SKF Half-year results 2013 Tom Johnstone, President and CEO

© SKF Group16 July 2013Slide 1 Highlights Q Katowice, Poland Madrid, Spain New business 10-year contract worth SEK 900 million with Turbomeca service contracts worth SEK 200 million in Latin America contract for wheel hub bearing units (HBU3) to Volvo Car Corporation Two new SKF Solution Factories Inaugurated in Madrid, Spain and Katowice, Poland Divestment, after quarter end SKF divested its metallic rods business including the operations at the SKF sites in St. Vallier sur Rhône, France and Monroe, Washington, USA.

© SKF Group16 July 2013Slide 2 Highlights Q Research programme SKF and INSA Lyon started a research programme to study the behavior of lubricants under extreme conditions for aerospace. SKF Windfarm Management Conference SKF’s eighth SKF Windfarm Management Conference was held in Warsaw, Poland. Asset Management Conference SKF hosted an Asset Management Conference in Dallas, USA with more than 160 customers. SKF Distributor College awarded its 180,000th certificate.

© SKF Group16 July 2013Slide 3 New products - examples SKF Steering boot kits for cars and light trucks. SKF Telescopic pillars series CPMA and CPMB for medical equipment.

© SKF Group16 July 2013Slide 4 SKF Restructuring programme – costs and expected savings Restructuring activities launched in: SEKm Q4 2012Q1 2013Q2 2013Total One-off costs Annual savings when fully implemented The savings for the second half year 2013 will be around SEK 150 million, evenly split between the third and the fourth quarter.

© SKF Group16 July 2013Slide 5 SKF Group – Q Financial performance Net sales, SEKm16,39217,174 Operating profit, SEKm 1,837 2,049 Operating margin, % Operating margin excl. restructuring,% Profit before tax, SEKm 1,627 1,774 Cash flow, SEKm 1, Organic sales growth in local currency: SKF Group: -2.2% Strategic Industries: -7.6% Regional Sales and Service:-4.8% Automotive:7.7% Key points Sales volumes down by -1.6% y-o-y Manufacturing relatively unchanged compared to last year Inventories 21.6% of sales Europe:-4% North America:-1% Asia:-4% Latin America:14%

© SKF Group16 July 2013Slide 6 Organic sales growth in local currency % change y-o-y

© SKF Group16 July 2013Slide 7 Europe -4% Asia/Pacific -4% Latin America 14% Middle East & Africa -3% North America -1% Growth development by geography Organic growth in local currency Q vs Q2 2012

© SKF Group16 July 2013Slide 8 Europe -7% Asia/Pacific -5% Latin America 11% Middle East & Africa -4% North America -6% Growth development by geography Organic growth in local currency YTD 2013 vs YTD 2012

© SKF Group16 July 2013Slide 9 Components in net sales Q1Q2Q3Q4Q1Q2Q3Q4Q1Q Percent y-o-y Volume Structure Price/mix Sales in local currency Currency Net sales

© SKF Group16 July 2013Slide 10 Growth in local currency, including structure % y-o-y Structure in 2011:4.8% Structure in 2012:0.4% Structure in YTD 2013:2.0% -3.1% 16.3% -2.1%

© SKF Group16 July 2013Slide 11 Operating profit SEKm 2011 One-time items

© SKF Group16 July 2013Slide 12 % 2011 One-time items Operating margin

© SKF Group16 July 2013Slide 13 % One-time items * Excluding one-time items 14.7* 11.9* * Operating margin 11.4

© SKF Group16 July 2013Slide 14 Operating margin per business area Strategic Industries Regional Sales and Service Automotive % Excluding one-off items (eg. restructuring, impairments, capital gains)

© SKF Group16 July 2013Slide 15 Inventories as % of annual sales %

© SKF Group16 July 2013Slide 16 Return on capital employed ROCE: Operating profit plus interest income, as a percentage of twelve months rolling average of total assets less the average of non-interest bearing liabilities. % * 15.3* 23.9* One-off costs * Excluding one-off costs

© SKF Group16 July 2013Slide 17 Cash flow, after investments before financing SEKm *SEK 1,707 million, excluding acquisitions and divestments. **SEK -69 million, excluding acquisitions and divestments. * **

© SKF Group16 July 2013Slide 18 Net debt SEKm AB SKF, dividend paid (SEKm) : 2011 Q22, Q22, Q22, Net debt:Loans and net provisions for post-employment benefits less short-term financial assets excluding derivatives. Cash out from acquisitions (SEKm) : 2012 Q Q1823

© SKF Group16 July 2013Slide 19 EURm Available credit facilities: EUR 500 million 2017 SEK 3,000 million 2017 No financial covenants nor material adverse change clause Debt structure, maturity years 100

© SKF Group16 July 2013Slide 20 SEKm Net sales16,39217,174 Operating profit1,8372,049 Operating margin, % Operating margin excl. one-offs, % Profit before taxes1,6271,774 Net profit1,1041,244 Basic earnings per share, SEK Cash flow, after investments before financing 1, Second quarter 2013

© SKF Group16 July 2013Slide 21 SEKm Net sales31,54434,105 Operating profit3,3174,185 Operating margin, % Operating margin excl. one-offs, % Profit before taxes2,8643,730 Net profit1,9222,570 Basic earnings per share, SEK Cash flow, after investments before financing 255*1,382* Half year 2013 * excluding acquisitions and divestments, SEK 1,078 million (1,401).

© SKF Group16 July 2013Slide 22 July 2013: SKF demand outlook Q Demand compared to the third quarter 2012 The demand for SKF’s products and services is expected to be slightly higher for the Group, Asia and North America as well as for all the business areas. It is expected to be relatively unchanged for Europe and higher for Latin America. Demand compared to the second quarter 2013 The demand for SKF’s products and services is expected to be relatively unchanged for the Group, Europe, Asia and North America as well as for all the business areas. It is expected to be slightly higher for Latin America. Manufacturing Manufacturing is expected to be slightly higher year over year and relatively unchanged compared to the second quarter.

© SKF Group16 July 2013Slide 23 Share of net sales 2012 Europe43% Asia Pacific24% North America23% Latin America7% Total Q vs Q / Sequential trend for Q SKF demand outlook Q3 2013, regions

© SKF Group16 July 2013Slide 24 Sequential trend for Q Share of net sales 2012 Strategic Industries 31% Regional Sales and Service 39% Automotive27% Total Q vs Q SKF demand outlook Q3 2013, business areas

© SKF Group16 July 2013Slide 25 6% 5% 29% 13% 12% 10% 4% 2% Aerospace Energy Trucks Industrial distribution Industrial, heavy, special and off-highway Cars and light vehicles Industrial, general Vehicle after market Railway Two-wheelers and electrical Share of net sales 2012 SKF sequential volume trend Q3 2013, main segments

© SKF Group16 July 2013Slide 26 Guidance for the third quarter 2013* Tax level: around 30% Financial net for the third quarter: Around SEK -200 million Currency impact on operating profit versus 2012 Q3: SEK -100 million Full year: SEK -450 million Additions to PPE: Around SEK 1.7 billion for 2013 * Guidance is approximate and based on current assumptions and exchange rates

© SKF Group16 July 2013Slide 27 Key focus areas 2013 Managing the uncertain and different demand environment - Profit and cash flow Initiatives and actions to support long-term financial targets - New factories in Mysore and Bengaluru in India - New warehouse in Shanghai, China - SKF Campus in Shanghai, China, including: ‣ New factory for automotive ‣ Global Technical Centre China ‣ SKF Solution Factory ‣ SKF College - Integration of new acquisitions, GBC and BVI - Cost reduction and efficiency programme - New IT systems Business Excellence and competence development One SKF and SKF Care as guiding lights

© SKF Group16 July 2013Slide 28 Cost reduction – specific programme Main activities: Consolidation of manufacturing - merger between sites - transfer to faster growing markets with more local production Optimization and productivity improvements - in the manufacturing and demand chain processes - in administration and support functions Reduction in purchasing cost - mainly through standardization and rationalization of the supplier base. Reduction of annual cost by SEK 3 billion by the end of Total cost for the programme around SEK 1.5 billion - 2,500 people impacted,

© SKF Group16 July 2013Slide 29 SKF’s priorities Sustainable profitable growth Expand the platform concept Exploit the asset life cycle approach Develop new products and grow SKF BeyondZero portfolio Extend and grow second brands Acquisitions Capital efficiency Fixed cost reduction Working capital efficiency Cost reduction Consolidation of manufacturing Optimization and productivity improvements Reduction in purchasing costs Investments & Innovation New and existing facilities Research and development

© SKF Group16 July 2013Slide 30 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 under the Administration Report; “Important factors influencing the financial results", "Financial risks" and "Sensitivity analysis”.

© SKF Group16 July 2013Slide 31