19 April 2011

0

The SKF Group

Tom Johnstone, President and CEO

19 April 2011

19 April 2011

2Key points, Q1 report

• Strong performance Operating profit:

SEK 2,504 m (1,702) Operating margin: 15.0% (11.8)Profit before tax: SEK 2,318 m (1,504)Cash flow: SEK 372 m (32)

• Strong organic sales growth in local currency:SKF Group: +21.4%Europe:

+22%

Industrial Division:

+20.8% North America:

+25%

Service Division:

+22.5% Asia:

+22%

Automotive Division:

+19.8%Latin America:

+18%

• Lincoln integration is going according to plan.

Outlook for Q2 for SKF Group• Demand

Significantly higher compared to Q2 2010Slightly higher sequentially compared to Q1 2011

• Manufacturing levelSignificantly higher year over yearRelatively unchanged compared to Q1 2011

19 April 2011

3

New businesses:

•

SKF was

awarded

a contract, worth

around

SEK 500 million, with Goldwind

for SKF Nautilus

bearings

for their

new 2.5 MW direct

drive turbine.

•

SKF signed a three-year strategic partnership, worth SEK 335 million, with Sandvik

Mining and Construction.

•

SKF and Konkola

Copper Mines Plc in Zambia signed a three-year contract, worth USD 2 million, covering a Predictive Maintenance solution.

•

SKF

signed a strategic partnership agreement with CITIC Pacific Special Steel Co., Ltd, for cooperation in purchasing, new product and technology development and human resources development.

Highlights Q1 2011

19 April 2011

4

•

SKF is building a new factory in Jinan, in the Shandong Province, China. The investment amounts to around SEK 590 million and the factory will initially employ about 500 people.

•

SKF signed an agreement to remain as the main partner to the Gothia

Cup for an additional three years. SKF will also continue to run the "Meet The World" qualifying tournaments held in around 20 countries globally.

Highlights Q1 2011

Jinan

19 April 2011

5Divestments

2011

•

On 1 February 2011, the forging business OMVP, in Villar

Perosa, Italy to the German based company Neumayer

Tekfor

Holding GmbH. OMVP has about 550 employees and net sales of around EUR 100 million, mainly to SKF.

•

At the beginning of the second quarter the cage factory in Gothenburg to the Japanese component manufacturer Nakanishi Metal Works CO., Ltd. The factory has 130 employees and will continue to supply SKF.

SKF completed

two agreements in line with its strategy to divest non-core component manufacturing:

19 April 2011

6Sales volume

-35-30-25-20-15-10-505

10152025

% change y-o-y

2009 2010 2011

19 April 2011

7Organic growth in local currencies

-30-25-20-15-10-505

10152025

% change y-o-y

2009 2010 2011

19 April 2011

8

Europe

+22%

Asia/Pacific +22%

Latin America +18%

Middle East & Africa +4%

North America +25%

Growth

development

by geography Organic

growth

Q1 2011 vs Q1 2010

19 April 2011

9

-20,0

14,2

21,4

1,0 0,05,0

-25-20-15-10-505

10152025

2009 2010 YTD March2011

Growth in local currency

% y-o-y

Acquisitions/DivestmentsOrganic growth

-19.0% 14.2% 26.4%

Long-term target: 8% per annum

Total growth

19 April 2011

10Components in net sales

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

-26.9 -30.8 -24.9 -14.1 5.3 16.6 19.0 16.3 20.1

1.4 1.1 1.2 0.4 0.0 0.0 0.0 0.0 5.0

7.1 5.6 3.7 0.3 -0.3 -0.5 0.3 0.9 1.3

-18.4 -24.1 -20.0 -13.4 5.0 16.1 19.3 17.2 26.4

13.6 12.2 6.6 -1.4 -7.7 -5.2 -3.2 -6.2 -10.8

-4.8 -11.9 -13.4 -14.8 -2.7 10.9 16.1 11.0 15.6

Percent y-o-y

Volume

Structure

Price / Mix

Sales in local currency

Currency

Net sales

2009 2010 2011

19 April 2011

11Operating profit

0200400600800

1 0001 2001 4001 6001 8002 0002 2002 4002 600

SEKm

2009

Restructuring

and one-time

items

2010 2011

19 April 2011

12Operating margin

%

0

2

4

6

8

10

12

14

16

2009

Restructuring

and one-time

items

2010

Long-term target

level: 15%

2011

19 April 2011

13Operating margin

0

2

4

6

8

10

12

14

16

2009 2010 YTD March2011

%

5.7

8.0*

Restructuring

and one-time

items

* Excluding

restructuring

and one-time

items

15.0

Long-term target

level: 15%

14.2*

13.8

19 April 2011

14

-12-10

-8-6-4-202468

1012141618

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Operating margin per division

IndustrialService

Automotive

%

Excluding one-off items

(eg. restructuring, impairments, capital gains)

2009 2010 2011

19 April 2011

15

SEKm 2011 2010

Net sales 16,702 14,446

Operating profit 2,504 1,702

Operating margin, % 15.0 11.8

Operating margin excl. restructuring, % 15.0 12.4

Profit before taxes 2,318 1,504

Net profit 1,620 1,070

Basic earnings per share, SEK 3.44 2.27

Cash flow, after investments before financing 372 32

First quarter 2011

19 April 2011

16

18

19

20

21

22

23

24

25

Inventories as % of annual sales

% Long-term target level: 18%

2009 2010 2011

19 April 2011

17Cash flow, after investments before financing

-6 000-5 500-5 000-4 500-4 000-3 500-3 000-2 500-2 000-1 500-1 000

-5000

5001 0001 5002 0002 500SEKm

2009 2010

Cash out fromacquisitions (SEKm): 2009

2412010

6,799

2011

19 April 2011

18Return on capital employed

0

5

10

15

20

25

30

2009 2010 YTD March 2011

ROCE: Operating profit plus interest income, as a percentage of twelve months average of total assets less the average of non-

interest bearing liabilities.

%

9.1

24.0

Long-term target: 27%

25.6

19 April 2011

19Net debt (Short-term financial assets minus loans and post-employment benefits)

-18 000

-16 000

-14 000

-12 000

-10 000

-8 000

-6 000

-4 000

-2 000

0

SEKm AB SKF, dividend paid (SEKm):2009 Q2

1,5942010 Q2

1,594Proposal to the Board to be decided in April:2011 Q2

2,277

2009 2010

Cash out fromacquisitions (SEKm): 2009

2412010

6,799

2011

19 April 2011

20

0

100

200

300

400

500

600

2011 2012 2013 2014 2015 2016

Debt structure

Maturity years, EURm

55

446

530

100100

•

Credit

facilities:

EUR 500 m 2014, whereof

EUR 400* m utilized

SEK 3,000 m 2017, unutilized

•

No financial

covenants

nor

material adverse

change

clause

400*

130

19 April 2011

21March

2011: Outlook for the second quarter 2011

Demand compared to the second quarter last yearThe demand for SKF products and services is expected to be significantly higher for the Group and all geographical regions. It will be significantly

higher for Industrial Division and the Service Division and slightly higher for Automotive Division.

Demand compared to the first quarter 2011

The demand is expected to be slightly higher for the Group, higher in Asia and Latin America, slightly higher in North America and relatively unchanged in Europe. The Industrial Division and the Service Division are expected to be slightly higher and the Automotive Division relatively unchanged.

Manufacturing levelThe manufacturing level will be significantly higher year on year and relatively unchanged compared to the first quarter.

19 April 2011

22Volume

trends, regions (based

on current

assumptions

and adjusted

for seasonality)

Daily volume

trends for: Q1 2011 Q2 2011

Net

sales2010

Europe 46%

North America 18%

Asia

Pacific 27%

Latin America 6%

Total

Outlook Q22011 vs 2010

+++

+++

+++

+++

+++

19 April 2011

23Volume

trends, divisions (based

on current

assumptions

and adjusted

for seasonality)

Daily volume

trends for Q2 2011

Net

sales2010

Industrial 32%

Service 36%

Automotive 30%

Total

Outlook Q22011 vs 2010

+++

+++

+++

+++

19 April 2011

24

14%

12%

5%

25%

18%

10%

5%

4%

4%

3%

Cars

Vehicle

Service Market

Energy

Industrial distribution

Industrial OEM, General+Special

Industrial OEM, Heavy

+ Off-highway

Aerospace

Railway

Trucks

Electrical

and two-wheeler

Sequential

volume

trend main

segments Q2 2011 (based

on current

assumptions)

Net

sales

2010

19 April 2011

25Guidance for the second quarter 2011

•

Tax level: around 30%

•

Financial net for the second quarter: Around SEK -175 m

•

Exchange rates on operating profit versus 2010 Q2: SEK -400 m

Full year: SEK -1.2 bn

•

Additions to PPE: Around SEK 2.3 bn

for 2011

Guidance is approximate and based on current assumptions and exchange rates.

19 April 2011

26Key focus areas ahead 2011

• Profit and cash flow-

manage currency and material headwinds

• Manufacturing and suppliers to support growth

• Growing segments and geographies

• Initiatives and actions to support long term targets

• Integration of Lincoln Industrial

• Business Excellence and competence development

One SKF and SKF Care as guiding lights

19 April 2011

27Cautionary

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 www.skf.com) under the Administration Report; “Important factors

influencing the financial results", "Financial risks" and "Sensitivity analysis”.

19 April 2011

28