1. Alrik Danielson, President and CEO
SKF Q4 results 2018
Alrik Danielson, President and CEO
4 April, 2019

2. Q4 – excellent result and strong cash flow
5.0% Organic sales growth
Net sales of 21,192 M, organic growth 5.0%
Operating profit 2,902 M (2,017)
Operating margin improved to 13.7% (10.4)
Cash flow 4,259 M (1,704)
Proposed dividend of SEK 6.00
2,902 M Operating profit
13.7% Operating margin
4 April, 2019

3. Industrial business performing well; increased volumes in all three main markets, North America, Europe and Asia 8.8% organic growth in Q4 and 9.4% for the full year
4 April, 2019

4. Automotive; organic sales in Q4 declined due to lower car volumes in Europe and to lower sales in Asia % organic growth in Q4 and +2.1% for the full year
4 April, 2019

5. Improving performance towards our targets in 2018
Targets set in 2016 and valid over a business cycle:
7.1%
Organic growth:
Target: 5%
12.9%
Operating margin:
Target: 12%
49%
Net debt / equity:
Target: <80%
27.8%
Net working capital:
Target: 25%
17.6%
Return on capital employed:
Target: 16%
4 April, 2019

6. Continued sales growth in Asia, North America & Europe Organic growth in local currency Q vs Q4 2017
Europe
+1.5%
North
America
+10.8%
Asia/Pacific
+8.1%
Latin
America 0%
4 April, 2019

7. New investment in automated Aerospace production
SKF Aeroengine site in Valenciennes, France
Fully automated production line
Dedicated to the production of SAFRAN's LEAP engine components
4 April, 2019

8. Q4 results – the details Christian Johansson, CFO2
Q4 results – the details Christian Johansson, CFO

9. Sales development 2017 2018 Q4 Q1 Q2 Q3 Organic +8.2 +7.5 +9.0 +6.9
Percent y-o-y Q4 Q1 Q2 Q3
Organic
+8.2
+7.5
+9.0
+6.9
+5.0
Structure
-0.6
-0.7
-0.1
-1.0
Currency
-3.6
-1.9
+3.4
+7.8
+4.8
Net sales
+4.0
+4.9
+11.8
+14.6
+8.8
4 April, 2019

10. Operating profit
4 April, 2019

11. Operating profit
4 April, 2019

12. Performance by customer group
Industrial
Net sales 15,214 M
Organic sales +9%
Operating margin 18.3%, (12.8)
Automotive
Net sales 5,978 M
Organic sales -3.6%
Operating margin 2.1%, (5.0)
4 April, 2019

13. 13.7% Operating margin SKF Group – Q4 2018 Q4 18 Q4 17 2018 2017
Financial net
Taxes ,603 -1,898
EPS
13.7% Operating margin
4 April, April, April, 2019

14. Cash flow after investments before financing*
4 April, 2019

15. Net working capital – finished goods inventories reduced in the quarter
4 April, 2019

16. Net debt/equity ratio continues to improve
4 April, 2019

17. Guidance for 2019* Q1 2019: Financial net: around -200 million
Currency impact on the operating profit is expected to be positive by 140 million compared with 2018, based on exchange rates per 31 December, 2018.
2019:
Tax level: around 28% for 2019, excluding effects from divestments
Additions to property, plant and equipment: around 2,800 million for
* Guidance is approximate and based on current assumptions and exchange rates.
4 April, 2019

18. Summary – 2018 a record year for SKF
11,049 M Operating profit
Organic growth of 7.1%
Record-high sales and operating profit
Strong cash flow
Proposed dividend of SEK 6.00
Expect to see relatively unchanged volumes in Q1
12.9% Operating margin
8,326 M Cash flow
4 April, 2019

19. January 2019: SKF demand outlook Q1 2019
Demand compared to the first quarter 2018 The demand for SKF’s products and services is expected to be relatively unchanged for the Group, including slightly higher demand for Industrial and lower demand for Automotive. Demand is expected to be higher in North America, slightly higher in Asia, relatively unchanged in Latin America and slightly lower in Europe.
4 April, 2019

20. SKF Q4 results 2018 Q & A
4 April, 2019

21. Financial calendar Q4 report 29 January Roadshow Stockholm 30 January
Roadshow US
4-6 February
Carnegie Capital Goods Seminar
7 March
Annual Report
March 2019
BAML London Conference
20 March
Annual General Meeting
28 March
Q1 Report
25 April
4 April, 2019

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. 4 April, 2019