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

2. Q4 Summary Alrik Danielson, CEO1
Q4 Summary Alrik Danielson, CEO

3. 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

4. 9.3% Operating margin* Q4 summary
Sales SEK M, +3.1% compared to Q4 2015, organic sales +1.2%, in line with guidance
Operating profit, excluding one-time items SEK M (1 726)
Operating margin, excluding one-time items 9.3% (9.5)
One-time items SEK -155 M (-687)
Cash flow SEK M (1 966)
Profit before tax SEK M (653)
Proposed dividend SEK 5.50 (5.50)
9.3% Operating margin*
* Excluding one-time items
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5. 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%
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6. Sales development by Customer Industry
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7. Successful magnetic bearing partnership with GE Oil & Gas
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8. Q4 results – the details Christian Johansson, CFO2
Q4 results – the details Christian Johansson, CFO

9. 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
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10. Organic sales growth
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11. Operating profit excluding one-time items
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12. Operating profit
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13. Operating performance
Industrial
Net sales SEK M
Organic sales +0.3%
Operating margin* 11.0%
Automotive
Net sales SEK M
Organic sales +3.3%
Operating margin* 5.3%
* Excluding one-time items
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14. 9.3% Operating margin* SKF Group – Q4 2016
Financial performance (SEKm)
2016
2015
Net sales
18 785
18 215
Cost of goods sold
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
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15. 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
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16. Cash flow after investments before financing*
* After investments before financing (excluding acquisitions and divestments and EU payment in Q ) 2013 and 2014 are restated
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17. Net debt reduced by 3.1 bn in the quarter
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18. Net working capital 29.9% of annual sales – negative currency effect of 2.5 pp.
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19. 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 – Full scale SAP implementation, 26 modules
Successful first go-live in Sweden and Finland on 4 January, – no major incidents
Focus in Design & build next releases - Preparation for implementation in additional European markets 2018
Integrated processes, systems and data
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20. 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
Expected cash spend of about SEK 950 M in About 800 expensed through the P&L, including amortization
Total cash spend for Unite remain at billion per year, as previously communicated
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21. Guidance for 2017* Q1 2017: Financial net: around -225 million
Currency impact on the operating profit is expected to be around 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
* Guidance is approximate and based on current assumptions and exchange rates.
5 November, 2017

22. 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

23. 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

24. 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
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25. SKF Q4 results 2016 Q & A
5 November, 2017

26. 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”.

27. 5 November, 2017