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 SKF Nine-Month Report 2016
   Wednesday, October 26, 2016 7:24:00 AM ET

Regulatory News:

SKF (STO:SKFA) (NQB:SKFRY) (STO:SKFB) (LSE:SKFB)

Alrik Danielson, President and CEO:

"Organic sales were relatively unchanged compared to last year. According to seasonality, organic sales were lower compared with the second quarter.

Net sales in the quarter were SEK 17.9 billion, operating profit was SEK 2 191 million and our operating margin was 12.2%. Excluding positive one-time items of SEK 380 million, operating profit was SEK 1 811 million and operating margin was 10.1%.

Our automotive business continues to improve its performance, in line with the ambitions set out in the profit improvement programme which was launched last year, with an operating margin excluding one-time items of 6.6%. Organic sales increased by 4.4% in the quarter compared with the corresponding quarter last year, driven mainly by strong growth in Asia.

Our industrial business delivered an operating margin, excluding one-time items of 11.7%, a continued resilient performance. Although the rate of decline in demand in North America and Asia has diminished, market conditions continued to be challenging during the third quarter.

Cash flow generation was a solid SEK 1 816 million in the quarter, excluding the effects from divestments.

Investments in the implementation of world-class manufacturing technologies in our spherical roller bearing factories in Gothenburg and Flowery Branch are progressing as planned. Similar technologies and processes are to be introduced across other product lines as part of our strategy to improve the flexibility and cost-competitiveness of our factories.

Entering the fourth quarter of 2016, demand for our products and services is expected to be relatively unchanged both compared to the same period last year and sequentially."

Key figures, SEKm                                                   Q3 2016   Q3 2015   YTD 2016   YTD2015
Net sales                                                                              17 912                       18 367                       54 002                        57 782
Operating profit excl. one-time items                                                  1 811                        1 976                        5 803                         6 929
Operating margin excl. one-time items, %                                               10.1                         10.8                         10.7                          12.0
One-time items in operating profit                                                     380                          -151                         138                           -1 000
Operating profit                                                                       2 191                        1 825                        5 941                         5 929
Operating margin, %                                                                    12.2                         9.9                          11.0                          10.3
Profit before taxes, excl. operating and financial one-time items                      1 669                        1 629                        5 225                         6 231
Profit before taxes                                                                    2 049                        1 348                        5 363                         5 181
Net cash flow after investments before financing                                       1 554                        1 808                        6 289                         4 450
Net sales change y-o-y, %:   Organic   Structure   Currency   Total
Q3 2016                                         -0.6                         -2.0                           0.1                           -2.5
YTD                                             -2.5                         -2.4                           -1.6                          -6.5
Organic sales change in local currencies, per region y-o-y, %:   Europe   North America   Latin America   Asia   Middle East & Africa
Q3 2016                                                                             -0.6                        -3.5                               -6.5                               3.8                       0.3
YTD                                                                                 2.0                         -8.3                               -4.1                               -3.8                      1.0

Outlook for the fourth quarter 2016

Demand compared to the fourth quarter 2015 The demand for SKF’s products and services is expected to be relatively unchanged for the Group and for Industrial. Demand for Automotive is expected to be slightly higher. Demand is expected to be relatively unchanged in Europe, lower in North America, slightly higher in Asia and higher in Latin America.

Demand compared to the third quarter 2016

The demand for SKF’s products and services is expected to be relatively unchanged for the Group including both Industrial and Automotive. Demand is expected to be slightly higher in Europe, lower in North America and relatively unchanged in Asia and in Latin America.

A teleconference will be held on 26 October at 14:00 (CEST):

SE: +46 8 5065 3937

UK: +44 20 3427 1912

US: +1 646 254 3360

You will find all information regarding the SKF nine-month report 2016 on the Group’s IR website.

Aktiebolaget SKF (publ)

The information in this press release is information which AB SKF is required to disclose under the EU Market Abuse Regulation (EU) No 596/2014 and pursuant to the Securities Markets Act. The information was provided by the above contact persons for publication on 26 October 2016 at 13:00 CEST.

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 17,000 distributor locations worldwide. Annual sales in 2015 were SEK 75 997 million and the number of employees was 46 635. www.skf.com

(R) SKF is a registered trademark of the SKF Group.

This information was brought to you by Cision http://news.cision.com

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20161026005857r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20161026005857/en/

SOURCE: SKF

SKF 
PRESS: 
Theo Kjellberg 
Director 
Press Relations 
tel: +46 31 337 6576 
mobile: +46 725-776576 
e-mail: theo.kjellberg@skf.com 
or 
INVESTOR RELATIONS: 
Patrik Stenberg 
Head of Investor Relations 
+46 31-337 2104 
+46 705-472 104 
patrik.stenberg@skf.com


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