1. 0
19 October 2010

2. The SKF Group
Tom Johnstone, President and CEO
19 October 2010

3. 2
Agenda
• Nine-months report and outlook
• New financial targets
• Acquisition of Lincoln Industrial
19 October 2010

4. 3
Agenda
• Nine-months report and outlook
• New financial targets
• Acquisition of Lincoln Industrial
19 October 2010

5. Key points, Q3 report 4
• Strong performance
Operating profit: SEK 2,309 m (957). Operating margin: 14.9% (7.2)
Profit before tax: SEK 1,950 m (689), including SEK 150 m related to Ovako.
Cash flow: SEK 1,936 m (1,359)
• Organic sales development in local currency:
SKF Group: +19.3%
Industrial Division: +17.9%
Service Division: +22.7%
Automotive Division: +15.0%
Outlook for Q4
• Demand
Significantly higher compared to Q4 2009
Slightly higher sequentially compared to Q3 2010, adjusted for normal seasonality
• Manufacturing level
Significantly higher year over year
Unchanged compared to Q3 2010, adjusted for normal seasonality
19 October 2010

6. Highlights Q3 2010 – investing for the future 5
• Two new factories announced:
-Dalian, China for medium-sized bearings
Investment: around SEK 400 m
In operation: in 2011
Employees: 250 people
-Mysore, India for seals
Investment: around SEK 160 m
In operation: second half of 2012
Employees: 600 people
• Investment of around USD 18 m in a new heat treatment
facility in Falconer, USA.
• Two new SKF Solution Factories were inaugurated, one in the
UK and one in Turkey.
19 October 2010

7. Highlights Q3 2010 – customers and sustainability 6
• Contract gained with Guohua Energy Investment for 180
SKF WindCon systems for existing turbines, and 58 SKF
WindCon systems for a new wind farm in Beijing.
• Over two billion USD documented savings by customers as a
result of using SKF solutions. Data collected over a 10-year
period with the use of SKF Documented Solutions Program.
• Continued launch of new products.
• SKF's factory in Tver, Russia achieved Gold and SKF’s headoffice
in the USA Platinum awards to the U.S. Green Building council's
LEED standard.
• SKF was included in the 2010 Dow Jones Sustainability Indexes
(DJSI) and in the FTSE4Good Index Series.
19 October 2010

8. Examples of new product launches 7
Four-row tapered Low friction X-Tracker SKF Engineering
roller bearing Simulation
Services
SKF Commutation
Sensor-Bearing Unit
SKF MetroCon – SKF Crane Asset SKF One Way SKF Hydraulic
Management Clutch driven lubricator
CBM for elevators and
escalators SKF Idler Sound
SKF Cam
Follower Monitor kit
SKF solutions for SKF SPEEDI-SLEEVE Unit
special pumps
19 October 2010

9. Sales volume 8
% change y-o-y
20
15
10
5
0
-5
-10
-15
-20
-25
-30
-35
2008 2009 2010
19 October 2010

10. Sales in local currencies (excl. structural changes) 9
% change y-o-y
20
15
10
5
0
-5
-10
-15
-20
-25
-30
2008 2009 2010
19 October 2010

11. Growth in local currency 10
(Organic growth + acquisition/divestments)
% y-o-y
13.2%
15
10 7.1%
5 -19.0%
0
-5
-10
-15
-20
2008 2009 YTD September
2010
Organic growth
Acquisitions/Divestments
19 October 2010

12. Growth development by geography 11
Local currency Q3 2010 vs Q3 2009
Europe
+12%
North America
+24%
Asia/Pacific
+34%
Latin America
+19%
Middle East
& Africa
+11%
19 October 2010

13. Growth development by geography 12
Local currency YTD September 2010 vs YTD September 2009
Europe
+4%
North America
+11%
Asia/Pacific
+34%
Latin America
+22%
Middle East
& Africa
+11%
19 October 2010

14. Components in net sales 13
2008 2009 2010
Percent y-o-y Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Volume 4.9 6.2 2.7 -13.0 -26.9 -30.8 -24.9 -14.1 5.3 16.6 19.0
Structure 1.0 1.3 0.5 2.4 1.4 1.1 1.2 0.4 0.0 0.0 0.0
Price / Mix 3.8 4.0 6.4 8.5 7.1 5.6 3.7 0.3 -0.3 -0.5 0.3
Sales in local 9.7 11.5 9.6 -2.1 -18.4 -24.1 -20.0 -13.4 5.0 16.1 19.3
currency
Currency -1.2 -4.1 -0.9 10.3 13.6 12.2 6.6 -1.4 -7.7 -5.2 -3.2
Net sales 8.5 7.4 8.7 8.2 -4.8 -11.9 -13.4 -14.8 -2.7 10.9 16.1
19 October 2010

15. Operating profit 14
SEKm
2 400
2 200
2 000
1 800
1 600
1 400
1 200
1 000
800
600
400
200
0
2008 2009 2010
Restructuring and one-time items
19 October 2010

16. Operating margin 15
%
16
14
12
10
8
6
4
2
0
2008 2009 2010
Restructuring and one-time items
19 October 2010

17. Operating margin 16
%
16
13.9*
14 12.7*
12 13.7
10
12.2
8.0*
8
6
4 5.7
2
0
2008 2009 YTD September
2010
Restructuring and one-time items
* Excluding restructuring and one-time items
19 October 2010

18. Operating margin per division 17
%
18
16
14 Service
12 Industrial
10
8 Automotive
6
4
2
0
-2
-4
-6
-8
-10
-12
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2008 2009 2010
Excluding one-off items
(eg. restructuring, impairments, capital gains)
19 October 2010

19. Third quarter 2010 18
SEKm 2010 2009
Net sales 15,465 13,324
Operating profit 2,309 957
Operating margin, % 14.9% 7.2%
Operating margin excl. restructuring, % 14.9% 8.7%
Profit before taxes 1,950 689
Net profit 1,425 483
Basic earnings per share, SEK 3.05 1.01
Cash flow after investments before 1,936 1,359
financial items
19 October 2010

20. First nine months 2010 19
SEKm 2010 2009
Net sales 45,620 42,340
Operating profit 6,250 2,199
Operating margin, % 13.7% 5.2%
Operating margin excl. restructuring, % 13.9% 7.3%
Profit before taxes 5,501 1,532
Net profit 3,946 1,200
Basic earnings per share, SEK 8.41 2.56
Cash flow after investments before 3,128 4,307
financial items
19 October 2010

21. Inventories as % of annual sales 20
% Long-term target level: 18%
25
24
23
22
21
20
19
18
2008 2009 2010
19 October 2010

22. Cash flow, after investments before financial items 21
SEKm
2 500
Cash out from
2 000 acquisitions (SEKm):
1 500 2008 1,284
2009 241
1 000
500
0
-500
-1 000
2008 2009 2010
19 October 2010

23. Return on capital employed 22
%
30
24.0
25
20.7
20
15
9.1
10
5
0
2008 2009 YTD September
2010
ROCE: Operating profit plus interest income, as a percentage of
twelve months average of total assets less the average of non-
interest bearing liabilities.
19 October 2010

24. Net debt 23
(Short-term financial assets minus loans and post-employment benefits)
SEKm
0
AB SKF,
-2 000
dividend paid (SEKm):
-4 000
2008 Q2 2,277
-6 000 2009 Q2 1,594
-8 000 2010 Q2 1,594
-10 000
Redemption (SEKm):
-12 000
2008 Q2 2,277
-14 000
-16 000
-18 000
2008 2009 2010
19 October 2010

25. Debt structure 24
Maturity years, EURm
500
400 446
300
200
100 130
100 100
55
0
2010 2011 2012 2013 2014 2015 2016
• Unutilized credit facilities: • No financial covenants nor material
EUR 500 m 2014 adverse change clause
SEK 3,000 m 2017
19 October 2010

26. September 2010: 25
Outlook for the fourth quarter 2010
Development compared to fourth quarter last year
The demand for SKF products and services is expected to be
significantly higher for the Group, the divisions and for the
different geographical areas.
Development compared to the third quarter 2010 and
adjusted for normal seasonality
The demand is expected to be slightly higher for the Group, the
divisions and for the different geographical areas.
Manufacturing level
The manufacturing level will be significantly higher year on year
and unchanged compared to the third quarter, adjusted for
normal seasonality.
19 October 2010

27. Volume trends, regions 26
(based on current assumptions and adjusted for seasonality)
Net sales Daily volume trends for: Outlook Q4
2009 Q3 2010 Q4 2010 2010 vs 2009
Europe 51% +++
North America 17% +++
Asia Pacific 23% +++
Latin America 6% +++
Total +++
19 October 2010

28. Volume trends, divisions 27
(based on current assumptions and adjusted for seasonality)
Net sales Daily volume trends Outlook Q4
2009 for Q4 2010 2010 vs 2009
Industrial 34% +++
Service 35% +++
Automotive 29% +++
Total +++
19 October 2010

29. Sequential volume trend main segments Q4 2010 28
(based on current assumptions)
Net sales 2009
14% Cars
5% Railway
22% Industrial distribution
16% Industrial OEM, General+Special
12% Vehicle Service Market
11% Industrial OEM, Heavy + Off-highway
7% Aerospace
7% Energy
3% Electrical and two-wheeler
3% Trucks
19 October 2010

30. Guidance for the fourth quarter 2010 29
• Tax level: around 30%
• Financial net for the fourth quarter:
Around SEK -175 m
• Exchange rates on operating profit versus 2009
Q4: SEK -50 m
Full year: SEK -400 m
• Additions to PPE: Around SEK 1.6 bn for 2010
Guidance is approximate and based on current assumptions and exchange rates.
19 October 2010

31. 30
Agenda
• Nine-months report and outlook
• New financial targets
• Acquisition of Lincoln Industrial
19 October 2010

32. SKF Group performance 31
Operating margin Sales growth in local currency
% %
14 12.6 12.9 12.2 13.7 13.2
15 11.8 13.2
10.8 7.3* 7.5* 7.1
12 9.9 10 5.2
10 8.0 5
8 5.7
0
6 2003 2004 2005 2006 2007 2008 2009 ytd
-5
2010
4 -10
2 -15
0 -20 -19.0
2003 2004 2005 2006 2007 2008 2009 ytd
2010 -25 * Excl. effects from sale of Ovako: 2005: 10.4%
Return on capital employed 2006: 10.1%
%
24.9 24.0
26
24 21.9 23.0
22 19.0 20.7* Long-term targets
20
18 14.0
• 12% Operating margin, level
16
14 • 6-8% Growth per annum (local)
9.1
12
10
• 24% Return on capital employed
8
6
4
2
0
2003 2004 2005 2006 2007 2008 2009 ytd
19 October 2010
* 2010 annualised is 23.9% 2010

33. SKF Group performance 32
Operating margin Sales growth in local currency
% %
14 12.6 12.9 12.2 13.7 13.2
15 11.8 13.2
10.8 7.3* 7.5* 7.1
12 9.9 10 5.2
10 8.0 5
8 5.7
ED
0
6 2003 2004 2005 2006 2007 2008 2009 ytd
-5
EV
2010
4
I
-10
CH
2 -15
0
A
-20 -19.0
2003 2004 2005 2006 2007 2008 2009 ytd
ts
2010 -25 * Excl. effects from sale of Ovako: 2005: 10.4%
Return on capital employed
e
2006: 10.1%
rg
%
24.9 24.0
Ta
26
24 21.9 23.0
22 19.0 20.7* Long-term targets
20
18 14.0
• 12% Operating margin, level
16
14 • 6-8% Growth per annum (local)
9.1
12
10
• 24% Return on capital employed
8
6
4
2
0
2003 2004 2005 2006 2007 2008 2009 ytd
19 October 2010
* 2010 annualised is 23.9% 2010

34. New financial targets 33
Old targets New targets
Operating margin level 12% 15%
Annual sales growth
6-8% 8%
in local currencies
ROCE 24% 27%
Inventory to sales 18% 18%
19 October 2010

35. SKF Group, long-term view 34
World recovery will continue (with some uncertainties)
Growth will be uneven between regions
- Asia +++
- L. America, Cent/East Europe, MEA ++
- N. America, W. Europe, Japan +
SKF Group focus on platforms/segments and delivering value will
result in better growth than industrial production
Asia, Industrial business and the aftermarket will continue to
increase as part of the Group
19 October 2010

36. SKF’s business strategy for achieving long-term 35
profitable growth and attaining financial targets
• keeping a clear and dedicated customer focus
• developing new products, solutions and services
• improving price quality by applying the SKF platform
and segment approach
• strengthening the product portfolio through greater
investment in R&D and through acquisitions
• focusing on rapidly expanding segments and regions
• reducing capital employed and fixed costs
• attracting, retaining and developing the right people
19 October 2010

37. Main initiatives going forward 36
• Accelerate profitable growth
• Reduce cost and eliminate waste
• Invest for growth
One SKF and SKF Care as guiding lights
19 October 2010

38. Main actions going forward 37
Accelerate profitable growth
• Continue to strengthen the platform/segment
approach
• Increase the development, launch and
commercialisation of new offerings (green)
• Value based selling – using
Documented Solutions Programme
• Strengthen our service business
• Acquisitions to strengthen platform offer
19 October 2010

39. Main actions going forward 38
Reduce cost and eliminate waste
• Build on Manufacturing Excellence into other
areas - Business Excellence
• Increased manufacturing and sourcing in
Best Cost Countries
• Reduce product cost through ICR* activities
* ICR means Integrated Cost Reduction
19 October 2010

40. Main actions going forward 39
Invest for growth
• Increase sales and engineering resources
• Additional factories in growth markets
• Additional SKF Solution Factories
• Increase spending in R&D and improve global
network
- accelerate plans for India and China
19 October 2010

41. Main initiatives going forward 40
• Accelerate profitable growth
• Reduce cost and eliminate waste
• Invest for growth
One SKF and SKF Care as guiding lights
19 October 2010

42. SKF Group – operating margin development 41
18
16
14
12
10
8
6
4
2
0
-2
-4
10
90
92
94
96
98
00
02
04
06
08
20
19
19
19
19
19
20
20
20
20
20
d
19 October 2010 yt

43. SKF Group – sales development (in local currencies) 42
18
16
14
12
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
-14
-16
-18
-20
10
90
92
94
96
98
00
02
04
06
08
20
19
19
19
19
19
20
20
20
20
20
d
19 October 2010 yt

44. New SKF long-term financial targets 43
15% Operating margin level
8% Annual sales growth (local currencies)
27% ROCE
18% Inventory to sales
19 October 2010

45. 44
Agenda
• Nine-months report and outlook
• New financial targets
• Acquisition of Lincoln Industrial
19 October 2010

46. SKF Group Vision 45
To equip the world
with SKF knowledge
19 October 2010

47. What is SKF knowledge? 46
19 October 2010

48. SKF’s platforms 47
Managing and reducing friction
19 October 2010

49. Increasing need for lubrication systems 48
• Increase performance and productivity
• Improve reliability and component life
-Protect in harsh conditions Dual-line lubrication systems
pumps, reservoirs
-Reduce catastrophic failures
• Lower maintenance and service costs
-Reduce labour spend
-Reduce lubrication consumption
• Reduce energy consumption
Oil and air lubrication systems
Progressive lubrication systems
Lubricant distributors, metering units
19 October 2010

50. Lubrication systems market 49
• The lubrication systems market comprises two main
technologies:
–Oil-based systems
–Grease-based systems
• The total world market incl products and services is estimated
to be >20 BSEK
• The main segments for lubrication systems are:
-Heavy industrial machinery (e.g metals, mining, pulp & paper)
-Special industrial machinery (e.g machine tools, marine)
-Energy (e.g wind, oil & gas)
-Off highway
-Agriculture
19 October 2010

51. SKF Lubrication Systems 50
Acquisitions
Cirval (Argentina) 2008
ALS (Canada) 2007
Safematic (Finland) 2006
Sommers (Sweden) 2005
Vogel (Germany) 2004
Manufacturing and engineering centres
19 October 2010

52. Acquisition of Lincoln Industrial 51
• Lubrication systems is one of SKF’s technology platforms and SKF has
improved its offerings in this area in recent years. It is a vital part of
SKF’s core competence in the management of friction.
• Lincoln Industrial is highly complementary to SKF Lubrication Systems
when it comes to technology as well as geographical sales coverage
and manufacturing footprint, particularly in North America and Asia.
• Lincoln Industrial is a highly attractive business, with consistent record
of strong financial performance, very good margins and strong cash flow.
• Lincoln Industrial’s consistent financial performance, the outlook and
synergies are reflected in the sales price of around USD 1 billion
(~10 times EBIT).
19 October 2010

53. Lincoln Industrial 52
Net sales geographical split Manufacturing and engineering centres
Other
Asia
North
America
Europe
2010: Sales approaching USD 400 m
EBIT margin around 24%.
19 October 2010

54. Lincoln Industrial’s offer portfolio 53
Spectrum
Solution
Increasing Application Complexity Manually
Automated
Operated
Systems
Fast Application Equipment
Products
Selected
Selected Applications
Food/Beverage Heavy Construction Wind Energy General Manufacturing Aftermarket
Vehicle Services
Steel/Glass Agriculture Mining Fire/Rescue Vocational Service
Engineered to move heavy grease under high pressure in extreme environments for every application
19 October 2010

55. The acquisition is in line with SKF’s strategy 54
Acquisitions are an integral part of the profitable growth strategy.
A systematic acquisition process has been established and the
strategic targets are identified
Acquisition criteria:
• Strategic fit with clear potential synergies and ability to exploit
these in a reasonable timeframe.
• Strong commitment and ownership by acquiring Division.
• EPS accretive in the first full year, positive TVA effect in two
to three years, including amortization of intangible assets.
19 October 2010

56. Summary of the third quarter 55
• Very strong quarter
• Positive outlook
• New financial targets
• Significant acquisition in lubrication systems area
19 October 2010

57. Cautionary statement 56
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 October 2010

58. 57
19 October 2010