2006-09-25 ©SKF SKF Renewable Energy Segments

Slide 1

SKF focus on wind energy market

Presented by Stefan KarlssonGlobal Segment Manager, Renewable Energy

2006-09-25 ©SKF SKF Renewable EnergySlide 2

• Fast growing industry (>20%/year in average, last 5 years)

• A young technology, in extremely rapid development, short product-cycle.

• Developing from local ventures to major mainstream energy generation.

• Growing truly global, also concerning manufacturing plants.

• New markets emerging; China, UK, Brazil, Portugal, Australia, Canada

• Business gradually maturing; M&A resulting in few large players.Recent entrance of financially strong actors (GE, Siemens, E.ON, etc)

• Large business potential in upcoming offshore installations

• Driven, and limited, by political and environmental decisions.

Characteristics of wind energy market

2006-09-25 ©SKF SKF Renewable EnergySlide 3

Wind Energy is a strategic key-market for SKF

SKF Annual Report 2005

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Strategic Alignment with Business Community……The SKF Wind Energy Vision

SKF GROUP VISIONSKF GROUP VISIONTo To equipequip the world with SKF the world with SKF knowledgeknowledge

EWEC Vision;EWEC Vision;""Wind force 12Wind force 12" aim to have 12% " aim to have 12% of worlds electricity needsof worlds electricity needssupplied by wind power by 2020.supplied by wind power by 2020.

SKF SKF Wind Energy Wind Energy VisionVision"SKF, a Driving Force in "SKF, a Driving Force in Wind Energy Wind Energy Development"Development"

2006-09-25 ©SKF SKF Renewable EnergySlide 5

SKF Wind Energy Mission

To To developdevelop SKFSKF´́s position in the s position in the windenergywindenergy business, business, from a from a preferred component supplier preferred component supplier to the first to the first choice developmentchoice development partner partner for the for the industries leading manufacturersindustries leading manufacturers,,and a and a competence suppliercompetence supplier in operation & in operation & maintenancemaintenance managementmanagementfor the for the windparkwindpark operations operations leading utilitiesleading utilities..basedbased on on experiences experiences and and competence competence from from our our 5 5 platformsplatforms

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SKF Platforms

Bearings

LubricationSystems

Mechatronics Services

SealsCombined into new

offers

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SKF applications in wind energy

Pitch bearings

Yaw bearing

Mainshaft bearings

Mainshaft housingsand locknuts

Gearbox bearings

Generator bearings

Condition Monitoring systems

Couplings

DistributedLubrication System

DiagnosticsServices

Repairs &Refurbishment

Sealing solutions

Bolt tentioning systems

EngineeringConsultancyServices

Plain bearings

2006-09-25 ©SKF SKF Renewable EnergySlide 8

SKF recent market launches towards wind energy business

New pitch bearingdesign with improvedcorrosion protection

DRTRB-unit with segmented cagefor minimized friction

New CRB-design withextra-high carrying capacityfor wind-gearboxes.

XL Hybrid bearingswith ceramic ballsfor superior insulation

WindCon 2.0/WebconIntranet supervisedcondition monitoring

Automatic centralizedlubrication add-on kitsfor established wind parks

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SKF Key-locations for Wind Energy Market

Göteborg, Sweden;* Sperical Roller Bearings* CARB-Bearings* Development Center

Hannover, USA* Spherical Roller Bearings

Landskrona, Sweden;* Radial Shaft Seals

Nieuwegein, The Netherlands;*European Research Center* WindCon product management

Avallon, France;* Pitch & Yaw- Slewing Bearings* Development Center, Slewings

Steyr, Austria;* Hybrid bearings for wind-generators* INSOCOAT & No-Wear coated bearings

Luleå, Sweden;* WindCon condition monitoring

Hofors, Sweden* Mainshaft Shrink Disks

Katrineholm, Sweden* Housings, Casted Products

Pune, India;* Housings, Casted Products

Dalian, China (ramp-up 2006);* Spherical Roller Bearings* Slewing Bearings

(Background: MW of wind energy installed per market end 2005)

Hockenheim, Germany;* Central Lubrication Systems

Schweinfurt, Germany;* DRTRB-unit ("Nautilus")* Cylindrical Roller Bearings* Tapered Roller Bearings* Monitoring Diagnostic Center* Development Center

2006-09-25 ©SKF SKF Renewable EnergySlide 10

China - An emerging, but rapidly growing wind energy-market

Goldwind

Dong Fang/REpower

Xian/Nordex

Windey

Vestas

GE-Wind

Suzlon

Gamesa SKF-Dalian

Historically installed 1 267 MW (end 2005)

Chinese authorities plan to have 30 000 MW of wind energy installed by 2020.

A majority of this is planned to be manufactured locally,through a 70% local content requirement on windturbines

Acciona

2006-09-25 ©SKF SKF Renewable EnergySlide 11

SKF Large Size Bearing Capacity Development

SKF develops manufacturing capacity in line with plans (rolling forecasts) from our key-customers in wind energy business community.

Being a truly global company, SKF is prepared to develop manufacturing capacity in new emerging markets, when justified.

Development of new manufacturing capacity has a long leadtime;

For elimination of bottlenecks (new machinery leadtimes); 12-30 months

For a complete new manufacturing line; 18-30 months

For a new greenfield manufacturing unit; 2-6 years (local variations)

* Have we discussed your projected capacity requirements 2008-2010 ??

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Wind Energy Market Growth andSKF Large Size Bearing Capacity Development

80%

100%

120%

140%

160%

180%

200%

220%

2004 2005 2006fc 2007 fc 2008 fc

Global WTG MW-installation (BTM 2003)

80%

100%

120%

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2004 2005 2006fc 2007 fc 2008 fc

Global WTG MW-installation (BTM 2004)Global WTG MW-installation (BTM 2003)

80%

100%

120%

140%

160%

180%

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220%

2004 2005 2006fc 2007 fc 2008 fc

SKF LSB Manufacturing capacity Global WTG MW-installation (BTM 2004)Global WTG MW-installation (BTM 2003)

80%

100%

120%

140%

160%

180%

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220%

2004 2005 2006fc 2007 fc 2008 fc

SKF LSB Manufacturing capacity Global WTG MW-installation (BTM 2005)Global WTG MW-installation (BTM 2004)Global WTG MW-installation (BTM 2003)

SKF is well positioned in emerging offshore market

•> 1 MSEK of SKF products per turbine,on several MW-offshore turbine types.

•Over 7 000 MW forecasted to be installedoffshore globally between 2007 and 2010.

•SKF mainshaft bearings and WindCon condition monitoring system will be equippedon a high number of offshore turbines.

2006-09-25 ©SKF SKF Renewable EnergySlide 14

SKF key focus in wind energy business

• "Win with the winners", globally, also through installation of new capacity in line with key-customers expansion.• Expand our offering range within entire value chain• Develop more customer value added solutions• Expand the marketplace, through maintenancesolutions.