,000
6,000
8,000
10,000 MSEK
202220212020
Additions to property,
plant and equipment
0
1,500
3,000
4,500
6,000 MSEK
20212020 2022
Paid dividend
per A and B share
0
2
4
8 SEK
6
Comments on the consolidated
statements of cash flow
0
100
300
400
200
500 MEUR
2025
2027
2028
2029
2024
2031
Debt structure
Q4Q3 Q4
Q2
Q3 Q4 Q2 Q3Q2Q1
Q1
202220212020
Q1
Cash flow from operating activities
–1,000
1,000
2,000
3,000
4,000 MSEK
0 0
3,000
9,000
6,000
MSEK 12,000
Quarter
12-month rolling
The Board of Directors’ proposed
distribution of surplus for the year
2022, which is subject to approval
at the Annual General Meeting in
March 2023, includes an ordinary
dividend of SEK 7 per share, see
Note 16.
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REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
Change in net debt
MSEK
2022
Closing balance
Cash
change
Businesses
acquired/sold
Other non-cash
changes
Translation
effect
2022
Opening balance
Loans
1)
18,346 1,044 15 –29 862 16,454
Post-employment benefits, net
2)
8,621 –1,080 1 –2,929 918 11,711
Lease liabilities 2,921 –809 –44 726 290 2,758
Other short-term financial assets
3)
–599 –220 –4 1 –32 –344
Cash and cash equivalents –10,255 2,963 143 — –143 –13,219
Net debt 19,034 1,898 111 –2,231 1,895 17,360
Derivatives
4)
included in Other financing items — — — — — —
MSEK
2021
Closing balance
Cash
change
Businesses
acquired/sold
Other non-cash
changes
Translation
effect
2021
Opening balance
Loans
1)
16,454 1,022 — –51 243 15,240
Post-employment benefits, net
2)
11,711 –1,740 — –2,183 498 15,136
Lease liabilities 2,758 –738 — 756 156 2,584
Other short-term financial assets
3)
–344 113 — 15 –22 –450
Cash and cash equivalents –13,219 1,386 27 — –582 –14,050
Net debt 17,360 43 27 –1,463 293 18,460
Derivatives
4)
included in Other financing items — — — — — —
1) Excludes derivatives, see Note 20.
2) Other non-cash changes includes remeasurements as well as expenses on defined benefit plans, see Note 18.
3) Other short-term financial assets excludes derivatives, see Note 14. Cash change of MSEK –220 (113) is explained by investment in financial assets of
MSEK –291 (–14) and sale of financial assets ofMSEK 71 (127).
4) Financing activities to hedge short- and long-term loans. Other financing items in cash flow include cash flow from derivatives as stated in the table and interest
premium for the repayment of loans.
COMMENTS ON THE CONSOLIDATED STATEMENTS OF CASH FLOW, CONT.
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STATEMENTS
| Equity attributable to owners of AB SKF | ||||||||
| Share | Share | FV OCI | Translation | Retained | Non- controlling | |||
| MSEK | capital | premium | reserve | reserve | earnings | Subtotal | interests | Total |
Opening balance 1 January 2021 | – | |||||||
Net profit | — | — | — | — | ||||
| Hyperinflation adjustment | — | — | — | — | — | |||
| Components of other comprehensive income | ||||||||
Currency translation adjustments | — | — | — | — | ||||
Change in FV OCI assets and cash flow hedges | — | — | — | — | — | |||
Remeasurements | — | — | — | — | — | |||
Income taxes | — | — | — | – | – | — | – | |
| Transactions with shareholders | ||||||||
| Non-controlling interest | — | — | — | — | — | — | — | — |
| Cost for Performance Share Programmes, net | — | — | — | — | — | |||
Dividends | — | — | — | — | – | – | – | – |
Closing balance 31 December 2021 | ||||||||
1)
3)
1)
2)
Net profit | — | — | — | — | ||||
| Hyperinflation adjustment | — | — | — | — | — | |||
| Components of other comprehensive income | ||||||||
Currency translation adjustments | — | — | — | — | ||||
Change in FV OCI assets and cash flow hedges | — | — | – | — | — | – | — | – |
Remeasurements | — | — | — | — | — | |||
Income taxes | — | — | — | – | – | — | – | |
| Transactions with shareholders | ||||||||
Non-controlling interests | — | — | — | — | — | — | – | – |
| Cost for Performance Share Programmes, net | — | — | — | — | — | |||
Dividends | — | — | — | — | – | – | – | – |
Other | — | — | — | — | — | — | – | – |
Closing balance 31 December 2022 |
3)
2)
1) See Note 27 for details.
2) See Note 23 for details.
3) See Note 1 for details.
Fair value other comprehensive income
reserve
The fair value other comprehensive income (FV
OCI) reserve accumulates changes in the fair value
of assets recognized directly in other comprehen-
sive income, net of tax, with the exception of any
dividends and any impairment losses. See Note 14
for details on FVOCI assets.
Hedging reserve
The hedging reserve accumulates activity related
to cash flow hedges, net of tax, being both changes
in fair value as well as amounts released to the
income statement. See Note 26 for detailson
hedging activity.
Translation reserve
Exchange differences relating to the translation
from the functional currencies of the SKF Group’s
foreign subsidiaries into SEK are accumulated in
the translation reserve. Upon the sale of a foreign
operation, the accumulated translation amounts
are recycled to the income statement and included
in the gain or loss on the disposal. Additionally,
gains and losses on hedging instruments meeting
the criteria for hedges of net investments in for-
eign operations, are recognized in the translation
reserve net of tax. See Note 26 for details.
Consolidated statements of changes in equity
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STATEMENTS
NOTES
Net sales – Total
1
2
2
3
7
8
9
6
5
4
3
12
11
13
10
1
Net sales by customer industry
– Automotive
Net sales by customer industry
– Industrial
2 Segment information, cont.
Automation, 1%
1
Traditional energy, 2%
2
Material handling, 2%
3
Agriculture, food & beverage, 5%
4
5
Marine, 2%
Off-highway, 2%
6
Railway, 5%
7
Aerospace, 5%
Renewable energy, 5%
8
9
Other industrial, 5%
10
Heavy industries, 6%
11
High speed machinery & electrical drives, 7%
12
Industrial distribution, 35%
1
High speed machinery
and electrical drives, 10%
2
Heavy industries, 8%
3
Aerospace, 7%
4
5
Other industrial, 7%
Renewable energy, 7%
6
Railway, 7%
7
Agriculture, food and
beverage, 6%
Off-highway, 3%
8
9
Marine, 3%
10
Material handling, 3%
11
Automation, 2%
12
Traditional energy, 2%
13
Industrial distribution, 25%
13
2
3
4
5
7
1
6
13
10
11
12
8
9
Light vehicles, 14%
1
Vehicle aftermarket, 9%
2
Commercial vehicles, 5%
3
Light vehicles, 50%
1
Vehicle aftermarket, 32%
2
Commercial vehicles, 18%
3
1
2
3
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STATEMENTS
NOTES
Net sales by geographic area
China and
Northeast Asia, 21%
India and
Southeast Asia, 9%
The Americas, 28%
Europe, Middle East
and Africa, 42%
Net sales by geographic area
Industrial
China and
Northeast Asia, 22%
India and
Southeast Asia, 9%
The Americas, 27%
Europe, Middle East
and Africa, 42%
Net sales by geographic area
Automotive
China and
Northeast Asia, 16%
India and
Southeast Asia, 10%
The Americas, 32%
Europe, Middle East
and Africa, 42%
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STATEMENTS
NOTES
0
1
2
3
5
4
% 6
20202019 2018 2021 2022
Research and development % of net sales
0
500
1,000
1,500
3,000 MSEK
2,500
2,000
Research and development
Research and development % of net sales
SKF ANNUAL REPORT 2022 55
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STATEMENTS
NOTES
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MARKET
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THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
NOTES
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NOTES
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CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
NOTES
Geographical distribution of property, plant and equipment 2021–2022
2022
27%
2021
24%
China & Northeast Asia
2022
5%
2021
6%
India & Southeast Asia
2022
18%
2021
16%
The Americas
2022
50%
2021
54%
Europe, Middle East
& Africa
2021
2022
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NOTES
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NOTES
BACK TO
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IS SKF
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MARKET
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NOTES
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NOTES
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NOTES
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GROUP
DATA
FINANCIAL
STATEMENTS
NOTES
−400
−300
−
200
−
100
0
200
100
THBRUBEUR USDTRYCAD DKKCNY
Effect of transactional currency flows on
operating profits of a 5% weaker SEK
300
MSEK
Other
1)
1) Other is a sum comprising 11 different currencies.
INRGBP USDCNY EUR
Effect of translation on operating profits to
SEK of a 5% weaker SEK
0
20
10
30
60 MSEK
50
40
Other
1)
1) Other is a sum comprising 47 different currencies.
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GROUP
DATA
FINANCIAL
STATEMENTS
NOTES
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REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
NOTES
which is the Parent Company of the SKF Group , is a
registered Swedish limited liability company domiciled
in Gothenburg . The headquarters’ address is AB SKF,
AB SKF is the company within the Group that makes
the strategic decisions and pays for the research and
development. AB SKF owns and controls the Intellec-
tual Property Rights within the Group. Subsidiaries
perform tasks decided by AB SKF and thus have a
limited commercial liability.
Dividend income from consolidated subsidiaries
amounted to MSEK 3,019 (2,010).
Net investments in subsidiaries increased by MSEK
367 (–421) whereof MSEK
–165 (–60) is attributable
to impairments and MSEK 533 (70) related to capital
contributions. Shares with abooked value of MSEK 0
(–354) were sold during the year.
Risks and uncertainties in the business for the
Group are de scribed in the Administration Report for
the Group. The financial position of the Parent Com-
pany is dependent on the financial position and devel-
opment of the subsidiaries. A general decline in the
demand for the products and services provided by
theGroup could mean lower residual profit and lower
dividend income for the Parent Company, as well as
aneed for write-down of the values in the shares in
subsidiaries. Due to the wide spread of markets, geo-
sidiaries operate, the risk that the financial position
for the Parent Company will be negatively affected is
assessed as small.
Unrestricted equity in the Parent Company
amounted to MSEK 24,061.
Parent Company, AB SKF Parent Company income statements
Parent Company statements of
comprehensive income
January–December
MSEK Note 2022 2021
Revenue 2 6,658 7,775
Cost of revenue 2 –5,923 –5,036
General management and administrative expenses 2 –1,799 –1,470
Other operating income and expenses, net 2 8 0
Operating profit –1,056 1,269
Financial income and expenses, net 3 3,549 2,325
Profit after financial items 2,493 3,594
Appropriations 4 1,115 –793
Profit before tax 3,608 2,801
Income taxes 5 5 –54
Net profit 3,613 2,747
January–December
MSEK Note 2022 2021
Net profit 3,613 2,747
Items that may be reclassified to the income statement
Assets at fair value through other comprehensive income 9 –15 95
Other comprehensive income, net of tax –15 95
Total comprehensive income 3,598 2,842
SKF ANNUAL REPORT 2022 80
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REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
PARENT COMPANY
Parent Company balance sheets
As of 31 December
MSEK Note 2022 2021
ASSETS
Non-current assets
Intangible assets 6 1,234 1,371
Property, plant and equipment 7 78 63
Investments in subsidiaries 8 22,442 22,074
Long-term receivables from subsidiaries 18,387 13,022
Investments in equity securities 9 338 349
Other long-term receivables 113 167
Deferred tax assets 5 398 312
42,990 37,358
Current assets
Short-term receivables from subsidiaries 5,555 6,958
Other short-term receivables 145 140
Prepaid expenses and accrued income 203 130
Cash and cash equivalents 10 3
5,913 7,231
Total assets 48,903 44,589
As of 31 December
MSEK Note 2022 2021
EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital 1,138 1,138
Statutory reserve 918 918
Capitalized development reserve — —
2,056 2,056
Unrestricted equity
Fair value reserve 148 163
Retained earnings 20,300 20,717
Net profit 3,613 2,747
24,061 23,627
26,117 25,683
Untaxed reserves 4 — —
Provisions
Provisions for post-employment benefits 10 602 430
Other provisions 64 15
666 445
Non-current liabilities
Long-term loans 11 18,386 13,023
18,386 13,023
Current liabilities
Short-term loans 11 — 3,031
Trade payables 495 320
Short-term liabilities to subsidiaries 2,581 1,488
Other short-term liabilities 153 132
Accrued expenses and deferred income 505 467
3,734 5,438
Total shareholders’ equity and liabilities 48,903 44,589
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GROUP
DATA
FINANCIAL
STATEMENTS
PARENT COMPANY
Parent Company statements
of changes in equity
Restricted equity Unrestricted equity
MSEK
Share
capital
1)
Statutory
reserve
Capitalized
development
reserve
Fair value
reserve
Retained
earnings Total
Opening balance 1 January 2021 1,138 918 99 68 23,578 25,801
Net profit — — — — 2,747 2,747
Components of other
comprehensive income
Change in assets to fair value through
other comprehensive income — — — 95 — 95
Capitalized development reserve — — –99 — 99 0
Transactions with shareholders
Cost under Performance Share
Programmes
2)
— — — — 0 0
Dividends — — — — –2,960 –2,960
Closing balance 31 December 2021 1,138 918 0 163 23,464 25,683
Net profit — — — — 3,613 3,613
Components of other comprehensive
income
Change in assets to fair value through
other comprehensive income — — — –15 — –15
Capitalized development reserve — — — — — —
Transactions with shareholders
Cost under Performance Share
Programmes
2)
— — — — 23 23
Dividends — — — — –3,187 –3,187
Closing balance 31 December 2022 1,138 918 0 148 23,913 26,117
1) The distribution of share capital between share types and the quota value is shown in Note 16
to the Consolidated financial statements.
2) See Note 23 to Consolidated financial statements for information about Performance Share Programmes.
Restricted equity includes share capital and statutory
reserves as well as capitalized development reserves
which are not available for dividend payments.
Unrestricted equity includes retained earnings which
can be distributed to shareholders. It also includes
the fair value reserve which accumulates the changes
in fair value of available-for-sale assets.
Parent Company statements
of cash flow
January–December
MSEK Note 2022 2021
Operating activities
Operating loss/profit –1,056 1,269
Adjustments for
Depreciation, amortization and impairments 6, 7 214 202
Other non-cash items 338 126
Payments under post-employment defined benefit plans 10 –38 –36
Income taxes paid/received –20 —
Changes in working capital
Trade payables 175 140
Other operating assets and liabilities, net –564 –2,394
Interest received 270 203
Interest paid –281 –252
Other financial items –73 404
Net cash flow from operating activities –1,035 –338
Investing activities
Additions to intangible assets 6 –70 –112
1)
Additions to property, plant and equipment 7 –22 –4
Sales of property, plant and equipment 7 — 17
Dividends received from subsidiaries 3 3,819 2,010
Investments in subsidiaries 8 –533 –464
Sales of shares in subsidiaries 8 — 354
Capital repayments from subsidiaries 8 — 472
Investments in equity securities 9 –5 –1
Net cash flow used in investing activities 3,189 2,272
Net cash flow after investments before financing 2,154 1,934
Financing activities
Proceeds from medium- and long-term loans 4,276 3,045
Repayment of medium- and long-term loans –3,236 –2,018
Cash dividends to AB SKF’s shareholders –3,187 –2,960
Net cash flow used in financing activities –2,147 –1,933
Increase(+)/decrease(–) in cash and cash equivalents 7 1
Cash and cash equivalents at 1 January 3 2
Cash and cash equivalents at 31 December 10 3
1) Includes intangible assets of MSEK 112 paid in 2021.
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Notes to the financial statements
of the Parent Company
Basis of presentation
The financial statements of the Parent Company are
prepared in accordance with the “Annual Accounts
Act” and The Swedish Financial Reporting Board rec-
ommendation RFR 2, “Accounting for Legal Entities”
as well as their interpretation (UFR). In accordance
with RFR 2, IFRS is applied to the greatest extent
possible under Swedish legislation, but full compli-
ance is not possible. The areas inwhich the Parent
Company’s accounting policies differ from the Group’s
are described below. For a description of the Group’s
accounting policies, see Note 1 to the Consolidated
financial statements.
Post-employment benefits
AB SKF reports pensions in the financial statements in
accordance with RFR 2. According to RFR 2, IAS 19
shall be adopted regarding supplementary disclosures
when applicable.
Investments in subsidiaries
Investments in subsidiaries are recorded at acquisi-
tion cost, reduced by any impairment.
Untaxed reserves
The tax legislation in Sweden allows companies to
make pro visions to untaxed reserves. Hereby, the
companies may, with certain limits, allocate and
retain profits in the balance sheet instead of imme-
diate taxation. The untaxed reserves are taken into
taxation at the time of their dissolution. In the event
that the business shows losses, the untaxed reserves
may be dissolved in order to cover the losses without
any taxation.
Equity
When development expenses are capitalized for
internal development of intangible assets, a corre-
sponding amount is transferred from retained
earnings to a reserve for capitalized development
inrestricted equity. The reserve is released to
retained earnings upon amortization of the capital-
izeddevelopment.
Intangible assets
According to Swedish legislation, goodwill has a defi-
nite useful life. The useful life amounts to eight years
and the amortization follows a linear pattern.
Leases
RFR 2 allows an exception from IFRS 16 which the
Parent Company has applied. Lease contracts are
reported as operational leases.
1 Accounting policies
AB SKF is the company within the Group that makes
the strategic decisions and pays for the research
anddevelopment and is as such entitled to residual
profits. Consequently the revenues are comprised
ofresidual profits and royalties from subsidiaries.
2 Revenues and operating expenses
MSEK 2022 2021
Income from participations in Group companies
Dividends from subsidiaries 3,819 2,010
Other financial income from investments in subsidiaries –2 483
Impairment and disposals of investments in subsidiaries –165 –60
3,652 2,433
Financial income
Interest income from subsidiaries 270 203
Interest income from external parties 1 —
271 203
Financial expenses
Interest expenses to subsidiaries –72 –73
Interest expenses to external parties –266 –202
Other financial expense –36 –36
–374 –311
3 Financial income and financial expenses
Costof revenue include research and development
expenses totalling MSEK 2,874 (2,501).
Of the total operating expenses, MSEK 4,185
(3,782) was invoiced from subsidiaries.
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DATA
FINANCIAL
STATEMENTS
PARENT COMPANY
Appropriations (MSEK) 2022 2021
Paid/received group contribution 1,115 –793
Untaxed reserves
Change in accelerated depreciation reserve — —
1,115 –793
Untaxed reserves in the balance sheet
Accelerated depreciation reserve — —
4 Appropriations
Taxes on profit before tax (MSEK) 2022 2021
Current taxes — —
Other taxes –81 –65
Deferred tax 86 11
5 –54
Net deferred assets per type net (MSEK) 2022 2021
Provisions for post-employment benefits 129 126
Tax credit carry forwards 266 186
Tax loss carry forwards 3 —
Other — —
Deferred tax assets 398 312
Reconciliation of the statutory tax in Sweden andthe actual tax (MSEK) 2022 2021
Tax calculated using the statutory tax rate in Sweden –743 –577
Non-taxable dividends and other financial income 787 526
Tax referring to previous years 24 23
Other non-deductible and non-taxable profit items, net –63 –26
Actual tax 5 –54
The corporate statutory income tax rate in Sweden is 20.6% (20.6).
5 Taxes
MSEK
2022
Closing balance Additions Impairments Derecognitions
2022
Opening balance
Acquisition cost
Goodwill 42 7 — — 35
Technology, Intellectual property
and similar items 1,058 45 — — 1,013
Internally developed software 2,308 18 — — 2,290
3,408 70 — — 3,338
MSEK
2022
Closing balance Amortization Impairments Derecognitions
2022
Opening balance
Accumulated amortization
Goodwill 31 6 — — 25
Technology, Intellectual property
and similar items 944 19 — — 925
Internally developed software 1,199 182 — — 1,017
2,174 207 — — 1,967
Net book value 1,234 1,371
MSEK
2021
Closing balance Additions Impairments Derecognitions
2021
Opening balance
Acquisition cost
Goodwill 35 — — — 35
Technology, Intellectual property
and similar items 1,013 — — — 1,013
Internally developed software 2,290 38 — — 2,252
3,338 38 — — 3,300
MSEK
2021
Closing balance Amortization Impairments Derecognitions
2021
Opening balance
Accumulated amortization
Goodwill 25 5 — — 20
Technology, Intellectual property
and similar items 925 16 — — 909
Internally developed software 1,017 174 — — 843
1,967 195 — — 1,772
Net book value 1,371 1,528
6 Intangible assets
See Note 10 to the Consolidated financial statements for information on the internally developed software
including impairment. Technology and similar items are amortized over eight years.
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PARENT COMPANY
MSEK
2022
Closing balance Additions Disposals
2022
Opening balance
Acquisition cost
Buildings 5 — — 5
Machine toolings and factory fittings 86 5 — 81
Assets under construction including advances 44 17 — 27
135 22 — 113
MSEK
2022
Closing balance Depreciation Disposals
2022
Opening balance
Accumulated depreciation
Buildings 3 — — 3
Machine toolings and factory fittings 54 7 — 47
57 7 — 50
Net book value 78 63
MSEK
2021
Closing balance Additions Disposals
2021
Opening balance
Acquisition cost
Buildings 5 — — 5
Machine toolings and factory fittings 81 — — 81
Assets under construction including advances 27 4 –17 40
113 4 –17 126
MSEK
2021
Closing balance Depreciation Disposals
2021
Opening balance
Accumulated depreciation
Buildings 3 — — 3
Machine toolings and factory fittings 47 7 — 40
50 7 — 43
Net book value 63 83
7 Property, plant and equipment
Investments in subsidiaries
held on 31 December (MSEK) 2022 Additions Impairment
Disposals
and capital
repayments 2021 Additions Impairment
Disposals
and capital
repayments 2020
Investments in
subsidiaries 22,442 533 –165 — 22,074 464 –60 –826 22,496
The Group is composed of 172 legal entities (subsidi-
aries), where AB SKF is the ultimate parent either
directly or indirectly via intermediate holding compa-
nies. The vast majority of the Group’s subsidiaries
perform activities related to manufacturing and sales.
Alimited number are involved in central Group func-
tions such as treasury or reinsurance, or as previously
mentioned, act as intermediate holding companies.
This legal structure is designed to effectively manage
legal requirements, administration, financing and
taxes in the countries in which the Group operates.
Incontrast, the Group’s operational structure described
in the Administration Report, gives a better overview
of how the Group runs its business. See also Note 2
to the Consolidated financial statements.
The tables below list firstly, the subsidiaries owned
directly by the Parent Company, and secondly, the
most significant of the remaining subsidiaries of the
Group. Taken together these subsidiaries account for
more than 90% of the Group’s sales and for more than
90% of the Group’s manufacturing facilities.
8 Investments in subsidiaries
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DATA
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STATEMENTS
PARENT COMPANY
Book value (MSEK)
Name of directly owned subsidiaries Country/Region
Registration
number
No. of
shares
% owner-
ship 2022 2021
Main
activities
1)
SKF Argentina S.A. Argentina — 14,677,299 86.25
2)
94 94 M,S
SKF Australia Pty. Ltd. Australia — 96,500 100 — — S
SKF Österreich AG Austria — 200 100 176 176 M,S
SKF Belgium NV/SA Belgium — 1,778,642 99.9
2)
109 109 S
SKF Logistics Services
Belgium NV/SA Belgium — 29,907,952 99.9
2)
28 28 O
SKF do Brasil Ltda. Brazil — 517,294,748 99.9
2)
626 626 M,S
SKF Bearings Bulgaria EAD Bulgaria — 24,664,309 100 202 202 M,S
SKF Canada Ltd. Canada — 130,000 100 58 58 M,S
SKF Chilena S.A.I.C. Chile — 88,191 99.9
2)
— — S
SKF (China) Co. Ltd. China — 133,400 100 1,135 1,135 O
SKF China Ltd. China — 11,000,000 100 15 15 S
SKF CZ, a.s. Czech
Republic — 430 100 10 10 S
SKF Danmark A/S Denmark — 5 100 7 7 S
Oy SKF Ab Finland — 48,400 100 12 12 M,S
SKF Holding France S.A.R.L. France — 1 100 3,371 3,371 O
SKF GmbH Germany — 1,000 100 1,573 1,573 M,S
SKF Lubrication Systems
Germany GmbH Germany — 2,574 10,1
2)
223 223 M,S
SKF Hellas S.A. Greece — 2,000 100 — — S
SKF Svéd Golyóscsapágy Zrt Hungary — 20 100 — — S
SKF Engineering and
Lubrication India Private Ltd.
India — 1,196,450 52.8
2)
314 314 M,S
SKF India Ltd. India — 22,666,055 45.8
3)
87 87 M,S
PT. SKF Indonesia Indonesia — 53,411 60 26 26 M,S
PT. SKF Industrial Indonesia Indonesia — 5 96.3
2)
1 1 S
SKF AI Ltd Israel — 2,413,322 100 220 220 S
SKF Industrie S.p.A Italy — 465,000 100 912 912 M,S
SKF Japan Ltd. Japan — 32,400 100 174 174 M,S
SKF Malaysia Sdn Bhd Malaysia — 1,000,000 100 57 57 S
SKF de México, S.A. de C.V. Mexico — 375,623,529 99.9
2)
600 204 M,S
SKF New Zealand Ltd. New Zealand — 375,000 100 11 11 S
SKF Norge AS Norway — 50,000 100 — — S
SKF del Peru S.A. Peru — 2,564,903 99.9
2)
— — S
SKF Philippines Inc. Philippines — 8,395 100 20 20 S
SKF Financial Services
Poland sp.zoo Poland — 100 100 37 30 O
SKF Polska S.A. Poland — 3,701,466 100 156 156 M,S
SKF Portugal-Rolamentos, Lda.
Portugal — 64,843 100 5 4 S
8 Investments in subsidiaries, cont.
Book value (MSEK)
Name of directly owned subsidiaries Country/Region
Registration
number
No. of
shares
% owner-
ship 2022 2021
Main
activities
1)
SKF Korea Ltd. Republic
of Korea — 128,667 100 74 74 M,S
SKF Sealing Solutions
Korea Co., Ltd.
Republic
of Korea — 153,320 51 15 15 M,S
SKF Asia Pacific Pte. Ltd. Singapore — 1,000,000 100 — — S
Barseco (PTY) Ltd. South Africa — 1,422,480 100 157 157 O
SKF Española S.A. Spain — 3,650,000 100 383 383 M,S
SKF Förvaltning AB Sweden 556350-4140 124,500 99.6
2)
4,144 4,144 O
SKF International AB Sweden 556036-8671 20,000 100 1,320 1,320 O
Återförsäkringsaktiebolaget
SKF Sweden 516401-7658 30,000 100 125 125 O
Bagaregården 16:7 KB Sweden 916622-8529 — 99.9
2)
99 99 O
SKF Eurotrade AB Sweden 556206-7610 83,500 100 12 12 S
SKF Lager AB Sweden 556219-5288 2,000 100 — — O
AB Svenska Kullagerfabriken Sweden 556210-0148 1,000 100 — — O
The Waste Company
Sweden AB Sweden 559128-2016 50,000 100 — — O
SKF Efolex AB Sweden 559233-1275 2,500 100 2 31 O
SKF Edge AB Sweden 556785-4640 1,000 100 2 9 O
SKF Verwaltungs AG Switzerland — 500 100 502 502 O
SKF Taiwan Co. Ltd. Taiwan — 169,475,000 100 102 102 S
SKF (Thailand) Ltd. Thailand — 1,847,000 92.4
2)
37 37 S
SKF B.V the
Netherlands — 1,450 100 304 304 S
SKF Holding Maatschappij
Holland B.V.
the
Netherlands — 60,002 100 423 423 O
Trelanoak Ltd. United
Kingdom — 6,965,000 100 120 120 O
PSC SKF Ukraine Ukraine — 1,267,495,630 100 207 207 M,S
SKF USA Inc. USA — 1,000 100 4,155 4,155 M,S
SKF Venezolana S.A. Venezuela — 20,014,892 100 — — O
22,442 22,074
1) M=Manufacturing, S=Sales, O=Other incl treasury, reinsurance, holding and/or dormant activities.
2) Parent Company together with subsidiares own 100%.
3) Parent Company together with subsidiaries own 52.6%.
SKF ANNUAL REPORT 2022 86
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IS SKF
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START
PRE SIDENT ’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
PARENT COMPANY
8 Investments in subsidiaries, cont.
Name of indirectly owned subsidiaries
Country
/Region
%
Ownership
Owned by
subsidiary in
Main
activities
1)
Alemite LLC USA 100 USA M,S
Beijing Nankou SKF Railway Bearings Co. Ltd. China 51 China M,S
BFW Coupling Services Ltd. Canada 100 Canada S
Cooper Roller Bearings Co. Ltd. United Kingdom 100 United Kingdom M
Kaydon Corporation USA 100 USA M,S
Kaydon S de R.L. de C.V. Mexico 100 the Netherlands M
Lincoln Industrial Corporation USA 100 USA M,S
M3M S.A.S France 100 France M
Ningbo General Bearing Ltd. China 100 Barbados M,S
PEER Bearing Company USA 100 USA S
PEER Bearing Company, Changshan (CPZ1) China 100 China M
SKF (China) Sales Co. Ltd. China 100 China S
SKF (Dalian) Bearings and Precision Technologies Co. Ltd. China 100 China M
SKF (Jinan) Bearings & Precision Technology Co. Ltd. China 100 China M
SKF (Schweiz) A.G. Switzerland 100 Switzerland S
SKF (Shanghai) Automotive Technologies Co. Ltd. China 100 China M
SKF (U.K.) Ltd. United Kingdom 100 United Kingdom M,S
SKF (Xinchang) Bearings and Precision Technologies China 100 China M
SKF (Zambia) Ltd. Zambia 100 Sweden S
SKF Aeroengine France S.A.S France 100 France M,S
SKF Aerospace France S.A.S. France 100 France M,S
SKF Bearing Industries (Malaysia) Sdn Bhd Malaysia 100 the Netherlands M
SKF Distribution (Shanghai) Co. Ltd. China 100 China S
SKF Economos Deutschland GmbH Germany 100 Austria S
SKF France S.A.S France 100 France M,S
SKF Intelligent Clean Technology (Shanghai) China 100 China M,S
SKF Latin Trade S.A.S Colombia 100 Chile S
SKF Lubrication Systems CZ s.r.o Czech Republic 100 Germany M
SKF Magnetic Mechatronics S.A.S France 100 France M,S
SKF Marine GmbH Germany 100 Germany M,S
SKF Marine Singapore Pte Ltd. Singapore 100 Germany S
SKF Mekan AB Sweden 100 Sweden M
SKF Metal Stamping S.R.L Italy 100 Italy M,S
SKF RecondOil AB Sweden 100 Sweden M,S
SKF Sealing Solutions Austria GmbH Austria 100 Austria M,S
Name of indirectly owned subsidiaries
Country
/Region
%
Ownership
Owned by
subsidiary in
Main
activities
1)
SKF Sealing Solutions GmbH Germany 100 Germany M,S
SKF Sealing Solutions (Qingdao) CO. China 100 Austria M,S
SKF Sealing Solutions S.A. de C.V. Mexico 100 USA M,S
SKF Sealing Solutions (Wuhu) Co. Ltd. China 100 China M,S
SKF Seals Italy S.p.A. Italy 100 Italy S,M
SKF Slovensko, spol. S.r.o. Slovakia 100 Sweden S
SKF South Africa (Pty) Ltd. South Africa 70 South Africa S
SKF Steyr Liegenschaftsvermietungs GmbH Austria 100 Austria O
SKF Sverige AB Sweden 100 Sweden M,S
SKF Türk Sanayi ve Ticaret Limited Sirketi Turkey 100 Belgium S
SKF Uruguay S.A Uruguay 100 Argentina S
SKF Vietnam Co. Ltd. Vietnam 100 Singapore S
Stewart Werner Corporation of Canada Canada 100 USA S
Venture Aerobearings LLC. USA 51 USA M,S
Vesta Si Sweden AB Sweden 100 Sweden M
1) M=Manufacturing, S=Sales, O=Other incl treasury, reinsurance and/or holding activities.
Name and location (MSEK)
Holding in
percent
Number
of shares Currency
2022
Book value
2021
Book value
Wafangdian Bearing Company Limited, China 19.7 79,300,000 HKD 316 332
Other SEK 22 17
338 349
9 Investments in equity securities
SKF ANNUAL REPORT 2022 87
THIS
IS SKF
BACK TO
START
PRE SIDENT ’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
PARENT COMPANY
Amount recognized in the balance sheet (MSEK) 2022 2021
Present value of funded pension obligations 705 546
Fair value of plan assets –292 –313
Net obligation 413 233
Present value of unfunded pension obligations 189 197
Net provisions 602 430
Change in net provision for the year (MSEK) 2022 2021
Opening balance 1 January 430 431
Defined benefit expense 210 35
Pension payments –38 –36
Closing balance 31 December 602 430
Components of expense (MSEK) 2022 2021
Pension cost 174 56
Interest expense 15 17
Return on plan assets 21 –38
Defined benefit expense 210 35
Defined contribution expense 115 119
Total post-employment benefit expense 325 154
All white collar workers of the Company are covered
by the ITP-plan according to collective agreements.
Additionally, the Company sponsors a complementary
defined contribution (DC) scheme for a limited group
of managers. This DC scheme replaced the previous
supplementary defined benefit plan which from 2003
is closed for new participants.
The calculation of defined benefit pension obligations
has been made in accordance with regulations stipu-
lated by the Swedish Financial Supervisory Authority,
FFFS 2007:24 and FFFS 2007:31.
The discount rate for the ITP-plan was 2.85%
(3.84) and for the other defined benefit plan it was
2.51% (0.39).
10 Provisions for post-employment benefits
Next year’s expected cash outflows for pension
obligations are MSEK 165.
In January 2022, the calculation basis for discount
rate was changed by –1%, life expectancy and consoli-
dation reserve, which meant a substantial increase in
AB SKF’s pension liability. In January 2023, the pen-
sion debt is expected to increase significantly due to
the accrual of debt for free bond holders according to
the inflation index of 10.84%.
Salaries, wages, other remunerations, average number of employees
and men and women in Management and Board
12
2022 2021
MSEK Maturity
Interest
rate
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Bonds
MEUR 296 2022 1.63 — — 3,031 3,094
MSEK 900 2024 1.13 899 875 899 922
MSEK 2,100 2024 3.49 2,098 2,134 2,097 2,153
MEUR 300 2025 1.25 3,324 3,113 3,046 3,143
MUSD 100 2027 4.06 1,043 1,076 905 1,057
MEUR 400 2028 3.13 4,406 4,273 — —
MEUR 300 2029 0.88 3,326 2,881 3,057 3,243
MEUR 300 2031 0.25 3,290 2,666 3,019 3,079
18,386 17,018 16,054 16,691
MSEK 2022 2021
1)
Salaries, wages and other remuneration 817 798
Social charges (whereof post- employment benefit expense) 585 (325) 466 (154)
1) 2021 includes cost of MSEK 59 related to 2020s short-term variable salary programme.
See Note 23 to the Consolidated financial statements
for information on remuneration to the Board and
President as well as men and women in management
and the Board. Refer to Note 25 to theConsolidated
11 Loans
financial statements for the average number of
employees and to Note 24 to the Consolidated
financial statements for fees to the auditors.
13 Contingent liabilities
MSEK 2022 2021
General partner 2 4
Other contingent liabilites 30 24
UK Pension guarantee 160 —
192 28
General partner relates to liabilities in limited
partner ship Bagaregården 16:7.
Other contingent liabilities refer to guarantee commit ment
regarding pension liabilities in the Swedish subsidiaries.
SKF ANNUAL REPORT 2022 88
THIS
IS SKF
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START
PRE SIDENT ’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
PARENT COMPANY
SKF ANNUAL REPORT 2022 89
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IS SKF
BACK TO
START
PRE SIDENT ’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
PARENT COMPANY
Auditor’s report
To the general meeting of the shareholders of AB
SKF (publ) corporate identity number 556007-3495
Report on the annual accounts and
consolidated accounts
Opinions
We have audited the annual accounts and consolidated
accounts of AB SKF (publ) for the financial year
1 January–31 December 2022. The annual accounts
andconsolidated accounts of the company are included
on pages 14–89 in this document.
In our opinion, the annual accounts have been pre-
pared in accordance with the Annual Accounts Act and
present fairly, in all material respects, the financial posi-
tion of the parent company as of 31 December 2022
andits financial performance and cash flow for the year
then ended in accordance with the Annual Accounts Act.
The consolidated accounts have been prepared in accord-
ance with the Annual Accounts Act and present fairly, in
all material respects, the financial position of the group
as of 31 December 2022 and their financial performance
and cash flow for the year then ended in accordance with
International Financial Reporting Standards (IFRS), as
adopted by the EU, and the Annual Accounts Act.
The statutory administration report is consistent with
the other parts of the annual accounts and consolidated
accounts.
We therefore recommend that the general meeting of
shareholders adopts the income statement and balance
sheet for the parent company and the group.
Our opinions in this report on the annual accounts and
consolidated accounts are consistent with the content
ofthe additional report that has been submitted to the
parent company’s audit committee in accordance with
theAudit Regulation (537/2014) Article 11.
Basis for Opinions
We conducted our audit in accordance with International
Standards on Auditing (ISA) and generally accepted
auditing standards in Sweden. Our responsibilities under
those standards are further described in the Auditor’s
Responsibilities section. We are independent of the par-
ent company and the group in accordance with profes-
sional ethics for accountants in Sweden and have other-
wise fulfilled our ethical responsibilities in accordance
with these require ments. This includes that, based on the
best of our knowledge and belief, no prohibited services
referred to inthe Audit Regulation (537/2014) Article 5.1
have been provided to the audited company or, where
applicable, its parent company or its controlled compa-
nies within the EU.
We believe that the audit evidence we have obtained
issufficient and appropriate to provide a basis for our
opinions.
Key Audit Matters
Key audit matters of the audit are those matters that,
inour professional judgment, were of most significance
inour audit of the annual accounts and consolidated
accounts of the current period. These matters were
addressed in the context of our audit of, and in forming
our opinion thereon, the annual accounts and consoli-
dated accounts as a whole, but we do not provide a
separate opinion on these matters.
Valuation of Goodwill
As of 31 December 2022, AB SKF (publ) accounts for
goodwill in the consolidated balance sheet amounting to
SEK 12 351 M. The value of the goodwill is dependent on
future income and profitability in the cash-generating
units, to which the goodwill refers, and is assessed for
impairment at least once a year. Management bases its
impairment test on several judgements and estimates
such as growth, EBIT development and cost of capital
(WACC) as well as other complex circumstances. Incor-
rect judgements and estimates may have a significant
impact on the group’s result and financial position.
Management has not identified any need for impairment
for any of the cash-generating units within the Group.
For further information, see Note 1 about critical
judgments and estimates and Note 10 about intangible
assets.
Our audit procedures included, but were not limited to:
• Review and assessment of SKF’s procedures and
model for impairment tests of goodwill and evaluation
of judgements and estimates made, that the proce-
dures are consistently applied and that there is
integrity in calculations;
• Verification of input data in calculations including
information from business plans for the forecast
period;
• Test of head room for each cash-generating unit
byperforming sensitivity analyses; and
• Review of the completeness in relevant disclosures
tothe financial reports.
When performing the audit procedures our valuation
experts have been involved.
Other information than the annual accounts and
consolidated accounts
This document also contains other information than the
annual accounts and consolidated accounts and is found
on pages 1–13 and 90–150. The Board of Directors and
the Managing Director are responsible for this other
information.
Our opinion on the annual accounts and consolidated
accounts does not cover this other information and we do
not express any form of assurance conclusion regarding
this other information.
In connection with our audit of the annual accounts
and consolidated accounts, our responsibility is to read
the information identified above and consider whether
the information is materially inconsistent with the annual
accounts and consolidated accounts. In this procedure we
also take into account our knowledge otherwise obtained
in the audit and assess whether the information other-
wise appears to be materially misstated.
If we, based on the work performed concerning this
information, conclude that there is a material misstate-
ment of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and the
ManagingDirector
The Board of Directors and the Managing Director are
responsible for the preparation of the annual accounts
and consolidated accounts and that they give a fair pres-
entation in accordance with the Annual Accounts Act and,
concerning the consolidated accounts, in accordance with
IFRS as adopted by the EU. The Board of Directors and
the Managing Director are also responsible for such
internal control as they determine is necessary to enable
the preparation of annual accounts and consolidated
accounts that are free from material misstatement,
whether due to fraud or error.
In preparing the annual accounts and consolidated
accounts, The Board of Directors and the Managing
Director are responsible for the assessment of the com-
pany’s and the group’s ability to continue as a going
concern. They disclose, as applicable, matters related
togoing concern and using the going concern basis of
accounting. The going concern basis of accounting is
however not applied if the Board of Directors and the
Managing Director intend to liquidate the company,
tocease operations, or have no realistic alternative but
todo so.
The Audit Committee shall, without prejudice to the
Board of Director’s responsibilities and tasks in general,
among other things oversee the company’s financial
reporting process.
Auditor’s responsibility
Our objectives are to obtain reasonable assurance about
whether the annual accounts and consolidated accounts
as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report
thatincludes our opinions. Reasonable assurance is a
high level of assurance but is not a guarantee that an
audit conducted in accordance with ISAs and generally
accepted auditing standards in Sweden will always detect
a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users
taken on the basis of these annual accounts and consoli-
dated accounts.
A further description of our responsibilities for the
audit of the annual accounts and consolidated accounts is
located at the Swedish Inspectorate of Auditors website:
www.revisorsinspektionen.se/revisornsansvar This
description forms part of the auditor´s report.
We must inform the Board of Directors of, among
other matters, the planned scope and timing of the audit.
We must also inform of significant audit findings during
our audit, including any significant deficiencies in internal
control that we identified.
We must also provide the Board of Directors with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communi-
cate with them all relationships and other matters that
may reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with the Board of
Directors, we determine those matters that were of
mostsignificance in the audit of the annual accounts
andconsolidated accounts, including the most important
assessed risks for material misstatement, and are
therefore the key audit matters. We describe these
matters in the auditor’s report unless law or regulation
precludes disclosure about the matter.
SKF ANNUAL REPORT 2022 90
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IS SKF
BACK TO
START
PRE SIDENT ’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
Report on other legal and regulatory requirements
Opinions
In addition to our audit of the annual accounts and
con solidated accounts, we have also audited the
administration of the Board of Directors and the
Managing Director of AB SKF (publ) for the financial
year1 January–31 December 2022 and the proposed
appropriations of the company’s profit or loss.
We recommend to the general meeting of share-
holders that the profit to be appropriated in accordance
with the proposal in the statutory administration report
and that the members of the Board of Directors and the
Managing Director be discharged from liability for the
financial year.
Basis for Opinions
We conducted the audit in accordance with generally
accepted auditing standards in Sweden. Our responsibili-
ties under those standards are further described in the
Auditor’s Responsibilities section. We are independent of
the parent company and the group in accordance with
professional ethics for accountants in Sweden and have
otherwise fulfilled our ethical responsibilities in accord-
ance with these requirements.
We believe that the audit evidence we have obtained
issufficient and appropriate to provide a basis for our
opinions.
Responsibilities of the Board of Directors and the
Managing Director
The Board of Directors is responsible for the proposal
for appropriations of the company’s profit or loss. At the
proposal of a dividend, this includes an assessment
ofwhether the dividend is justifiable considering the
requirements which the company’s and the group’s type
of operations, size and risks place on the size of the
parent company’s and the group’s equity, consolidation
requirements, liquidity and position in general.
The Board of Directors is responsible for the company’s
organization and the administration of the company’s
affairs. This includes among other things continuous
assessment of the company’s and the group’s financial
situation and ensuring that the company’s organization
isdesigned so that the accounting, management of
assets and the company’s financial affairs otherwise are
controlled in a reassuring manner. The Managing Direc-
tor shall manage the ongoing administration according to
theBoard of Directors’ guidelines and instructions and
among other matters take measures that are necessary
to fulfill the company’s accounting in accordance with law
and handle the management of assets in a reassuring
manner.
Auditor’s responsibility
Our objective concerning the audit of the administration,
and thereby our opinion about discharge from liability,
isto obtain audit evidence to assess with a reasonable
degree of assurance whether any member of the Board
of Directors or the Managing Director in any material
respect:
• has undertaken any action or been guilty of any omis-
sion which can give rise to liability to the company, or
• in any other way has acted in contravention of the
Companies Act, the Annual Accounts Act or the
Articles of Association.
Our objective concerning the audit of the proposed
appropriations of the company’s profit or loss, and there by
our opinion about this, is to assess with rea son able
degree of assurance whether the proposal is in accord-
ance with the Companies Act.
Reasonable assurance is a high level of assurance but
is not a guarantee that an audit conducted in accordance
with generally accepted auditing standards in Sweden
will always detect actions or omissions that can give rise
to liability to the company, or that the proposed appropri-
ations of the company’s profit or loss are not in accord-
ance with the Companies Act.
A further description of our responsibilities for the
audit of the management’s administration is located
atthe Swedish Inspectorate of Auditors website:
www.revisorsinspektionen.se/revisornsansvar. This
description forms partof the auditor’s report.
The auditor’s examination of the Esef report
Opinions
In addition to our audit of the annual accounts and
consolidated accounts, we have also examined that
the Board of Directors and the Managing Director
have prepared the annual accounts and consolidated
accounts in aformat that enables uniform electronic
reporting (the Esef report) pursuant to Chapter 16,
Section 4 a ofthe Swedish Securities Market Act
(2007:528) for ABSKF (publ) for the financial year
1 January–31 December 2022.
Our examination and our opinion relate only to the
statutory requirements.
In our opinion, the Esef report has been prepared in
aformat that, in all material respects, enables uniform
electronic reporting.
Basis for opinion
We have performed the examination in accordance with
FAR’s recommendation RevR 18 Examination of the Esef
report. Our responsibility under this recommendation is
described in more detail in the Auditors’ responsibility
section. We are independent of AB SKF (publ) in accord-
ance with professional ethics for accountants in Sweden
and have otherwise fulfilled our ethical responsibilities in
accordance with these requirements.
We believe that the evidence we have obtained is suffi-
cient and appropriate to provide a basis for our opinion.
Responsibilities of The Board of Directors and the
Managing Director
The Board of Directors and the Managing Director are
responsible for the preparation of the Esef report in
accordance with the Chapter 16, Section 4 a of the
Swedish Securities Market Act (2007:528), and for such
internal control that the Board of Directors and the
Managing Director determine is necessary to prepare
theEsef report without material misstatements, whether
due to fraud or error.
Auditor’s responsibility
Our responsibility is to obtain reasonable assurance
whether the Esef report is in all material respects
prepared in a format that meets the requirements of
Chapter 16, Section 4 (a) of the Swedish Securities
Market Act (2007:528), based on the procedures
performed.
RevR 18 requires us to plan and execute procedures
toachieve reasonable assurance that the Esef report is
prepared in a format that meets these requirements.
Reasonable assurance is a high level of assurance,
butit is not a guarantee that an engagement carried out
according to RevR 18 and generally accepted auditing
standards in Sweden will always detect a material mis-
statement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually
or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of the Esef report.
The firm applies International Standard on Quality
Management 1, which requires the firm to design, imple-
ment and operate a system of quality management
including policies or procedures regarding compliance
with ethical requirements, professional standards and
applicable legal and regulatory requirements.
The examination involves obtaining evidence, through
various procedures, that the Esef report has been pre-
pared in a format that enables uniform electronic report-
ing of the annual accounts and consolidated accounts.
The procedures selected depend on the auditor’s judg-
ment, including the assessment of the risks of material
misstatement in the report, whether due to fraud or
error. In carrying out this risk assessment, and in order
to design audit procedures that are appropriate in the
circumstances, the auditor considers those elements of
internal control that are relevant to the preparation of
the Esef report by the Board of Directors and the Manag-
ing Director, but not for the purpose of expressing an
opinion on the effectiveness of those internal controls.
The examination also includes an evaluation of the
appropriateness and reasonableness of assumptions
made by the Board of Directors and the Managing
Director.
The procedures mainly include a validation that the
Esef report has been prepared in a valid XHMTL format
and a reconciliation of the Esef report with the audited
annual accounts and consolidated accounts.
Furthermore, the procedures also include an assess-
ment of whether the consolidated statement of financial
performance, financial position, changes in equity, cash
flow and disclosures in the Esef report have been marked
with iXBRL in accordance with what follows from the Esef
regulation.
Deloitte AB was appointed auditor of AB SKF (publ)
by the general meeting of the shareholders on
25 March 2021 and has been the company’s auditor
since 25 March 2021.
Gothenburg, March 1, 2023
Deloitte AB
Hans Warén
Authorized Public Accountant
SKF ANNUAL REPORT 2022 91
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PRE SIDENT ’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
Group Management as of 31 December 2022
Rickard Gustafson
President and CEO
Born 1964
MSc from the Institute of Technology
at Linköping University, Sweden.
Employed since 2021
Previous positions
President and CEO of SAS Group,
CEO of the insurance company Codan/
Trygg Hansa and he has held several
positions within General Electric.
Board member
Telia Company and The Confederation
of Swedish Enterprise
Shareholding
9,600 SKF B
John Schmidt
President, Industrial Region Americas
Born 1969
Bachelor of Science, Mechanical
Engineering from the Pennsylvania
State University.
Employed since 2001 and 1993–1998
Previous positions
President, Industrial Sales Americas,
President and CEO SKF USA Inc,
Vice President Industrial Market NAM
and several other positions within SKF.
Shareholding
25,883 SKF B
Aldo Cedrone
Acting President, Industrial Region
Europe Middle East and Africa
Born 1958
Master in Mechanical Engineering
from Università di Roma,
“La Sapienza”. Employed since
1989and 1985–1987
Previous positions
Director Ball Bearing Cluster
& Managing Director SKF Italy,
Director Manufacturing within
Industrial Market and Automotive
Market and Business unit Director
forPowertrain & TW.
Shareholding
869 SKF B
Manish Bhatnagar
President, Industrial Region India
and Southeast Asia
Born 1969
Master of Business Administration
from Indian Institute of Management,
Calcutta, and B.E. in Electronics
Engineering from Birla Institute of
Technology & Science, Pilani, India.
Employed since 2018
Previous positions
Senior roles at General Electric
and Danaher.
Board member
SKF India Ltd.
Shareholding
930 SKF B
Henry Wang
President Industrial Region China
and Norteast Asia
Born 1968
Master of Business Administration
from the University of Calgary and
aBachelor of Engineering from
Shanghai Jiaotong University.
Employed since October 2022 and
1997–2019
Previous positions
President of Alstom’s operations in
China, CEO of KUKA in China, Head of
SKF Industrial Sales in China as well
as several other positions within SKF.
Shareholding
0 SKF B
David Johansson
President, Automotive
Born 1980
Master in Science; Industrial
Marketing, Electrical Engineering
at Chalmers University of
Technology, Gothenburg.
Employed since 2005
Previous positions
Director, Global Railway and China
Mobility business, Director, China
Automotive, Aerospace and Railway
business, Director, Global Marine
Business Unit and several other
positions within SKF.
Board member
SKF India Ltd.
Shareholding
1,500 SKF B
140SKF ANNUAL REPORT 2022
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THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
GROUP MANAGEMENT AS OF 31 DECEMBER 2022, CONT.
Thomas Fröst
President, Independent and
Emerging Business
Born 1962
Degree in Industrial Economics from
ChalmersUniversity of Technology.
Employed since 1988
Previous positions
President, Industrial Technologies,
Director Industrial Units, Head of
Industrial Marketing, and several
otherpositions within SKF.
Shareholding
1,904 SKF B
Joakim Landholm
Senior Vice President,
Group Operations
Born 1969
Master of Science from Stockholm
School of Economics.
Employed since February 2022
Previous positions
CEO Hector Rail, Chief Commercial
Officer SAS and senior positions at
Codan/Trygg Hansa and GE Capital.
Board member
SKF India Ltd.
Shareholding
4,090 SKF B
Annika Ölme
Chief Technology Officer and Senior
Vice President, Technology
Development
Born 1973
Master of Science in Electrical
Engineering from Chalmers University
of Technology and a Master of
Business Administration from
Waikato University.
Employed since October 2022 and
2002–2017
Previous positions
CTO and Head of Engineering at
SAAB Radar Solutions, Managing
Director of Arcam, a subsidiary of
General Electric and several various
positions within SKF.
Board member
Image Systems AB and
Jacob Wallenberg Foundation
Shareholding
45 SKF B
Niclas Rosenlew
Chief Financial Officer and Senior Vice
President, Group Finance
Born 1972
Master of Science in Finance, Hanken,
Swedish School of Economics.
Employed since 2019
Previous positions
CFO of Basware and senior positions
within Microsoft, Nokia and Deutsche
Bank.
Shareholding
8,640 SKF B
Mathias Lyon
General Counsel and Senior Vice
President, Group Legal & Compliance
Born 1975
Master of Laws, Faculty of Law
atLund University.
Employed since 2012
Previous positions
SKF Deputy General Counsel and
several other positions at Volvo,
AstraZeneca, Mannheimer Swartling
and Rosengrens.
Shareholding
2,062 SKF B
Ann-Sofie Zaks
Senior Vice President, Group People
Experience and Communication
Born 1976
Bachelor’s degree, Innovation
Program with special focus on
Behavioural Science from University
college of Mälardalen.
Employed since2001
Previous positions
People Experience Director Bearing
Operations, Program manager, Group
People Transformation initiative and
several other positions within SKF.
Shareholding
5,584 SKF B
141SKF ANNUAL REPORT 2022
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VALUE CREATION
AND STRATEGY
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THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
Seven-year review
MSEK unless otherwise stated 2022 2021 2020 2019 2018 2017 2016
Income statements
Net sales 96,993 81,732 74,852 86,013 85,713 77,938 72,589
Operating expenses incl. associated comp. –88,401 –70,974 –67,783 –76,618 –74,664 –69,346 –65,062
Operating profit 8,532 10,758 7,069 9,395 11,049 8,592 7,527
Financial income and expense, net 1,239 –695 –769 –926 –861 –934 –788
Profit before taxes 7,293 10,063 6,300 8,469 10,188 7,658 6,739
Taxes 2,438 –2,484 –1,826 –2,677 –2,603 –1,898 –2,530
Net profit 4,855 7,579 4,474 5,792 7,585 5,760 4,209
Balance sheets
Intangible assets 18,193 16,942 16,242 18,397 17,722 17,360 19,568
Deferred tax assets 3,173 3,839 4,800 4,437 3,563 3,633 3,806
Property, plant and equipment 24,897 20,723 18,161 18,420 16,688 15,762 15,746
Right of use assets 3,084 2,661 2,517 2,991 — — —
Non-current financial and other assets 1,781 1,674 1,939 2,019 1,964 1,627 1,688
Inventories 26,052 20,997 15,733 18,051 17,826 17,122 15,418
Trade receivables 16,905 13,972 12,286 14,006 13,842 13,416 13,462
Other current assets 16,838 18,820 18,879 15,787 15,568 12,283 14,219
Total assets 110,923 99,628 90,557 94,108 87,173 81,203 83,907
Equity 54,043 45,365 35,712 37,366 35,452 29,823 27,683
Provisions for post-employment benefits 8,748 11,781 15,170 15,366 12,894 12,309 13,945
Deferred tax provisions 1,365 1,040 792 960 1,118 1,100 1,380
Other provisions 2,305 2,517 3,482 2,474 2,541 2,275 2,224
Financial liabilities 22,135 19,336 18,349 19,017 17,157 18,508 23,650
Trade payables 11,594 9,881 8,459 8,266 7,831 7,899 7,100
Other liabilities 10,733 9,709 8,593 10,659 10,180 9,289 7,925
Total equity and liabilities 110,923 99,628 90,557 94,108 87,173 81,203 83,907
MSEK unless otherwise stated 2022 2021 2020 2019 2018 2017 2016
Key figures
1)
Operating margin, % 8.8 13.2 9.4 10.9 12.9 11.0 10.4
EBITA 9,173 11,340 7,681 10,008 11,541 9,064 8,016
EBITDA 12,316 14,064 10,470 12,892 13,522 10,916 9,895
Return on capital employed, % 10.6 14.8 9.8 13.2 17.6 14.2 11.9
Return on equity, % 9.5 18.8 12.1 15.7 22.8 20.4 16.5
Net working capital, % of sales 32.4 30.7 26.1 27.7 27.8 29.0 30.0
Net debt/equity, % 35.2 38.3 51.7 59.3 49.1 71.3 84.4
Net debt/EBITDA, % 1.5 1.2 1.8 1.7 1.3 1.9 2.4
Turnover of total assets, times 0.90 0.85 0.79 0.90 1.00 0.96 0.89
Gearing, % 35.6 40.5 48.0 47.1 45.0 49.9 55.3
Equity/assets, % 48.7 45.5 39.4 39.7 40.7 36.7 33.0
Net cash flow after investments before
financing 295 2,100 5,259 4,953 8,326 4,753 7,717
Investments and employees
Additions to property,
plant and equipment 5,030 3,822 3,332 3,461 2,647 2,243 1,869
Research and development
expenses 3,177 2,751 2,515 2,691 2,591 2,395 2,246
Patents – number of first filings 240 241 200 201 202 192 191
Average number of employees 40,773 40,861 38,385 41,559 42,565 43,814 43,508
Number of employees registered
at 31 December 42,641 42,602 40,963 43,360 44,428 45,678 44,868
1) See page 144 for definitions.
142SKF ANNUAL REPORT 2022
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THE SHARE
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STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
Three-year review
MSEK unless otherwise stated 2022 2021
1)
2020
1)
Industrial
Net sales 69,516 58,559 53,912
Operating profit 7,875 9,289 6,778
Operating margin, % 11.3 15.9 12.6
Assets and liabilities, net 51,108 44,127 38,681
Registered number of employees 36,744 36,136 34,590
Automotive
Net sales 27,417 23,173 20,940
Operating profit 657 1,469 291
Operating margin, % 2.4 6.3 1.4
Assets and liabilities, net 14,504 10,885 8,776
Registered number of employees 3,270 3,392 3,399
1) Previously published figures have been restated to conform to the current Group structure. For more information refer
to Note 2 in the consolidated financial statements.
SEK per share unless otherwise stated | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 |
Earnings per share | 9.81 | 16.10 | 9.44 | 12.20 | 16.0 | 12.02 | 8.75 |
| Dividend per A and B share | |||||||
| Total dividends, MSEK | |||||||
| Purchase price of B shares | |||||||
| at year-end on NASDAQ Stockholm | 159.15 | 214.5 | 213.4 | 189.4 | 134.5 | 182.2 | 167.6 |
| Equity per share | 114 | 96 | 75 | 78 | 74 | 62 | 57 |
| Yield (B), % | 4.4 | 3.3 | 3.0 | 1.6 | 4.5 | 3.0 | 3.3 |
| P/E ratio, B | |||||||
| (share price/earnings per share) | 16.2 | 13.3 | 22.6 | 15.5 | 8.4 | 15.2 | 19.2 |
| Cash flow from operations, per share | 12.4 | 11.5 | 18.2 | 20.7 | 18.3 | 14.1 | 15.7 |
| Cash flow, after investments | |||||||
| and before financing, per share | 0.7 | 4.6 | 11.6 | 10.9 | 18.3 | 10.4 | 17.0 |
2)
2)
1)
2)
1) See page 144 for definitions.
2) According to the Board’s proposal for the year 2022.
Distribution of shareholding
Shareholding Number of shareholders % Number of shares %
1–1,000 70,511 88.4 15,308,201 3.4
1,001–10,000 8,453 10.6 22,667,305 5.0
10,001–100,000 621 0.8 17,523,511 3.9
100,001– 180 0.2 339,350,584 74.5
Anonymous ownership — — 60,501,467 13.3
79,765 100 455,351,068 100
Source: Monitor, Modular Finance as of 31 December 2022.
Per-share data
1)
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REMUNERATION
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GROUP
DATA
FINANCIAL
STATEMENTS
SKF has applied the guidelines issued by ESMA
(European Securities and Markets Authority) on
APMs (Alternative Performance Measures).
Thesekey figures are not defined or specified in
IFRS but provides complementary information
toinvestors and other stakeholders on the com-
pany´s performance. These measures are used
internally by management, as a complement to
IFRS measures, as basis for business decisions.
The alternative performance measures, defined
bySKF Group, may not be comparable to similar
measures presented by other groups.
Adjusted operating profit
Operating profit excluding items affecting
comparability.
Adjusted operating margin
Operating profit margin excluding items affecting
comparability.
Average number of employees
Total number of working hours of registered
employees, divided by the normal total working
time for the period.
Basic earnings per share in SEK
(as defined by IFRS)
Net profit less non-controlling interests divided
by the ordinary number of shares.
Capital employed
Twelve months rolling average oftotal assets less
the average of non-interest bearing liabilities.
Currency impact on operating profit
The effects of both translation and trans action
flows based on current assumptions and exchange
rates compared to the corresponding period
lastyear.
Debt
Loans plus provisions for post- employment
benefits, net.
Dividends pay-out ratio
Dividends paid in relation to net income for
the year the dividend relates to.
EBITA (Earnings before interest,
taxesandamortization)
Operating profit before amortizations.
EBITDA (Earnings before interest,
taxes, depreciation and amortization)
Operating profit before depreciations,
amortizations, and impairments.
Equity/assets ratio
Equity as a percentage of total assets.
Equity per share
Equity excluding non-controlling interests
divided by the ordinary number of shares.
Gearing
Debt as a percentage of the sum of debt
andequity.
Gross margin
Gross income as a percentage of net sales.
Definitions
Items affecting comparability
Significant income/expenses that affects
comparability between accounting periods.
Thisincludes, but is not limited to, restructuring
costs, impairments and write-offs, currency
exchange rate effects caused by devaluations and
gains and losses on divestments of businesses.
Net debt
Debt less short-term financial assets excluding
derivatives.
Net debt/EBITDA
Net debt, as a percentage of twelve months
rolling EBITDA.
Net debt/equity
Net debt, as a percentage of equity.
Net working capital as % of annual
sales (NWC)
Trade receivables plus inventory minus trade
payables as a percentage of twelvemonths
rolling net sales.
Operating margin
Operating profit, as a percentage of net sales.
Organic growth
Sales excluding effects of currency and acquired
and divested businesses.
Revenue growth
Sales excluding effects of currency and
divested businesses.
P/E ratio
Share price at year end dividend by basic
arnings per share.
Registered number of employees
Total number of employees included in SKF’s
payroll at the end of the period.
Return on capital employed (ROCE)
Operating profit/loss plus interest income, as
apercentage of twelve months rolling average
oftotal assets less the average of non-interest
bearing liabilities.
Return on equity (ROE)
Profit/loss after taxes as a percentage of twelve
months rolling average of equity.
Turnover of total assets
Net sales in relation to twelve-month rolling
average of total assets.
Total value added (TVA)
TVA is the operating profit, less the pre-tax cost
ofcapital. The pre-tax cost of capital is based on
aweighted cost of capital with a risk premium of
6%above the risk-free interest rate.
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FINANCIAL
STATEMENTS
Alternative performance measures
MSEK unless otherwise stated 2022 2021
EBITA & EBITDA
Net profit 4,855 7,579
Taxes 2,438 2,484
Financial income and expense, net 1,239 695
Operating profit 8,532 10,758
Amortizations of intangible assets 641 582
EBITA 9,173 11,340
Depreciation and impairments of intangible and tangible assets 3,143 2,724
EBITDA 12,317 14,064
Adjusted operating profit
Operating profit 8,532 10,758
Items affecting comparability
1)
1,672 81
Adjusted operating profit 10,204 10,839
Net work capital (NWC), % of 12 months rolling sales
Total net sales (rolling 12-months) 96,933 81,732
Inventory 26,052 20,997
Trade receivables 16,905 13,972
Trade payables –11,594 –9,881
Net Working Capital 31,363 25,088
NWC, % of 12 months rolling sales 32.4 30.7
Return on Equity (ROE) for the 12-month period, %
Net profit (rolling-12 months) 4,855 7,579
Equity (rolling 12-month average) 50,943 40,336
ROE for the 12-month period, % 9.5 18.8
Capital employed (rolling 12-months average)
Total assets 108,014 95,633
Provisions 3,567 3,806
Other non-current liabilities 28 30
Trade payables 11,415 8,993
Other current liabilities 11,062 9,910
Non-interest bearing liabilities 26,073 22,739
Capital employed (rolling 12-months average) 81,942 72,895
Return on capital employed (ROCE) for the 12-month period, %
Operating profit (rolling 12-months) 8,532 10,758
Interest income – external (rolling 12-months) 135 35
Operating profit plus interest income 8,667 10,793
Capital employed (rolling 12-months average) 81,942 72,895
ROCE for the 12-month period, % 10.6 14.8
MSEK unless otherwise stated 2022 2021
Adjusted return on capital employed (ROCE) for the 12-month period, %
Adjusted operating profit (rolling 12-months) 10,204 10,839
Interest income – external (rolling 12-months) 135 35
Adjusted operating profit plus interest income 10,339 10,874
Capital employed (rolling 12-months average) 81,942 72,895
Adjusted ROCE for the 12-month period, % 12.6 14.9
Debt & net debt
Long term loans – total 18,175 13,275
Current financial liabilities 916 3,864
Short term derivative liabilities –111 –106
Post-employment benefits – other 760 977
Post-employment benefits – pension 7,988 10,804
Defined benefit assets –127 –71
Long term lease liabilities 2,286 2,179
Debt 29,888 30,923
Current financial assets –11,224 –13,657
Short term derivative assets 370 94
Net debt 19,034 17,360
Gearing, %
Shareholder's equity
54,043 45,365
Debt 29,888 30,923
Gearing, % 35.6 40.5
Equity/assets ratio, %
Shareholder's equity
54,043 45,365
Total assets 110,923 99,628
Equity/assets ratio, % 48.7 45.5
Net debt/equity, %
Shareholder's equity
54,043 45,365
Net debt 19,034 17,360
Net debt/equity, % 35.2 38.3
Net debt/equity, excl post-employment benefits, %
Shareholder's equity
54,043 45,365
Net debt, excluding post-employment benefits 10,413 5,650
Net debt/equity, excl post-employment benefits, % 19.3 12.5
Net debt/EBITDA, %
Net debt
19,034 17,360
EBITDA (rolling 12 months) 12,317 14,064
Net debt/EBITDA, % 1.5 1.2
1) For more information, see page 45.
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STATEMENTS
General information
Annual General Meeting
The Annual General Meeting will be held at
Radisson Blu Scandinavia Hotel, Södra Hamn gatan
59, Gothen burg, Sweden, at 14.00 on Thursday,
23March 2023.
The Board of Directors has decided that the
shareholders shall be able to exercise their voting
rights by postal voting in accordance with the
company’s articles of association.
For more information about the Annual General
Meeting including preconditions for participation
and instructions for postal voting can be found in
the notice and is available at www.skf.com.
Payment of dividend
The Board of Directors proposes a divi-
dend of SEK 7.00 per share for 2022.
Monday, 27 March 2023 is proposed as
the record date. Subject to resolution by
the Annual General Meeting, it is expected
that Euroclear will distribute the dividend
on Thursday, 30 March 2023.
Financial information and reporting
Publishing dates for financial reports in 2023:
Annual Report 2022 1 March
Q1 report 27 April
Q2 report 19 July
Q3 report 27 October
Q4 report 9 February 2024
The reports are available in Swedish and English
on investors.skf.com. Asubscription service for
press releases and interim reports, sent via
e-mail or SMS, isavailable on the website.
Contact information
Patrik Stenberg
Director SKF Group Investor Relations
and Mergers & Acquisitions
email: patrik.stenberg@skf.com
www.investors.skf.com
Theo Kjellberg
Director Group Communication
email: theo.kjellberg@skf.com
SKF Group Headquarters
SE-415 50 Gothenburg, Sweden
Telephone: +46 31 337 10 00
www.skf.com
Company reg.no 556007-3495
CAUTIONARY STATEMENT
This report contains forward-looking statements that
are based on the current expectations of the manage-
ment of SKF. Although management believes that the
expectations reflected in such forward-looking state-
ments are reasonable, no assurance can be given that
such expectations will prove to have been correct.
Accordingly, results could differ materially from those
implied in the forward-looking statements as a result
of, among other factors, changes in economic, market
and competitive conditions, changes in the regulatory
environment and other government actions, fluctua-
tions in exchange rates and other factors mentioned
in the Administration Report in this Annual Report.
® SKF, ALEMITE, SKF Axios, BeyondZero, DST,
GBC, HYATT, INSOCOAT, KAYDON, Lincoln, PEER,
RecondOil, SKF4U, SKF INSIGHT are registered
trademarks of the SKF Group.
© SKF GROUP 2023 All rights reserved. Please note
that this publication may not be copied or distributed,
in whole or in part, unless prior written permission is
granted.
Every care has been taken to ensure the accuracy of
the information contained in this publication, but no
liability can be accepted for any loss or damage whether
direct, indirect or consequential arising out of the use
of the information contained herein.
The report is originally written in English and trans-
lated to Swedish.
PUB GCR/R1 19520 EN · March 2023
SKF Annual Report 2022 was published on 1 March 2023.
Produced by AB SKF and Solberg Kommunikation.
Photo credits: SKF Group, Magnus Cimmerbeck, Anatol Kotte, Oscar
Hyltbring, John Hagby, Magnus Fond. Certain images used under
license from Shutterstock.com and with the courtesy of Siemens
Mobility, Volvo Cars, NIO and Goldwind.
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Remuneration
Report
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FINANCIAL
STATEMENTS
Introduction
This remuneration report provides an outline
ofhow AB SKF’s principles for remuneration
forGroup Management (the “remuneration
principles”), adopted by the Annual General
Meeting 2020 and revised in 2022, have been
implemented in 2022. The report also provides
details on the remuneration of AB SKF’s CEO.
Inaddition, the report contains a summary of
ABSKF’s outstanding share and share-price
related incentive programs. The report has been
prepared in compliance with Chapter 8, Sections
53 a and 53 b of the Swedish Companies Act
(2005:551) and the Remuneration Rules issued
bythe Swedish Corporate Governance Board.
Information required by Chapter 5, Sections
40–44 of the Annual Accounts Act (1995:1554)
is available in note 23 on p. 72–75 in the com-
pany’s annual report for 2022 (the “annual report
2022”). Information on the work of the Remu-
neration Committee in 2022 is set out in the
corporate governance report, which is available
onp. 132–138 inthe annual report 2022.
Remuneration of the Board of Directors is not
covered by this report. Such remuneration is
resolved annually by the Annual General Meeting
and disclosed in note 23 on p. 72–75 in the annual
report 2022.
Key developments 2022
The CEO summarizes the company’s overall
performance in his statement on page 11–13 in
the annual report 2022.
Overview of the application of the
remuneration principles in 2022
The objective of the remuneration principles is to
ensure that the SKF Group can attract and retain
the best people in order to contribute to the SKF
Group’s mission and business strategy, its long-
term interests and sustainability. Remuneration
for Group Management shall be based on market
competitive conditions and at the same time sup-
port the shareholders’ best interests. Variable
salary covered by the principles shall be linked to
predetermined and measurable criteria, aiming to
promote the SKF Group’s business strategy and
long-term interests, including its sustainability.
The total remuneration package for a Group
Management member shall consist of the following
components: fixed salary, variable salary, pension
benefits, conditions for notice of termination and
severance pay, and other benefits such as a com-
pany car. The components shall create a well-
balanced remuneration reflecting individual per-
formance and responsibility as well as the SKF
Group’s overall performance. The Annual General
Meeting may also – irrespective of the principles
–resolve on other remuneration components, e.g.
SKF’s Performance Share Programme.
The principles are found at www.skf.com. The
remuneration principles, adopted by the Annual
General Meeting 2020 and revised in 2022, have
been fully implemented.
No deviation from the principles have been
decided and no derogations from the procedure for
implementation of the principles have been made.
Table 1 – Total CEO remuneration in 2022 (kSEK)
Table 1 below sets out total remuneration earned by AB SKF’s CEO during 2022
1)
.
Fixed remuneration Variable remuneration
Extraordinary
items
Pension
expense
Total
remuneration
Proportion of fixed
and variable
remunerationTotal remuneration
2)
Base
salary
Other
benefits
One-year
variable
Multi-year
variable
3)
Rickard Gustafson, CEO 14,460 175 4,352 — — 5,780 24,767 82% / 18%
1) Disbursements may or may not have been made during the year.
2) Allotment of shares under the SKF Performance Share Programme is not covered by the remuneration principles and is reported separately under share based remuneration below.
The auditor’s report regarding the company’s
compliance with the principles is available on
www.skf.com. No remuneration has been
reclaimed.
In addition to remuneration covered by the
remuneration principles, the Annual General
Meetings of the company have resolved to imple-
ment SKF Performance Share Programme for
senior managers and key employees.
Application of performance criteria
The performance measures for the CEO’s variable
remuneration have been selected to deliver the
company’s strategy and to encourage behavior
which is in the long-term interest of the company.
In the selection of performance measures, the
strategic objectives, sustainability, short-term and
long-term business priorities for 2022 have been
taken into account.
The performance measures for the CEO’s
variable cash remuneration have been divided
equally between adjusted operating margin,
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PRESIDENT ’S
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VALUE CREATION
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RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
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networking capital and organic growth. There is
also one criterion linked to reduction of green-
house gas emissions. To determine the range for
the para m eters, both the business plan and the
final result ofthe year before is the baseline.
Thereduction ofCO
2
e emissions criterion is related
to the SKF Group net zero 2030 objective. During
2022, the financial performance measures were
partly met and the net zero 2030 measure was
fully met. Theoutcome was therefore that 43%
ofthe maximum variable cash remuneration was
earned by the CEO during the year; 0% relating
toadjusted operating margin, 0% relating to
networking capital, 33% relating to organic
growth and 10% related to the reduction of
CO
2
e emissions.
Comparative information on the change of
remuneration and company performance
2020 was the first reference year and therefore no
year over year changes for the previously reported
financial years (RFY) will be presented. Coming
years will be added so that the annual change over
the last five years will be visible.
Share-based remuneration
Outstanding share-related incentive plans
Since 2008 the Annual General Meeting has
resolved each year upon the SKF Performance
Share Programme for senior managers and key
employees. The SKF Performance Share Pro-
grammes for 2020–2022 have been ongoing
during 2022.
The number of shares that may be allotted must
be related to the degree of achievement of the
Total Value Added (TVA) target level, as defined
bythe Board, for the TVA development during a
three-year calculation period. From the SKF Per-
formance Share Programme 2022 a performance
criterion related to the reduction of CO
2
e emissions
has been included. The performance criteria used
to assess the outcome of the proposed SKF Per-
formance Share Programme is distinctively linked
to the business strategy and thereby to the SKF
Group’s long-term value creation, including its
sustainability. These performance criteria include
a clear link to the SKF Group’s yearly growth,
long-term financial targets and capital efficiency.
For further information on said SKF Performance
Share Programme, including the criteria which
theoutcome depends on, please refer to the Board
of Directors’ proposal on SKF’s Performance
Share Programme 2022 which can be found on
www.skf.com.
At the end of 2022, the SKF Performance Share
Programme 2020 expired. Allotment of shares
was subject to the satisfaction of performance
conditions during the three-year period 2020
–2022, compared to the financial year 2019. Since
the threshold level of the TVA was met and the
TVA target was partly met, as decided by the
Board, the participants of the programme were
awarded 43% allotment of shares under the pro-
gramme. In total, around 226,000 SKF B shares
were allotted under the programme, correspond-
ing to approximately 0.05% of the total number of
outstanding shares. Allotment of shares requires
that the persons covered by the programme are
employed in the SKF Group during the entire
calculation period. The CEO Rickard Gustafson,
that joined in 2021, did not participate in the
Performance Share Programme 2020 and was
therefore not awarded any allotment of shares
under the programme. No CEO allotment of shares
was therefore awarded.
The CEO Rickard Gustafson participates in the
Performance Share Programme 2021 and the
Performance Share Programme 2022. Allotment
of shares may be made following the expiry of the
three-year calculation period, i.e. during 2024 and
2025 respectively, if all the conditions of the pro-
gramme are met and the allotment is approved by
the Board.
Table 2 – Change of remuneration and company performance over the last reported financial
years (kSEK)
2022 2022 vs. 2021 2021 vs. 2020
President remuneration 24,767 +868 (+3.6%) +2,506 (+11.7%)
1)
Adjusted operating profit
2)
10,204,000 –635,000 (–5.9%) +1,645,000 (+17.9%)
Cash flow
3)
5,641,000 +393,000 (+7.5%) –3,017,000 (–36.5%)
Average remuneration on a full-time equivalent
basis of employees in AB SKF 1,051 +3 (+0.3%) +18 (+1.7%)
1) Alrik Danielson (Jan–April), Niclas Rosenlew (May), Rickard Gustafson (June–Dec).
2) Operating profit excluding items affecting comparability.
3) Net cash flow from operating activities.
149SKF ANNUAL REPORT 2022
THIS
IS SKF
BACK TO
START
PRESIDENT ’S
LETTER
VALUE CREATION
AND STRATEGY
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
AB SKF
SE-415 50 Gothenburg, Sweden
Telephone +46 31 337 10 00
www.skf.com