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The SKF Group

The SKF Group. First-quarter results 2008 Tom Johnstone, President and CEO. Highlights during the first quarter 2008. Acquisition of QPM Aerospace’s metallic rod business. Opened the first machine tool competence centre in Stuttgart, Germany. New contract with:

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The SKF Group

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  1. The SKF Group First-quarter results 2008 Tom Johnstone, President and CEO

  2. Highlights during the first quarter 2008 • Acquisition of QPM Aerospace’s metallic rod business. • Opened the first machine tool competence centre in Stuttgart, Germany. • New contract with: - Siemens Transportation Systems to deliver axleboxes and tapered roller bearing units for new long distance Railjet trains. - British Petroleum to provide proactive reliability maintenance services in the North Sea over a five year period. - Goldwin Science and Technologies Co. Ltd. in China to supply the main shaft seals for their new 1.5 MW wind turbine.

  3. First quarter 2008

  4. Operating margin Long-term target level: 12% % 2006 2007 2008

  5. Operating margin Long-term target level: 12% % 13.1 12.9 12.6 11.3* * excluding income from the jointly controlled company Oy Ovako Ab

  6. Operating margin per division % Service Industrial Automotive 2007 2008 2006 Excluding one-time items (eg. restructuring, impairments, capital gains)

  7. Sales in local currencies (excl. structural changes) % change y-o-y 2007 2008 2006

  8. Growth development in local currency Acquisitions/Divestments Long-term target level: 6-8% per annum Organic growth % Y-o-Y 13.2 9.7 7.5* * Excluding effect from Ovako: 2006 10.1%

  9. Net sales development per quarter 2007 2006 2008 Percent y-o-y

  10. Cash flow, after operating investments before financial items SEKm Cash out from acquisitions (SEKm): 2006 2,129 2007 1,209 2008 Q1 54 Cash in from Ovako (SEKm): 2006 Q4 1,217 2007 Q2 46 2006 2007 2008

  11. Net debt(Short-term financial assets minus loans and post-employment benefits) SEKm AB SKF, dividend paid (SEKm): 2006 Q2 1,821 2007 Q2 2,049 2007 Q2, redemption 4,554 2006 2007 2008

  12. Inventories as % of annual sales Long-term target level: 18% % 2006 2007 2008

  13. Return on capital employed Long-term target level: 24% % ROCE: Operating profit plus interest income, as a percentage of twelve months average of total assets less the average of non interest bearing liabilities.

  14. April 2008: Outlook for the second quarter 2008(compared to the first quarter 2008) The market demand for SKF’s products and services in the second quarter of 2008 is expected to be higher for the Group. The demand is expected to be higher in Europe, relatively unchanged 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 slightly higher for the Automotive Division. The manufacturing level for the second quarter 2008 will be slightly higher compared to the first quarter 2008, and higher than the second quarter 2007.

  15. Volume development

  16. Key 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

  17. SKF Corporate Sustainability Employee Care Business Care Operating margin SKF Care BeyondZeroTM Environment Care Community Care

  18. SKF Group Vision To equip the world with SKF knowledge

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