The SKF Group

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The SKF Group
First-quarter results 2008 Tom Johnstone,
President and CEO
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Highlights during the first quarter 2008

• New contract with
• - Siemens Transportation Systems to deliver
  axleboxes and tapered roller bearing units for
  new long distance Railjet trains.
• - British Petroleum to provide proactive
  reliability maintenance services in the North
  Sea over a five year period.
• - Goldwin Science and Technologies Co. Ltd. in
  China to supply the main shaft seals for their
  new 1.5 MW wind turbine.

• Acquisition of QPM Aerospaces metallic
• rod business.
• Opened the first machine tool competence centre
  in Stuttgart, Germany.

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First quarter 2008
SEKm 2008 2007
Net sales 15,596 14,371
Operating profit 2,040 1,886
Operating margin 13.1 13.1
Profit before taxes 1,924 1,825
Net profit 1,296 1,214
Basic earnings per share, SEK 2.77 2.57
Cash flow after operating investments before financial items -131 -653
Cash flow after operating investments before financial items, excluding acquisitions -77 -439
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Operating margin
Long-term target level 12

2006
2007
2008
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Operating margin
Long-term target level 12

13.1
12.9
12.6
11.3
excluding income from the jointly controlled
company Oy Ovako Ab
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Operating margin per division

Service
Industrial
Automotive
2007
2008
2006
Excluding one-time items (eg. restructuring,
impairments, capital gains)
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Sales in local currencies (excl. structural
changes)
change y-o-y
2006
2007
2008
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Growth development in local currency
Acquisitions/Divestments
Long-term target level 6-8 per annum
Organic growth
Y-o-Y
13.2
9.7
7.5
Excluding effect from Ovako 2006 10.1
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Net sales development per quarter
2007
2006
2008

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
6.0 2.5 3.3 8.8 7.9 6.9 9.0 6.3 4.9
-4.9 -0.5 1.1 4.6 4.0 4.6 3.7 1.0 1.0
2.9 2.0 2.0 2.3 1.8 2.7 2.0 3.2 3.8
4.0 4.0 6.4 15.7 13.7 14.2 14.7 10.5 9.7
8.0 1.0 -2.1 -5.8 -5.6 -2.3 -1.9 -2.0 -1.2
12.0 5.0 4.3 9.9 8.1 11.9 12.8 8.5 8.5
Percent y-o-y

Volume
Structure
Price / Mix
Sales in local currency
Currency Net sales

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Cash flow, after operating investments before
financial items
SEKm
Cash out from acquisitions (SEKm) 2006
2,129 2007 1,209 2008 Q1 54 Cash in from Ovako
(SEKm) 2006 Q4 1,217 2007 Q2 46
2006
2007
2008
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Net debt (Short-term financial assets minus
loans and post-employment benefits)
SEKm
AB SKF, dividend paid (SEKm) 2006 Q2
1,821 2007 Q2 2,049 2007 Q2, redemption 4,554
2006
2007
2008
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Inventories as of annual sales
Long-term target level 18

2006
2007
2008
14
Return on capital employed
Long-term target level 24

ROCE Operating profit plus interest income, as a
percentage of twelve months average of total
assets less the average of non interest bearing
liabilities.
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April 2008 Outlook for the second quarter
2008(compared to the first quarter 2008)
The market demand for SKFs products and services
in the second quarter of 2008 is expected to be
higher for the Group. The demand is expected to
be higher in Europe, relatively unchanged in
North America and significantly higher in both
Asia and Latin America. The demand is expected to
be higher in the Industrial Division and the
Service Division and slightly higher for the
Automotive Division. The manufacturing level for
the second quarter 2008 will be slightly higher
compared to the first quarter 2008, and higher
than the second quarter 2007.
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Volume development
Net sales 2007 Net sales 2007
Europe 56
North America 18
Asia Pacific 18
Latin America 5
Total
Outlook Q2 2008 vs 2007





Daily volume trend for Q1 2008 Q2 2008 Daily volume trend for Q1 2008 Q2 2008





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Guidance for the second quarter 2008

• Tax level 32
• Financial net for second quarterminus SEK 150
  million
• Exchange rates on operating profit versus
  2007 Q2 minus SEK 200 million
• Full year minus SEK 500 million
• Additions to PPE slightly above SEK 2 billion

Guidance is approximate and based on current
assumptions and exchange rates
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Key focus areas ahead

• Strengthen the platform/segment approach
• Maintain a positive price/mix
• Focus on fast growing segments and geographies
• Drive operational efficiency and Six Sigma
• Manage material costs and supply
• Attract and retain the best people

Use sustainability as a guiding light
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SKF Corporate Sustainability
Employee Care
Business Care
Operating margin
SKF Care
BeyondZeroTM
Environment Care
Community Care
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SKF Group Vision
To equip the world with SKF knowledge
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