The SKF GroupYear-end result, 2005

Tom Johnstone, President and CEO

3

2006-01-26

Areas in focus 2005 Performance 2005

• Operating margin level

Maintain a positive price/mix

Recovery of raw material cost increase

• Continued sales growth

Maintain organic growth pace

Acquisition/divestment (mainly Ovako)

• Strengthen the platform/segment offer

• Cash flow after investments before financing and acquisitions

3.4%

Done

8.4%

-1.1%

Ongoing

MSEK 2 848

4

2006-01-26

Major events 2005

• SKF steel business was merged into a jointly owned company Oy Ovako Ab. SKF's share is 26.5%.

• Construction of a number of new factories in Asia was initiated.

• Acquisition of Jaeger Industrial Ltd. and Sommers Industriteknik AB.

• Announced the closure of two factories in the USA, for the automotive industry.

• Rationalization in Europe, mainly in France.

• SKF included in sustainability indexes:DJSI World and DJSI STOXX - for the sixth year and FTSE4Good Index Series - for the fifth year.

• Global OHSAS 18001 certification

• 4.2 billion SEK was distributed to SKF shareholders via the dividend and a share split/redemption programme.

5

2006-01-26

New divisional structure in 2006

Industrial Division

Service Division

Automotive Division

-Sales to the industrialaftermarket, mainlythrough a network ofsome 7 000 distributors-Knowledge basedsolutions to optimiseasset efficiency.-Logistic services.

Sales - some 33%*.

-Sales to the industrial OEMcustomers and the develop-ment and manufacturing of a wide range of bearings, linear motion and mecha-tronics products, couplings, related products andlubrication systems.

Sales - some 31% of theGroup's sales*.

-Sales, development andmanufacturing of bearings,seals and components toautomotive, two-wheelers,household appliances andpower tools OEM manu-facturers.-Vehicle Service Market.

Sales - some 36%*

Restated financial figures will be published on the Group's website during March 2006.

6

2006-01-26

MSEK 2005 2004

Net sales 12 648 11 536

Operating profit 1 268 1 183

Operating margin 10.0% 10.3%

Profit before taxes 1 275 1 113

Net profit 862 845

Earnings per share, SEK 1.85 1.67

Cash flow after investments before

financing 529 543

Fourth quarter 2005

7

2006-01-26

MSEK 2005 2004

Net sales 49 285 44 826

Operating profit 5 327 4 434

Operating margin 10.8% 9.9%

Profit before taxes 5 253 4 087

Net profit 3 607 2 976

Earnings per share, SEK 7.73 5.90

Cash flow after investments before

financing

2 430 2 153

Year-end result 2005

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2006-01-26

Operating margin

%

2002 2003 2004

0

1

2

3

4

5

6

7

8

9

10

11

12

13

2005

9

2006-01-26

0

2

4

6

8

10

12

14

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Operating margin per division

Industrial

Service

Aero and Steel excl. OvakoElectrical

Automotive

%

2003 2004 2005

10

2006-01-26

Sales in local currencies (excl. structural changes)

-6-4-202468

1012141618

% change y-o-y

2002 2003 2004 2005

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2006-01-26

Net sales development per quarter

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

6.2 3.2 4.2 3.1 4.8 8.9 9.6 10.2 8.3 7.6 5.1 1.3

0.7 0.1 0.2 0.3 0.1 0.0 2.2 2.0 2.3 0.2 -2.9 -3.7

1.2 0.6 1.2 0.1 1.1 1.8 2.3 4.2 3.6 3.6 2.1 2.6

8.1 3.9 5.6 3.5 6.0 10.7

14.1

16.4 14.2 11.4

4.3 0.2

-9.3 -8.6 -5.5 -7.4 -4.6 -2.3 -2.9 -3.8 -3.2 0.2 3.2 9.4

-1.2 -4.7 0.1 -3.9 1.4 8.4 11.2

12.6 11.0 11.6

7.5 9.6

Percent y-o-y

2003 2004

Volume

Structure

Price / Mix

Sales in local currency Currency

Net sales

2005

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2006-01-26

Group sales volume vs Industrial production

0

2

4

6

8

10

12

14

03Q1 03Q2 03Q3 03Q4 04Q1 04Q2 04Q3 04Q4 05Q1 05Q2 05Q3 05Q4

in %

oya

Group Sales Volume Global Industrial Production (Source: JP Morgan)

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2006-01-26

Growth development / local currency6% annual growth rate (whereof 4% organic)

% Y-o-Y

0

2

4

6

8

10

12

2002 2003 2004 2005

Acquisitions / Divestments

Organic growth

(Organic 8.4, Net acq/div -1,1)

3.0

7.3

5.2

11.8

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2006-01-26

Net sales per geography, 2005 (2004)

North America, 20% (20)

Latin America, 5% (5)

Sweden, 4% (5)

Western Europe excl. Sweden, 47% (48)

Central and Eastern Europe, 4% (4)

Asia, 17% (15)

Middle East and Africa, 3% (3)

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2006-01-26

Cash flow, after investments before financing

-200

0

200

400

600

800

1 000

1 200

1 400

1 600MSEK

2002 2003 2004 2005

16

2006-01-26

Net cash

-1 500

-500

500

1 500

2 500

3 500

4 500

5 500

MSEK

2002 2003

Dividend paid:

2001 Q2, MSEK 598

2002 Q2, MSEK 683

2003 Q2, MSEK 911

2004 Q2, MSEK 1 138

2005 Q2, MSEK 1 366

2004 Q2, Pension: MSEK 3 100

2005 Q2, Redemption, MSEK 2 846

2004

(Short-term financial assets - loans)

2005

17

2006-01-26

Inventories as % of annual sales

%

2002 2003 2004

18

19

20

21

22

23

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2005

Target, end 2007 - 18%

18

2006-01-26

Currency management and net currency flows

-6000

-4000

-2000

0

2000

4000

6000USD Euro Others

SEK

• 75% of net currency flows in USD will be hedged 3-12 months, all other currency flows and also translation are not hedged.

• Negative effect for 2005 vs 2004: MSEK 150

• Estimated positive effect for 2006 vs 2005,

based on current assumptions and exchange rates:

Q1, 2006:MSEK 100

Full year, 2006:MSEK 400

Currency management 2006: Net currency flows 2005 excl. Ovako:

CAD

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2006-01-26

January 2006: Outlook for the first quarter 2006

The market demand for SKF's products and services in the first quarter of 2006, compared to the previous quarter, is expected to remain on a high level in Europe, to be slightly higher in North America, significantly higher in Asia and to remain on a high level in Latin America. This is in addition to normal seasonality.

The manufacturing level will be unchanged for the first quarter of 2006, compared to the fourth quarter of 2005, while higher in absolute terms due to normal seasonality.

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2006-01-26

Volume trend for the first quarter 2006

Europe 55%

20%

17%

5%

North America

Asia Pacific

Latin America

Net sales 2005 October 2005

Total

Note: This is the sequentialdevelopment

January 2006

21

2006-01-26

SKF Group targets

• 10% Operating margin level

• 6% Growth per annum

• 20% ROCE

• 18% Inventory / sales

2006

2007

22

2006-01-26

Guidance 2006

• Taxes, annual level: around 32%

• Financial net, for the year: approximately MSEK 200

• Currency, based on current assumptions and exchange rates: a positive MSEK 100 for Q1, 2006 and a positive MSEK 400 for the year

• Addition to tangible assets: in line with depreciations

23

2006-01-26

SKF capital structure 2006

The AB SKF Board proposes the AGM to decide on:

• a 33% increase in the dividend, SEK 4 per share, in total SEK 1.8 billion

• a mandate to the Board to repurchase up to 5% of the company's share

24

2006-01-26

Cautionary statement

This report 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 20-F report on file with the SEC (United States Securities and Exchange Commission) under "Forward-Looking Statements" and "Risk Factors".