1. Alrik Danielson, President and CEO
SKF Q1 results 2017
Alrik Danielson, President and CEO
20 September, 2018

2. 2017 – a busy first quarter Digitalisation and connectivity
New IMx-8 machine health monitoring platform launched
Enlight Centre launched. A next-generation, Internet enabled condition-based maintenance and condition monitoring system
Investments
New fully automated SRB production channel opened in Göteborg, Sweden
Expanding production capacity in Nilai, Malaysia
Structure and Climate
New climate targets launched
Consolidated organizational structure and Group Management 5G
20 September, 2018

3. Industrial digitalisation product releases Q1 2017
SKF Enlight centre for Marine
SKF Multilog IMx-8
Industrial digitalisation product releases Q1 2017
SKF QuickCollect app
SKF QuickCollect sensor
SKF Data Collect app
20 September, 2018

4. 12.0% Operating margin* Q1 summary
Sales SEK M, +10.9% compared to Q1 2016, organic sales +8.0%
Adjusted operating profit SEK M (1 972)
Adjusted operating margin 12.0% (11.2)
One-time items SEK -62 M (-97)
Cash flow SEK 64 M (510)
Profit before tax SEK M (1 658)
12.0% Operating margin*
* Adjusted for items affecting comparability
20 September, 2018

5. Sales development by geography Organic growth in local currency Q1 2017 vs Q1 2016
Europe
+5.0%
North
America
+7.8%
Asia/Pacific
+12.8%
Latin
America
+11.4%
Middle East
& Africa
+9.5%
20 September, 2018

6. Sales development by Customer Industry
20 September, 2018

7. Q1 results – the details Christian Johansson, CFO2
Q1 results – the details Christian Johansson, CFO

8. Sales development 2016 2017 Q1 Q2 Q3 Q4 Organic -6.1 -4.4 -0.6 +1.2
Percent y-o-y Q1 Q2 Q3 Q4
Organic
-6.1
-4.4
-0.6
+1.2
+8.0
Structure
-0.8
-2.0
-1.8
Currency
-3.0
+0.1
+3.7
+4.9
Net sales
-8.9
-8.0
-2.5
+3.1
+10.9
20 September, 2018

9. Organic sales growth
20 September, 2018

10. Adjusted operating profit*
* Adjusted for items affecting comparability
20 September, 2018

11. Operating profit
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12. Performance by customer group
Industrial
Net sales SEK
Organic sales +7.9%
Adjusted operating margin* 14.2%
Automotive
Net sales SEK M
Organic sales +8.4%
Adjusted operating margin* 7.2%
* Adjusted for items affecting comparability
20 September, 2018

13. 12.0% Operating margin* SKF Group – Q1 2017
Financial performance (SEKm)
2017
2016
Net sales
19 601
17 676
Cost of goods sold
Gross profit
4 974
4 394
Gross margin, %
25.4
24.9
Selling and administrative expenses
-2 691
-2 495
Other operating expenses 12
-24
Operating profit
2 295
1 875
Items affecting comparability
-62
-97
Adjusted operating profit
2 357
1 972
Operating margin, %
11.7
10.6
Adjusted operating margin, %
12.0
11.2
Financial income and expense, net
-170
-217
Profit before taxes
2 125
1 658
Taxes
-654
-514
Net profit
1 471
1 144
Basic earnings per share, SEK
3.09
2.40
12.0% Operating margin*
* Adjusted for items affecting comparability
20 September, 2018

14. Cost management
The fixed cost index was 98 at the end of Q1, adjusted for the costs related to the implementation of our new ERP system Unite the index was 96.
The number of employees increased by 652 in the quarter – of which 130 permanent employees, and 522 temporary employees including agency personnel. Staff employees were reduced by 90 people.
Activity-based cost reductions continue with high focus
20 September, 2018

15. Cash flow after investments before financing*
20 September, 2018

16. Net working capital 30.9% of annual sales
20 September, 2018

17. Net debt decreased by 0.9 bn in the quarter
20 September, 2018

18. Guidance for 2017* Q2 2017: Financial net: around -225 million
Currency impact on the operating profit is expected to be around million compared with 2016 based on exchange rates per March 31.
2017:
Tax level: around 30% for 2017, excluding effects from divestments
Additions to property, plant and equipment: around 2,200 million for
* Guidance is approximate and based on current assumptions and exchange rates.
20 September, 2018

19. April 2017: SKF demand outlook Q2 2017
Demand compared to the second quarter 2016 The demand for SKF’s products and services is expected to be higher for the Group and for Industrial. Demand for Automotive is expected to be significantly higher. Demand is expected to be slightly higher in Europe, significantly higher in North America and in Asia and higher in Latin America. Demand compared to the first quarter 2017 The demand for SKF’s products and services is expected to be slightly higher for the Group including Industrial and Automotive. Demand is expected to be relatively unchanged in Europe and in Latin America, slightly higher in North America and higher in Asia.
20 September, 2018

20. Financial calendar Roadshow Stockholm 4 May Q2 report 21 July
31 October
20 September, 2018

21. SKF Q1 results 2017 Q & A
20 September, 2018

22. 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 under the Administration Report; “Risk management at SKF" and "Sensitivity analysis”.

23. 20 September, 2018