The SKF Group First-quarter result 2005 Tom Johnstone, President and CEO
3 MSEK Net sales Operating profit Operating margin10.0%8.4% Profit before taxes Net profit Earning per share, SEK Cash flow* * After investments before financing. First quarter 2005
4 Areas in focus 2005 Performance Q Operating margin level Maintain a positive price/mix Recovery of raw material cost increase Continued sales growth Maintain organic growth pace Acquisitions Strengthen the platform/segment offer Cash flow In line with net profit, annual basis price/mix 3.6% OK organic growth 11.9% growth by acquisitions 2.3% Ongoing MSEK 144
5 Operating margin* % * excluding restructuring and impairment in Q
6 Operating margin per division* Industrial Service Aero and Steel Electrical Automotive % * excluding restructuring and impairment in Q
7 Growth development / local currency 10 BSEK additional sales = 6 % annual growth rate % Y-o-Y Growth by acquisitions Organic growth 6% total growth 4% organic growth Up to March
8 Inventories as % of annual sales %
9 Cash flow * MSEK * After investments before financing. Including the acquisition price of Willy Vogel AG in the third quarter
10 Net sales development per quarter Q1Q2Q3Q4Q1Q2Q3Q4Q Percent y-o-y Volume Structure Price / Mix Sales in local currency Currency Net sales 2005
11 Sales in local currency % change y-o-y
12 Steel Business - Ovako Overview of "NewCo" Combined steel operations of SKF, Rautaruukki and Wärtsilä Leading producer of long steel products and engineering steels Shareholding SKF 26.5%Rautaruukki 47% Wärtsilä 26.5% Proforma 2004: Targeted completion during Q EBIT86 MEUR 18 production sites Margin 6.7% 2 M tonnes Net Sales MEUR employees
13 Steel Business - Ovako Implications for SKF Supports SKF strategy to focus on front-end activities - close to customer - solutions and services Long term supply agreement - steel moves from fixed to variable cost SKF financial effect, based on 2004 proforma: - annual sales decrease by MSEK capital release of MSEK value of shareholding approx MSEK main ratios improve - Margin, EPS, ROCE
14 April 2005: Outlook for the second quarter The market demand for SKF's products and services in the second quarter is expected to remain on a high level in Europe and North America and to continue to be significantly higher in Asia and Latin America. The manufacturing level will be maintained to ensure a good service level.
15 Volume trend for the second quarter 2005 Europe 57% 20% 15% 5% North America Asia Pacific Latin America Net sales 2004 April 2005 Total Jan 2005 Note: This is the sequential development