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Cash 360

The treasury cockpit — 13-week cash, EBITDA-to-FCF conversion, working-capital unlock, receivables, liquidity and covenant headroom.

AB SKF (SKF Group) · FY2025 (Jan–Dec 2025, audited anchor)

World's largest bearing maker today — clear #1 in industrial bearings

37,271 employees · 90+ sites · 130 countries

▲ Executive read· the answer, then the moves

Liquidity is sound at SEK 12.5 bn (≈ 7 weeks cover), but SEK 1.3 bn of working capital is trapped in receivables — and far more in inventory. Pull DSO from 65d to 60d to help self-fund the ~SEK 4 bn/yr capex rather than lean on the SEK 35.2 bn of covenant headroom.

5 of 5 headline metrics improving vs prior · still off target: Cash Conversion Cycle 111d vs 100d, DSO (Days Sales Outstanding) 65d vs 60d

Do now — ranked by urgency

1
Unlock SEK 1.3 bn by pulling DSO to the 60d targetWatch
Why it matters
Every day of DSO above 60d ties up working capital; closing the gap releases ≈ SEK 1.3 bn of one-time cash.
What's driving it
DSO 65d vs 60d target
Overdue >60d = SEK 2.4 bn of SEK 16.3 bn AR
FYI
Normalizing laggard divisions to 60d DSO releases ≈ SEK 1.3 bn
Owner: Treasury
Work the overdue book →▤ open the overdue receivables
2
IAC guidance BSEK −2.5 to −3.0 for 2026Watch
Why it matters
Keep separation spend inside the announced envelope; track footprint payback quarter by quarter.
What's driving it
Items affecting comparability
Signal: Alert
FYI
Separation plus Americas footprint consolidation front-load costs (Q2 2026 IAC −1,004, roughly half separation / half footprint).
Act →
3
DSO 65 vs 60 target — NWC 30.4% of salesWatch
Why it matters
Tighten OEM terms & collections; unwind the separation WC build in H2 2026.
What's driving it
DSO
Signal: Alert
FYI
>60d AR ≈ MSEK 2,400; the separation working-capital build dented H1 2026 operating cash flow (Q1 −446).
Act →▤ open the overdue book
4
RecondOil & remanufacturing circularity — PlannedWatch
Why it matters
Unbanked margin until captured — rightsizing & footprint fund the >17% post-spin frame.
What's driving it
SEK 120 M run-rate targeted
Signal: Savings program
FYI
Circular offers scaling from pilot to plant-scale; supports the clean-growth pillar.
Owner: CFO
Act →

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Liquidity

SEK 12.5 bn

≈ 7 weeks cover

Free cash flow

SEK 6.9 bn

44% EBITDA conversion

Cash conversion cycle

111d

DSO 65 + DIO 104 − DPO 58

Working-capital unlock

SEK 1.3 bn

DSO 65→60d target

Exhibit 1

13-week direct cash flow forecast

Net weekly cash (bars) and ending cash (line) vs. SEK 4.0 bn minimum. Forecast trough: SEK 8.5 bn.

Above minimum

SEK 9.0 bn

Opening cash

SEK 23.5 bn

13-wk collections

SEK 23.6 bn

13-wk disbursements

SEK 9.0 bn

Closing cash

Exhibit 2

EBITDA → Free cash flow

SEK 15.7 bn EBITDA converts to SEK 6.9 bn FCF (44%).

Exhibit 3

Cash collected

Monthly, MSEK.

Cash conversion cycle

Working-capital days

DSO — receivables65d

DIO — inventory104d

DPO — payables (offset)(58d)

Cash conversion cycle111d

Where cash is trapped

Working-capital cash unlock

SEK 1.3 bn

Normalizing laggard divisions to 60-day DSO releases ~SEK 1.3 bn one-time.

SKF Vertevo75d

SEK 969 M

SKF62d

SEK 360 M

Collections

AR aging

Total AR SEK 16.3 bn

Current daysSEK 9.6 bn

1-30 daysSEK 2.9 bn

31-60 daysSEK 1.4 bn

61-90 daysSEK 1.5 bn

90+ daysSEK 900 M

Overdue (>60d) = SEK 2.4 bn.

Exhibit 4

Collections priority

Highest DSO first.

Account	Revenue	DSO	Credit risk
Automotive OEMs	SEK 17.4 bn	75d	Medium
Industrial OEMs (machinery · aero · rail · energy)	SEK 27.0 bn	68d	Medium
Services & performance contracts	SEK 11.1 bn	60d	Low
Vehicle aftermarket distributors	SEK 8.6 bn	58d	Low
Industrial distributors (17,000 locations)	SEK 27.6 bn	55d	Low

Exhibit 5

Supplier DPO

Working-capital lever.

Supplier	Spend	DPO	OTIF	Risk
Bearing-grade steel (EU mills · green & recycled programs)	SEK 18.0 bn	60d	94%	Medium
Components, cages & sealing materials	SEK 8.0 bn	55d	92%	Medium
Energy & renewable electricity (91% renewable)	SEK 4.5 bn	30d	97%	Medium
Contract manufacturing & MRO (incl. Industrial→Vertevo transfers)	SEK 3.8 bn	40d	90%	High
Logistics & freight (airfreight-avoidance directive)	SEK 3.2 bn	45d	91%	Medium
Lubricants, chemicals & process media	SEK 2.5 bn	50d	93%	Low