1. SKF Half-year results 2015 Alrik Danielson, President and CEO
15 July 2015
19 April 2017

2. Highlights - examples of new business in Q2 2015
United Technologies Corporation, USA Long-term contract Pratt & Whitney Delivery of engine bearings
ReGen Powertech, India Pitch and yaw bearing sets and mainshaft bearings
PT. Kereta API Indonesia (Indonesian Railways) Tapered roller bearing units
Floatel International AB, Sweden Global service agreement including SKF Multilog IMx-M
Volkswagen, Mexico Wheel hub and MacPherson suspension bearing units

3. Highlights
Completed the divestment of: - Erin Engineering and Research Inc. to Jensen Hughes, a US-based engineering consultancy. - Two filtration businesses, Purafil and Kaydon Custom Filtration, to Filtration Group Corporation, an affiliate of Madison Industries.
New products: - a smaller version of a shaft alignment tool that it launched earlier in the year, designed to make shaft alignment easy and intuitive an upgraded version of the third generation hub bearing unit, designed to reduce preload, friction and CO2 emissions.

4. Highlights – customer awards received
Awards from SKF distributors:
-‘Supplier of the Year’ Motion Industries in Canada and in the Southeast and Midwest regions of the USA
-‘Supplier of the Year in Transmission Imes Dexis, Benelux and Technics 2014’
‘Best Supplier Award Year 2014’ Shanghai Hanbell Precise Machinery Co., China
‘Best Supplier Award’ Shanghai Automobile Gear Works, China
‘Best Plant award’ The PSA Group, for SKF’s factories in St Cyr, France and Tudela, Spain.

5. Automotive Market profit improvement programme
Clear aim of improving productivity and competitiveness
Three main focus areas:
Products – Review of product portfolio; emphasis on application- focused offerings with the specific performance required for the application
Competitiveness – Improve our overall competitiveness; focus on costs, manufacturing footprint and process technology
Vehicle Service Market – Further adapt aftermarket and OEM offerings, as the design-life of products delivered to OEM customers continues to increase; adapt our aftermarket offering to new reality, ensuring a competitive offer and value proposition for second and third vehicle owners
Actions to run as part of normal business; possible restructuring costs to be communicated as and if they occur
Intention to develop business as part of SKF

6. SKF Group – Q2 2015 Financial performance (SEKm) 2015 2014 Net sales
19 961
17 955
Operating profit
2 383
2 096
Operating margin, %
11.9
11.7
Operating margin excl. one-time items, %
12.9
12.3
Profit before taxes
2 241
1 761
Basic earnings per share, SEK
3.65
2.54
Net cash flow after investments before financing
1 654
-1 402*
Organic sales change y-o-y:
SKF Group
-1.5%
Europe
0.7%
Industrial Market
-2.5%
North America
-5.7%
Automotive Market 0%
Asia
-3.7%
Specialty Business
1.0%
Latin America
4.6%
Middle East and Africa
15.7%
*Adjusted for the EU payment this is million

7. SKF Group – Half year 2015 Financial performance (SEKm) 2015 2014
Net sales
39 415
34 689
Operating profit
4 104
4 120
Operating margin, %
10.4
11.9
Operating margin excl. one-time items, %
12.6
Profit before taxes
3 833
3 548
Basic earnings per share, SEK
6.11
5.26
Net cash flow after investments before financing
2 642
-1 465*
Organic sales change y-o-y:
SKF Group
-0.2%
Europe
0.8%
Industrial Market
-0.6%
North America
-4.1%
Automotive Market
0.3%
Asia
0.6%
Specialty Business
Latin America
1.5%
Middle East and Africa
15.0%
*Previously published cash flow information is restated and adjusted for the EU payment this is million

8. Organic sales growth in local currency
% change
y-o-y
2013
2014
2015

9. Organic sales growth in local currency
% y-o-y
3.9%
-0.7%
-0.2%
Structure in 2013: 2.5%
Structure in 2014: 3.7%
Structure in 2015: -0.1%

10. Sales development by geography Organic growth in local currency Q2 2015 vs Q2 2014
Europe
0.7%
North
America
-5.7%
Asia/Pacific
-3.7%
Latin
America
4.6%
Middle East
& Africa
15.7%

11. Sales development by geography Organic growth in local currency YTD 2015 vs YTD 2014
Europe
0.8%
North
America
-4.1%
Asia/Pacific
0.6%
Latin
America
1.5%
Middle East
& Africa
15.0%

12. Components in net sales
2013
2014
2015
Percent y-o-y Q1 Q2 Q3 Q4
Organic
-8.0
-2.2
2.0
6.9
5.8
4.6
3.2
2.8
1.4
-1.5
Structure
1.5
2.6
1.1
4.8
4.7
3.8
5.4
0.9
-0.2
Sales in local currency
-6.5
0.4
3.1
11.7
10.5
8.4
8.6
3.7
-1.7
Currency
-4.0
-5.0
-2.1
-0.1
5.3
8.9
14.9
12.9
Net sales
-10.5
-4.6
9.6
10.4
9.5
13.9
12.6
16.3
11.2

13. Operating profit as reported
SEKm
2013
2014
2015

14. Operating profit excluding one-time items
SEKm
2013
2014
2015

15. Operating margin One-time items * Excluding one-time items 12.6* 11.9*%
12.6*
11.9*
11.7*
11.0
10.4
5.8

16. Operating margin per business area, as reported%
Industrial Market
Specialty Business*
Automotive Market
2013
2014
2015
* Q4 2013, impacted by cost related to Kaydon acquisition

17. Operating margin per business area, excl. one-time items%
Industrial Market
Specialty Business
Automotive Market
2013
2014
2015

18. Operating profit bridge, Q2 2015
SEKm
+650 80
+2 383
+2 096
-223
-80
-140
-1 547
Q2 2014
One-time items at 2014 exchange rates
Organic sales in local currencies
Currency impact
Savings from cost-reduction programme
Other*
Q2 2015
* Includes general inflation, manufacturing and purchasing impacts, IT project, and R&D.

19. Operating profit bridge, YTD 2015
SEKm
+1 100 80
+4 104
+2 096
-396
-780
-20
-1 547
YTD 2014
One-time items at 2014 exchange rates
Organic sales in local currencies
Currency impact
Savings from cost-reduction programme
Other*
YTD 2015
* Includes general inflation, manufacturing and purchasing impacts, IT project, and R&D.

20. Employee productivity and efficiency
Expected productivity and efficiency gains from new organisation on-track: - merging the two industrial businesses - general staff optimization and productivity improvements
Agreements have been reached covering 60% of the concerned individuals.
Q1 2015
Q2 2015
Target
Cost, SEKm
535
224
1 400
People affected
575
270
1 500
Cost savings - 80
Annual cost savings, SEKm
460*
170*
1 200
* On a full-year basis, as of Jan 2016

21. Net working capital as % of annual sales
Target: 27% %
2013
2014
2015

22. Return on capital employed
One-time items
* Excluding one-time items %
15.1*
14.8*
14.7*
13.9
12.6
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 4) 3) 2) 1)
2013
2014
2015
Excl. acq. and div.: 1) Q SEK -69 million
2) Q SEK 871 million
3) Q SEK million
Excl. EU payment 4) Q SEK million
* 2013 and 2014 are restated

24. Net debt AB SKF, dividend paid (SEKm): 2013 Q2 2 530 2014 Q2 2 530
Cash out from major
acquisitions (SEKm):
2013 Q1 823
2013 Q
Cash from divestments (SEKm):
2015 Q
EU payment (SEKm):
2014 Q
2013
2014
2015
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
Available credit facilities:
EUR 500 million 2019
SEK million 2018
EUR 150 million 2017
No financial covenants nor material adverse change clause

26. July 2015: SKF demand outlook Q3 2015
Demand compared to the third quarter 2014
The demand for SKF’s products and services is expected to be relatively unchanged for the Group, Europe and Asia. For North America it is expected to be lower and for Latin America higher. For all business areas it is expected to be relatively unchanged.
Demand compared to the second quarter 2015
The demand for SKF’s products and services is expected to be slightly lower for the Group. For Europe it is expected to be lower and for all other regions it is expected to be relatively unchanged. For the business areas, Industrial Market and Specialty Business it is expected to be relatively unchanged and for Automotive Market it is expected to be lower.

27. Guidance for 2015* Q3 2015: Financial net: around -230 million
Currency impact on operating profit vs 2014 Q3: 450 million, based on exchange rates June 30.
2015:
Tax level: below 30% for 2015
Additions to PPE: around million for 2015
* Guidance is approximate and based on current assumptions and exchange rates.

28. 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”.