Alrik Danielson, President and CEO SKF Q4 results 2016 Alrik Danielson, President and CEO

Q4 Summary Alrik Danielson, CEO 1 Q4 Summary Alrik Danielson, CEO

2016 – a busy year Structure and customer offering New customer focused organisation in place 5 divestments Two value propositions; rotating equipment performance and products Investments Investments in new production technology and automation in Sweden, US and Germany Investments in logistics and distribution centres Cost competitiveness Automotive turn-around program Consolidation of US manufacturing footprint initiated 3,000 fewer employees compared to the fourth quarter 2014 Successful first implementation of Unite 5 November, 2017

9.3% Operating margin* Q4 summary Sales SEK 18 785 M, +3.1% compared to Q4 2015, organic sales +1.2%, in line with guidance Operating profit, excluding one-time items SEK 1 741 M (1 726) Operating margin, excluding one-time items 9.3% (9.5) One-time items SEK -155 M (-687) Cash flow SEK 1 428 M (1 966) Profit before tax SEK 1 376 M (653) Proposed dividend SEK 5.50 (5.50) 9.3% Operating margin* * Excluding one-time items 5 November, 2017

Sales development by geography Organic growth in local currency Q4 2016 vs Q4 2015 Europe +0.9% North America -4.4% Asia/Pacific +8.1% Latin America -4.5% Middle East & Africa +6.6% 5 November, 2017

Sales development by Customer Industry 5 November, 2017

Successful magnetic bearing partnership with GE Oil & Gas 5 November, 2017

Q4 results – the details Christian Johansson, CFO 2 Q4 results – the details Christian Johansson, CFO

Sales development 2015 2016 Q4 Q1 Q2 Q3 Organic -5.2 -6.1 -4.4 -0.6 Percent y-o-y Q4 Q1 Q2 Q3 Organic -5.2 -6.1 -4.4 -0.6 +1.2 Structure -1.0 -0.8 -2.0 -1.8 Currency 4.7 -3.0 +0.1 +3.7 Net sales -1.5 -8.9 -8.0 -2.5 +3.1 5 November, 2017

Organic sales growth 5 November, 2017

Operating profit excluding one-time items 5 November, 2017

Operating profit 5 November, 2017

Operating performance Industrial Net sales SEK 13 108 M Organic sales +0.3% Operating margin* 11.0% Automotive Net sales SEK 5 668 M Organic sales +3.3% Operating margin* 5.3% * Excluding one-time items 5 November, 2017

9.3% Operating margin* SKF Group – Q4 2016 Financial performance (SEKm) 2016 2015 Net sales 18 785 18 215 Cost of goods sold -14 383 -14 214 Gross profit 4 402 4 001 Gross margin, % 23.4 22.0 Selling and administrative expenses -2 841 -2 874 Other operating expenses 25 -88 Operating profit 1 586 1 039 One-time items -155 -687 Operating profit excl. one-time items 1 741 1 726 Operating margin, % 8.4 5.7 Operating margin excl. one-time items, % 9.3 9.5 Financial income and expense, net -210 -386 Profit before taxes 1 376 653 Taxes -406 -225 Net profit 970 428 Basic earnings per share, SEK 1.95 0.82 9.3% Operating margin* * Excluding one-time items 5 November, 2017

Cost management The number of employees decreased by 265 in the quarter – reduction of 282 permanent employed, increase of 17 temporary employees and agency personnel Continuous reduction of fixed cost in focus. The fixed cost index was relatively unchanged, adjusted for the costs related to the implementation of our new ERP system Unite. Activity-based cost reductions continue with high focus 5 November, 2017

Cash flow after investments before financing* * After investments before financing (excluding acquisitions and divestments and EU payment in Q2 2014.) 2013 and 2014 are restated 5 November, 2017

Net debt reduced by 3.1 bn in the quarter 5 November, 2017

Net working capital 29.9% of annual sales – negative currency effect of 2.5 pp. 5 November, 2017

Unite – SKF’s new ERP system A global ERP programme to enable SKF’s business objectives Covers all key business processes – sales & service, demand chain and logistics, finance, purchasing and manufacturing Unite program runs from 2013-2022 – Full scale SAP implementation, 26 modules Successful first go-live in Sweden and Finland on 4 January, 2017 – no major incidents Focus in 2017 - Design & build next releases - Preparation for implementation in additional European markets 2018 Integrated processes, systems and data 5 November, 2017

Unite – financials 2016 – Build, test, train and prepare for first launch Total cash spend SEK 940 M, of which: - SEK 620 M expensed through the P&L - SEK 320 M capitalised as an investment Financial outlook 2017-2022 Expected cash spend of about SEK 950 M in 2017. About 800 expensed through the P&L, including amortization Total cash spend 2017-2022 for Unite remain at 0.8-1.2 billion per year, as previously communicated 5 November, 2017

Guidance for 2017* Q1 2017: Financial net: around -225 million Currency impact on the operating profit is expected to be around + 200 million compared with 2016 based on exchange rates per December 31. 2017: Tax level: around 30% for 2017, excluding effects from divestments Additions to property, plant and equipment: around 2,200 million for 2017 * Guidance is approximate and based on current assumptions and exchange rates. 5 November, 2017

SKF demand outlook - Definition The demand outlook for SKFs products and services represents management's best estimate based on current information about the future demand from our customers. The demand outlook reflects the expected volume development adjusted for acquisitions/divestments in the markets where our customers operate. 5 November, 2017

February 2017: SKF demand outlook Q1 2017 Demand compared to the first quarter 2016 The demand for SKF’s products and services is expected to be slightly higher for the Group and for Industrial. Demand for Automotive is expected to be higher. Demand is expected to be slightly higher in Europe, North America and in Latin America and higher in Asia. Demand compared to the fourth quarter 2016 The demand for SKF’s products and services is expected to be relatively unchanged for the Group including and for Industrial. Demand for Automotive is expected to be higher. Demand is expected to be higher in Europe and North America, slightly lower in Latin America and significantly lower in Asia. 5 November, 2017

Financial calendar Roadshow Boston & New York 6-7 February Annual Report 7 March Carnegie 15 March BAML London Conference 21 March Annual General Meeting 29 March Capital Markets Day 6 April 5 November, 2017

SKF Q4 results 2016 Q & A 5 November, 2017

Cautionary 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”.

5 November, 2017