1. © SKF Group6 August 2015Slide 0 Industrial Market, Regional Sales and Service Presented by Vartan Vartanian President Industrial Market, Regional Sales and Service

2. © SKF Group Regional Sales and Service We realize full life cycle value for industrial systems! We increase customer productivity through: Development and delivery of advanced services and engineering products Innovative industry-leading integrated solutions throughout the life cycle Global reach through our regional structure and authorized channel partner network The Power of Knowledge Engineering CMD 2013

3. © SKF Group Regional Sales and Service Business Structure 7 Sales Areas with Global Coverage Regional Sales and Service 7 Regional Areas Focused Industries with Strategic Accounts Solution, Production, Product Development with 23 SKF Solution Factory locations Channel and Pricing Management with distribution Industrial Market, Regional Sales and Service CMD 2013

4. © SKF Group What we focus on Working to improve customers’ productivity and sustainability around the world with a focus on industrial segments such as Food and Beverage; Marine; Metals; Pulp and Paper; and Mining A global network – ease of access Global distribution business State-of-the-art supply chain management Driving growth by leveraging SKF technology platform offers as well as SKF Solution Factory and Life Cycle Management (AEO) Operational excellence to drive profitability and reduce total cost Deliver proven value Profitable growth CMD 2013

5. Agenda Industrial Market, Regional Sales and Service Agenda Global business Focused Industries and strategic accounts Distribution How we achieve operational excellence Key business message  Focused Industries and the Marine business by Thomas Fröst, Director Focused Industries  Solution, Production and Product Development in the SKF Service business by Christian Gill, Director Solution, Production and Product Development

6. Global business Industrial Market, Regional Sales and Service Agenda Global business Focused Industries and strategic accounts Distribution How we achieve operational excellence Key business message  Focused Industries and the Marine business by Thomas Fröst, Director Focused Industries  Solution, Production and Product Development in the SKF Service business by Christian Gill, Director Solution, Production and Product Development

7. © SKF Group RSS sales share and proportion by geography in 2012 Central East Europe & Middle East Africa Latin America China North Europe North America S&SE Asia West Europe Net sales MSEK: 25,329 Operating margin: 12.5 % Numbers of employees:6,479 39% of SKF Group’s total net sales CMD 2013

8. © SKF Group Close to customers almost everywhere in the world Countries with Regional Sales and Service Sales business unit CMD 2013

9. © SKF Group6 August 2015Slide 8 Regional Sales and Service - global business coverage Industrial Distributors Customized Seals Marine Marine Headquarters Marine Sales Agents Marine Service Stations Product service division Power transmission Customized seals System/product development Warehouses Remote diagnostic services SKF Solution Factory Condition monitoring centers

10. © SKF Group6 August 2015Slide 9 Regional sales and service in China Distributors Customized Seals Warehouses Remote diagnostic services SKF Solution Factory Marine Headquarters Marine Sales Offices Industrial Service Center

11. © SKF Group6 August 2015Slide 10

12. Focused Industries and strategic accounts Industrial Market, Regional Sales and Service Agenda Global business Focused Industries and strategic accounts Distribution How we achieve operational excellence Key business message  Focused Industries and the Marine business by Thomas Fröst, Director Focused Industries  Solution, Production and Product Development in the SKF Service business by Christian Gill, Director Solution, Production and Product Development

13. © SKF Group Focused Industries and strategic accounts OEM customers examples End user customers examples Deliver SKF equipped solutions Equip with SKF knowledge Optimizing the life cycle Marine Mining Pulp and Paper Food and Beverage Metals CMD 2013

14. © SKF Group Technology upgrade in wafer ovens Wafer oven application in a bakery: A challenge for the end-user Frequent re-lubrication required with costly high temperature lubricants Limit to increase oven throughput, 446 °F near current grease performance SKF Solution SKF integral wafer oven units Customer value 5 years re-lubrication-free operation running 24/7, reducing 150 hours of labor and 88 lbs/yr/oven Increased productivity through elimination of 26 hours of planned downtime Increased temperature, 50 to 59 °F, allowed higher speed and increased throughput SKF technologies improved reliability, cost control and safety for a bakery group. SKF contributed to the design and development of a new, higher performing proving oven for the OEM supplier. Optimizing the life cycle CMD 2013

15. © SKF Group A full asset life cycle approach Deliver SKF equipped solutions Equip with SKF knowledge Optimizing the life cycle Cost in the asset life cycle* 3 % 12 % 35 % 50 % * Source: Specht, G.; Beckmann, Ch.; F&E-Management. Schaeffer-Poeschel Verlag, Stuttgart 1996 CMD 2013

16. © SKF Group Strategic accounts: The engines for profitable growth  Accelerate profitable growth Deeper knowledge of customer and their industry: Replication of solutions Stronger relationships More involvement in new projects: Innovations More value creation and capturing through full life cycle approach CMD 2013

17. Distribution Industrial Market, Regional Sales and Service Agenda Global business Focused Industries and strategic accounts Distribution How we achieve operational excellence Key business message  Focused Industries and the Marine business by Thomas Fröst, Director Focused Industries  Solution, Production and Product Development in the SKF Service business by Christian Gill, Director Solution, Production and Product Development

18. © SKF Group 29 % Net sales Industrial Distribution within 2012 Industrial Distribution within SKF Group sales: CMD 2013

19. © SKF Group6 August 2015Slide 18 Industrial Distributors Industrial Distribution Network More than 6000* locations LAM 400 Branches NAM 2500 Branches Europe West 900 Branches CEEMEA 900 Branches China 250 Branches Europe North 600 Branches S&SE Asia 550 Branches * Numbers are Industrial Distributors owned branches, not including Certified Rebuilders and sub-distributors

20. © SKF Group Global programmes for stronger growth in Industrial Distribution Channel Management: Increase level of mutual engagement and joint activities toward final customers Education: Equip SKF and distributors' employees with arguments to defend SKF value proposition Supply Chain efficiency: Cost savings in supply chain and inventory level optimization Differentiation: Certified programs and Solution Factory CMD 2013

21. © SKF Group Channel management Profitable growth with Distributors Joint planning and acting Set the basics Understand distributor drivers CMD 2013

22. © SKF Group Process integration activities with distributors to improve supply chain efficiency Goals: Lower administration cost Optimize capital employed Reduce lost sales Improve service level Through: IT Integration Inventory Management Collaborative forecasting CMD 2013

23. How we achieve operational excellence Industrial Market, Regional Sales and Service Agenda Global business Focused Industries and strategic accounts Distribution How we achieve operational excellence Key business message  Focused Industries and the Marine business by Thomas Fröst, Director Focused Industries  Solution, Production and Product Development in the SKF Service business by Christian Gill, Director Solution, Production and Product Development

24. © SKF Group Delivering SKF value consistently Customer Challenges Raise energy efficiency Increase productivity Decrease maintenance Optimise designs Reduce cost … Evaluation of value SKF Solution Factory Industries Technology SKF Sales, Customer Service, SKF Distributor CMD 2013

25. © SKF Group Understanding sales operations to achieve operational excellence in sales Face to face time customers Availability Sales capacity Off times and trainings Potential sales capacity Activities not related to sales 100 % CMD 2013

26. © SKF Group Customer visits: A key to grow opportunities and success Time Sales visits Business won Number of opportunities measured Time CMD 2013

27. © SKF Group ‘Unbeatable’ Customer Service One of the Strategic Programs for 2016: ‘Enhance the role of Customer Service & unlock the full potential’ The overall objectives for Customer Service are to: Increase customer satisfaction, loyalty and retention Contribute to growing sales above market growth Reduce waste and effective use of resources: “One Industrial Customer Service” We want to ‘raise the bar’ going forward – to further differentiate SKF in the marketplace A key role in driving customer satisfaction & loyalty Customer Service team in Indonesia Customer Service team in Hungary CMD 2013

28. © SKF Group Latest innovative technologies System 24 Hose reels TLRC and TLRS Series SKF ChainLube SKF Telescopic pillar SKF Acoustic Emission Enveloping SKF Machine Condition Indicator SKF Static Motor Analyzer Baker DX SKF Thruster Monitoring SKF Extreme temperature bearings Hydraulic seals SKF FX Bushings SKF Extended Life plain bearing New range of air-driven hydraulic pumps and oil injectors BeyondZero TM Servo Actuator CMD 2013

29. © SKF Group Validating savings at industrial customers Verified customer savings:24 billion SEK Verified savings in 2012: 4 billion SEK Energy and sustainability calculations: ~ 1,000 verified cases of reduction in CO2 Total accepted/verified cases: ~40,000 Coming from more than 25 industrial segments 5 languages 51 currencies can be converted SKF Documented Solution Program CMD 2013

30. © SKF Group6 August 2015Slide 29

31. Key business message Industrial Market, Regional Sales and Service Agenda Global business Focused Industries and strategic accounts Distribution How we achieve operational excellence Key business message  Focused Industries and the Marine business by Thomas Fröst, Director Focused Industries  Solution, Production and Product Development in the SKF Service business by Christian Gill, Director Solution, Production and Product Development

32. © SKF Group Key business message Driving profitable sales growth in all 7 Sales Areas Focused Industries will expand SKF offerings and value propositions Growing distribution network as a key to customers world wide Service business is a driver in the asset life cycle management approach Strategic Accounts accelerating growth Innovations driving long term sustainable profitable business Supply chain value will be continuously increased CMD 2013