0 19 October 2010. The SKF Group Tom Johnstone, President and CEO 19 October 2010.

1

19 October 2010

The SKF Group

Tom Johnstone, President and CEO

19 October 2010

3

19 October 2010

Agenda

• Nine-months report and outlook

• New financial targets

• Acquisition of Lincoln Industrial

4

19 October 2010

Agenda

• Nine-months report and outlook

• New financial targets

• Acquisition of Lincoln Industrial

5

19 October 2010

Key points, Q3 report

• 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

• DemandSignificantly higher compared to Q4 2009Slightly higher sequentially compared to Q3 2010, adjusted for normal seasonality

• Manufacturing levelSignificantly higher year over yearUnchanged compared to Q3 2010, adjusted for normal seasonality

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19 October 2010

• Two new factories announced: - Dalian, China for medium-sized bearings

Investment: around SEK 400 mIn operation: in 2011Employees: 250 people

- Mysore, India for sealsInvestment: around SEK 160 mIn operation: second half of 2012Employees: 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.

Highlights Q3 2010 – investing for the future

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19 October 2010

• 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.

Highlights Q3 2010 – customers and sustainability

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19 October 2010

Examples of new product launches

SKF Commutation Sensor-Bearing

Unit

Four-row tapered roller bearing

SKF MetroCon –

CBM for elevators and escalators

Low friction X-Tracker

SKF Cam Follower UnitSKF SPEEDI-SLEEVE

SKF One Way Clutch

SKF Crane Asset Management

SKF Idler Sound Monitor kit

SKF Hydraulic driven lubricator

SKF Engineering

Simulation Services

SKF solutions for special pumps

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19 October 2010

Sales volume

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

101520

% change y-o-y

2008 2009 2010

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19 October 2010

Sales in local currencies (excl. structural changes)

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

101520

% change y-o-y

2008 2009 2010

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19 October 2010

-20

-15

-10

-5

0

5

10

15

2008 2009 YTD September2010

Growth in local currency(Organic growth + acquisition/divestments)

% y-o-y

Acquisitions/Divestments

Organic growth

7.1%

-19.0%

13.2%

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19 October 2010

Europe+12%

Asia/Pacific +34%

Latin America +19% Middle

East & Africa

+11%

North America +24%

Growth development by geography Local currency Q3 2010 vs Q3 2009

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19 October 2010

Europe+4%

Asia/Pacific +34%

Latin America +22% Middle

East & Africa

+11%

North America +11%

Growth development by geography Local currency YTD September 2010 vs YTD September 2009

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19 October 2010

Components in net sales

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

4.9 6.2 2.7 -13.0 -26.9 -30.8 -24.9 -14.1 5.3 16.6 19.0

1.0 1.3 0.5 2.4 1.4 1.1 1.2 0.4 0.0 0.0 0.0

3.8 4.0 6.4 8.5 7.1 5.6 3.7 0.3 -0.3 -0.5 0.3

9.7 11.5 9.6 -2.1 -18.4 -24.1 -20.0 -13.4 5.0 16.1 19.3

-1.2 -4.1 -0.9 10.3 13.6 12.2 6.6 -1.4 -7.7 -5.2 -3.2

8.5 7.4 8.7 8.2 -4.8 -11.9 -13.4 -14.8 -2.7 10.9 16.1

Percent y-o-y

Volume

Structure

Price / Mix

Sales in local currency

Currency

Net sales

2008 2009 2010

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19 October 2010

Operating profit

0200400600800

1 0001 2001 4001 6001 8002 0002 2002 400SEKm

2008 2009

Restructuring and one-time items

2010

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19 October 2010

Operating margin

%

0

2

4

6

8

10

12

14

16

2008 2009

Restructuring and one-time items

2010

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19 October 2010

Operating margin

0

2

4

6

8

10

12

14

16

2008 2009 YTD September2010

%

12.2

5.7

12.7*

8.0*

Restructuring and one-time items* Excluding restructuring and one-time

items

13.9*

13.7

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19 October 2010

-12-10-8-6-4-202468

1012141618

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Operating margin per division

IndustrialService

Automotive

%

2008

Excluding one-off items(eg. restructuring, impairments, capital gains)

2009 2010

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19 October 2010

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 financial items

1,936 1,359

Third quarter 2010

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19 October 2010

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 financial items

3,128 4,307

First nine months 2010

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19 October 2010

18

19

20

21

22

23

24

25

Inventories as % of annual sales

% Long-term target level: 18%

2008 2009 2010

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19 October 2010

Cash flow, after investments before financial items

-1 000

-500

0

500

1 000

1 500

2 000

2 500SEKm

Cash out fromacquisitions (SEKm):

2008 1,2842009 241

2008 2009 2010

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19 October 2010

Return on capital employed

0

5

10

15

20

25

30

2008 2009 YTD September2010

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

%

24.0

9.1

20.7

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19 October 2010

Net 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

0SEKm

AB SKF, dividend paid (SEKm):2008 Q2 2,2772009 Q2 1,5942010 Q2 1,594

Redemption (SEKm):

2008 Q2 2,277

2008 2009 2010

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19 October 2010

Debt structure

0

100

200

300

400

500

2010 2011 2012 2013 2014 2015 2016

Maturity years, EURm

55

446

130100100

• Unutilized credit facilities:

EUR 500 m 2014 SEK 3,000 m 2017

• No financial covenants nor material adverse change clause

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19 October 2010

September 2010: Outlook for the fourth quarter 2010

Development compared to fourth quarter last yearThe 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 seasonalityThe demand is expected to be slightly higher for the Group, the divisions and for the different geographical areas.

Manufacturing levelThe manufacturing level will be significantly higher year on year and unchanged compared to the third quarter, adjusted for normal seasonality.

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19 October 2010

Volume trends, regions(based on current assumptions and adjusted for seasonality)

Daily volume trends for: Q3 2010 Q4 2010

Net sales2009

Europe51%

North America

17%

Asia Pacific23%

Latin America

6%

Total

Outlook Q42010 vs

2009

+++

+++

+++

+++

+++

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19 October 2010

Volume trends, divisions(based on current assumptions and adjusted for seasonality)

Daily volume trends for Q4

2010

Net sales2009

Industrial34%

Service35%

Automotive29%

Total

Outlook Q42010 vs

2009

+++

+++

+++

+++

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19 October 2010

14%

5%

22%

16%

12%

11%

7%

7%

3%

3%

Cars

Railway

Industrial distribution

Industrial OEM,

General+Special

Vehicle Service Market

Industrial OEM, Heavy + Off-

highway

Aerospace

Energy

Electrical and two-wheeler

Trucks

Sequential volume trend main segments Q4 2010(based on current assumptions)

Net sales 2009

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19 October 2010

Guidance for the fourth quarter 2010

• Tax level: around 30%

• Financial net for the fourth quarter:Around SEK -175 m

• Exchange rates on operating profit versus 2009Q4: SEK -50 mFull 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.

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19 October 2010

Agenda

• Nine-months report and outlook

• New financial targets

• Acquisition of Lincoln Industrial

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19 October 2010

-25

-20

-15

-10

-5

0

5

10

15

2003 2004 2005 2006 2007 2008 2009 ytd2010

Sales growth in local currency%

* Excl. effects from sale of Ovako: 2005: 10.4% 2006: 10.1%

5.2

11.8

7.3* 7.5*

13.2

7.1

Long-term targets

• 12% Operating margin, level

• 6-8% Growth per annum (local)

• 24% Return on capital employed

-19.0

SKF Group performance

0

2

4

6

8

10

12

14

2003 2004 2005 2006 2007 2008 2009 ytd2010

Operating margin%

9.910.8

12.6

8.0

12.912.2

5.7

02468

101214161820222426

2003 2004 2005 2006 2007 2008 2009 ytd2010

14.0

19.021.9 23.0

24.9

Return on capital employed%

24.0

9.1

13.7

20.7*

13.2

* 2010 annualised is 23.9%

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19 October 2010

-25

-20

-15

-10

-5

0

5

10

15

2003 2004 2005 2006 2007 2008 2009 ytd2010

Sales growth in local currency%

* Excl. effects from sale of Ovako: 2005: 10.4% 2006: 10.1%

5.2

11.8

7.3* 7.5*

13.2

7.1

-19.00

2

4

6

8

10

12

14

2003 2004 2005 2006 2007 2008 2009 ytd2010

Operating margin%

9.910.8

12.6

8.0

12.912.2

5.7

02468

101214161820222426

2003 2004 2005 2006 2007 2008 2009 ytd2010

14.0

19.021.9 23.0

24.9

Return on capital employed%

24.0

9.1

13.7

20.7*

13.2

* 2010 annualised is 23.9%

Targets

ACHIEVED

Long-term targets

• 12% Operating margin, level

• 6-8% Growth per annum (local)

• 24% Return on capital employed

SKF Group performance

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19 October 2010

New financial targets

Old targets New targets

Operating margin level 12% 15%

Annual sales growth in local currencies

6-8% 8%

ROCE 24% 27%

Inventory to sales 18% 18%

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19 October 2010

SKF Group, long-term view

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

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19 October 2010

SKF’s business strategy for achieving long-term 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 platformand segment approach

• strengthening the product portfolio through greaterinvestment 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

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19 October 2010

Main initiatives going forward

• Accelerate profitable growth

• Reduce cost and eliminate waste

• Invest for growth

One SKF and SKF Care as guiding lights

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19 October 2010

Main actions going forward

Accelerate profitable growth

• Continue to strengthen the platform/segment approach

• Increase the development, launch and commercialisation of new offerings

(green)

• Value based selling – usingDocumented Solutions Programme

• Strengthen our service business

• Acquisitions to strengthen platform offer

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19 October 2010

Main actions going forward

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

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19 October 2010

Main actions going forward

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

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19 October 2010

Main initiatives going forward

• Accelerate profitable growth

• Reduce cost and eliminate waste

• Invest for growth

One SKF and SKF Care as guiding lights

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19 October 2010

SKF Group – operating margin development

-4-202468

1012141618

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19 October 2010

SKF Group – sales development (in local currencies)

-20-18-16-14-12-10-8-6-4-202468

1012141618

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19 October 2010

New SKF long-term financial targets

15% Operating margin level

8% Annual sales growth (local currencies)

27% ROCE

18% Inventory to sales

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19 October 2010

Agenda

• Nine-months report and outlook

• New financial targets

• Acquisition of Lincoln Industrial

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19 October 2010

To equip the worldwith SKF

knowledge

SKF Group Vision

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19 October 2010

What is SKF knowledge?

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19 October 2010

SKF’s platforms

Managing and reducing friction

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19 October 2010

Increasing need for lubrication systems

• Increase performance and productivity

• Improve reliability and component life-Protect in harsh conditions-Reduce catastrophic failures

• Lower maintenance and service costs -Reduce labour spend-Reduce lubrication consumption

• Reduce energy consumption

Dual-line lubrication systems pumps, reservoirs

Progressive lubrication systemsLubricant distributors, metering units

Oil and air lubrication systems

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19 October 2010

Lubrication systems market

• 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

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19 October 2010

SKF Lubrication Systems

Acquisitions

Cirval (Argentina)2008

ALS (Canada)2007

Safematic (Finland)2006

Sommers (Sweden)2005

Vogel (Germany)2004Manufacturing and engineering

centres

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19 October 2010

Acquisition of Lincoln Industrial

•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).

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19 October 2010

Lincoln Industrial

Manufacturing and engineering centres

2010: Sales approaching USD 400 m

EBIT margin around 24%.

Net sales geographical split

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19 October 2010

Lincoln Industrial’s offer portfolioS

ele

cte

d A

pp

lic

ati

on

s

Food/Beverage Heavy Construction Wind Energy General Manufacturing AftermarketVehicle Services

Steel/Glass Agriculture Mining Fire/Rescue Vocational Service

Se

lec

ted

Pro

du

cts

So

luti

on

Sp

ec

tru

m

AutomatedSystems

ManuallyOperated

Equipment

Increasing Application Complexity

Fast Application

Engineered to move heavy grease under high pressure in extreme environments for every application

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19 October 2010

The acquisition is in line with SKF’s strategy

Acquisitions are an integral part of the profitable growth strategy.

A systematic acquisition process has been established and thestrategic 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.

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19 October 2010

Summary of the third quarter

• Very strong quarter

• Positive outlook

• New financial targets

• Significant acquisition in lubrication systems area

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19 October 2010

Cautionary 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”.

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19 October 2010