Letter to the Shareholders
Rotation is everywhere around us and this rotating movement of machines and equipment is the foundation for businesses globally. For companies to maintain profitability and an edge in today’s competitive markets, it is essential that their rotating equipment is reliable and dependable. This reliability is central to what SKF does.
SKF offers solutions that connect machines using Industrial Internet of Things (IIoT) enabled monitoring. Our Rotating Equipment Performance (REP) solutions help businesses drive efficiencies and increase productivity through a combination of digitalized insights, advanced predictive diagnostics, technologically superior products and an in-depth understanding of markets.
Reliability of machines and equipment is closely intertwined with the global movement towards a circular economy where businesses are conscientiously using resources in an efficient and responsible manner. For SKF India, this sustainability is integrated into all our operations. It is not the responsibility of a single department or function but transcends across the entire organization. It helps us, our vendors, our customers, our employees and all communities around us achieve a more sustainable future.
SKF Care is our definition of sustainability and fostering sustainability means identifying processes, functions, resources and customers who adopt technologies and concepts that make a positive economic, social and environmental impact. The SKF Care framework is central to ensuring sustainability in our daily operations and across the entire value chain, both upstream and downstream. We are taking systematic steps to reduce negative environmental impact and create value for our customers and the environment.
In our own operations, we are constantly looking for new and more sustainable ways in how raw materials are selected, utilized and processed. Today, over 68% of our energy usage comes from green sources. In the past five years, we have reduced our CO2 emissions by over 26%, despite a significant increase in production. Our supply chain has graduated to using reusable, long-lasting plastic packing instead of corrugated packaging, which we estimate has saved more than 1500 trees in this year itself.
Through our Business Care initiatives, we offer to customers our unrivalled application knowledge and in-depth industry experience to help them not only get the best performance from their plant equipment and meet their business objectives, but we also assist them in driving down their total cost of ownership and meeting their own sustainability goals, whether it is through reducing energy losses or improving asset utilization. As an example, SKF offers remanufacturing solutions to our customers for gearboxes and bearings, thus increasing the life of the product significantly without any loss in performance. In fact, our remanufacturing of over 6000 railway bearings this past year has saved significant costs and reduced about 600 tonnes of CO2 emissions.
Employee Care at SKF ensures employee well-being, safety and health in all our endeavours. Our permanent employees have received an average of 2108 hours of behavioural safety training and we have recently introduced a structured program on safety behaviours. In addition, we offer our employees opportunities for upskilling and leadership development, with over 28 hours of development interventions per employee for this year.
The shift towards automation, digitalization and IIoT needs constant upskilling of resources and we are addressing this need through our flagship Community Care initiatives. The Youth Empowerment at SKF (YES) program helps underprivileged young men and women gain training as automotive technicians to support them with meaningful jobs and entrepreneurship opportunities. I am happy to share that we have now trained over 1900 YES beneficiaries and 80% of them are currently employed in the industry. We also run a special Scholarship Program for Girls where we are financially supporting the ambitions and dreams of many underprivileged and deserving girls in the more remote districts of Karnataka and Maharashtra through their high school and undergraduate education. I am especially proud of the fact that both these programs have a strong commitment from our employees who volunteer in selection processes for these education initiatives.
Finally, our commitment to Environment Care has taken new wings with the Khadakwasla dam in Pune and the Mantapa lake in Bengaluru being taken up for revitalization. We are working with local communities and NGOs who understand the need for preserving and protecting our disappearing water resources.
Our fiscal results for FY 2018-2019 are detailed in this annual report and demonstrate the underlying strength of our business. Our revenue for FY 2018-2019 was Rs. 30,345 millions as compared to Rs. 28,048 millions for the same period in the previous year. Our operating margin was 13.5% and profit after tax was Rs. 3,357 millions.
I take this opportunity to thank our valued customers, whose trust and support has made us successful over the years. The dedication of our employees in driving outcomes in a sustainable and reliable manner is reflected in our results for this year. We look forward to their energy and commitment to helping your Company achieve its strategic direction in the future as well.
Our distributors, suppliers, bankers and all stakeholders are a part of our journey and will continue to be integral in creating and delivering value in a sustainable manner.