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The SKF Group Half-year result, 2005 Tom Johnstone, President and CEO

The SKF Group Half-year result, 2005 Tom Johnstone, President and CEO. Second quarter 2005. * MSEK 718, before the acquisition of Jaeger Industrial Ltd. and the purchase of minority shareholding in previously acquired companies. Half-year 2005. Areas in focus 2005 Performance Q2 2005.

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The SKF Group Half-year result, 2005 Tom Johnstone, President and CEO

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  1. The SKF GroupHalf-yearresult, 2005Tom Johnstone, President and CEO

  2. Second quarter 2005 * MSEK 718, before the acquisition of Jaeger Industrial Ltd. and the purchase of minority shareholding in previously acquired companies.

  3. Half-year 2005

  4. Areas in focus 2005 Performance Q2 2005 3.6% Ongoing 11.2% 0.2% • Ongoing • MSEK 718 • Operating margin level Maintain a positive price/mix Recovery of raw material cost increase • Continued sales growth Maintain organic growth pace Structure • Strengthen the platform/segment offer • Cash flow before financingand acquisitions • In line with net profit, annual basis

  5. Major events during the 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

  6. Operating margin* % 2004 2005 2002 2003 * excluding restructuring and impairment in Q4 2003

  7. Operating margin per division* % Service Industrial Electrical Aero and Steel excl. Ovako Automotive 2004 2005 2003 * excl. restructuring and impairment in Q4, 2003 and in Q2, 2005

  8. Sales in local currency % change y-o-y 2004 2005 2002 2003

  9. Growth development / local currency10 BSEK additional sales = 6 % annual growth rate % Y-o-Y 6% total growth 4% organic growth Up to June Growth by acquisitions Organic growth

  10. Net sales development per quarter 2003 2004 2005 Percent y-o-y

  11. Inventories as % of annual sales % 2004 2005 2003 2002

  12. Cash flow, after investments before financing MSEK 2004 2005 2002 2003

  13. Net debt (Short-term financial assets - loans) MSEK Dividend paid: 2001 Q2, MSEK 598 2002 Q2, MSEK 683 2003 Q2, MSEK 911 2004 Q2, MSEK 1 138 2005 Q2, MSEK 1 366 2004 Q2, Pension: MSEK 3 100 2005 Q2, Redemption, MSEK 2 846 2004 2005 2001 2002 2003

  14. Net interest bearing liabilities (Short-term financial assets - loans - net postemployment benefits) MSEK 2004 2005 2003

  15. Share split and distribution to shareholders MSEK 1 366 Dividend MSEK 2 846 Redemption MSEK 4 212 Distributed to shareholders Number of shares as per June 30, 2005 SKF A 63 876 892 SKF B 391 474 176 Total 455 351 068 SKF issued during the second quarter: A 350 million euro dual-tranche bond - a 100 million euro three-year floating-rate bond - a 250 million euro five-year fixed rate bond

  16. Jaeger Industrial Co Ltd. • Leading supplier in Asia-Pacific • Complete range of actuation systems • Low cost manufacturing and high volume capabilities • Own sales units plus sales through specialized dealers • Manufacturing plants both in Taiwan and China • Turnover year 2004,MSEK 320 • 750 employees • ~50% sales volume in Asia • Founded 1982 • Five business units (Taiwan, China & USA) • ISO 9001

  17. Jaeger market segments • Satellite disc positioning • Gate openers • General industry • Health care & Ergonomics

  18. Accumulated change in the number of employees Employees acquisitions capacity adjustment and restructuring 2001 2003 2002 2004 2000 2005

  19. Fixed assets / Sales % % Up to June

  20. SKF Group targets • 10% Operating margin level • 6% Growth per annum • 20% ROCE • 18% Inventory / sales 2006 2007

  21. July 2005: Outlook for the third quarter The market demand for SKF’s products and services in the third quarter, compared to the previous quarter, is expected to remain on a high level in Europe, to be slightly higher in North America, higher in Latin America and significantly higher in Asia. However, the third quarter is seasonally lower than the second quarter. The manufacturing level will be unchanged during the third quarter, compared to the second quarter, while lower in absolute terms due to normal seasonality.

  22. Volume trend for the third quarter 2005 Net sales 2004 July 2005 April 2005 Europe 57% 20% North America Asia Pacific 15% Latin America 5% Total Note: This is the sequentialdevelopment

  23. Cautionary statement This report 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 20-F report on file with the SEC (United States Securities and Exchange Commission) under "Forward-Looking Statements" and "Risk Factors".

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