SKF Releases 2024 Annual Report: Revenue Declines Slightly, Focuses on Sustainability and Technological Innovation

[Gothenburg, Sweden, March 2025] – SKF, a global leader in bearings and industrial solutions, has released its financial results for 2024. Despite macroeconomic uncertainties and weakening market demand, SKF has maintained stable operations through cost structure optimization, accelerated regionalization, technological innovation, and an enhanced sustainability strategy. These efforts have laid a solid foundation for the company’s long-term growth.

Financial Overview: Resilience Amid Market Challenges
In 2024, SKF reported a net revenue of SEK 98.72 billion, a year-on-year decline of 5.4%. Despite the revenue dip, the company maintained a solid profit margin, with an adjusted operating margin of 12.3%, consistent with 2023. This was achieved through effective cost management, an optimized product mix, and a flexible pricing strategy.

Key Financial Data
- Total Revenue: SEK 98.72 billion (-5.4% YoY)
- Industrial Division Revenue: SEK 69.48 billion (-5.7% YoY)
- Automotive Division Revenue: SEK 29.25 billion (-4.9% YoY)
- Adjusted Operating Margin: 12.3%
- Operating Cash Flow: SEK 10.8 billion
- Net Debt/EBITDA: 1.1

Despite the decline in demand, SKF maintained a strong cash flow, ensuring sufficient funding for future investments.

Technological Innovation: Strengthening High-Growth Market Expansion
As a global technology leader in the bearing industry, SKF invested SEK 3.33 billion in R&D in 2024, accounting for 3.4% of total revenue. More than 90% of its innovation projects focused on high-growth markets, including railways, electric vehicles, electric drives, agricultural machinery, and food processing.

Key Innovations
- Smart Bearings and Monitoring Systems: SKF launched next-generation smart bearings integrating IoT and AI technology, enabling remote monitoring and predictive maintenance to help customers reduce maintenance costs and improve operational efficiency.
- High-Performance Railway Bearings: SKF developed a new gearbox bearing for high-speed and freight trains, reducing friction by 20%, thereby improving efficiency and reliability.
- Lightweight Ceramic Bearings: With the rising demand for energy-efficient products in electric vehicles and renewable energy, SKF introduced lightweight ceramic bearings that enhance durability and extend EV battery life.
- RecondOil Smart Oil Regeneration Technology: This innovation significantly reduces lubrication oil waste, enhances equipment performance, and advances SKF’s circular economy model.

"At SKF, innovation is the core driver of long-term profitable growth. We are optimizing our R&D investments to focus on high-growth markets and emerging technologies, ensuring SKF remains at the forefront of future competition," said Rickard Gustafson, President and CEO of SKF Group.

Sustainability: Major Carbon Reduction and Green Manufacturing Acceleration
SKF continued to advance its sustainability strategy in 2024, achieving a 59% reduction in Scope 1 and Scope 2 carbon emissions compared to 2019. This was significantly ahead of the industry average and was driven by several key initiatives:
- Renewable Energy Procurement: SKF increased the share of renewable electricity across its global manufacturing facilities, with China contributing the highest proportion.
- Energy Efficiency Improvements: SKF optimized production processes and energy management to reduce overall energy consumption.
- Decarbonizing the Supply Chain: SKF is actively encouraging suppliers to adopt low-carbon materials and production methods, with a goal of achieving net-zero emissions by 2050.

Additionally, SKF received the Platinum Medal from EcoVadis for the fifth consecutive year and achieved top-tier recognition in the CDP Climate Change ratings.

"Sustainability at SKF is not just a corporate responsibility but a key driver of long-term growth. We will continue advancing green manufacturing and fostering a sustainable transformation across the supply chain," Gustafson added.

Strategic Adjustment: Spinning Off the Automotive Business to Focus on Industrial Markets
SKF's Board of Directors has approved the spin-off of its automotive business, with plans to list it independently on the Stockholm Stock Exchange in 2026. This strategic move aims to:
- Enhance Market Competitiveness: The independent automotive business will have greater strategic flexibility, allowing it to better adapt to global automotive market changes.
- Optimize Resource Allocation: SKF’s industrial division will focus on high-value markets such as aerospace, rail, food processing, and high-speed machinery, improving overall profitability.
- Improve Operational Efficiency: The independent automotive business will concentrate on the electric vehicle, commercial vehicle, and aftermarket sectors, enabling faster market response and higher growth potential.

"Spinning off the automotive business is a natural evolution of SKF’s strategy. It will allow both businesses to focus more effectively on their respective markets, driving stronger growth," said Gustafson.

Regionalization Strategy: Strengthening Local Supply Chains for Greater Market Adaptability
In response to global supply chain volatility, SKF has continued to implement a regionalized production strategy. In 2024, the company increased its localized supply chain ratio across Asia, North America, and Europe, achieving an overall regionalization rate of nearly 70%.

Key Achievements in Regionalization
- China Market: SKF expanded investments in China, increasing local production capacity and reducing supply chain dependencies, shortening delivery cycles by 25%.
- North American Market: SKF expanded its U.S. manufacturing facilities and strengthened partnerships with local suppliers to ensure supply chain stability.
- India and Southeast Asia: SKF launched new production lines in India to expand regional market share and enhance efficiency through digital manufacturing.

"Regionalization improves supply chain resilience, shortens delivery times, and reduces logistics costs, ultimately creating greater value for our customers," Gustafson stated.

2025 Outlook: Enhancing Profitability and Capturing Global Growth Opportunities
Looking ahead to 2025, SKF will continue to advance key strategic initiatives:
1. Increase R&D Investment: Focus on electrification, intelligent manufacturing, and renewable energy to expand its product portfolio.
2. Accelerate Regionalized Supply Chains: Optimize global manufacturing bases, enhance local supply capabilities, and strengthen market competitiveness.
3. Execute Automotive Business Spin-Off: Ensure a smooth transition and increase market penetration.
4. Achieve Higher Sustainability Targets: Continue low-carbon manufacturing efforts and accelerate green supply chain initiatives.

"We have successfully navigated market challenges in 2024 while maintaining profitability. In 2025, we will further drive technological innovation, sustainability, and business optimization to secure SKF’s leadership in the global bearing industry," Gustafson concluded.

About SKF
Founded in 1907, SKF Group is a global leader in bearings, seals, lubrication systems, and industrial services. The company is committed to leveraging advanced technology and digital solutions to improve equipment reliability and operational efficiency, driving the industrial sector towards a sustainable future.