# SKF

> Clarifo company profile — qualitative business description generated from
> the company's filings. Financial statements, charts and ratios are
> available on Clarifo (https://www.clarifo.com/en/companies/skfa).

## Overview

SKF (often referenced in filings as SKF Group) is a Swedish-based industrial technology company that designs, manufactures and services bearings, seals, lubrication systems, magnetic and mechatronic solutions, and related condition-monitoring technologies. The group serves a broad range of industrial and automotive applications through two main segments, Industrial and Automotive, and operates with a decentralized model supported by central corporate functions. SKF has a global manufacturing and distribution footprint across the Americas, EMEA, India & Southeast Asia, and China & Northeast Asia, supplying both OEMs and aftermarket customers in more than 20 end industries.

## Products & services

• Rolling bearings and bearing units for industrial and automotive applications
• Seals and sealing solutions for rotating and stationary equipment
• Centralized and automated lubrication systems and components
• Intelligent solutions such as condition monitoring and asset optimization
• Engineering, reliability and maintenance services for rotating equipment
• Magnetic and mechatronic solutions for specialized industrial uses

- **Bearings and Bearing Units** (45%) — Rolling bearings and bearing assemblies for industrial machinery, vehicles and specialized equipment.
- **Seals and Sealing Solutions** (15%) — Rotary and static seals used in industrial equipment and automotive powertrain and chassis systems.
- **Lubrication Systems** (15%) — Centralized and automated lubrication and flow management systems and related components.
- **Intelligent Solutions and Services** (15%) — Condition monitoring, reliability services, asset optimization and digital solutions for rotating equipment.
- **Magnetic and Mechatronic Solutions** (10%) — Magnetic bearings and mechatronic subsystems for high-speed machinery and specialized applications.

- Rolling bearings and bearing units for diverse machinery
- Seals and sealing solutions for rotating and stationary equipment
- Centralized and automated lubrication systems and components
- Condition monitoring, reliability and asset optimization solutions
- Engineering and maintenance services for rotating equipment
- Magnetic and mechatronic solutions for specialized industries

## Customers

SKF’s customers are primarily industrial and automotive OEMs, distributors and end-users that rely on rotating equipment and motion systems. In the Industrial segment, SKF serves sectors such as aerospace, high-speed machinery and electrical drives, heavy industries, railway, agriculture, food and beverage, renewable and traditional energy, marine, material handling and automation, often via industrial distribution channels and a large aftermarket. In Automotive, SKF supplies light vehicles, commercial vehicles and off-highway equipment manufacturers as well as the vehicle aftermarket, where reliability, energy efficiency and lifecycle cost are key purchasing criteria.

- **Industrial OEMs** (primary) — Manufacturers of machinery, equipment and systems buy bearings, seals, lubrication and intelligent solutions to integrate into their products for performance, reliability and efficiency.
- **Industrial Aftermarket and Distributors** (primary) — Distributors and end-users in maintenance, repair and operations purchase replacement bearings, seals, lubrication components and services to maximize uptime and extend asset life.
- **Automotive OEMs** (primary) — Light vehicle, commercial vehicle and off-highway manufacturers source wheel-end, powertrain and chassis bearings, seals and related components for new vehicle production.
- **Vehicle Aftermarket** (secondary) — Independent and OEM-branded aftermarket channels buy replacement bearings and related components for repair, maintenance and performance upgrades.
- **Specialized Industries (Aerospace, Renewable, Magnetic)** (secondary) — Aerospace, renewable energy and high-speed machinery customers procure specialized bearings, magnetic and mechatronic solutions and engineering services for demanding applications.

- Industrial OEMs needing bearings, seals and lubrication in machinery
- Automotive OEMs for light, commercial and off-highway vehicles
- Industrial distributors serving local maintenance and MRO markets
- End-users seeking reliability and energy savings in rotating assets
- Aerospace and high-speed machinery customers needing precision
- Vehicle aftermarket buyers focused on replacement and upgrades

## Geography

SKF operates globally with employees and facilities organized into four main regions: North and South America; Europe, Middle East and Africa; India and Southeast Asia; and China and Northeast Asia. Production and warehousing sites are spread across these regions, supported by a world-wide distribution network that underpins a large recurring aftermarket. Geographic diversification exposes SKF to a wide range of regulatory, geopolitical and climate-related conditions, while regionalization of supply chains is used to enhance resilience and proximity to customers.

- Global footprint across Americas, EMEA, India & SE Asia, China & NE Asia
- Manufacturing and warehousing sites in multiple high- and low-cost countries
- Large installed base and aftermarket presence in Europe and North America
- Growing exposure to cleantech and industrialization in Asia and emerging markets
- Regionalization strategy to align production and supply with local demand
- Physical climate risk assessed at production and warehousing locations

## Strategy

SKF’s strategy centers on combining its core technology platforms—bearings, seals, lubrication systems, intelligent solutions and services—into customized, higher-value offerings for targeted industries. Within Industrial Solutions, the group emphasizes targeted growth in high-growth industries and geographies, innovation leadership, and a more efficient, business-driven value chain supported by regionalized and modernized supply chains. Across the group, SKF aligns its portfolio with long-term trends such as digitalization, cleantech and energy efficiency, while using acquisitions and R&D to strengthen capabilities in areas like lubrication and magnetic bearings.

- **Targeted expansion in high-growth industries and geographies** (medium-term) — Cleantech, renewable energy and industrializing regions offer structural demand for efficient rotating equipment solutions.
- **Grow services, intelligent solutions and digital offerings** (medium-term) — Condition monitoring, reliability services and asset optimization create recurring revenue and embed SKF in customers’ operations.
- **Innovation leadership in lighter, more efficient and repairable products** (long-term) — Customers seek energy and carbon savings and longer asset life, driving demand for advanced bearing and sealing technologies.
- **Regionalization and modernization of manufacturing and supply chains** (medium-term) — Geopolitical tensions and supply chain disruptions require more flexible, localized production and logistics.
- **Climate transition alignment and decoupling growth from emissions** (long-term) — Science-based climate targets and regulatory expectations shape investment, product design and energy sourcing decisions.

- Integrate bearings, seals, lubrication and intelligent solutions into systems
- Expand in high-growth industries such as cleantech and renewable energy
- Grow services and condition monitoring to deepen aftermarket ties
- Modernize and regionalize supply chains for flexibility and resilience
- Pursue selective bolt-on acquisitions in lubrication and magnetic bearings
- Align product design with energy efficiency and lower emissions for customers

## Risks

SKF faces a mix of strategic, operational, financial and sustainability-related risks arising from its global industrial footprint and technology-intensive portfolio. Key themes include digitalization and cyber security, geopolitical tensions and supply chain resilience, talent and leadership, legal and compliance complexity, and climate-related physical and transition risks. As a diversified industrial supplier, SKF is also exposed to cyclical demand in end markets such as automotive, heavy industry and energy, as well as execution risks in regionalizing and modernizing its value chain.

- **Speed of digitalization and AI adoption** [high] — Connected value chains, digital customer interfaces and operational efficiency increasingly depend on advanced digital and AI capabilities; lagging here can erode competitiveness.
- **Geopolitical tensions and trade disruptions** [high] — Global conflicts, sanctions, tariffs and export controls can disrupt SKF’s international supply chains, increase costs and restrict access to certain markets or technologies.
- **People and leadership** [medium] — The business depends on specialized engineering, digital and leadership skills; failure to attract and retain critical competences can slow innovation and execution of strategy.
- **Information and cyber security** [high] — Advanced cyber threats, including those enabled by AI, can compromise operations, intellectual property and customer trust, while regulations like NIST and TISAX raise compliance thresholds.
- **Legal and regulatory compliance** [high] — Increasing complexity in trade compliance, export control, international sanctions and antitrust, along with ongoing investigations, can lead to fines, restrictions and reputational damage.
- **Climate-related physical and transition risks** [high] — Physical climate events can affect production and warehousing sites, while transition policies, carbon pricing and changing customer preferences may render some assets or products less viable.

- Pace of digitalization and AI adoption affecting competitiveness
- Geopolitical tensions disrupting trade, sanctions and supply chains
- Talent attraction, development and retention in key technical roles
- Information and cyber security threats and rising compliance demands
- Legal and regulatory compliance in trade, sanctions and antitrust
- Climate-related physical and transition risks impacting assets and demand

## Accounting

SKF prepares consolidated financial statements under IFRS, with the Swedish parent company applying RFR 2, which creates some differences in areas such as goodwill amortization and pension accounting. Key judgmental areas include business combinations and goodwill allocation, fair value measurement of financial liabilities and derivatives, and provisions and contingent liabilities related to legal and compliance matters. Revenue recognition spans product sales and service contracts, while lease accounting and climate- and risk-related investments affect the balance sheet through right-of-use assets and long-term liabilities.

- **Parent company vs Group accounting under RFR 2 and IFRS** — Investors must focus on consolidated IFRS numbers for performance while understanding parent-only items like residual profit and royalty income.
- **Goodwill and business combinations** — Changes in assumptions or deferred tax calculations can adjust goodwill and affect future earnings through amortization (parent) or impairment (group).
- **Financial liabilities and fair value measurement** — Interest rate and credit spread movements influence disclosed fair values and hedge accounting adjustments, impacting perceived leverage and risk.
- **Untaxed reserves in Sweden** — The timing of dissolving untaxed reserves can materially affect taxable income and equity at the parent level.
- **Revenue recognition for products and services** — Mix shifts between product and service revenue can change margin patterns and the timing of revenue and profit recognition.

- Parent company applies RFR 2, differing from Group IFRS in some areas
- Goodwill amortized over definite life in parent accounts, not in IFRS group
- Business combinations measured at fair value with goodwill allocation
- Financial liabilities at amortized cost with fair value disclosure via DCF
- Derivatives measured at fair value through profit or loss and hedge effects
- Untaxed reserves in Sweden affect timing of taxable income recognition

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*Last updated: 2026-08-11T04:04:55.809204+00:00*