15 July 2008

1

The SKF Group

Half-year results 2008

Tom Johnstone, President and CEO

15 July 2008

3Highlights during the second quarter 2008

• SKF signed an agreement with PEER Bearing Company to acquire its manufacturing operations in China and Thailand. The acquisition is subject to certain conditions to closing and requires approvals by relevant authorities.

• SKF announced that the railway bearing plant in Russia will be located in Tver. The facility will be in operation in January 2010.

• SKF will increase the manufacturing capacity for large and medium size bearings at the new SKF factory in Dalian, China.

• SKF sold the operating assets of Roller Bearing Industries, Inc., USA, to Greenbrier Companies, USA. The company has an annual sales of around SEK 60 million, some 50 employees and was acquired by SKF in 2001.

15 July 2008

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• SKF and Nestlé established a global training programme to improve and define best practices related to maintenance and reliability for reducing unplanned mechanical failures.

• The SKF Certified Rebuilder programme for electric motors was launched in Europe and Latin America.

• SKF distributed to shareholders a total of SEK 4,554 million in dividend and redemption.

• SKF arranged new long-term financing of SEK 1,500 million and EUR 250 million.

Highlights during the second quarter 2008

15 July 2008

5

SEKm 2008 2007

Net sales 16,077 14,963

Operating profit 2,135 2,019

Operating margin 13.3% 13.5%

Profit before taxes 1,978 1,957

Net profit 1,369 1,274

Basic earnings per share, SEK 2.95 2.71

Cash flow after operating investments before financial items 872 888

Cash flow after operating investments before financial items, excluding acquisitions

880 1,414

Second quarter 2008

15 July 2008

6

SEKm 2008 2007

Net sales 31,673 29,334

Operating profit 4,175 3,905

Operating margin 13.2% 13.3%

Profit before taxes 3,902 3,782

Net profit 2,665 2,488

Basic earnings per share, SEK 5.72 5.28

Cash flow after operating investments before financial items 741 235

Cash flow after operating investments before financial items, excluding acquisitions

803 975

First half year 2008

15 July 2008

7Operating margin

%

0123456789

1011121314

2006 2007

Long-term target level: 12%

2008

15 July 2008

8Operating margin

0

2

4

6

8

10

12

14

2006 2007 YTD June 2008

%

* excluding income from the jointly controlled company Oy Ovako Ab

12.6 12.9

11.3*

13.2

Long-term target level: 12%

15 July 2008

9

0

2

4

6

8

10

12

14

16

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Operating margin per division

IndustrialService

Automotive

%

2006 2007 2008

Excluding one-time items (eg. restructuring, impairments, capital gains)

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10Sales in local currencies (excl. structural changes)

0

2

4

6

8

10

12

14

16% change y-o-y

2006 2007 2008

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11

02468

101214

2006 2007 YTD J une 2008

Growth development in local currency

% Y-o-Y

Acquisitions/DivestmentsOrganic growth

7.5*

13.2

* Excluding effect from Ovako:2006 10.1%

Long-term target level: 6-8% per annum

10.7

15 July 2008

12Net sales development per quarter

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

6.0 2.5 3.3 8.8 7.9 6.9 9.0 6.3 4.9 6.2

-4.9 -0.5 1.1 4.6 4.0 4.6 3.7 1.0 1.0 1.3

2.9 2.0 2.0 2.3 1.8 2.7 2.0 3.2 3.8 4.0

4.0 4.0 6.4 15.7 13.7 14.2 14.7 10.5 9.7 11.5

8.0 1.0 -2.1 -5.8 -5.6 -2.3 -1.9 -2.0 -1.2 -4.1

12.0 5.0 4.3 9.9 8.1 11.9 12.8 8.5 8.5 7.4

Percent y-o-y

Volume

Structure

Price / Mix

Sales in local currency Currency

Net sales

2006 2007 2008

15 July 2008

13Cash flow, after operating investments before financial items

-700

-500-300

-100

100

300500

700

9001 100

1 300

1 500

1 700

2006 2007

SEKm

Cash out fromacquisitions (SEKm): 2006 2,1292007 1,2092008 YTD 62

Cash in from Ovako (SEKm):2006 Q4 1,2172007 Q2 46

2008

15 July 2008

14Net debt (Short-term financial assets minus loans and post-employment benefits)

-14 000

-12 000

-10 000

-8 000

-6 000

-4 000

-2 000

0

SEKm

AB SKF, dividend paid (SEKm):2006 Q2 1,8212007 Q2 2,0492008 Q2 2,277

Redemption (SEKm):

2007 Q2 4,5542008 Q2 2,277

2006 2007 2008

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15

18

19

20

21

22

23

Inventories as % of annual sales

%

2006 2007

Long-term target level: 18%

2008

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16Return on capital employed

23

24

25

26

27

2006 2007 YTD June 2008

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

%Long-term target level: 24%

15 July 2008

17July 2008: Outlook for the third quarter 2008(compared to the second quarter 2008 and adjusted for seasonality )

The market demand for SKF’s products and services in the third quarter of 2008 is expected to be higher for the Group. The demand is expected to be higher in Europe, slightly lower in North America and significantly higher in both Asia and Latin America. The demand is expected to be higher in the Industrial Division and the Service Division and relatively unchanged for the Automotive Division.

The manufacturing level for the third quarter 2008 will be relatively unchanged compared to the second quarter 2008, and slightly higher than the third quarter 2007.

15 July 2008

18Volume development

Daily volume trend for: Q2 2008 Q3 2008

Net sales2007

Europe 56%

North America

18%

Asia Pacific 18%

Latin America

5%

Total

Outlook Q32008 vs

2007

++

-

+++

+++

++

15 July 2008

19Guidance for the third quarter 2008

• Tax level: 32%

• Financial net for third quarter:minus SEK 200 million

• Exchange rates on operating profit versus 2007Q3: minus SEK 130 million

Full year: minus SEK 500 million

• Additions to PPE: slightly above SEK 2 billion

Guidance is approximate and based on current assumptions and exchange rates

15 July 2008

20Solid, flexible debt structure and liquidity

0

1000

2000

3000

4000

5000

2008 2009 2010 2011 2012 2013 2014

Maturity years, SEK

250

2,300

1,500 1,400

4,600

9001) 2)3)

1) New bond loan2) New 5 year term-loan, repayment option, assumed to 20123) New private placement, 8 years, repayment option for SKF

from 2010

15 July 2008

21Key focus areas ahead

• Strengthen the platform/segment approach

• Maintain a positive price/mix

• Focus on fast growing segments and geographies

• Drive operational efficiency and Six Sigma

• Manage material costs and supply

• Attract and retain the best people

Use sustainability as a guiding light

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Community CareCommunity Care

Business CareBusiness Care

SKF Corporate Sustainability

Environment CareEnvironment Care

BeyondZeroTM

SKF CareSKF Care

Operating margin

Employee CareEmployee Care

0

2

4

6

8

10

12

14

2003 2004 2005 2006 2007

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23SKF Group Vision

To equip the worldwith SKF

knowledge

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