19 April 2012

0

SKF First-quarter results 2012

Tom Johnstone, President and CEO

19 April 2012

19 April 2012

2Highlights Q1 2012

•

SKF signed

an agreement

to acquire

the US-based

General Bearing Corporation for around

USD 125 million on a cash

and debt

free

basis.

•

SKF received

an order worth

around

SEK 350 million from Vestas

for the delivery

of main

shaft

solutions to the Vestas

V112-3.0 MW turbine.

•

SKF was

awarded

two

contracts

totaling

around

SEK 50 million from Siemens Rail Systems for railway projects in Europe. SKF will deliver axle boxes and wheel set bearing units.

•

SKF received orders from one major metal industry customer for SKF ConRo

Compacts worth EUR 1.8 million.

•

SKF signed a three-year contract with Scania. The contract includes bearings for truck wheel end units and transmissions to Scania

production facilities in Brazil.

Acquisition:

New businesses:

19 April 2012

3

•

inaugurated two SKF University Technology Centres:

•

held the SKF North American Distributor convention in Florida, and participated in a maintenance fair in Sweden.

• awarded the 140,000 certificate from the SKF Distributor College

•

launched

a range

of informational

and calculation-focused

apps

for iPhone

and iPad.

Highlights Q1 2012

SKF:

Luleå

University of Technology, for condition monitoring and asset management

Chalmers University of Technology, for sustainability and environment

Foto

: Kar

l Willi

am

Foto

: Rob

in O

lsso

n

19 April 2012

4Examples of new products

launched

in 2012

SKF Nautilus

rangeextensions

Servo Actuator

for industrial

applicationsNext

generation SNL, SE housings

A hand-held, 18-volt,

lithium-iongrease

gun

SKF SpeedSensor Unit

Integrated

monotube

seal

SKF Compact

Wire Steering

Bearing

SKF Solar Hub

SKF ThrusterMonitoring

SKF Bus DoorActuator

4

19 April 2012

5SKF Group Q1 2012

Financial performance

Q1 2012

Q1 2011Net sales, SEKm

16,931

16,702Operating profit,

SEKm

2,140

2,504Operating margin, %

12.6

15.0Profit before tax, SEKm

1,981

2,318Cash flow, SEKm

696

372

Organic sales growth in local currency:SKF Group: +1.1%Europe:

-1.2%

Industrial market, Strategic Industries:

+2.5% North America:

+14.7%

Industrial market, Regional Sales and Service:

+3.0%Asia:

-8.1%

Automotive:

-4.2%Latin America:

+11.1%

Key points Sales were relatively unchanged y-o-yManufacturing was significantly lower y-o-yInventories were reduced to 20.5% of sales

19 April 2012

6Organic sales growth in local currency

0

5

10

15

20

25

20122010 2011

% change y-o-y

19 April 2012

7Sales volume

-5

0

5

10

15

20

25

% change y-o-y

2010 2011 2012

19 April 2012

8

Europe

-1.2%

Asia/Pacific -8.1%

Latin America +11.1%

Middle East & Africa +2.5%

North America +14.7%

Growth development

by geography

Organic

growth

in local

currency

Q1 2012 vs Q1 2011

19 April 2012

9

-5

0

5

10

15

2010 2011 Q1 2012

Growth in local currency

% y-o-y

Acquisitions/DivestmentsOrganic growth

14.2% 16.3% 1.0%

Long-term target: 8% per annum

Total growth

4.8%

11.5%

0.0%

14.2%

-0.1%1.1%

19 April 2012

10Components in net sales

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

5.3 16.6 19.0 16.3 20.1 12.6 6.2 0.0 -0.8

0.0 0.0 0.0 0.0 5.0 4.4 5.1 4.8 -0.1

-0.3 -0.5 0.3 0.9 1.3 1.6 2.0 2.8 1.9

5.0 16.1 19.3 17.2 26.4 18.6 13.3 7.6 1.0

-7.7 -5.2 -3.2 -6.2 -10.8 -12.2 -6.3 -2.1 0.4

-2.7 10.9 16.1 11.0 15.6 6.4 7.0 5.5 1.4

Percent y-o-y

Volume

Structure

Price/mix

Sales in local currency

Currency

Net sales

2010 2011 2012

19 April 2012

11Operating profit

0

300

600

900

1 200

1 500

1 800

2 100

2 400

2 700

SEKm

2010

Restructuring

and one-time

items

2011 2012

19 April 2012

12Operating margin

%

0

2

4

6

8

10

12

14

16

2010

Restructuring

and one-time

items

2011

Long-term target

level: 15%

2012

19 April 2012

13Operating margin

0

2

4

6

8

10

12

14

16

2010 2011 Q1 2012

%

Restructuring

and one-time

items

* Excluding

restructuring

and one-time

items

14.7*

Long-term target

level: 15%

14.2*

13.8 14.512.6

19 April 2012

14

0

3

6

9

12

15

18

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Operating margin per business area

Strategic Industries

Regional Sales and Service

Automotive

%

2010 2011 2012

19 April 2012

15

SEKm 2012 2011

Net sales 16,931 16,702

Operating profit 2,140 2,504

Operating margin, % 12.6 15.0

Profit before taxes 1,981 2,318

Net profit 1,341 1,620

Basic earnings per share, SEK 2.84 3.44

Cash flow, after investments before financing 696 372

First quarter 2012

19 April 2012

16

18

19

20

21

22

23

24

25

Inventories as % of annual sales

% Long-term target level: 18%

2010 2011 2012

19 April 2012

17Cash flow, after investments before financing

-6 000

-5 000

-4 000

-3 000

-2 000

-1 000

0

1 000

2 000

SEKm

2010 2011 2012

* SEK 798 million,

excluding

SEK 6,799 million for the acquisition

of Lincoln.

*

19 April 2012

18Return on capital employed

0

5

10

15

20

25

30

2010 2011 Q1 2012

ROCE: Operating profit plus interest income, as a percentageof twelve months rolling average of total assets less the average of non-interest bearing liabilities.

%

21.924.0

Long-term target: 27%

23.6

19 April 2012

19Net debt

-18 000

-16 000

-14 000

-12 000

-10 000

-8 000

-6 000

-4 000

-2 000

0

SEKm

AB SKF, dividend paid (SEKm):2010 Q2

1,5942011 Q2

2,277

2010 2011

Cash out fromacquisitions (SEKm): 2010

6,799

2012

Net debt:

Loans and net provisions for post-

employment benefits less short-term

financial assets excluding derivatives.

19 April 2012

20

0

100

200

300

400

500

600

2012 2013 2014 2015 2016 2017 2018

Debt structure

Maturity years, EURm

396

100100

•

Credit

facilities:

EUR 500 million 2014 SEK 3,000 million 2017

•

No financial

covenants

nor

material adverse

change

clause

130

500

110

0

19 April 2012

21Dividend proposal

AB SKF’s Board proposes to the Annual General Meeting

an increase of the dividend by 10%, giving a dividend of SEK 5.50 (5.00) per share.

The Annual General Meeting

will

be held

on 25 April.

19 April 2012

22April 2012: Outlook for the second quarter 2012

Demand

compared

to the second

quarter

last yearThe demand

for SKF’s

products and services is expected to be slightly higher for the Group. It is expected to be relatively unchanged in Europe and Asia, and significantly higher in North America and Latin America. The demand is expected to be slightly higher for Strategic Industries and Regional Sales and Service and relatively unchanged for the Automotive.

Demand

compared

to the first quarter

2012The demand

for SKF’s

products and services is expected to be slightly higher for the Group. It is expected to be relatively unchanged in Europe, slightly higher in North America and higher in Asia and Latin America. The demand is expected to be slightly higher for all business areas.

Manufacturing

levelThe manufacturing

level is expected to be lower year on year but higher compared to the first quarter.

19 April 2012

23Demand outlook

Q2 2012, regions

(based

on current

assumptions)

Sequential

trends for: Q1 2012 Q2 2012

Share

of net

sales2011

Europe 46%

Asia

Pacific 26%

North America 19%

Latin America 6%

Total

Q2 2012 vs Q2 2011

+/-

+/-

+++

+++

+

19 April 2012

24Demand outlook

Q2 2012, business areas

(based

on current

assumptions)

Sequential

trends for Q2 2012

Share

of net

sales2011

Strategic

Industries 31%

Regional Sales

and Service 39%

Automotive 27%

Total

Q2 2012 vs Q2 2011

+

+

+/-

+

19 April 2012

25

5%

26%

18%

13%

10%

10%

6%

3%

5%

4%

Trucks

Industrial Distribution

Industrial OEM, General + Special

Cars

Vehicle

Service Market

Industrial OEM, Heavy

+ Off-highway

Energy

Two-wheelers

and Electrical

Aerospace

Railway

Sequential volume

trend Q2 2012, main

segments

(based

on current

assumptions)

Share

of net

sales

2011*

* excluding

Lincoln

19 April 2012

26Guidance for the second quarter 2012

• Tax level: around 30%

•

Financial net for the second quarter:

Around SEK -175 million

•

Exchange rates on operating profit versus 2011

Q2: SEK 125 millionFull year: SEK 200 million

•

Additions to PPE: Around SEK 2.0 billion for 2012

Guidance is approximate and based on current assumptions and exchange rates

19 April 2012

27Key focus areas ahead 2012

•

Managing the uncertain and different demand environment

-regions and segments

•

Profit and cash flow-

inventory management

• Initiatives and actions to support long-term financial targets

• Continue the integration of Lincoln

• Business Excellence and competence development

• Implement the new organization for the Industrial market

One SKF and SKF Care as guiding lights

19 April 2012

28Cautionary statement

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 2012

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