1

Tore Bertilsson

Executive Vice President

and CFO

2

SKF - a truly global company

• Established: 1907

• Sales 2004: MSEK 44 826

• Employees: 39 867

• Factory locations: 100 in 24 countries

• Countries with SKF presence: more than 130

3

Net sales per geography, 2004

North America, 20 %

Latin America, 5 %

Sweden, 5 %

Western Europe excl.

Sweden, 48 %

Central and Eastern

Europe, 4%

Asia, 15 %

Middle East and Africa, 3%

4

Net sales per Division, 2004

Industrial Division, 24 %

Service Division, 32 %

Automotive Division, 31%

- OEM 23 %

- VSM 8 %

Electrical Division, 4 %

Aero and Steel Division

- Aero 4%

- Steel 5%

5

Transportation

6

Industrial Applications

7

SKF's Platforms

8

The five platforms

- cover SKF's technology and capabilities around

rotating and linear motion equipment.

- enable SKF to develop the optimal solution for the

customer.

- make SKF unique.

No competitor has this combined competence.

9

SKF's Platforms

Bearingsand units

9

10

DGBB Unit

2.6 T

imes

Plastic Drum SupportTop loadedSales factor 2.6-4.6*

DGBB/HUBSales factor 1

* Depending on the selected bearing

Bearing units for washing machines

11

SKF's Platforms

Seals

11

12

Mechatronics

SKF's Platforms

12

13

Jaeger Industrial Co Ltd.

• Turnover year 2004, MSEK 320

• 750 employees

• ~50% sales volume in Asia

• Leading supplier in Asia-Pacific

• Complete range of actuation systems

• Low cost manufacturing and high volume capabilities

14

Services

SKF's Platforms

14

15

Service contracts

IMS contract in Brazil

Baosteel, China

TFO contract

16

Lubrication systems

SKF's Platforms

SYSTEM 24

LAGD 125

SYSTEM MultiPoint

LAGD 400

SYSTEM 24

LAGD 125

SYSTEM MultiPoint

LAGD 400

17

Vogel integration

Railway customer - Alstom METROPOLIS -

metro vehicles for Barcelona

2000 axleboxes equipped with tapered roller

bearing units plus 500 slewing bearings

equipped with Vogel lubrication systems.

18

Segment 1

Segment 2

Segment 3

Segment 4

Value

proposition

Bearings/Units Seals Mechatronics Services

Lubrication systems

X X X X

X X X X

X X X X X

X X X

Value

proposition

Value

proposition

Value

proposition

SKF Platforms

19

SKF applications in wind energy

Pitch bearings

(slewing bearings)

Yaw bearing

(slewing or plain)

Mainshaft bearing(s)

SRB/CARB/TRB/DRTRB

Mainshaft housings

SKF/Sibco design

Gearbox bearings (through sub-suppliers)

TRB/CRB/SRB/CARB/DRTRB

Generator bearings

DGBB/InsoCoated/Hybrid

Condition Monitoring

WindCon/Microlog/

Couplings

Distributed

Lubrication System

Sealing solutionsMonitoring

Services

Repairs &

Refurbishment

20

SKF Group targets

• 10% Operating margin level

• 6% Growth per annum

• 20% ROCE

• 18% Inventory / sales

2006

2007

21

22 10624 610Net sales

9.3%10.4%Operating margin

20042005MSEK

1 094406Cash flow after investments before financing

2.803.60Earning per share, SEK

1 4021 684Net profit

1 8642 443Profit before taxes

2 0622 571Operating profit

Half-year 2005

22

Major events during the second quarter

• Merger of long-steel operations, Oy Ovako Ab

• Share split and redemption

• Launch of a 350 million euro dual-tranche bond

• Acquisition of Jaeger Industrial Ltd.

• Announcement of the closure of two plants in the USA

23

Operating margin*

%

2002 2003 2004

0

1

2

3

4

5

6

7

8

9

10

11

* excluding restructuring and impairment in Q4 2003

2005

24

Growth development / local currency10 BSEK additional sales = 6 % annual growth rate

% Y-o-Y

0

2

4

6

8

10

12

14

16

2002 2003 2004 2005

Growth by acquisitions

Organic growth

6% total growth

4% organic growth

Up to June

25

SKF in China

Wuhu

Beijing

Wuhan

Guangzhou

Wafangdian

Hong Kong

Tianjin

Xi'an

Nanjing

Dalian

ShanghaiChengdu

Qingdao

SKF (China) Investment Co.

SKF (China) Sales Co.

SKF Reliability Systems Co.

SKF Automotive Bearing Co.

Dalian SKF Wazhou Co.

Anhui CR Seals Co.

Beijing Nankou SKF Railway Co.

Shenyang

Chongqing

SKF China Ltd.

SKF China Ltd. Sales Offices

SKF China Ltd. New Offices (2005 Plan)

Wholly-owned companies

Joint Ventures

SKF Shanghai Bearing Co.

+22

26

-4

-2

0

2

4

6

8

10

12

14

16

18

20

22

24

Q1 Q1 Q1 Q1 Q1 Q1 Q1

Return on capital employed*

%

2002 2003 2004 2005

* Operating profit plus interest income,as a

percentage of twelve months average of total

assets. As of 2003, according to IFRS

200120001999

27

Inventories / Sales

18

20

22

24

26

28

98 99 00 01 02 03 04 05

%

June

28

Fixed assets / Sales

20

22

24

26

28

30

32

34

36

38

40

98 99 00 01 02 03 04 05

%%

Up to June

29

Performance management

The link between…

Shareholder value

• Earnings per

share

• Cash flow

Operational

performance

• TVA

Focus on

- revenue growth

- margin improvement

- capital efficiency

30

TVA - The key performance measure

0

40

80

120

160

200

240

1600 1200 800 400

Cost of Capital

• Grow

• Develop

• Invest

• Restructure

• Run for cash

• Exit

TVA = Operating profit - Cost of capital

Capital

employed

Profit

31

Cash flow after investments before financing

(excl. the acquisition of Willy Vogel AG in 2004, and Jaeger Industrial Co Ltd. in 2005)

0

1 000

2 000

3 000

4 000

2000 2001 2002 2003 2004 2005

• Accumulated free cash flow generated since January 2000, MSEK >15 000

• Cash conversion this period, 120% of Net profit (Target 100%)

Up to June

32

Volume trend for the third quarter 2005

Europe 57%

20%

15%

5%

North America

Asia Pacific

Latin America

Net sales 2004 July 2005

Total

April 2005

Note: This is the sequential

development

33

Summary

• Truly global company

• Global market leader

• Growth ahead of market

• Share holder value driven

• Strong cash flow and solid financial position