1. SKF Year-end results 2014 Alrik Danielson, President and CEO
28 January 2015
10 April 2017

2. Examples of new business in Q4 2014
GE Aviation and Safran Group, Mainshaft and gearbox (Snecma & Hispano-Suiza) bearings
Chongqing Gearbox Co., Ltd, China Bearing sets
Andritz Hydro, Germany Special bearing and sealing solution
Mazda, Mexico Low-friction wheel bearing units
Daimler, Germany Wheel hub bearing units
Jiangsu Jintongling Fluid Machinery Co., Ltd, High-speed permanent China magnetic motor unit solutions

3. Examples of new business in Q1 – Q3 2014
Hindustan Aeronautics Ltd, India Customized bearings for helicopter transmission and main rotor
Bell Helicopter Textron Inc.,USA Elastomeric bearings
Turbogaz, Ukraina Magnetic bearings
SCA, BillerudKorsnäs, Condition monitoring solutions Vattenfall, Sweden
Geely Automobile, China Transmission seals
Volkswagen, Germany Energy efficient tapered roller and ball bearings
Envision Energy, China Strategic long-term partnership

4. Examples of new business in Q1 – Q3 2014
Dongfang Electric New Energy, China Main shaft bearings equipment
Aurizon, Australia Service contract
Doosan Heavy Industries and SKF Supergrip Bolts Construction, South Korea and SKF Nautilus bearing
HSD SpA, Italy Super precision bearings and engineering support
Tesla Motors, USA Bearing for the gearbox, e-motor and wheels
Volvo Cars, Sweden Wheel hub bearing units
Scania, Sweden Wheel bearing units and high pressure valve stem seals

5. Customer awards Q4 2014
Best supplier award – Kirloskar Pneumatic Company Ltd., India
Best supplier award – Nanjing Gearbox Company, China
Top runner-up ’Best Vendor’ – Tata Steel, India
Winner ’Cloud’ category – Software AG Innovation Awards
Supplier Quality Excellence awards 2014 – General Motors, USA
Quality Silver Award 2014 – Bajaj Auto Limited, India

6. Examples of new technologies, products and solutions 2014
SKF Wireless Machine Condition Sensor
SKF Mudblock cassette seals, MUD 11
SKF Gear Bearing Unit
SKF Wireless MicroVibe
Compact tapered roller bearing unit for heavy freight
Tapered roller bearing unit
for passenger railway applications
Electric grease transfer pump
SKF Oil Injection Sets - THKI series
Connect
SKF Tachometer
Floating
piston
PuraBreeze 100

7. SKF Group – Q4 2014 Financial performance (SEKm) 2014 2013 Net sales
18 499
16 430
Operating profit
1 608
-1 547
Operating margin, %
8.7
-9.4
Operating margin excl. one-time items, %
11.2
11.0
Profit before tax
1 293
-1 760
Basic earnings per share, SEK
1.84
-4.57
Cash flow after investments before financing
2 053
-6 732
Organic sales growth in local currency:
SKF Group
2.8%
Europe 1%
Strategic Industries
7.4%
North America 2%
Regional Sales and Service
2.2%
Asia 8%
Automotive
-0.5%
Latin America 4%
Middle East and Africa
-5%
Key points
Sales volumes up by 1.8% y-o-y.
Manufacturing was relatively unchanged compared to last year.

8. SKF Group – 2014 Financial performance (SEKm) 2014 2013 Net sales
70 975
63 597
Operating profit
7 801
3 693
Operating margin, %
11.0
5.8
Operating margin excl. one-time items, %
11.7
11.9
Profit before tax
6 668
2 821
Basic earnings per share, SEK
10.10
2.0
Cash flow after investments before financing excl. EU payment
4 693
5 342
Cash flow after investments before financing
1 868
Organic sales growth in local currency:
SKF Group
3.9%
Europe 1%
Strategic Industries
8.4%
North America 3%
Regional Sales and Service
1.8%
Asia
10%
Automotive
2.0%
Latin America
Middle East and Africa 9%
Key points
Sales volumes up by 3.3% y-o-y.
Manufacturing was slightly higher compared to last year.

9. Organic sales growth in local currency
% change
y-o-y
2012
2013
2014

10. Organic sales growth in local currency
% y-o-y
3.9%
-0.7%
-2.5%
Structure in 2012: 0.4%
Structure in 2013: 2.5%
Structure in 2014: 3.7%

11. Sales development by geography Organic growth in local currency Q4 2014 vs Q4 2013
Europe 1%
North
America 2%
Asia/Pacific 8%
Latin
America 4%
Middle East
& Africa
-5%

12. Sales development by geography Organic growth in local currency 2014 vs 2013
Europe 1%
North
America 3%
Asia/Pacific
10%
Latin
America 1%
Middle East
& Africa 9%

13. Components in net sales
2012
2013
2014
Percent y-o-y Q1 Q2 Q3 Q4
Volume
-0.8
-2.8
-5.0
-5.9
-8.7
-1.6
2.2
7.1
6.2
3.6
1.9
1.8
Structure
-0.1
0.0
0.8
1.0
1.5
2.6
1.1
4.8
4.7
3.8
5.4
0.9
Price/mix
2.0
0.5
0.7
-0.6
-0.2
-0.4
1.3
Sales in local currency
-3.7
-4.2
-6.5
0.4
3.1
11.7
10.5
8.4
8.6
3.7
Currency
-2.7
-3.6
-4.0
-2.2
-2.1
5.3
8.9
Net sales
1.4
2.8
-6.4
-7.8
-10.5
-4.6
9.6
10.4
9.5
13.9
12.6

14. Operating profit as reported
SEKm
2012
2013
2014

15. Operating profit excluding one-time items
SEKm
2012
2013
2014

16. Operating margin One-time items * Excluding one-time items 12.0* 11.9*%
12.0*
11.9*
11.7*
11.3
11.0
5.8

17. Operating margin per business area as reported%
Regional Sales and Service
Specialty Business
Strategic Industries
Automotive
2012
2013
2014

18. Operating margin per business area excl. one-time items%
Regional Sales and Service
Specialty Business
Strategic Industries
Automotive
2012
2013
2014

19. Operating profit bridge, Q4 2014 excl. One-time items
SEKm
+300
-398
+110
+165
+23
+2 078
+75
+1 803
-1 547
Q4 2013
Volumes excl. Specialty Business
Price/mix
excl.
Specialty
Business
Specialty Business
Savings
Currencies
Other*
Q4 2014
* R&D, S&A, IT, inflation etc.
One-time items
2013:
2014:

20. Operating profit bridge, 2014 excl. One-time items
SEKm
+180
-1 227
+500
+375
+390
+505
+8 291
+7 568
2013
Volume
excl. Specialty Business
Price/mix
excl.
Specialty
Business
Specialty Business
Savings
Currencies
Other*
2014
* R&D, S&A, IT, inflation etc.
One-time items
2013:
2014:

21. Net working capital as % of annual sales
Target: 27% %
2012
2013
2014

22. Return on capital employed
One-time items
* Excluding one-time items %
17.1*
15.1*
14.8*
16.2
13.9
7.5
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.

23. Cash flow, after investments before financing
SEKm 1) 5) 4) 3) 2)
2012
2013
2014
Excl. acq. and div.: 1) Q SEK million
2) Q SEK -69 million
3) Q SEK 871 million
4) Q SEK million
Excl. EU payment 5) Q SEK million

24. Net debt AB SKF, dividend paid (SEKm): 2012 Q2 2 504 2013 Q2 2 530
Cash out from major
acquisitions (SEKm):
2012 Q3 829
2013 Q1 823
2013 Q
EU payment (SEKm):
2014 Q
2012
2013
2014
Net debt: Loans and net provisions for post-employment benefits less short-term financial assets excluding derivatives.

25. Debt structure, maturity years
850
500
500
200
110
100
100
Available credit facilities:
EUR 500 million 2019
SEK million 2016
EUR 150 million 2017
No financial covenants nor material adverse change clause

26. January 2015: SKF demand outlook Q1 2015
Demand compared to the first quarter 2014
The demand for SKF’s products and services are expected to be slightly higher for the Group, higher for Asia and relatively unchanged for Europe, North America and Latin America. It is expected to be relatively unchanged for Automotive Market and Specialty Business and slightly higher for Industrial Market.
Demand compared to the fourth quarter 2014
The demand for SKF’s products and services are expected to be relatively unchanged for the Group, Europe and Latin America, and slightly higher for Asia and North America. It is expected to be relatively unchanged for Industrial Market and Automotive Market and slightly higher for Specialty Business.
Manufacturing
Manufacturing is expected to be higher year over year and compared to the fourth quarter.

27. SKF demand outlook Q1 2015, main regions
Share of net sales 2014
Europe
41%
Asia Pacific
25%
North America
Latin America 6%
Total
Sequential trend for Q1 2015
Q1 2015
vs Q1 2014
+/- ++ +

28. SKF demand outlook Q1 2015, main business areas
Share of net sales 2014
Industrial Market
60%
Automotive Market
26%
Specialty Business
13%
Total
Sequential trend for Q1 2015
Q1 2015
vs Q1 2014 +
+/-

29. SKF sequential volume trend Q1 2015, Industries
Share of net sales 2014
14%
Cars and light vehicles 6%
Energy
28%
Industrial distribution
Industrial, heavy, special and off-highway
11%
Industrial, general 9%
Vehicle service market
Aerospace 5%
Railway
Trucks 2%
Two-wheelers and Electrical

30. Guidance for the first quarter 2015*
Tax level: < 30%
Financial net: around SEK -250 million
Currency impact on operating profit vs Q1: SEK +300 million
Full year: SEK +900 million
Additions to PPE: around SEK 1.7 billion for 2015
* Guidance is approximate and based on current assumptions and exchange rates.

31. SKF’s programme to improve efficiency and reduce cost
Restructuring
Q4 12
Q1 13
Q2 13
Q3 13
Q4 13
2013
Q1 14
Q2 14
Q3 14
Q4 14
2014
Total
Cost, SEKm
200
250
190 50
490
100 20
220
340
1 030
People affected
530
410
320
130
860
170 30
300
1 690
Giving future gross savings:
Full year gross savings SEKm
150 80 40 5
205
575
Realized gross savings from total programme, SEKm
Q1 13
Q2 13
Q3 13
Q4 13
2013
Q1 14
Q2 14
Q3 14
Q4 14
2014
Restructuring 15 35 75
200 70 50 10
140
S&A
Purchasing
100
400 60
360
Total
165
185
225
800
130
150
110
500

32. New productivity improvement programme
Main activities: Productivity gain through merging the industrial businesses - merger between Strategic Industries & Regional Sales and Service worldwide - streamlining of supporting country organisations in all main countries
General staff optimization and productivity improvements - in Group Headquarters and central staff functions in the Automotive business
Reduction of annual cost by SEK 1.2 billion by the end of 2016
Total cost for the programme around SEK 1.4 billion
1 500 people impacted.
Major part of the programme implemented within 2015.

33. 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”.