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Bearings maker SKF announces fresh targets, aims for 14% core profit margin

·1-min read
FILE PHOTO: SKF headquarters are pictured in Gothenburg
FILE PHOTO: SKF headquarters are pictured in Gothenburg

STOCKHOLM (Reuters) - Sweden's SKF <SKFb.ST>, the world's biggest maker of industrial bearings, set new long-term financial targets on Wednesday, including a higher goal for profitability, which it said reflected strong progress in streamlining the company.

SKF's new targets include an adjusted operating margin of 14%, and revenue growth of 5%, including acquisitions but adjusted for divestments.

The previous targets, introduced in 2016, included a reported operating margin of 12% and organic sales growth of 5% in local currencies.

"During the last few years we have been going through a transformation. Whilst we are far from done, we have made significant progress, not least during the past year," Chief Executive Alrik Danielson said ahead of strategy presentations during the afternoon.

"It is now time to take the next steps of our transformation journey."

SKF has been revamping its vast factory network, raised spending on automation, pushed performance-based revenue models and cut costs since CEO Alrik Danielson took the helm in 2015.

It has beaten earnings forecasts throughout this year, and in the report on the third-quarter last week, it reached an adjusted operating margin of 13.3%, up year-on-year, despite a fall in sales.

SKF shares strengthened slightly following the news on Wednesday, rising 0.8% by 1147 GMT.

(Reporting by Johannes Hellstrom; Editing by Simon Johnson)