SKF, AB: SKF Q2 2026: Continued margin improvement

Gothenburg, 17 July 2026

Q2 2026

• Net sales: MSEK 23,195 (23,166)
• Organic growth: 1.4% (-0.2%). Driven by organic sales growth within the industrial segments, offset by negative market demand for the Automotive business.
• Adjusted operating profit: MSEK 3,223 (3,090). Driven by solid commercial execution, especially within Specialized Industrial Solutions.
• Adjusted operating margin: 13.9% (13.3%).
• Net cash flow from operating activities: MSEK 2,055 (2,817). Mainly driven by working capital build-up related to the ongoing Automotive separation.

Financial overview, MSEK unless otherwise stated	Q2 2026	Q2 2025	Half year 2026	Half year 2025
Net sales	23,195	23,166	45,068	47,132
Organic growth, %	1.4	-0.2	1.9	-1.8
Adjusted operating profit	3,223	3,090	6,174	6,323
Adjusted operating margin, %	13.9	13.3	13.7	13.4
Operating profit	2,219	1,300	4,862	4,185
Operating margin, %	9.6	5.6	10.8	8.9
Adjusted net profit	2,333	2,373	4,380	4,669
Net profit	1,329	583	3,068	2,531
Net cash flow from operating activities	2,055	2,817	1,609	3,794
Basic earnings per share	2.77	1.13	6.34	5.08
Adjusted earnings per share	4.98	5.06	9.23	9.77

Rickard Gustafson, President and CEO:

"In Q2, our adjusted operating margin improved year-over-year, mainly driven by further strengthened profitability in Specialized Industrial Solutions (SIS). We continued to execute on our commercial agenda and strategic initiatives, including investments in attractive growth areas such as humanoids, as well as progressing the Automotive separation.

Solid commercial execution drives margin improvement

Organic sales increased by 1.4% year-over-year, mainly driven by solid price/mix. The SIS segment continued its strong growth, primarily driven by Aerospace and Magnetic Solutions. This more than compensated for continued weakness in the Automotive segment, although growth in China, especially in light and commercial vehicles, was strong. In Bearing Solutions, organic sales were flat compared to the same quarter last year. Our regions in Asia continued to grow, Europe remained soft, while the OEM market in the Americas showed early signs of improvement.

The adjusted operating margin at 13.9% improved year-over-year and sequentially. I'm pleased to see the strong margin development in SIS with growth in targeted areas including aftermarket. As previously communicated, an improved margin development for SIS is one key lever to deliver on our mid- and long-term targets for our Industrial business. The margin in the Automotive business also improved by further efficiencies in production and sourcing. As part of the separation, production lines are being transferred into Automotive plants which means that production support was provided to Automotive also in this quarter. This led to a somewhat less efficient production performance, resulting in a limited positive earnings impact on the Group. For the full year, we expect some support production also in the second half.

Savings from rightsizing activities of approximately MSEK 350 more than offset separation-related negative synergies with a stronger net contribution than in Q1. For the full year 2026, we expect that rightsizing savings will be higher than the negative synergies. We were again able to largely compensate for tariff-related costs, and, at current levels, we aim to continue to do so also in Q3. In Q2, we received the majority of the IEEPA tariff reclaims, which impacted sales negatively due to customer refunds and had a somewhat positive impact on earnings. As expected, the negative impact from currency movements was significantly lower than in the first quarter. Items affecting comparability in Q2 was BSEK -1.0 whereof approximately half related to the consolidation of our footprint in the Americas as previously communicated. The other half is related to the ongoing Automotive separation.

Cash flow from operating activities was BSEK 2.1. This was lower than in the same period last year, reflecting higher working capital development mainly related to the ongoing Automotive separation.

Creating two even sharper businesses

We continue to develop our portfolio and strengthen SKF's long-term profitable growth potential. The Automotive business is now separated and operates as a standalone business within the SKF Group, and we remain on track for the planned listing in Q4 2026, subject to SKF's Board of Directors proposing a listing and shareholders' approval. Kerstin Enochsson has been elected Board member of SKF Vertevo, confirming her role as CEO with a clear task to build an even stronger standalone Automotive business.

In parallel, we are strengthening our industrial business. The announced humanoids partnership with Leaderdrive marks an important step into an attractive growth area, expanding capabilities in critical bearing applications and access to robotics expertise, technology and customers. Additionally, we initiated a modernization of our IT landscape to create an AI foundation for greater agility, resilience and efficiency in our supply chain.

Outlook

Given signs of improved market demand in certain industries in Q2, we expect organic sales to strengthen somewhat in Q3, year-over-year. However, geopolitical turmoil, including the conflict in the Middle East, amplifies overall unpredictability."

Outlook and guidance

Outlook

• Q3 2026: Given signs of improved market demand in certain industries in Q2, we expect organic sales to strengthen somewhat, year-over-year. However, geopolitical turmoil, including the conflict in the Middle East, amplifies overall unpredictability.

Guidance Q3 2026

• Currency impact on the operating profit: around MSEK 100, year-over-year, based on exchange rates as per 30 June 2026.

Guidance FY 2026

• Tax level excluding effects related to divested businesses and separation of the Automotive business: around 29%.
• Additions to property, plant and equipment: around BSEK 4.
• Items affecting comparability related to the Automotive separation and footprint optimization: BSEK -2.5 to -3. This is within the frame communicated at CMD 2025.

A webcast will be held on 17 July 2026 at 08:30 (CEST):
Sweden: [phone]
UK/International: [phone]

https://www.skf.com/group/investors

Aktiebolaget SKF
(publ)

The half year report presented in this press release contains financial and inside information that AB SKF is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication through the agency of the contact person set out below on 17 July 2026 at 07.30 CEST.

For further information, please contact:
Press Relations: Carl Bjernstam, [phone]; [phone]; [e-mail]
Investor Relations: Sophie Arnius, [phone]; [phone]; [e-mail]

Since 1907, SKF has been making some of the world's most innovative bearings, seals, lubrication systems, condition monitoring solutions, and services to reduce friction. Less friction means more energy saved and by reducing it, we make industry smarter, more competitive, and more energy efficient, building a more sustainable future where we can all do more with less. SKF is represented in approximately 130 countries and has around 17,000 distributor locations worldwide. Annual sales in 2025 were SEK 91,583 million and the number of employees was 37,271. www.skf.com

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