Presentation

1. 0
19 April 2011

2. The SKF Group
Tom Johnstone, President and CEO
19 April 2011

3. Key points, Q1 report 2
• Strong performance
Operating profit: SEK 2,504 m (1,702)
Operating margin: 15.0% (11.8)
Profit before tax: SEK 2,318 m (1,504)
Cash flow: SEK 372 m (32)
• Strong organic sales growth in local currency:
SKF Group: +21.4%
Europe: +22% Industrial Division: +20.8%
North America: +25% Service Division: +22.5%
Asia: +22% Automotive Division: +19.8%
Latin America: +18%
• Lincoln integration is going according to plan.
Outlook for Q2 for SKF Group
• Demand
Significantly higher compared to Q2 2010
Slightly higher sequentially compared to Q1 2011
• Manufacturing level
Significantly higher year over year
Relatively unchanged compared to Q1 2011
19 April 2011

4. Highlights Q1 2011 3
New businesses:
• SKF was awarded a contract, worth around SEK 500 million, with
Goldwind for SKF Nautilus bearings for their new 2.5 MW direct
drive turbine.
• SKF signed a three-year strategic partnership, worth SEK 335
million, with Sandvik Mining and Construction.
• SKF and Konkola Copper Mines Plc in Zambia signed a three-year
contract, worth USD 2 million, covering a Predictive Maintenance
solution.
• SKF signed a strategic partnership agreement with CITIC Pacific
Special Steel Co., Ltd, for cooperation in purchasing, new product
and technology development and human resources development.
19 April 2011

5. Highlights Q1 2011 4
• SKF is building a new factory in Jinan, in the
Shandong Province, China. The investment Jinan
amounts to around SEK 590 million and the
factory will initially employ about 500 people.
• SKF signed an agreement to remain as the main
partner to the Gothia Cup for an additional three
years.
SKF will also continue to run the "Meet The World"
qualifying tournaments held in around 20 countries
globally.
19 April 2011

6. Divestments 2011 5
SKF completed two agreements in line with its strategy to divest
non-core component manufacturing:
• On 1 February 2011, the forging business OMVP, in
Villar Perosa, Italy to the German based company
Neumayer Tekfor Holding GmbH. OMVP has about
550 employees and net sales of around EUR 100
million, mainly to SKF.
• At the beginning of the second quarter the cage
factory in Gothenburg to the Japanese component
manufacturer Nakanishi Metal Works CO., Ltd. The
factory has 130 employees and will continue to supply
SKF.
19 April 2011

7. Sales volume 6
% change y-o-y
25
20
15
10
5
0
-5
-10
-15
-20
-25
-30
-35
2009 2010 2011
19 April 2011

8. Organic growth in local currencies 7
% change y-o-y
25
20
15
10
5
0
-5
-10
-15
-20
-25
-30
2009 2010 2011
19 April 2011

9. Growth development by geography 8
Organic growth Q1 2011 vs Q1 2010
Europe
+22%
North America
+25%
Asia/Pacific
+22%
Latin America
+18%
Middle East
& Africa +4%
19 April 2011

10. Growth in local currency 9
Long-term target: 8% per annum
Total growth -19.0% 14.2% 26.4%
% y-o-y
25 21,4
20
14,2
15
10 5,0
5 1,0 0,0
0
-5
-10
-15
-20
-25 -20,0
2009 2010 YTD March
2011
Organic growth
Acquisitions/Divestments
19 April 2011

11. Components in net sales 10
2009 2010 2011
Percent y-o-y Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Volume -26.9 -30.8 -24.9 -14.1 5.3 16.6 19.0 16.3 20.1
Structure 1.4 1.1 1.2 0.4 0.0 0.0 0.0 0.0 5.0
Price / Mix 7.1 5.6 3.7 0.3 -0.3 -0.5 0.3 0.9 1.3
Sales in local -18.4 -24.1 -20.0 -13.4 5.0 16.1 19.3 17.2 26.4
currency
Currency 13.6 12.2 6.6 -1.4 -7.7 -5.2 -3.2 -6.2 -10.8
Net sales -4.8 -11.9 -13.4 -14.8 -2.7 10.9 16.1 11.0 15.6
19 April 2011

12. Operating profit 11
SEKm
2 600
2 400
2 200
2 000
1 800
1 600
1 400
1 200
1 000
800
600
400
200
0
2009 2010 2011
Restructuring and one-time items
19 April 2011

13. Operating margin 12
Long-term target level: 15%
%
16
14
12
10
8
6
4
2
0
2009 2010 2011
Restructuring and one-time items
19 April 2011

14. Operating margin 13
Long-term target level: 15%
%
16 15.0
14.2*
14
12
13.8
10
8.0*
8
6
4
5.7
2
0
2009 2010 YTD March
2011
Restructuring and one-time items
* Excluding restructuring and one-time items
19 April 2011

15. Operating margin per division 14
%
18
16 Service
14 Industrial
12
10 Automotive
8
6
4
2
0
-2
-4
-6
-8
-10
-12
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2009 2010 2011
Excluding one-off items
(eg. restructuring, impairments, capital gains)
19 April 2011

16. First quarter 2011 15
SEKm 2011 2010
Net sales 16,702 14,446
Operating profit 2,504 1,702
Operating margin, % 15.0 11.8
Operating margin excl. restructuring, % 15.0 12.4
Profit before taxes 2,318 1,504
Net profit 1,620 1,070
Basic earnings per share, SEK 3.44 2.27
Cash flow, after investments before financing 372 32
19 April 2011

17. Inventories as % of annual sales 16
% Long-term target level: 18%
25
24
23
22
21
20
19
18
2009 2010 2011
19 April 2011

18. Cash flow, after investments before financing 17
SEKm
2 500
2 000
1 500
1 000 Cash out from
500 acquisitions (SEKm):
0
-500 2009 241
-1 000
-1 500 2010 6,799
-2 000
-2 500
-3 000
-3 500
-4 000
-4 500
-5 000
-5 500
-6 000
2009 2010 2011
19 April 2011

19. Return on capital employed 18
Long-term target: 27%
%
30
25.6
24.0
25
20
15
9.1
10
5
0
2009 2010 YTD March 2011
ROCE: Operating profit plus interest income, as a percentage of
twelve months average of total assets less the average of non-
interest bearing liabilities.
19 April 2011

20. Net debt 19
(Short-term financial assets minus loans and post-employment benefits)
SEKm
AB SKF,
0
dividend paid (SEKm):
-2 000 2009 Q2 1,594
-4 000 2010 Q2 1,594
-6 000 Proposal to the Board to
be decided in April:
-8 000
2011 Q2 2,277
-10 000
-12 000 Cash out from
-14 000 acquisitions (SEKm):
-16 000 2009 241
-18 000 2010 6,799
2009 2010 2011
19 April 2011

21. Debt structure 20
Maturity years, EURm
600
530
500 446 400*
400
300
200
100 100
100 55 130
0
2011 2012 2013 2014 2015 2016
• Credit facilities: • No financial covenants nor material
EUR 500 m 2014, whereof EUR 400* m utilized adverse change clause
SEK 3,000 m 2017, unutilized
19 April 2011

22. March 2011: 21
Outlook for the second quarter 2011
Demand compared to the second quarter last year
The demand for SKF products and services is expected to be significantly higher for
the Group and all geographical regions. It will be significantly higher for Industrial
Division and the Service Division and slightly higher for Automotive Division.
Demand compared to the first quarter 2011
The demand is expected to be slightly higher for the Group, higher in Asia and Latin
America, slightly higher in North America and relatively unchanged in Europe. The
Industrial Division and the Service Division are expected to be slightly higher and the
Automotive Division relatively unchanged.
Manufacturing level
The manufacturing level will be significantly higher year on year and relatively
unchanged compared to the first quarter.
19 April 2011

23. Volume trends, regions 22
(based on current assumptions and adjusted for seasonality)
Net sales Daily volume trends for: Outlook Q2
2010 Q1 2011 Q2 2011 2011 vs 2010
Europe 46% +++
North America 18% +++
Asia Pacific 27% +++
Latin America 6% +++
Total +++
19 April 2011

24. Volume trends, divisions 23
(based on current assumptions and adjusted for seasonality)
Net sales Daily volume trends Outlook Q2
2010 for Q2 2011 2011 vs 2010
Industrial 32% +++
Service 36% +++
Automotive 30% +++
Total +++
19 April 2011

25. Sequential volume trend main segments Q2 2011 24
(based on current assumptions)
Net sales 2010
14% Cars
12% Vehicle Service Market
5% Energy
25% Industrial distribution
18% Industrial OEM, General+Special
10% Industrial OEM, Heavy + Off-highway
5% Aerospace
4% Railway
4% Trucks
3% Electrical and two-wheeler
19 April 2011

26. Guidance for the second quarter 2011 25
• Tax level: around 30%
• Financial net for the second quarter:
Around SEK -175 m
• Exchange rates on operating profit versus 2010
Q2: SEK -400 m
Full year: SEK -1.2 bn
• Additions to PPE: Around SEK 2.3 bn for 2011
Guidance is approximate and based on current assumptions and exchange rates.
19 April 2011

27. Key focus areas ahead 2011 26
• Profit and cash flow
- manage currency and material headwinds
• Manufacturing and suppliers to support growth
• Growing segments and geographies
• Initiatives and actions to support long term targets
• Integration of Lincoln Industrial
• Business Excellence and competence development
One SKF and SKF Care as guiding lights
19 April 2011

28. Cautionary statement 27
This presentation contains forward-looking statements that are based on the
current expectations of the management of SKF.
Although management believes that the expectations reflected in such forward-
looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Accordingly, results could differ
materially from those implied in the forward-looking statements as a result of,
among other factors, changes in economic, market and competitive conditions,
changes in the regulatory environment and other government actions, fluctuations
in exchange rates and other factors mentioned in SKF's latest annual report
(available on www.skf.com) under the Administration Report; “Important factors
influencing the financial results", "Financial risks" and "Sensitivity analysis”.
19 April 2011

29. 28
19 April 2011