Henrik Lange President, Industrial Division - skf-ir.prod

Industrial Division

Henrik Lange

President, Industrial Division

SKF Capital Markets Day 2009

SKF Industrial Division

• Product development & production of:

- A wide range of bearings and units

- Linear Motion products

- By-wire systems

- Centralized lubrication systems

Responsible for:• Sales & Marketing to industrial

OEM customers

• Business Areas:

Aerospace, Actuation & Motion Control, Lubrication systems and Railways

Industrial Division

19 May 2009 © SKF Group


Actuation & Motion Control

• Develop SKF business in electro-mechanical actuators, linear drives, actuation systems & magnetic bearings.

• Strengthening SKFs position within by-wire applications.

• Main industry focus: factory automation, medical, oil & gas, and machine tool.

Magnetic bearings and high speed motorsfor air and refrigerant turbocompressors

• SKF magnetic bearings in high speed permanent magnet motors– Replacing conventional

drivetrain solutions

– Drivetrain losses typically reduced from 15% to 6%

– Enables compact products, less noise and extended operating life

• Acquisition of S2M has extended SKF position and expertise in the magnetic system market



SKF lubrication systems

• Market leading automatic and centralized lubrication systems

• Customized lubrication systems for wide range of industry and vehicle applications

• Global presence with service and support

• Main industry focus: machine tool, pulp & paper, wind energy, off-highway, mineral, and material handling


Industrial Division Aerospace

• Offers solutions based on bearings, structural components and seals to the global aerospace market

Venture Bearings LLC

• Venture Aerobearings LLC, a joint venture between SKF and GE in August 2007

• First sales delivery Q2 2009


http://www.skf.com/portal/skf/home/services?contentId=267654&lang=en


Industrial Division Railways

• The leading bearing and service supplier to the global railway industry.

• SKF axleboxes and sensorizedbearing solutions are market leading.

• SKF supply maximized performance and minimized lifecycle cost for railway operators all over the world.

SKF solutions in Railway to meet market needs

Axleboxbearings

Axleboxes

Sensors

Drive systems


Investing in our Railway business – Factory in Tver

• Project on time

• Plan is to be ready for state approval in Dec 2009 and to start production Q1 2010

• Factory will produce compact tapered bearing units for the Russian railways


Railway contracts

Skoda Electric a.s.

• A long term contract worth EUR 11 million

• SKF will provide traction motor bearing units for the new Prague 15T low floor tramway generation.

Zhuzhou Electric Locomotive Co.

• An order of EUR 14 million

• The latest design of 500 main line electric locomotives, for Chinese railways, will be equipped with SKF axleboxes and drive system bearings.



Customer's

customer

IdeaTechnology

& Business

drives

InitialDev

Design &

Engineering

VerificationDef

DesignPrototyping

Test SerialLaunch

Procurement

LaunchSales

After salesSupport

Services

• design optimization

• test & verification

• trouble shooting

• system integration

SKF Products & Solutions

Customer business process

Creating and capturing value with OEMs

Net sales comparison by customer segment

Aerospace

15%

Off highway

8%

General industry

20%

Heavy industry

10%

Energy

14%

Special industrial machinery

16%

Railway

8%Other

9%Aerospace

Railway

Off-highway

Trucks

Two-wheeler and Electrical

General industry

Heavy industry

Special industri

al

equipment

Vehicle Service Market

Industrial distribution

Cars and light trucks

Energy

SKF Group Industrial Division


Creating & capturing value in many industries

General Industry• Industrial gearboxes• Fluid power• Material handling

Commercial transport• Aerospace• Railways• Off-highway

Energy• Renewable • Hydro Oil & Gas• Hydrogen carbon• Nuclear

Special industrial machinery• Food & Beverage• Machine Tools• Marine• Healthcare• Medical • Printing • Textile

Heavy Industry• Metal-working• Mining• Pulp & Paper


Wind market still growing

Annual Wind Power DevelopmentActual 1990-2008 & Forecast 2009-2013

0

10,000

20,000

30,000

40,000

50,000

60,000

1990 1995 2000 2008 2013

MW

Europe USA Asia Rest of World ExistingSource: BTM Consult ApS - March 2009

Annual Wind Power DevelopmentActual 1990-2008 & Forecast 2009-2013

0

10,000

20,000

30,000

40,000

50,000

60,000

1990 1995 2000 2008 2013

MW

Europe USA Asia Rest of World ExistingSource: BTM Consult ApS - March 2009


SKF contribution to wind turbine technology


Pitch bearings

Yaw bearingMainshaft housingsand locknuts

ConditionMonitoringWindCon/WebCon

Couplings

Automatic distributedlubrication system

Monitoring and diagnosticsservices

Mechanical repairs &refurbishment

Sealing solutions

EngineeringConsultancyServices

Plain bearings

Maintenancetools and grease

Gearbox bearingsTRB/CRB/SRB/CARB/DRTRB

Generator bearingsDGBB/InsoCoated/Hybrid

Mainshaft bearing(s)SRB/CARB/TRB/DRTRB

Bolt tensioning toolsTower alignment services

SKF large size bearing capacity development

Moderated pace of new investment in 2009


http://www.xtian.nu/flag/index.asp?nr=183&vad=land






Marine - Strong offer portfolio


Condition monitoring

Propellerseals

Slewingbearings

Lubrication systems

Alignment and troubleshooting

Mounting & installation

services

Shaft couplings, bolts and nuts

Alignment and mounting equipment

Bearing arrangements

Condition based maintenance &

asset management

Application engineering

services


Marine- SKF lubrication solution for large diesel engines

2-stroke diesel engines

SKF Cylinder Lubrication System • Electronically controlled • Load-dependent lubrication of cylinders• Reducing the lubricating oil consumption by a third

Off-highway - SKF solutions for agricultural industry

• SKF Agri Hub for tillage discs

• SKF Y-bearing units for agricultural shafts

• SKF Actuators for agricultural applications



Off-highway - SKF electronic parking brake

Hybrid solution equipped with:

• A mechanical emergency brake

• SKF smart electro-mechanical actuator

• High reliability for the operators and helps the driver in various driving conditions


Machine Tools – SKF offerings

SKF has a strong offer portfolio for Machine Tools customers • Bearings and units

– SKF Super Precision Bearings

– Ball Screw support bearings

• Mechatronics– Precision guides

– Ball & Roller Screws

– Sensor units

• Seals

• Lubrication– Minimum Quantity Lubrication

– Grease lubrication systems

• Services– Spindle repair services

Machine Tools – launch of new super precision bearings

• Launch of the new generation SKF-SNFA Super-precision angular contact ball bearings.

• A joint SKF-SNFA super precision bearings development team has been established, which has merged and further developed the specific strengths.

• The combined strengths of SKF and SNFA will enable SKF to design, manufacture and supply outstanding products, create innovative new solutions and provide world-class application engineering support.



Industrial Division - Bearing Manufacturing

• Responsible for the manufacturing of a wide range of SKF bearings

• 135 channels• Min OD 20 mm• Max OD 8,000 mm• 130 M bearings / year


Manufacturing Excellence in Industrial Division

Status:

• All bearing factories have introduced the Bridge of Manufacturing Excellence

Results:

• More involved and enthusiastic employees and improved result

• Shared practice across countries and factories

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Manufacturing Excellence example in China

Everyday improvements by everybody and everywhere

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Management kick-off meeting

“Principlay”

Manufacturing Excellence – daily shift meetings in China

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Manufacturing Excellence example in China –Standardised work

Standardised working table Standardised cleaning stationfor all working station


Manufactruing Excellence example in China -Visualisation

The buffer visualised after soft turning to show the buffer volume and sequence

The shift output is set on the LED at the exit of heat treatment


Process focus – Six Sigma deployment

BELTS STATUS – Ind Div

BELT COLOUR NO. OF BELTS

Black Belts 130

Green Belts 711

Design for 6Sigma

Black Belts56

Hard savings

SEK 122 m (2008)



Industrial Division environmental care

• Energy Management strategy implemented in all ID factories

• Sourcing green electricity

• Energy and CO2 follow-up system

• Dedicated budget for energy and CO2 reducing investments

200 000

210 000

220 000

230 000

240 000

250 000

260 000

270 000

Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008

Industrial Division, Metric Tonnes CO2 Emissions

Create and capture more environmental values

30% reduced energy consumption…2 times longer lubricant life = less lubricant

SKF E2 Deep Groove Ball Bearings

No re-lubrication system No grease usage and disposal Less hazardous waste creation and disposal

ConRo

Improved operator safetyReduced water consumptionNo spraying of soluble lubricants

Dry lubrication systems for conveyors

400 litres diesel savings per tractor and year8 tons CO2 / tractor and yearReduced lubricant leakage to nature

Agri HUB ->


How we handle the current softer market demand

• Flexibility:– Time banks– Shift models– Short time work schemes– Temporary workers

• Cost down initiatives:– S&A – COGS– Restructuring

• Manage cash flow:– Stock– Receivables – Postpone investments


Key business messages

• Utilize flexibility to adapt to changing market demand• Continue to create and capture value through new market

offers to existing and new industry customers• Effective account management with a strong key account

management structure• Continued focus on manufacturing excellence in

manufacturing• Manage cash flow by bringing down stock, receivables and

postpone investments• Cost down initiatives


Documents

Henrik Lange President, Industrial Division - skf-ir.prod