2007-04-24

0

The SKF Group

First-quarter results 2007

Tom Johnstone, President and CEO

2007-04-24

2Major events 2007

• Introduction of new energy-efficient bearings and solutions.

• Acquisitions:Preventive Maintenance Company Inc. (PMCI), USAABBA Linear Tech Co., Ltd., Taiwan Automatic Lubrication Systems (ALS), Canada

• SKF invests SEK 600 million to increase capacity in Göteborg.

• Sale of forging business in Luchow, Germany

2007-04-24

3

801538Cash flow after investments before financing

177-653Cash flow after operating investments beforefinancial items

13,28914,371Net sales

12.1%13.1%Operating margin

20062007MSEK

2.452.57Basic earnings per share, SEK

1,1381,214Net profit

1,5991,825Profit before taxes

1,6091,886Operating profit

First quarter 2007

2007-04-24

4Operating margin

%

0123456789

1011121314

2005 2006 2007

2007-04-24

5Operating margin

0

2

4

6

8

10

12

14

2005 2006 2007 Q1

%

* excluding income from the jointly controlled company Oy Ovako Ab

12.6

10.8

13.1

10.4*11.3*

2007-04-24

6

0

2

4

6

8

10

12

14

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Operating margin per division

IndustrialService

Automotive

%

2005 2006 2007

2007-04-24

7Sales in local currencies (excl. structural changes)

0

2

4

6

8

10

12

14

16% change y-o-y

2005 2006 2007

2007-04-24

8Growth development / local currency

% Y-o-Y

02468

101214

2005 2006 2007 Q1

Acquisitions / DivestmentsOrganic growth

7.3 7.5

13.7

2007-04-24

9Net sales development per quarter

9.9

-5.8

15.7

2.3

4.6

8.8

Q4

8.1

-5.6

13.7

1.8

4.0

7.9

Q1

4.3

-2.1

6.4

2.0

1.1

3.3

Q3

5.0

1.0

4.0

2.0

-0.5

2.5

Q2

12.0

8.0

4.0

2.9

-4.9

6.0

Q1

9.6

9.4

0.2

2.6

-3.7

1.3

Q4

7.5

3.2

4.3

2.1

-2.9

5.1

Q3

11.0

-3.2

14.2

3.6

2.3

8.3

Q1

11.6

0.2

11.4

3.6

0.2

7.6

Q2Percent y-o-y

Currency

Net sales

Sales in localcurrency

Price / Mix

Structure

Volume

2005 2006 2007

2007-04-24

10Cash flow, after investments before financing

-1 200-1 000

-800-600-400-200

0200400600800

1 0001 2001 4001 6001 800MSEK

2005 2006

Cash out from acquisitions: 2005 MSEK 4192006 MSEK 2,1292007 Q1 MSEK 214

Cash from Ovako:2006 Q4 MSEK 1,217

2007

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11Cash flow after operating investments before financial items

-700-500-300-100100300500700900

1 1001 3001 5001 700

2005 2006 2007

MSEK

2007-04-24

12Net cash (Short-term financial assets - loans)

-1 500

-500

500

1 500

2 500

3 500

4 500

5 500

MSEK

AB SKF, dividend paid:

2005 Q2, MSEK 1,366

2006 Q2, MSEK 1,821

2005 Q2, Redemption, MSEK 2,846

2005 2006 2007

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13

18

19

20

21

22

23

Inventories as % of annual sales

%

2005 2006 2007

Target, end 2007 - 18%

2007-04-24

14SKF capital structure

The AB SKF Board proposes to the AGM in April 2007 to decide on:

1. a 12.5% increase in the dividend,SEK 4.50 per share

2. a share split 2:1 combined with anautomatic redemption procedureof one share for SEK 10

3. a mandate to the Board to repurchase up to 5% of the company's share

Adding up to a total distribution to shareholders of SEK 6.6 billion

2007-04-24

15April 2007: Outlook for the second quarter 2007(compared to the first quarter 2007)

The market demand for SKF's products and services in the second quarter of 2007 is expected to be higher for the Group. The demand is expected to be higher in Europe and Latin America, significantly higher in Asia and relatively unchanged in North America. The demand is expected to be higher in the Industrial and Service Division and slightly higher in the Automotive Division.

The manufacturing level for the second quarter will be unchanged compared to the first quarter 2007 and significantly higher compared to the second quarter last year.

2007-04-24

16Volume development

Daily volume trend for: Q1 2007 Q2 2007

Total

5%Latin America

18%Asia Pacific

20%North America

54%Europe

Net sales2006

++

++

+++

=

++

Outlook Q22007 vs 2006

*

Updated in March 2007 from slightly higher to higher.*

2007-04-24

17Financial targets – long term

Operating margin, level 12%

Growth in local currencies, per annum 6-8%

Return on capital employed 24%

Gearing around 50%

Inventories, by end 2007 18%

2007-04-24

18Guidance 2007

• Underlying tax level: around 32-33%

• Financial netQ2: around minus SEK 100-120 million Full year forecast: around minus SEK 500 million

• Exchange ratesQ2: a negative effect of approximately SEK 200 million Full year: a negative effect of approximately SEK 550 million

• Additions to property, plant and equipment: slightly above SEK 2 billion

Guidance based on current assumptions and exchange rates

2007-04-24

19Acquisition – ABBA Linear Tech Co., Ltd.

• Annual turnover: SEK 250 million

• 400 employees

• A leading Asian manufacturerof profile rail guides.

• Price: SEK 400 million for 90%shareholding

2007-04-24

20Acquisitions 2007

Automatic Lubrication Systems (ALS)

• Yearly sales: approximately CAD 2 million

• 13 employees

• A leading service company to mobile transportation equipmentand industrial machinerycustomers for lubrication systems

Preventive Maintenance Company Inc.

• Annual turnover: USD 10 million

• 70 employees

• A market leader in Predicitvemaintenance (PdM) services

2007-04-24

21Bearings and units

Acquisitions:

New factories:

Significant manufacturingexpansion:

Restructuring:

Setting new standards:

Bearingsand units

• SNFA SAS, France

• Dalian, China

• Shanghai, China

• Jakarta, Indonesia

• Busan, South Korea

• India

• North America

• Det Norske Veritas and Germanischer Lloyd announced official verification - SKF Explorer bearingshas set a new performance standard.

• SKF Life Theory - new standard for bearing life calculations.

• Brazil • Mexico

• France

• Sweden

2007-04-24

22Seals/Mechatronics/Services/Lubrication systems

Services

Acquisitions:

Lubricationsystems

• Safematic lubrication, Finland

• Automatic Lubrication Systems,Canada

Seals

Acquisitions:

New factories:

Significant

manufacturing

expansion:

Mechatronics

• ABBA Linear Tech Co., Ltd., Taiwan

• Shanghai, China

• Precision Balancing & Analyzing, USA

• Monitek Australia, Australia

• Preventive Maintenance Company Inc., USA

• Macrotech Polyseal Inc., USA

• Economos Austria GmbH, Austria

• Taegu, Korea

• Bulgaria • India • Mexico

2007-04-24

23SKF Energy efficient bearings

Providing a minimum of 30% reduction in energyconsumption.

Deep groove ball bearings Taper roller bearings

2007-04-24

24Energy-efficient solutions

SKF actuators in spot weldingcut energy use by more than90% in welding robots.

SKF actuatorsin buildingscut energy useby 30-50%.

SKF magnetic bearingsin gas compressorsreduce energy by 90%.

SKF throttle-by-wirereduces fuel use by 5%in business jets.

SKF Client Energy and Environment Analysis (CEEA)is a web-based tool thatidentifies high-energyconsumption areas withinan operation.

2007-04-24

25Cautionary statement

This report 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 20-F report on file with the SEC (United

States Securities and Exchange Commission) under "Forward-Looking

Statements" and "Risk Factors".

2007-04-24

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