20 April 2010

0

The SKF Group

First-quarter results 2010

Tom Johnstone, President and CEO

20 April 2010

2Key points, Q1 report

• Strong operating profit and marginSEK 1,702 m versus SEK 768 m previous year11.8% versus 5.2% previous year

• Production levels increased during the quarterSignificantly higher year over year.

• Sales in local currency:Industrial Division: -12.1%Service Division: +8.2%Automotive Division: +26.2% Negative price/mix influenced by higher automotive sales versus industrial market.

• Improving demand outlook for Q2Significantly higher compared to Q2 2009Slightly higher sequentially compared to Q1 2010

• Manufacturing levelSignificantly higher year over yearHigher compared to average Q1 2010

20 April 2010

3Highlights 2010

• Inauguration of two new factories in India:- The Haridwar factory will manufacture deep groove ball bearings and primarily

serve the two-wheeler market and the vehicle service market in India. Totalinvestment: around SEK 250 million.

- The Ahmedabad factory will manufacture medium to large size bearings ofvarious types to serve customer segments such as wind energy and heavy industries. Total investment: around SEK 450 million.

• A programme was concluded in March for adjusting the manufacturing capacity in Gothenburg, Sweden. The total cost of these activities is around SEK 90 million and the benefit of these actions will be around SEK 50 million per year.

• The ninth SKF Solution Factory was inaugurated in Houston, USA

Photos

20 April 2010

4Sales volume

-35-30-25

-20-15-10-5

05

10% change y-o-y

2008 2009 2010

20 April 2010

5Sales in local currencies (excl. structural changes)

-30-25-20

-15-10-50

51015

% change y-o-y

2008 2009 2010

20 April 2010

6Growth in local currency(Organic growth + acquisition/divestments)

-25

-20

-15

-10

-5

0

5

10

2008 2009 YTD March2010

Organic growth

% y-o-y

Acquisitions/Divestments

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

7.1%-19.0%

5.0%

20 April 2010

7Growth development by geographyLocal currency Q1 2010 vs Q1 2009

Europe-6%

Asia/Pacific +34%

Latin America +21%

Middle East & Africa +11%

North America +1%

20 April 2010

8Components in net sales

20092008 2010Percent y-o-y Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

-24.9 -14.1

0.4

0.3

-13.4

-1.4

-14.8

1.2

3.7

-20.0

6.6

-13.4

-30.8

1.1

5.6

-24.1

12.2

-11.9

-26.9

1.4

7.1

-18.4

13.6

-4.8

-13.0

2.4

8.5

-2.1

10.3

8.2

2.7

0.5

6.4

9.6

-0.9

8.7

6.2

1.3

4.0

11.5

-4.1

7.4

4.9

1.0

3.8

9.7

-1.2

8.5

Q1

5.3

0.0

-0.3

5.0

-7.7

-2.7

Volume

Structure

Price / Mix

Sales in local currency

Currency

Net sales

20 April 2010

9Operating profit

0200400600800

1 0001 2001 4001 6001 8002 0002 200SEKm

2008 2009 2010

Restructuring and one-time items

20 April 2010

10Operating margin

% Long-term target level: 12%

2008 2009

0

2

4

6

8

10

12

14

16

2010

Restructuring and one-time items

20 April 2010

11Operating margin

0

2

4

6

8

10

12

14

2008 2009 YTD March2010

%

12.2

Long-term target level: 12%

5.7

12.7*

8.0*

Restructuring and one-time items

* Excluding restructuring and one-time items

11.8

12.4*

20 April 2010

12Operating margin per division

-12-10

-8-6-4-202468

1012141618

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

IndustrialService

Automotive

%

2008

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

2009 2010

20 April 2010

13First quarter 2010

SEKm 2010 2009

Net sales 14,446 14,849

Operating margin excl. restructuring, % 12.4% 6.4%

Cash flow after investments before financial items

32 523

Operating margin, % 11.8% 5.2%

Operating profit 1,702 768

Profit before taxes 1,504 531

Net profit 1,070 394

Basic earnings per share, SEK 2.27 0.86

20 April 2010

14Inventories as % of annual sales

18

19

20

21

22

23

24

25% Long-term target level: 18%

2008 2009 2010

20 April 2010

15Cash flow, after investments before financial items

-1 000

-500

0

500

1 000

1 500

2 000

2 500SEKm

Cash out fromacquisitions* (SEKm):

2008 1,2842009 241

20092008 2010

* including non-controlling interests.

20 April 2010

16Return on capital employed

0

5

10

15

20

25

30

2008 2009 YTD March 2010

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%

24.0

9.111.9

20 April 2010

17Net debt(Short-term financial assets minus loans and post-employment benefits)

-18 000

-16 000

-14 000

-12 000

-10 000

-8 000

-6 000

-4 000

-2 000

0

SEKm

AB SKF, dividend paid (SEKm):2008 Q2 2,2772009 Q2 1,5942010 Q2 proposed 1,594

Redemption (SEKm):2008 Q2 2,277

2008 2009 2010

20 April 2010

18SKF capital structure

The AB SKF Board proposes the Annual General Meeting to decide on:

• a dividend of SEK 3.50 per share

• a mandate to the Board to repurchase a maximum of 5% of the company's own shares

20 April 2010

19Volume trends(based on current assumptions)

Daily volume trends for: Q1 2010 Q2 2010

Total

6%Latin America

23%Asia Pacific

17%North America

51%Europe

Net sales2009

+++

+++

+++

++

++

Outlook Q22010 vs 2009

20 April 2010

20Sequential volume trend main segments Q2 2010(based on current assumptions)

7%

14%

7%

5%

22%

16%

12%

11%

3%

3%

Aerospace

Cars

Energy

Railway

Industrial distribution

Industrial OEM, General+Special

Vehicle Service Market

Industrial OEM, Heavy + Off-highway

Trucks

Electrical and two-wheeler

Net sales 2009

20 April 2010

21Volume trends, Divisions(based on current assumptions)

Daily volume trends for Q2 2010

Net sales2009

Industrial 34%

Service 35%

Automotive 29%

Total +++

+++

+++

+

Outlook Q22010 vs 2009

20 April 2010

22March 2010: Outlook for the second quarter 2010

Sales development compared to second quarter last yearThe demand for SKF products and services is expected to be significantly higher for the Group in total. In Europe and North America it is expected to be higher and in Asia and Latin America significantly higher. It is expected to be slightly higher for the Industrial Division and significantly higher both for the Service Division and Automotive Division.

Sales development compared to the first quarter 2010The demand is expected to be slightly higher for the SKF Group in total. In Europe and North America it is expected to be slightly higher and in Asia and Latin America higher. For both the Industrial Division and Service Division it is expected to be slightly higher and for the Automotive Division higher.

Manufacturing levelThe manufacturing level will be significantly higher year on year and higher compared to the average of the first quarter 2010.

20 April 2010

23Guidance for the second quarter 2010

• Tax level: around 30%

• Financial net for the second quarter:Around SEK -150 million

• Exchange rates on operating profit versus 2009Q2: SEK -200 millionFull year: SEK -500 million

• Additions to PPE: Around SEK 1.5 billion for 2010

Guidance is approximate and based on current assumptions and exchange rates.

20 April 2010

24Key focus areas ahead 2010

• Profit and cash flow

• Adjustment of manufacturing output to new demand levels

• Growing segments and geographies

• Strengthening the platform/segment approach

• Competence development

SKF Care and Six Sigma as guiding lights

20 April 2010

25SKF Care

Employee Care

Community CareEnvironmental Care

Business Care

BeyondZeroTM

0

2

4

6

8

10

12

14

2003 2004 2005 2006 2007 2008 2009

SKF Care

Operating margin

20 April 2010

26SKF Group Vision

To equip the worldwith SKF knowledge

20 April 2010

27Cautionary statement

This presentation 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 annual report

(available on www.skf.com) under the Administration Report; “Important factors

influencing the financial results", "Financial risks" and "Sensitivity analysis”.

20 April 2010

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