SKF Year-end report 2013

Tom Johnstone, President and CEO:
“During the quarter SKF completed the acquisition of Kaydon which enables us to
better support our customers with a more complete offer. Their sales and
operating profit developed as planned and the integration into the Group is
going very well.
  Operational cash flow for the Group was good and sales in total developed in
line with expectations sequentially and grew strongly compared to the weak
fourth quarter in 2012. The mix was more negative than expected due to stronger
automotive sales and industrial OEM sales. We continued to take steps to support
our profitable growth. We gained a number of important new orders in all three
business areas. We opened 4 new SKF Solution Factories in the quarter and now
have 27 worldwide. Investment in R&D increased in the year and the number of
patents was up over 10%. We have also announced the establishment of 2 new
Global Technical Centres in Europe which will further strengthen our R&D
activities.
  Profit was heavily impacted in the fourth quarter by the provision for the
expected fine from the European Commission and one-off costs primarily related
to the acquisition of Kaydon and restructuring. It was also impacted by steps
taken to reduce inventory and by the negative mix.
  Looking forward we expect demand to be slightly higher compared to the first
quarter last year and to the fourth quarter.”

Key figures                 Q4 2013  Q4 2012  Full year 2013  Full year 2012
(Kaydon Corporation is
included from 16 October
2013)
Net sales, SEKm             16,430   14,984   63,597          64,575
Operating loss/profit,      -1,547   1,221    3,693           7,314
SEKm
Operating profit excl. one  1,803    1,521    7,568           7,754
-time costs, SEKm
Operating margin, %         -9.4     8.1      5.8             11.3
Operating margin excl. one  11.0     10.2     11.9            12.0
-time costs, %
Loss/profit before taxes,   -1,760   969      2,821           6,408
SEKm
Net loss/profit, SEKm       -2,043   995      1,044           4,816
Basic earnings per share,   -4.57    2.12     2.00            10.23
SEK

The operating loss/profit for Q4 includes one-time costs of SEK 3,350 m (300),
whereof SEK 3,000 m relates to a possible amount of a fine in relation to the
ongoing investigation by the European Commission, SEK 260 m relates to the
acquisition of Kaydon and SEK 90 m (300) to other one-time costs. The full year
results include one-time costs of SEK 3,875 m (440).

Net sales change y-o-y,  Volume  Price/  Structure  Currency  Total
in SEK,attributable to:          mix                effect
Q4 2013                  7.1%    -0.2%   4.8%       -2.1%     9.6%
Full year 2013           -0.7%   0.0%    2.5%       -3.3%     -1.5%

Sales in the fourth quarter in local currencies and excluding structure
increased by 3.4% in Europe, by 3.8% in North America, by 10.5% in Latin
America, by 14.7 % in Asia and by 15.8% in Middle East and Africa.
Manufacturing in the fourth quarter was higher compared to last year.
Sales for the full year in local currencies and excluding structure decreased by
2.7% in Europe and by 2.5% in North America. In Asia they increased by 1.6%, in
Latin America by 10.3% and in Middle East and Africa by 3.3%.
Manufacturing for the full year was relatively unchanged compared to last year.

Dividend proposal
The Board has decided to propose a dividend of SEK 5.50 per share to the Annual
General Meeting.

Outlook for the first quarter of 2014
Demand compared to the first quarter 2013
The demand for SKF’s products and services is expected to be slightly higher for
the Group, Europe and North America. It is expected to be slightly lower in
Latin America and higher in Asia Pacific. For Strategic Industries it is
expected to be relatively unchanged, for Regional Sales and Service slightly
higher and for Automotive higher.
Demand compared to the fourth quarter 2013
The demand for SKF’s products and services is expected to be slightly higher for
the Group, Europe and North America. It is expected to be relatively unchanged
in Asia Pacific and slightly lower in Latin America. For Regional Sales and
Service and Automotive it is expected to be slightly higher and for Strategic
Industries relatively unchanged.

Manufacturing
Manufacturing is expected to be higher year over year and slightly higher
compared to the fourth quarter.

Gothenburg, 28 January 2014

Aktiebolaget SKF
       (publ)

A teleconference will be held on 28 January at 14.00 CET, 13.00 (UK), 08.00
(US):
SE: +46 (0)8 506 307 79
UK: +44 (0)844 571 8957
US: +1 866 682 8490

You will find all information regarding SKF Year-end results 2013 on
the IR website.
investors.skf.com/quarterlyreporting

AB SKF is required to disclose the information provided herein pursuant to the
Securities Markets Act and/or the Financial Instruments Trading Act. The
information was submitted for publication at around 13.00 on 28 January 2014.
For further information, please contact:
Press Relations: Ingalill Östman,  46 31-337 3260, mobile: 46 706-973260,
ingalill.ostman@skf.com
Investor Relations: Marita Björk, 46 31-337 1994, mobile: 46 705-181994,
marita.bjork@skf.com
SKF is a leading global supplier of bearings, seals, mechatronics, lubrication
systems, and services which include technical support, maintenance and
reliability services, engineering consulting and training. SKF is represented in
more than 130 countries and has around 15,000 distributor locations worldwide.
Annual sales in 2013 were SEK 63,597 million and the number of employees was
48,401. www.skf.com

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