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SSKF · Executive Cockpit

Board Pack

Value creation, performance and risk review — FY2025 (Jan–Dec 2025, audited anchor). Bearing Solutions · Specialized Industrial Solutions (SIS) · Automotive (SKF Vertevo).

SEK 91.6 bn

Net sales (FY2025)

Portfolio & capex moves

37,271

Employees

World's largest bearing maker today — clear #1 in industrial bearings

Market position

Listed (Nasdaq Stockholm: SKF B) · FAM/Wallenberg 29.2% of votes · Cevian 8.1% · Chair Hans Stråberg · Rickard Gustafson (President & CEO) · HQ Gothenburg, Sweden

Where we stand

Executive scorecard

SKF · Board Pack · 1 · Executive Summary

Net Sales

SEK 91.6 bn

prior SEK 98.7 bn

Organic Growth (H1 2026)

1.9%

prior -0.4%

Adjusted Operating Profit

SEK 11.7 bn

prior SEK 12.2 bn

Adjusted Operating Margin

12.7%

prior 12.3%

Aftermarket & Services Revenue

SEK 33.5 bn

prior SEK 34.9 bn

Aftermarket & Services Mix

37.0%

prior 35.0%

Net Revenue Retention (top accounts)

106.0%

prior 104.0%

Employees (registered)

37,271

prior 38,743

Executive summary

Growth & profitability

Revenue, EBITDA & mix

SKF · Board Pack · 2 · Performance

Revenue by segment

Bearing Solutions54%

Automotive (SKF Vertevo)26%

Specialized Industrial Solutions (SIS)21%

Bearing Solutions

SEK 49.2 bn

+1.2% · Adj margin 17.5% · Aftermkt 51%

Automotive (SKF Vertevo)

SEK 23.6 bn

-4.3% · Adj margin 3.8% · Aftermkt 36%

Specialized Industrial Solutions (SIS)

SEK 18.8 bn

+4.5% · Adj margin 11.5% · Aftermkt 38%

Portfolio validation

Brand & portfolio economics, margin journey

SKF · Board Pack · 3 · Portfolio

Brand / line	Since	Revenue	Aftermarket	Adj profit Δ	Value capture	Status
SKF	1907	SEK 65.6 bn	SEK 24.9 bn	+SEK 10.6 bn	90%	Integrated
PEER	2008	SEK 900 M	SEK 150 M	+SEK 110 M	85%	Integrated
Lincoln	2010	SEK 2.5 bn	SEK 1.2 bn	+SEK 436 M	95%	Integrated
Alemite	2010	SEK 600 M	SEK 300 M	+SEK 78 M	92%	Integrated
Kaydon	2013	SEK 2.2 bn	SEK 500 M	+SEK 364 M	88%	Integrated
@ptitude / IMx / Axios (condition monitoring)	2015	SEK 2.9 bn	SEK 2.9 bn	+SEK 592 M	80%	In progress
RecondOil	2018	SEK 150 M	SEK 120 M	+SEK 10 M	55%	In progress
Cooper (split-roller)	2020	SEK 450 M	SEK 160 M	+SEK 65 M	70%	In progress
SKF Vertevo	2026	SEK 23.6 bn	SEK 8.6 bn	+SEK 892 M	60%	In progress

The SKF master brand (the industrial core) is fully integrated and carries the base; the newer or transferring lines — SKF Vertevo (the Automotive spin-off, stand-alone since Jan 2026, listing planned Q4 2026), Cooper split-roller, RecondOil and the @ptitude / IMx / Axios condition-monitoring platform — remain in mix-shift and value capture. Lincoln, Alemite, Kaydon and PEER round out the lubrication and specialty portfolio.

Balance sheet & liquidity

Leverage, cash & covenants

SKF · Board Pack · 4 · Capital & Cash

Net Debt / Adj EBITDA

0.8x

target 3.0x

Covenant Headroom

2.2x

target 1.5x

Interest Cover (EBITDA / financial net)

9.3x

target 8.0x

Market Capitalization

SEK 118.0 bn

Net Cash Flow After Investments

SEK 6.9 bn

target SEK 7.0 bn

Cash Conversion Cycle

111d

target 100d

DSO (Days Sales Outstanding)

65d

target 60d

Program Realization (rightsizing & WCM)

70.0%

target 100.0%

Net leverage 0.8x (net debt ~SEK 12.1 bn — SKF definition incl. pensions & leases) is a fortress — 2.2x of headroom to the 3.0× ceiling — funding regionalization, aerospace & super-precision capex (~SEK 4 bn) from within, with net debt/equity ex-pensions just 10.2% vs the <40% target. The path: run-rate free cash flow, working-capital discipline (CCC 111d) and margin expansion toward >17% as the industrial pure-play sharpens — leaving post-spin balance-sheet optionality (bolt-ons, buyback potential), not deleveraging.

Governance

Watch-list & priority actions

SKF · Board Pack · 5 · Risk & Actions

●Reported −7.2% is currency, not demandceo

FY2025 sales fell 7.2% reported but organic was only −0.4% — currency −6.6% (USD/SEK −16.5%). H1 2026 organic already +1.9%.

→ Quote organic for demand and reported for scale; hold tariff-compensating pricing discipline.

●Separation on track for Q4 2026ceo

Vertevo stand-alone since Jan 2026 (own board, own central costs, restated reporting); extra production-line transfers running inside the cost envelope.

→ Hold the window: Board listing proposal → EGM (autumn) → Lex Asea distribution → Q4 2026 listing.

●Fortress balance sheet at 0.8×cfo

Net debt MSEK 12,052 (SKF definition incl. pensions 6,372 + leases 2,895) = 0.8× adjusted EBITDA; net debt/equity ex-pensions 10.2% vs <40% target.

→ Preserve optionality — bolt-ons and potential extra distribution/buyback after the spin.

●IAC guidance BSEK −2.5 to −3.0 for 2026cfo

Separation plus Americas footprint consolidation front-load costs (Q2 2026 IAC −1,004, roughly half separation / half footprint).

→ Keep separation spend inside the announced envelope; track footprint payback quarter by quarter.

●DSO 65 vs 60 target — NWC 30.4% of salescfo

>60d AR ≈ MSEK 2,400; the separation working-capital build dented H1 2026 operating cash flow (Q1 −446).

→ Tighten OEM terms & collections; unwind the separation WC build in H2 2026.

●NSK–NTN merger would displace SKF as #1 by revenueboard

Basic agreement 12 May 2026; joint holding company targeted for Oct 2027 (~24% combined share, press estimate; regulatory risk remains).

→ Press the industrial-bearings lead: aftermarket depth, technology and regionalization — word superlatives carefully.

●Margin expanding through the carve-outboard

Adjusted margin 12.7% FY2025 → 13.7% H1 2026 (Q2 13.9%); rightsizing run-rate ~1.4 of BSEK 2 banked.

→ Stay on the post-spin frame: >17% mid-term, >19% long-term for the industrial pure-play.

●Aftermarket spine holds the cycleboard

Aftermarket & services ≈ MSEK 33,500 (37% of sales); >50% of Industrial revenue is recurring and cycle-dampening.

→ Scale condition monitoring & REP contracts across the 17,000-location distributor network.

Material external signals

[Nasdaq/Press] Q2 2026: organic +1.4%, adjusted margin 13.9% — separation on track for Q4 2026 listing · Automotive (SKF Vertevo)→ margin improving through the carve-out; EGM expected autumn 2026

[News] NSK and NTN agree to merge under a joint holding company — target Oct 2027 · NSK–NTN (competitors)→ would displace SKF as #1 by revenue (~24% combined share, press est.); industrial-bearings leadership holds

[Nasdaq/Press] 'SKF Vertevo' announced as the name of the Automotive spin-off · Automotive (SKF Vertevo)→ vertere (to turn) + evo (evolution); listing Q4 2026 pending Board proposal & EGM

[News] USD/SEK fell ~16.5% through 2025 — FY2025 currency effect −6.6% on sales · Group (FX)→ organic was only −0.4%; quote organic for demand, reported (−7.2%) for scale

AB SKF is listed (Nasdaq Stockholm: SKF B): headline financials are real FY2025 anchors (SEK); granular per-segment / per-program detail is modelled. AI summary generated by Azure OpenAI (GPT-4.1).