SKF Half-year report 2007

SKF reports record sales and profit for the second quarter of 2007. Operating profit increased by 18.6% and sales were up 11.9%. Basic earnings per share increased by 17.8%. The outlook is for continued good volume growth for the third quarter of 2007.

• Net sales for the second quarter of 2007 were SEK 14,963 million (13,373), and for the first half-year SEK 29,334 million (26,662).

• Operating profit for the second quarter was SEK 2,019 million (1,702), and for the first half-year SEK 3,905 million (3,311). The operating margin for the second quarter was 13.5% (12.7), and for the first half-year 13.3% (12.4).

• Profit before taxes for the second quarter was SEK 1,957 million (1,520). The profit before taxes for the first half-year was SEK 3,782 million (3,119).

• Net profit for the second quarter was SEK 1,274 million (1,071). Net profit for the first half-year was SEK 2,488 million (2,209).

• Basic earnings per share for the second quarter were SEK 2.71 (2.30), and for the first half-year SEK 5.28 (4.75). Diluted earnings per share for the second quarter were SEK 2.70 (2.30), and for the first half-year SEK 5.26 (4.74).

The increase of 11.9% in net sales for the quarter, in SEK, was attributable to:
volume 6.9%, structure 4.6%, price/mix 2.7% and currency effects -2.3%.
For the first half-year, the increase of 10.0%, in SEK, was attributable to:
volume 7.4%, structure 4.4%, price/mix 2.2% and currency effects -4.0%.

Sales development in the second quarter (excl. structural effects)
Sales in the second quarter of 2007, calculated in local currencies and compared to sales in the same quarter last year, were significantly higher for the Group. Sales were significantly higher for the Industrial Division and the Service Division and higher for the Automotive Division. Sales were significantly higher in Europe, Asia and Latin America. Sales in North America were higher.

The manufacturing level for the second quarter was unchanged compared to the first quarter 2007 and significantly higher compared to the second quarter last year.

Outlook for the third quarter of 2007 (compared to the second quarter 2007)
The market demand for SKF's products and services in the third quarter of 2007 is expected to be higher for the Group. The demand is expected to be higher in Europe and Latin America, significantly higher in Asia and relatively unchanged in North America. The demand is expected to be higher in the Industrial and Service Division and slightly higher in the Automotive Division.

The manufacturing level for the third quarter 2007 will be unchanged compared to the second quarter 2007, while lower in absolute terms due to normal seasonality, and significantly higher than the third quarter 2006.