Automotive Division

1. Automotive Division Tryggve Sthen President, Automotive Division

2. Presentation outline • Automotive Division update • Key financials • Division overview • Cost reductions • Growth in Asia

3. 1 Automotive Division update

4. Automotive Division overview Cars Trucks Two wheelers Vehicle service market Home appliances & Power tools

5. A good AD journey for many years… Sales development Record operating margin SEKb 18.6 6.0% Excl. One-time costs

6. The great secession in 2008-2009 followed by a strong recovery Sales development Record operating margin SEKb 7.2% 4.4 Excl. One-time costs

7. 2 Cost reductions

8. Lower cost & better cash • Cost cutting • Down sizing • Managing cash Reducing costs – lower cost & better cash

9. Capacity flexibility- Lay-offs and early retirements Q4 2008 and H1 2009 • In total about 2,000 people • All sites affected, mainly: • Asia • Pune • Americas • Glasgow closure • Elgin • Salt Lake City • Tortuguitas • Cajamar • Europe • Lutsk • Fontenay • Varese • St Cyr • Leverkusen

10. Capacity flexibility 2009: At peak about 9,000 people in short-time work

11. Lower cost & better cash Restructuring • Plant restructuring in Europe & North America • Shift of production • Cost cutting • Down sizing • Managing cash Reducing costs - restructuring

12. Europe • Fontenay, France • Schweinfurt, Germany • Leverkusen, Germany Factory closures/restructuring over the last few years • North America • Aiken • Springfield • Franklin • Glasgow • Elgin • Seneca

13. Shift in manufacturing footprint • Asia expansion • China new HBU plant • Korea 2 new plants • Indonesia new plant • India new plant • Latin America growth • Mexico • Seals • Bearings • Brazil • East Europe growth • Ukraine capacity • Bulgaria capacity Manufacturing increase from 30% in 2008 to 45% in 2010

14. Lower cost & better cash Internal improvements Restructuring • Benchmarking • Six Sigma • Manufacturing Excellence • Plant restructuring in Europe & North America • Shift of production • Cost cutting • Down sizing • Managing cash Reducing costs

15. 3 Growth

16. Grow with winning customers Value for customers Growth strategy in Asia

17. Bearings and seals to Fuwa trailer axles • Guangdong Fuwa Engineering Manufacturing Co. Ltd. is the largest trailer axle manufacturer in the world • Several bearing and seal contracts

18. Bearings to Yuchai engine • Yuchai is the largest diesel engine manufacturer in China • Recently secured important bearing contract Hub bearing unit 1 Fan unit Yuchai engine

19. Haridwar factory inaugurated 7 April • Haridwar factory to supply ball bearings to • Hero Honda and other automotive customers in the region as well as to the aftermarket • Contract with Hero Honda for 5 years production: • > 100 million bearings

20. Product introduction targeting Asia demand Grow with winning customers Value for customers Broad product offering Growth strategy in Asia

21. Asia targeting product launches in the last 6 months • 12 new products launched globally • 4 specifically targeting the Asia market • SKF Rocker Arm Bearing & • SKF Rocker Arm Bearing Unit • SKF One Way Clutch • Hub Bearing Unit 1 • for compact cars

22. Product range expansion • Dealer network expansion Product introduction targeting Asia demand Grow with winning customers Aftermarket penetration Broad product offering Value for Customers Growth strategy in Asia

23. Aftermarket business in China Dealer network 2007 12 Distributor/Dealers 2008 + 8 2009 + 6 2009 = 26 (end of year) • Product Range • New product lines added • New kits added to existing product lines

24. Growth Broad green offering Value for customer Emerging markets After-market Down-sizing Restruct-uring Internal improve-ments Cost reductions The way ahead Profitable Growth