The SKF Group

SKF and Sustainability

Tom Johnstone, President and CEO

November 30th, 2009

To make a decent

profit –in a decent

way

October 30, 2007 © SKF Group Slide 1

SKF -

A truly global company

Established: 1907

Sales 2008: SEK 63,361 million

(~USD 8.5 billion)

Employees: 44,799

Production sites: 110 in 28 countries

SKF presence: in over 130 countries

Distributors/dealers: 15,000 locations

Global certificates:

ISO 14001OHSAS 18001 certification

October 30, 2007 © SKF Group Slide 2

SKF Group Vision

To equip the worldwith SKF knowledge

October 30, 2007 © SKF Group Slide 3

SKF’s

Environmental Care milestones

Environmental Policy

19891989

SKF EnvironmentalReport

19941994

ISO 14001

19981998

Global ISO 14001 certification covering all manufacturing sites, distribution centres, and technical centres –90 sites in 28 countries

SKF’s

Environmental targets:

•

50% solvent reduction by 2012, compared to 2007’s level

•

80% recycling rate for grinding sludge by 2012

•

Water consumption reduction target –

site specific

• CO2

reduction target

October 30, 2007 © SKF Group Slide 4

SKF’s

Environmental Care milestones

Environmental Policy

19891989

SKF EnvironmentalReport

19941994

ISO 14001

19981998

SKF’s

first CO2

target:

-10%

over 5 years adjusted for volume increases(2002 –

2007)

This was achieved in 2005

SKF’s

new CO2

target from 2006:

-5%

absolute reduction annually

CO2

emission reporting and target

20022002

New CO2

emission target

2006

October 30, 2007 © SKF Group Slide 5

SKF Care

Employee Care

Community Care

Business Care

Environmental Care

BeyondZeroTM SKF Care

0

2

4

6

8

10

12

14

2003 2004 2005 2006 2007 2008

Operating margin

October 30, 2007 © SKF Group Slide 6

BeyondZeroTM

0

-

+BeyondZero

Reduce

energy

intensity•

Energy

training

+ energy

toolbox•

Energy

efficient

pumps•

Energy

efficient

motors•

Waste

heat recovery•

Improved

window

insulation

Reduce

carbon

intensity•

On-site

solar power•

Sourcing

renewable

energy

Energy

efficient

bearingsMechatronics

in welding

robotsActuators

in window

facadeBy-wire

auto-throttle

in aerospaceClient

Needs

Analysis

–

Energy

and Sustainability

October 30, 2007 © SKF Group Slide 7

SKF’s

focus on CO2 emissions

2007: 473K tonnes2008: 426K tonnes

2007: 473K tonnes2008: 426K tonnes

2007: 86K tonnes2008: 82K tonnes

2007: 86K tonnes2008: 82K tonnes

2008*: 18K tonnes2008*: 18K tonnes

2008*: 60K tonnes2008*: 60K tonnes

October 30, 2007 © SKF Group Slide 8

SKF –

Internal Energy and CO2

Strategy

Value added =standard cost, ps rate

SupplyCarbon

Intensity

Energy Intensity

Energy Demand

CO2

from Energy Supply CO2

5% Absolute Reduction

October 30, 2007 © SKF Group Slide 9

I) Reduce energy intensity

Compressed air managementfrequency control in honing oil pump motor

Waste heat recycling Building insulation

LED lighting

LEED building certification

-

140 MWh -

226 MWh

-

200 t CO2 -

150 t CO2

October 30, 2007 © SKF Group Slide 10

Energy Reduction Grinding Water System

Grinding

water

pressurePressure

reduction:from

6.5 bar to 3.5 bar

CoolerPressure

difference

reduction:from

1.5 bar to 0.7 bar

System pumpsVariable speed

drive

Filter pumpsVariable speed

drive

Hard Savings:Power

72kW

Energy:

432.000kWh per yearCO2 :

110 Tonnes

pre

year

Costs:

€

43.700

October 30, 2007 © SKF Group Slide 11

II) Reduce carbon intensity

SKF Sweden BTP, Netherlands

Carbon neutral source for building heatingSKF Airasca, Italy (-

2,294 tonnes

CO2)On-site photovoltaic power generation

SKF Schweinfurt, Germany (-365 tonnes

CO2)

SKF European Distribution Centre, Belgium

Green electricity sourcing in :

Total saving

–

10,000 tonnes

CO2 pa

October 30, 2007 © SKF Group Slide 12

SKF –

Internal Energy and CO2

Strategy

Value added =standard cost, ps rate

Energy Demand

CO2

from Energy Supply CO2

Target :-

5% Absolute Reduction pa

2008 Result> -9% CO2 emission

October 30, 2007 © SKF Group Slide 13

SKF’s

Environmental Care milestones

Environmental Policy

19891989

SKF Environmental

Report

19941994

ISO 14001

19981998

CO2

emission reporting and

target

20022002

Life Cycle Management

20092009

New CO2

target

2006

October 30, 2007 © SKF Group Slide 14

SKF Operations

InboundLogistics

Outbound

Logistics

Componentsupply

Material Supply

Use Phase(at Customer)

Disposal

Use Phase(at Customer)

Life Cycle Thinking applied to Carbon Emissions

Energy Demand

CO2

per unit Energy supplied SKF Operations

InboundLogistics

Outbound

Logistics

Componentsupply

Material Supply D

isposalValue Chain

Area = total emissions, tonnes

October 30, 2007 © SKF Group Slide 15

BeyondZeroTM

0

-

+BeyondZero

Reduce

energy

intensity•

Energy

training

+ energy

toolbox•

Energy

efficient

pumps•

Energy

efficient

motors•

Waste

heat recovery•

Improved

window

insulation

Reduce

carbon

intensity•

On-site

solar power•

Sourcing

renewable

energy

Energy

efficient

bearingsMechatronics

in welding

robotsActuators

in window

facadeBy-wire

auto-throttle

in aerospaceClient

Needs

Analysis

–

Energy

and Sustainability

October 30, 2007 © SKF Group Slide 16

SKF Energy

Efficient

(E2) bearings

Deep groove ball bearings

Cylindrical roller bearings

Spherical roller bearings

Tapered roller bearings

October 30, 2007 © SKF Group Slide 17

Energy Efficient Bearings –

The Sangam

Textile Group -

India

SKF E2 energy efficient bearings provide power savings, extended life and R0I of 37 days when tested on Twister Electric Motors at The Sangam

Group Textile Mill.

The customer now plans to expand the use of Energy Efficient Bearings throughout the Sangam

Group.

October 30, 2007 © SKF Group Slide 18

Energy Efficient Bearings –

GlaxcoSmithKline

-

India

SKF E2 energy efficient bearings provide power savings and ROI of 17 days when tested on Cold Water Pump Motors at GlaxcoSmithKline

India.

The customer now plans to install Energy Efficient Bearings on all Cold Water Pump Motors

October 30, 2007 © SKF Group Slide 19

EU Parliament –

2,7 million kWh/year Beverage manuf

–

1 000 m3 water,-

95% lubricants

Business jet –

1 million l of fuel / aircraft SKF

Client Needs Analysis

–

Energy and Sustainability

Deliver higher efficiency for customers

October 30, 2007 © SKF Group Slide 20

Enable cleaner technology for tomorrow

Wind energy –

one of the fastest growing markets for SKF

October 30, 2007 © SKF Group Slide 21

SKF solutions for wind turbine

October 30, 2007 © SKF Group Slide 22

SKF Benefits of the Partnership with Göteborg Energi

•

Wind Power Energy•

Biogas•

District Heating•

District Cooling•

Heat Recovery

•

Supplier of Bearing arrangements•

WindCon, WindLub and other SKF-products for wind turbines in the project.

•

Remote monitoring •

Top of turbine services•

Repairs and Spare part supply

Sustainable Production Arena for R&D

Business opportunity within Solution and Maintenance Service

•

Access to existing wind turbines ownedby Göteborg Energi for testing of SKF products

Building Brand•

Reference Case •

Create Business Opportunities•

SKF focus on Sustainability

October 30, 2007 © SKF Group Slide 23

SKF Care

Employee Care

Community Care

Business Care

Environmental Care

BeyondZeroTM SKF Care

0

2

4

6

8

10

12

14

2003 2004 2005 2006 2007 2008

Operating margin

October 30, 2007 © SKF Group Slide 24

Awards and recognition

October 30, 2007 © SKF Group Slide 25

October 30, 2007 © SKF Group Slide 26