2 About this presentation SKF’s organization is customer-focused and serves around 40 different industries. This presentation aims at giving an overview of SKF’s 26 main industry groups and includes:an overview of each industry's % of sales 2013description of industry trends and requirementsexamples of SKF’s offerscustomer cases
3 SKF’s main addressable customer industries Industrial distributionSales through industrial distributors.Industry, generalAutomationMachine toolIndustrial, drives(fluid machinery, industrial electrical motors and generators, material handling and industrial transmission and driveline services)Medical and Health Care.Industry, heavy and specialHeavy industrial machinery:MetalsMining & CementPulp & PaperSpecial industrial machinery:MarineFood and BeverageAerospaceAircraft and helicopter builders (system integrators), aero engine, gearbox, and other aircraft systems manufacturers.EnergyRenewable energy(wind, solar and ocean)Traditional energy(oil and gas and traditional electric power generationRailwayPassenger (high-speed vehicles, metro cars and light rails), locomotives (diesel and electric) and freight cars..Off-highwayConstruction, agriculture and forestry and fork lift trucks.Cars and light trucksCars and light truck manufacturers(OEMs) and their sub-suppliers.Vehicle Service MarketSpare-part kits products for cars, trucks and two-wheelers.TrucksTruck, trailer and bus manufacturers (OEMs) and their sub-suppliers.Two-wheelers and ElectricalMotorcycles, scooters and skates. Home appliances, portable power tools and electric motors.14 April 201733
4 Net sales by customer industry 2013 Cars and light trucksIndustrial distributionVehicle Service MarketTwo-wheelers and ElectricalTrucksIndustry, generalRailwayOff-highwayEnergyIndustry, heavy and specialAerospace14 April, 2017
5 Industrial distribution – 29% of net sales (2013) 1/3SKF has the largest distributor network in the bearing industry and its 7,000 distributor locations reaches over one million customers worldwide.SKF does not own its distributor network but works closely with independent distributors who add value through their proximity to customers in all industries; their markets and industry knowledge and their complementary product offers and ability to fully support customers in various ways, especially regarding service levels.The network has expanded over the years with the addition of specialized distributors in different product categories for example lubrication systems and mechatronics and in different industries for example agriculture and marine.Customers are mainly end-users, but also OEMs usually small to mid-size.14 April 201755
6 SKF’s solutions for Industrial distribution 2/3Examples of support to distributors:SKF’s programme “More with SKF” is developed to strengthen all stages in the supply and value chain, from SKF and its distributors all the way to the customer. It contains a set of tools for distributors in several categories like branding, sales and marketing, supply chain, product range management, people development, e-business, quality and value generation.Inventory management in order to optimize Distributors' stock level. SKF has initiated a way of streamlining the information flow between distributors and SKF to reduce transactional costs and reduce inventories.SKF Distributor College is an e-learning platform, whose users can attend various training schemes online. It offers around 45 courses in 20 languages.14 April 201766
7 Customer case – Industrial distribution 3/3Improved reliability and less downtimeTiense Suiker, a major sugar mill in Belgium had frequent problems with its support rollers. Wear had caused a deficiency in the rollers’ hardened surface and they needed to be replaced. The customer was looking for a partner to take care of the engineering, production and installation of the rollers.SKF and its authorized distributor proposed engineering services including hardening the rollers, with the aim of increasing the intervals between planned downtime. The bearings were mounted on tapered shafts, oil injection was used to provide easy dismounting and disassembled bearings were reworked. This gave the customer improved reliability and less unplanned downtime while saving EUR 1.3 million. SKF is now the preferred service partner for the customer’s improvement projects.Case from Annual Report 2013
8 Industry, general – 11% of net sales (2013) Including :Automation, Machine tool, Industrial drives: Fluid machinery, Industrial electric motors and generators, Material handling, Industrial transmission and driveline services, Medical and Healthcare14 April 201788
9 Automation 1/3 Market overview The global industrial automation market has almost doubled over the past decade, which is almost twice as fast as overall industrial production.The industry is driven by a need for greater flexibility to manufacture different products on the same production line, with improved reliability, higher precision and further energy savings.The market is gradually shifting from using pneumatic or hydraulic drives, to electromechanical drives, as they require much less energy due to major reductions in energy loss. The shift represents a potential growth for electromechanical robotic joining tools of 20 to 30% annually, depending on the application.14 April 201799
10 SKF’s solutions for the Automation industry 2/3SKF supports the automation industry at the very early design phaseof industrial robots, commonly used in material joining and formingprocesses in assembly lines.Examples of solutionsSKF’s compact electromechanical cylinder is equipped with SKF’s inverted roller screw (mechatronics), automatic lubrication system,sealing solutions, different types of sensors andthe SKF energy efficient bearings.SKF also supplies planetary roller screws. It has several important features such as acceleration and speed far beyond the limits of ball screws, a high level of shock resistance, and superior motor downsizing.14 April 20171010
11 Customer case – Automation 3/3SKF development partner for the two largest hexapods ever builtThe French technology company Symetrie, developed two hexapods in 2013 to simulate wave profiles for a customer in the oil and gas industry. To achieve this, the hexapods were required to carry very heavy loads and at the same time handle powerful dynamic motion, without compromising reliability and safety.SKF was selected as the development partner for the actuators and delivered a customized electromechanical solution. This solution enables the actuators to move at speeds of up to 1.5 metres per second, while carrying a weight of 4 tonnes. The actuators have a two metre long stroke and safety brake, directly mounted onto the screw resulting in easy motion control, high accuracy and safety.Case from Annual Report 2013
12 Machine tool 1/2 Market overview Global industrial production is normally a key driver for market development in the machine tool industry which has almost doubled over the last 20 years.Machine tools can be found in most production processes. The trend is that manufacturers are demanding more customized technology solutions to reach greater speed and precision, as well as easy-to-operate machines.End-users want to achieve higher productivity and reduce the total cost of owner-ship. Solutions that provide reduced energy use, improved working conditions and reduce the impact on the environment are highly attractive in the market and are key drivers.14 April 20171212
13 SKF’s solutions for the Machine tool industry 2/2SKF works with manufactures and end-users to optimize machine tools to run faster, for longer and in a cleaner way during their entire operating life.SKF offers engineering consultancy, simulation and design validation, advanced condition monitoring technologies, predictive and proactive maintenance programmes and hands-on maintenance training and a range of products tailored around spindle operation and machine tool motion.Products include super-precision bearings, lubrication systems and coolant pumps, customized sealing solutions, linear drive and guiding systems.Example of solutionSpindles play a major role in machine tool performance as they drive the tools for cutting process and is critical for its precision.SKF provides complete solutions for optimal spindle operation and machine tool motion.14 April 20171313
14 Industrial drives: Fluid machinery 1/3Including:Industrial fans,pumps andcompressorsMarket overviewThe fluid machinery market is driven by many different industries including oil and gas, hydrocarbon processing and water industries,as well as various facilities such as airports, hospitals and shopping malls.The market has shown strong organic growth for a number of years and this is expected to continue.The industry focuses on the important need for constant equipment efficiency improvement. The development of the industry is also influenced by environmental standards and legislation, the need to lower energy use and maintenance costs.14 April 20171414
15 SKF’s solutions for the Fluid machinery industry 2/3SKF supports manufacturers and end-users with engineering servicesin the design process, industry-specific solutions for monitoring systemsand magnetic bearings.Example of solutionAn energy-efficient high-speed permanent magnet motor solution for aeration blowersin wastewater facilities that can reduce energy use by up to 40%. This solution also uses less mechanical parts than traditional drive systems, which means reduced maintenance, while powerful built-in monitoring and diagnostic capabilities maintain high performance and reliability.14 April 20171515
16 Customer case – Fluid machinery 3/3Agreement for SKF Certified Rebuilder programmeSKF and SPP Pumps, a UK-based pump manufacturer and part of the Indian company KBL, signed a three-year agreement in 2013, covering the SKF Certified Rebuilder programme for pumps.As part of the programme, SKF will supply condition monitoring equipment, fitting and alignment tools, as well as training in advanced analysis and repair techniques for the critical aspects of pump servicing. To start with, the agreement covers SPP Pump’s five service centres across the UK.Case from Annual Report 2013
17 Industrial drives: Industrial electrical motors and generators 1/2Market overviewElectric motor-driven systems account for more than 40% of the world’s electricity use, and therefore improvements in their design have a major impact on global energy demand.Minimum energy performance standards have been introduced in, for example, North America and the EU.14 April 20171717
18 SKF’s solutions for Electric motors and generators 2/2SKF provides different solutions, one being the SKF Energy Efficient E2 deep groove ball bearing range. SKF Rotor Positioning provides the functionality of both the bearing and the encoder, since it is equipped with sensors insensitive to the strong magnetic fluxes, which are typical for this type of motor.Examples of solutionsElectric motors, generators and associated equipment can be damaged when an electric current passes through the bearing.SKF offers different insulation solutionsto avoid this damage, like the INSOCOAT and hybrid bearings. The rings in INSOCOATbearings are coated with an insulating ceramic layer while in SKF hybrid bearings insulation is provided by the ceramic rollingelements themselves.14 April 20171818
19 Industrial drives: Material handling 1/3Market overviewThe material handling industry is influenced by the growthin globalization, which is changing the patterns of travelling,consumption, and goods supply. This in turn increases shipmentof bulk and cargo volumes between continents.The industry is also driven by growing urbanization and the need to expand infrastructure to be able to handle a larger population.14 April 20171919
20 SKF’s solutions for the Material handling industry 2/3SKF supports manufacturers and end-users with offers and servicesfor heavy and medium duty conveyors, crane applications, elevatorsand escalators, that keep their equipment running as effectively andefficiently as possible.SKF offers solutions ranging from bearings, seals and lubrication systems to asset management services.Example of solutionSKF SYSTEM 24 is a single point automatic lubrication system that continuously delivers precisely measured amounts of lubricantto desired points via a gas-driven pump. It is ideal for lubrication points difficult to reach manually, or where there are a large number of lubrication points where manual greasing would be less effective.14 April 20172020
21 Customer case – Material handling 3/3Saving man hours, increasingavailability and safetyOne of Europe’s largest ports experienced a double digit growth in container traffic. The high volume was making it difficult to keep the port cranes properly lubricated since manual lubrication could only be carried out when the cranes were not in operation.By replacing manual lubrication of the crane wheel base, trolley and winch with SKF’s automated lubrication system, SKF ProFlex, for over 60 lubrication points on each crane, the terminal operating company saved about 2,000 man hours. They also increased the crane availability and eliminated the safety risks workers are exposedto if they would need to perform the manual lubrication work on the cranes.Case from Annual Report 2012
22 Industrial drives: Industrial transmission and driveline services 1/2Market overviewGear units and drivelines are used in virtually every industrial process.Due to the large utilization in industrial equipment, there is great variability in size and shape of the units. It ranges from fractional (less than 1kW) gear motors to multi-megawatt, fully customized gearboxes.The designers of industrial gear units for heavy industries can face different challenges such as, variable speed and torque, high torque at constant speed, heavy external and/or shock loads, and highly contaminated or poor lubrication conditions.When the electric motor, coupling and gearbox are installed in a driveline, there is still considerable potential to be attained in efficiency gain.14 April 20172222
23 SKF’s solutions for Industrial transmission and driveline services 2/2SKF works with manufactures and integrators of gearboxes in the development phase for more efficient and reliable machinery and equipment.SKF helps customers select the most suitable maintenance strategy for their installed driveline, provides driveline health status assessments during production, and offers the most suitable spare parts when the assets need repairing.SKF offers engineering and design support, including root cause analysis capabilities, and in certain cases driveline re-engineering.Example of solutionUpgraded SKF Explorer self-aligning rollerbearings comprise important features such as greater load carrying capacity, enhanced wear and contamination resistance, and lower friction compared to competing solutions.14 April 20172323
24 Medical and Healthcare 1/3Market overviewThe medical industry is evolving around an increasingly ageing population, obesity, more healthcare being carried out at home, a growing population in emerging countries and the need for more flexible and automated equipment.The industry is highly regulated with strict safety standards and medical norms.The medical and healthcare industry has enjoyed steady growth over the past decade and the global market is expected to continue growing.14 April 20172424
25 SKF’s solutions for Medical and Healthcare industry 2/3SKF is a development partner to many medical equipment manufacturers and supports customers in optimizing medical equipment design.SKF’s products are used to provide linear and rotational motion for applications ranging from imaging, surgery, laboratory automation, life support, dental, ophthalmic and hospital equipment.Solutions include electromechanical actuation for lifting, rolling bearings and profile rails for turning and guiding functions, engineered machined seals for separating media, and associated control components.SKF also provides testing support during design, pre-production and production to comply with industry norms and standards.Example of solutionSKF Telescopic pillar for ophthalmic equipment and infant care provides a universal “plug and play” lifting solution. It combines a robust load-carrying capacity, smooth and silent lifting, short retracted length and a wide degree of design flexibility in a compact, two-section unit.14 April 20172525
26 Customer case – Medical and Healthcare 3/3Stiff and precise linear guides in nanoScan ®Mediso Medical Imaging Systems is one of the world’s largest suppliers of medical diagnostic and research purpose imaging devices.SKF works with Mediso in R&D activities, providing specialized engineering support and compact, high-efficiency linear motion and actuation systems solutions.SKF’s solution can be found in Mediso’s new generationof medical equipment, the nanoScan ® , which uses tomography technology for medical imaging, providingan ultimate performance in a unified multimodality imaging solution. In 2012, the precision rail guides were incorporated into the Mediso imaging solutions.Case from Annual Report 2012
27 Industry, heavy and special – 10% of net sales (2013) Including :Heavy : Metals, Mining and Cement, Pulp and PaperSpecial : Marine and Food and Beverage14 April 20172727
28 Heavy: Metals, Mining and Cement, Pulp and Paper Market overviewGrowing population, increasing urbanization and expanding middle classes in many developing economies, are underlying reasons for growth for heavy industriesThere is a steady shift in importance from traditional markets such as Europe and North America to China, India and Latin America.Heavy industries are highly capital-intensive, which makes it very important that assets are both productive and reliable.14 April 20172828
29 SKF’s solutions for the Metals industry 1/2SKF is a technical development partner for the world’s leading OEMs and a service partner for end-users in the metals industry.SKF supplies a wide range of solutions including bearings, seals, services and lubrication systems.Example of solutionBearings for extreme temperatures are a powerful range of products in the metals industry. Maintenance costs can be cut and reliability increased by replacing conventional grease-lubricated bearings with SKF’s extreme temperature bearings.For example, a cooling bed for sheet metal, equipped with 5,000 bearings can save 7.5 tonnes of grease and 23 tonnes of CO2 per year. This is equivalent to an 82% reduction in the climate impact, compared to using grease-lubricated deep groove ball bearings.14 April 20172929
30 Customer case – Metals 2/2 SKF part of strategic supplier initiative Tata Steel, the largest private sector steel producer in India, chose SKF as the only bearing supplier among the 27 key global suppliersinvolved in its supplier relationship management initiative. Tata Steel’s initiative sets out to strengthen its relationship with strategicsuppliers by sharing knowledge, best practices and processes.As part of the initiative, SKF is continually training Tata Steel’s employees in bearingand lubrication best practices to supportproductivity. SKF has supplied Tata Steel with solutions based on all five of its technology platforms for many years, mainly focusingon bearings and services.Case from Annual Report 2013
31 SKF’s solutions for the Mining and Cement industry 1/1SKF provides the mining, mineral processing and cement industries with a wide range of products and services that contribute to improved productivity, reliability and worker safety.SKF has close relationships with manufacturers and end-users worldwide and is increasing its relationship with engineering, procurement and construction consultants.Example of solutionSKF offers different monitoring technologies to help customers improve productivity. They are now installed in more than 400 mines and cement plants around the world14 April 20173131
32 SKF’s solutions for the Pulp and Paper 1/2SKF is leading supplier of bearings and associated products to both OEMs and pulp and paper mills, SKF has developed to become the leading lubrication systems supplier to the industry. In addition, SKF continues to expand its service offerings which now account for a sizeable proportion of the business.SKF service offerings, including Integrated Maintenance Solutions and SKF Clients Needs Analysis - Asset Management, help customers to maximize their productivity and reliability and reduce costs.Example of solutionThe SKF Flowline pumping unit is a circulating oil lubrication system which can help mills reduce oil and energy consumption, as the tank only requires a third to a half of the oil volume used in conventional systems.14 April 20173232
33 Customer case – Pulp and Paper 2/2Renewed contract with Smurfit Kappa in VenezuelaSKF and Smurfit Kappa, a world-leader in paper-based packaging, signed a renewed contract in2013.SKF will provide inspection of mechanical and electrical equipment and thermographic analysisto Smurfit Kappa’s mill in San Felipe, Venezuela.SKF has been providing maintenance services forthe rotating parts at the Valencia mill since 2005.By the end of the initial contract period, SKF had reduced machine down-time in rotating equipmentand cut bearing consumption, saving thousands of dollars annually.Case from Annual Report 2013
34 Special: Marine 1/2 Market overview About 80% of world trade (volume) is carried out by a fleet of around 50,000 commercial ships.The transportation sector is highly dependent on the business climate. Investments in larger ships, with higher carrying capacity, reduce the cost and emissions per unit of transportation.Vessels supporting off-shore platforms continue to show strong growth, driven by global energy demand.The lifetime of a ship is typically years. A vessel out of operation for just one day can cost a ship operator hundreds of thousands of dollars. As a result, high reliability and availability are important in order for vessels to be profitable.Rising fuel costs and tough environmental and safety regulations influence the industry to develop more predictable, reliable and fuel- efficient vessels.14 April 20173434
35 SKF’s solutions for the Marine industry 2/2SKF’s main focus is on offshore supply vessels, workboats, tankers, and passenger and cruise ships.SKF provides products and services for every stage in the life cycle of the machinery from design, manufacture and installation to operation and maintenance. SKF’s offers include integrated product and service solutions for propulsion systems, including key components in large two-stroke engines, thrusters, electric pods and gearboxes, as well as couplings and shaft line transmission products.SKF also offers a wide range of specialized condition-based maintenance services for different types of vessels. Other services provided are alignment services, 3D measurements, on-site machining and machinery mounting solutions.Example of solutionSKF’s condition monitoring services and products help enhance the ships reliability and performance. SKF offer portable systems and full on-line installations of data collection on ships’ and rigs’ propulsion and positioning equipment.
36 Special: Food and Beverage 1/3Market overviewFood and beverage is one of the world’s largest manufacturing industries in an economy.Average consumer spending on food and non-alcoholic beverages is 25% of income, which makes this manufacturing industry less cyclical than others.The industry is typically faced with challenges such as extreme temperatures and moist, frequent, hygienic wash-downs affecting equipment reliability, as well as hazardous work environments.It focuses on improving efficiency, reliability, hygiene, operator and food safety, as well as reducing waste of water, energy, and lubricants.14 April 20173636
37 SKF’s solutions for Food and Beverage industry 2/3SKF supports OEM designers with proven technologies from food and beverage processing plants, in line with hygienic design, food safety, waste and total cost reduction requirements.SKF helps end-users to achieve extended machine life and increase operational efficiency (OE) levels. plants, in line with hygienic design, food safety, waste and total cost reduction requirements. This is achieved through SKF knowledge within sealing solutions, bearings and units, lubrication systems, services and mechatronics.Example of solutionSKF ChainLube, airless oil projection system isa reliable, easy-to-use solution for accurate, automatic chain lubrication. The system supports the Hazard Analysis and Critical Control Points (HACCP) process for safe food production.
38 Customer case – Food and Beverage 3/3Improved operational efficiencyGriffins Food Ltd. needed to reduce its unplanned engineering downtime and waste, while improving operational efficiency.SKF deployed the SKF Clients Needs Analysis - Asset Management, to initiate the assessment. SKF and Griffins agreed on a potential operational efficiency improvement of 5%. This included a maintenance strategy review, root cause failure analysis training and a range of further technical and on-task training, reliability engineering, job plans and documentation. The solution also incorporates products and services from SKF’s technology platforms in delivering the improvements.As the project neared completion in 2013, the site had already achieved an operational efficiency improvementof 8% and an engineering downtime reduction of 4%.Case from Annual Report 2013
39 Aerospace – 6% of net sales (2013) 1/3Market overviewThe aerospace market has almost doubled every decade over the past 40 years. Growing global travel, especially related to Asia, the need to renew ageing fleets due to tougher environmental legislation and fuel price pressure drives the industry.Russia’s, India’s and China’s domestic markets are expected to expand and create a greater demand for smaller single-aisle aircraft and helicopters.Flight performance and safety are critical issues in the aerospace market. Products need to operate reliably in highly demanding conditions and call for very specific engineering knowledgeHigh demand for lighter, more durable aircraft using composite materials, as well as a new generation of quieter and more fuel-efficient engines.14 April 20173939
40 SKF’s solutions for Aerospace industry 2/3Relations between manufacturers and their suppliers are often very long-term since an engine or helicopter model can have a lifetime of up to 50 years. SKF supports the main players in the industry with developing their new flight programmes.SKF provides main aircraft, helicopter, engine and system manufacturers with highly engineered customized solutions, including main-shaft and transmission bearings, seals, and precision elastomeric devices.SKF also provides airlines and maintenance repair and overhaul customers with maintenance and repair services.Example of solutionTo support growth of electrical flight control, SKF Fly-by-Wire proposes a new range of integrated side-sticks, providing the direct link between the pilot and flight computers.
41 Customer case – Aerospace 3/310-year agreement for engine bearingsSKF signed a 10-year agreement in 2013, with Turbomeca a division of the French-based Safran Group, to provide bearings for their latest helicopter engine, the Arrano. The agreement is worth SEK 900 million and builds upon SKF’s successful support of other Turbomeca engine programmes.Case from Annual Report 2013
42 Energy – 5% of net sales (2013) Including :Renewable energyTraditional energyMarket overviewWith the world’s population continually increasing, access to energy is one of the greatest challenges to be solved.The energy industry is often subject to government regulations and incentives which aim to address cost, security of supply as well as environmental issues, most significantly climate change.14 April 20174242
43 Renewable energy 1/3 Including : Wind, ocean and solar energy Market overviewGlobal concern about fossil fuel use and carbon emissions, coupled with the need to secure energy supplies are positive long-term driving forces.The wind energy market has grown six-fold over the past decade.Wind energy onshore is the most developed renewable energy source, but offshore wind is gaining in importance.Ocean energy is still a small but interesting energy source and SKF is at the forefront of development in this market and has supply agreements with several manufacturers of wave and tidal turbine devices. SKF is also a supplier for solar tracking systems.14 April 20174343
44 SKF’s solutions for the Wind energy 2/3The wind sector wants larger turbines, reduction in turbine weight and friction, a longer service life and turbines that can withstand harsher operating environments.SKF is a development partner to leading manufacturers of wind energy solutions, as well as a supplier of solutions to the emerging wind aftermarket.SKF primarily provides solutions and services for wind turbines, related to the main shaft, generator and gearbox applications.Example of solutionSKF Nautilus bearings provide designers the freedom to develop a wide variety of turbines anda possibility to customize their solution. It increases reliability, service intervals can be prolonged, andit contributes to reducing energy costs.
45 Customer case – Wind 3/3 Extended collaboration with Envision Energy SKF extended its collaboration with the Chinese wind turbine manufacturer Envision Energy in 2013, to include delivery of SKF’s Nautilus bearings for Envision’s 3.0MW turbines, as well as spherical roller bearings and CARB toroidal roller bearings for Envision’s 4.0MW turbines.SKF has been a development partner to Envision Energy, since the company was founded in 2006 and supplies all the bearings for their standard 1.5MW, 1.6MW and 2.3MW turbines. Envision Energy, with its research and development basein Denmark, is one of the most rapidly expanding companies and among the top five leading wind turbine manufacturers in China.Case from Annual Report 2013
46 Traditional energy – Oil and gas 1/3Market overviewNew drilling technologies, such as horizontal drilling, have opened up new resource bases onshore; while off-shore drilling vessels are now able to safely explore ultra-deep water formations.The demand for increased asset reliability, improved operational performance and heightened environmental stewardship, has resulted in a favorable investment climate. Global capital investments in this sector has increased 45% since 2008.14 April 20174646
47 SKF’s solutions for the oil and gas industry 2/3SKF provides manufacturers and end-users with bearings, seals, lubrication systems, actuators, and simulation tools that enables quick, accurate assessment of real-life fuel efficiency and CO2 emission reduction.Example of solutionMagnetic bearings operate without metal - to-metal contact, generating virtually no bearing friction or bearing wear. The design also eliminates the need for seals, and for lubrication systems. These features reduce maintenance demands and noise while eliminating emissions and reducing the risk of gas leaks.
48 Customer case – Oil and gas 3/3Engineering solution enhancespipeline reliability over vast areaSKF signed a three-year contract witha major North American refining and transportation company, responsiblefor over 21,000 km of pipeline, to help manage its reliability.Case from Annual Report 2013
49 Traditional energy – Traditional electric power generation 1/2Market overviewIncreasing demand for energy worldwide continues to be a driver for new power plant construction and the renewing of ageing plants and equipment.The majority of the world’s power plants today are coal-fired, followed by combined cycle gas plants and nuclear power plants. Non-OECD countries, such as India and China, continue to invest heavily in new coal-fired plants.In OECD countries there is a distinct trend to move from coal to natural gas. This fuel shifting can result in lower CO2 emissions, around 50% less than coal.14 April 20174949
50 SKF’s solutions for Traditional electric power generation 2/2SKF is a strategic partner to manufacturers and end-users for both the gas and coal-based power industries.SKF’s expertise is instrumental when specifying and designing power plant applications together with OEMs, such as pumps, compressors, steam and gas turbines, conveyors and crushers.Once installed, SKF offers a range of condition monitoring tools and software, training, maintenance and repair services to help power plant owners and operators extend plant service life and reduce the total cost of operations.
51 Railway – 4% of net sales (2013) 1/3Market overviewGrowth is driven by industrial production, growing global urbanization, increased global concern for emissions, rising fuel prices and continued liberalization of the railway market, and the need to replace old rolling stock.The freight wagon sector (excluding locomotives) makes up around 25% of the total market volume and locomotives and mass transit represents some 75%.China and India are the fastest growing markets in both sectors.14 April 20175151
52 SKF’s solutions for the Railway industry 2/3SKF is a global supplier to the railway industry, and focuses on servicing both the freight and mass transit markets.SKF supplies OEMs and end-users with a wide range of solutions covering wheelset bearings, axleboxes and drive system bearings, lubrication systems, sealing solutions, condition-monitoring and aftermarket services.Example of solutionSKF Insight - a self-powered sensor bearing, piloted by SKF’s railway customers in 2013.This new technology allows for wireless communication of information about the condition of the bearing via the SKF networkof Remote Diagnostic Centres.This will help SKF’s customers to even further extend maintenance intervals and reduce the operational cost of the rolling stock.
53 Customer case – Railway 3/3SKF received orders from Chinese railway companiesSKF received orders for a value of more than SEK 50 million from the Chinese companies Tangshan Loco and Changchun Railway Co for wheel set bearings for very high speed trains, operating at speeds above 350 km/h. The trains are designed for a speed of 380 km/h and the bearings are tested at 420 km/h at the SKF Railway Test Centre.SKF was able to design a solution that could cope with the challenges of long maintenance intervals. The key was to find a solution with very low internal friction to limit the operating temperature of the bearing. This is important since the life of the lubricating grease in the bearing can be extended if the operating temperatureis kept under control. The SKF solution has been approved by the Chinese railway authorities and deliveries started during the year.Case from Annual Report 2013
54 Off-highway – 3% of net sales (2013) 1/3Market overviewIncreasing urbanization drives the demand for earthmoving, tunnelling, road building and other construction equipment.Need for greater food supply and increased mechanization in developing economies, drives demand for agricultural machinery.The off-highway market is influenced by tougher safety and environmental legislation, as well as fuel price pressure.Creates greater demand for electric, hybrid, or traditional drivetrains and products, which weigh less, are more efficient, and have integrated wireless technology linking the equipment, managers, operators, dealers and OEMs together.14 April 20175454
55 SKF’s solutions for Off-highway industry 2/3SKF provides manufacturers and end-users with bearings, seals, lubrication systems, actuators, and simulation tools that enables quick, accurate assessment of real-life fuel efficiency and CO2 emission reduction.Examples of solutionsSKF Agri Hub family that provides improved resistance to corrosion and fertilizer ingress.SKF Extended Life spherical plain bearings for the farming, forestry and construction industries is part of the SKF BeyondZero portfolio
56 Customer case – Off-highway 3/3SKF provides CNH Coex with Y-TECH bearing unitsCNH Coex, the French subsidiary of CNH Global N.V., manufacturer of agricultural machinery, was dissatisfied with the performance of their existing bearing solution for their Grape Harvester.They wanted a solution that could withstand the harsh environment of daily washdowns without corrosion occurring and a solution that would reduce the weight,for instance to limit soil compaction.SKF solved the issue by providing maintenance free and corrosive resistance Y-TECH bearing units which weigh around 50% less than standard cast iron.Case from Annual Report 2013
57 Cars and light trucks – 14% of net sales (2013) 1/3Market overviewGlobal car production has increased by 50 % compared to 10 years ago. Today, there are around 1 billion cars on the roads worldwide.Asia accounts for more than half of the total world production. 25% of all cars are produced in China.Americas and Europe account for 20% each of world production.Increasing global energy demand, ambitious governmental CO2 reduction targets and growing customer demand drives the development of solutions that reduce or eliminate fuel consumption and carbon emissions.14 April 20175757
58 SKF’s solutions for Cars and light trucks 2/3SKF is a strategic partner to major car manufacturers worldwide.Lead times for developing new generations of vehicles is fairly long and SKF is involved in the development process years before production starts.SKF develops products for reducing fuel consumption and emissions, by reducing the friction, weight and size of the solutions, and by integrating sensors.Examples of solutionsSKF Low Friction Hub Bearing Unit - reduces friction by more than 20%, enabling a reduction of CO2 emissions.SKF’s high-pressure valve stem seals - allows increased pressure for maintaining power output when car manufacturers downsize engines to reduce CO2 emissions.
59 Customer case – Cars and light trucks 3/3SKF is a strategic partner and supplier to Chinese Great Wall MotorsSKF was awarded further business in 2013, by Chinese car manufacturer, Great Wall Motors, for high-pressure valve stem seals for engine valve train and bearing retainers for transmissions.The sealing solution allows greater pressure, whichis needed for maintaining power output, when enginesare downsized for reducing CO2 emissions.SKF and Great Wall Motors have also signed a strategic partnership agreement to increase cooperation developing sustainable solutions for energy-efficient vehicles. With solid global engineering knowledge and experience, SKF can help Great Wall Motors to grow faster and improve on both the domestic and foreign markets.Case from Annual Report 2013
60 Vehicle Service Market – 11% of net sales (2013) 1/3Market overviewThe aftermarket follows the development in the overall automotive industry.China is the world’s largest car manufacturing country and the Chinese aftermarket is forecasted to grow in the forseeable future.The overall aftermarket is driven by the continually ageing global car population with long retention times and an increasing amount of electronic devices that require repairing or replacing, which calls for extensive product knowledge.14 April 20176060
61 SKF’s solutions for the Vehicle service market 2/3SKF provides spare parts for cars, trucks and two-wheelers, serving installers through a network of distributors and dealers.SKF has a product portfolio covering more than 20,000 kits, comprehensive local sales forces and distributor networks, technical support, hands-on training and an efficient logistics and delivery set-up.The product offer consists of components and kits – service components bundled together to carry out a complete repair.SKF supports its global distributor network with applications such as smart stock management programmes, fitting instructions and other specific product information.
62 Customer case – Vehicle service market 3/3Wheel-end and engine parts to NorautoThe Spanish distributor and repair shop company Norauto, part of the French Norauto corporation with its 540 branches worldwide, wanted to develop its mechanical business using an experienced wheel-end and engine parts supplier.SKF was chosen to support Noraout’s business due to its reliable, quick deliveries and extensive development plan for marketing activities, technical support and training. SKF’s solutions complement Norauto’s existing range and deliveries began during the year.Case from Annual Report 2013
63 Trucks market – 5% of net sales (2013) 1/2Market overviewLong-term development of the market is related to increasing needfor transport as economies and e-trade grow.New regulations to reduce exhaust emissions and total cost of ownership drive the need for virtually maintenance-free and more energy-efficient solutions.14 April 20176363
64 SKF’s solutions for trucks 2/2SKF serves global truck, bus and trailer market with modules, bearings, seals and mechatronic systems for drivetrain, steering systems and trailer axles.SKF’s solutions help to reduce the total cost of ownership and improve vehicle fuel efficiency.Example of solutionAround 90% of all tyre damage comes from wrong pressure in the tyres, which leads to higher fuel consumption, high tyre wear and safety risks.The new tyre pressure monitoring system monitors the accurate air pressure of each vehicle’s tyres, which reduces fuel consumption and CO2 emissions. Important drivers for the system are safety and cost reduction.The downtime can be reduced by around 40% by optimal tyre pressure. The system is in the final development stages to be launched in 2014.
65 Two-wheelers and Electrical industry – 2% of net sales (2013) 1/4Two-wheelersAsia accounts for 2/3 of the global two-wheeler market.The market is highly dependent on fuel prices that drive the development of fuel-efficient solutions.Electrical industryManufacturers of home appliances, electric motors for use in consumer goods, portable power tools and skates.The production is mainly focused in China, South Korea, Poland, Turkey, Russia, Italy, Germany, Mexico and Brazil, where China and South Korea are growing in importance.14 April 20176565
66 SKF’s solutions for Two-wheelers 2/4SKF provides manufacturers with solutions for engines and transmissions, chassis and suspensions, wheel assembly and racing applications.Examples of solutionsSKF Sealed Energy Efficient deep groove ball bearing - manages friction, grease retention and dust exclusion.SKF StopGo solution for two-wheelers - enables fuel savings of between 6–10%.Integrated monotube seal for the shock absorber. Incorporates five components into one easy-to-install unit and provides reliable sealing over a wide temperature range.
67 Customer case – Two-wheelers 3/4SKF supplies Honda with energy efficient bearingsSKF supplies Honda motorbikes and scooters with SKF Energy Efficient bearings and SKF Rocker Arm Bearings.These solutions help improve the efficiency of the engine making it run smother and reducing fuel consumption. Honda’s main markets are India and Indonesia, but many of their models are sold in various countries around the world.SKF Rocker Arm Bearing (Cam follower unit)Case from Annual Report 2013
68 SKF’s solutions for the Electrical industry 4/4SKF is present in all the major manufacturing regions and providesthe industry with energy-efficient solutions.Example of solutionSKF Drum Support Unit, which reduces energy use with energy-efficient bearings and low friction seals and enables exact alignment of the shaft. Another benefit is the mechanical integration of the washing tank and housing, which reduces the number of parts in the washing machine.
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