Industrial Market, Strategic Industries Railway & Off-highway Business Unit

Speaker 25 min Rakesh Makhija President Strategic Industries 15 min Rutger Barrdahl Director Railway and Off-highway 15 min Ole K Jødahl Director Industrial Drives 5 min Key business message & Summary 15 min Q&A CMD 2013

Overview Off-highway Railway Provider of innovative, sustainable solutions to the mobile industrial machinery market Design partner of the global technology and market leaders Creating value over machine lifecycle through industry expertise Leader in wheelset bearings, axleboxes and drive system bearings to the global railway industry Industry leading in railway services, sensorization and condition-based maintenance SKF offers global railway operations maximized performance, safety and minimized lifecycle cost CMD 2013 31 March 2017 2

Agricultural challenges Mud, dust and debris Rain and runoff Corrosive chemicals Precision farming Long periods of inactivity followed by intense work schedules Meeting the growing challenges… Rising fuel costs New regulations on reducing harmful emissions and noise Protecting the health and safety of workers …of modern farming… …with SKF Agri Solutions Designed for reality Lab and real life tested solutions Solutions for virtually any agriculture machine and application CMD 2013

The agriculture business is expected to grow at an annual rate of 6% SKF Agri solutions Y Bearings Agri range CAHB Actuators Lub Systems The agriculture business is expected to grow at an annual rate of 6% Agri Hub AH1 Agri Hub AH2 Agri Hub AH3 Steering Units Mud Block Seals CMD 2013

SKF Agri Hubs - Relubrication-free, cost-effective, integrated Customer value and benefits Relubrication-free, cost-effective, integrated For OEMs A cost-effective solution Higher product quality and reliability Stronger market image Supports sustainability efforts For end users Avoid soil erosion Increased farm productivity Relubrication-free Reduced environmental impact Easy to install/replace Reduce maintenance and ownership cost Boosts farm productivity by 150%: reducing bearing failure triples service life vs. traditional bearing and drive uptime Expected performance as much 100.000 hectares Reduced cost of ownership up to 6000 € / machine Reduced seed bed pollution up to 500 kg of grease / machine CMD 2013

Construction and mining machinery challenges Multi-purpose machines Tough environmental conditions Productivity increase Smart resources exploitation New markets adaptation Meeting the growing challenges… Fuel efficiency Stringent emission regulations Owning & operating cost reduction Operator safety & comfort …of OEMs and Users … Application optimized design Friction optimization Contamination resistant Reduced maintenance Increased reliability …with SKF Solutions providing ... CMD 2013

SKF solutions for demanding Construction Machinery Applications Increasing urbanization continues to drive the demand for earthmoving, tunnelling, road building and other construction equipment. Around 800 000 machines are yearly produced totaling about 100 Billion USD Sales and is expected to grow to over 1 million by 2020 (source: Off Highway Research, PSR, Local Statistics, Roland Berger Consultants) An important impact on the design of the construction machinery is the tougher environmental legislation and fuel price pressure. In most areas in the world including emerging economies, legislations impose exhaust gas reduction, recycling capability, noise and vibrations limitation like in the automotive industry The consequence is greater demand for higher drive train efficiency and working process optimization. This is influencing a move to electric vehicles or a combination of conventional and electric, also called hybrid enabling better equipment control, possibilities to recover braking energy and to reduce energy consumption for the whole vehicle For optimizing efficiency in drive train, it cannot be done by simply improving isolated components. Therefore, SKF has developed advanced simulation tools analysing the complete drive train of the vehicle, all components, not only the bearings and the interaction between them. SKF Solutions uses appropriate bearings and seals that support friction reduction and increased power density. Here are few examples - Planet cylindrical roller bearing specifically designed for high load carrying capacity and speed limit than full complement bearing traditionally used - Heavy duty hydraulic seals withstanding higher pressure and speed - Hybrid Sensor bearing allowing precise motor control, saving space, insuring the electric insulation in electrical drive application - New extended life spherical plain bearing, to reduce maintenance requirements All these product share their capability to withstand rough conditions of the construction machinery, reduce consumption of energy and improve machine productivity CMD 2013 31 March 2017

Hydraulic cylinders seals Guide ring Wiper seal Hydraulic cylinders are only functioning by virtue of the seals sealing of between high pressure hydraulic oil and low pressure oil or the environment. At the same time, the proper operation of the cylinder is assured by a controlled flow of oil through the seals for lubricating the surfaces. This is needed for both minimising friction, wear and corrosion. The balance between keeping tight and allowing oil flow through is delicate. Not to speak of keeping the contaminant out at the rod side, which is in connection to the environment. Then of course there are cylinders used hundreds of times a day and those that only work intermittently. Naturally, we distinguish as well between high pressure and low pressure solutions (or heavy duty and normal duty). The sealing part requires several seals in different parts of the cylinder. This ranges from a dynamic pressure barrier (rod seal and piston seal), to a seal taking up pressure spikes (buffer seal), and a seal to keep contamination out (wiper seal). Furthermore, rings to guide the rod within the cylinder bore (guide rings). » Seals from left to right (note illustration only – might not be in our new assortment anymore) » CUT piston seal » GLG piston seal » GS-XX8 rod seal » PWY wiper seal » PAK wiper seal » GA wiper seal » RGR and PGR guide rings Rod seal Piston seal Buffer seal CMD 2013 31 March 2017

Railway challenges Meeting the growing challenges… Liberalization of railway operations Urbanization will increase global demand Requirements on local production and support Aging fleet especially in emerging markets. Meeting the growing challenges… High safety requirement Increased maintenance intervals Bearing life prediction …of OEMs and Users … Reliability in operations Life cycle management Increased performance …with SKF Solutions providing ... CMD 2013

SKF solutions for railways CONDITION MONITORING BEARING DESIGN & CONSULTANCY Training Bearing refurbishing Bearing investigation Bearing exchange Bearing re-lubrication Bearing Condition Monitoring OTHER RAILWAY SERVICES Axlebox overhaul Suspension Tubes overhaul Drive system bearings overhaul Axletronic systems Sensors IMxR monitoring system Multilog OTHER APPLICATIONS Wheel flange lubrication systems BOGIE Axleboxes Axlebearings Axletronic Slewing bearings Suspension tubes OTHER APPLICATIONS DRIVE SYSTEMS Articulation joints Gearbox bearings Motor bearings AMPEP – High performance plain bearing CMD 2013

Railway Service operations in SKF Gothenburg Luton Tver Pinerolo Nankou Bogotá Perth Melbourne CMD 2013

Improving bearing performance to achieve longer maintenance intervals  Better Grease Improved Grease Retention Maintenance interval Low Friction Seal - II New Heat Treatment Low Friction Bearing High Performance Cage Reduced Fretting Corrosion Selective Surface Treatment Low Friction Seal - I 1.2 Million km SKF Insight™ 2011 2012 2013 2014 2015 CMD 2013

Two variants for railway industry Smart end cap for freight cars Integrated in bearing for passenger applications CMD 2013

SKF Insight™ - Extending maintenance intervals and hence reducing operator cost Good Conventional Sensors Condition Listen & Feel ! Temperature Worse Operational Life Time CMD 2013

Rail Condition Monitoring Overview Currently, our condition monitoring products are used or installed in 27 railway projects around the world. Sweden France Germany North America Spain Poland China Portugal Italy Turkey South Korea India Brazil Australia CMD 2013

Recognised by leading industry players SKF wins AGCO Fendt supplier award for innovation in Agri market Best Technology supplier award from Siemens Large Drives for Railway CMD 2013 31 March 2017

Key business message – Railway and Off-highway The Agri and Railway industry will continue to grow in the coming years. Construction and mining remain uncertain in the short term. SKF is well positioned to grow with our global presence, both in our manufacturing footprint as well as our local sales presence. Our new offers are in the forefront with the technical trends and demands from the market. CMD 2013 17