A changing world,

a changing SKF

SKF Group

SKF and the world

SKF vision and mission

A world of reliable rotation

The undisputed leader
in the bearing business

SKF Group

SKF Group

Changing business reality

Globalization

Technology

More competitive
landscape across the
value chain

Automation,
electrification and
digitalization drive the
change

Chinese/Indian
companies going
global
Overcapacity in heavy
and investmentdriven industries
Slowing global
industrial growth

SKF Group

SKF Group

Competitors

New technology
requirements for new
applications
Technology for cost
competitiveness
Technology to enable
flexible production
with zero resetting

New, emerging
competitors gaining
ground

Chinese competitors
strengthen position
fueled by local
market
Asia now represents
50% of global market

Customers

New Asian customers

going global
More transparent
supplier market gives
stronger buying power
Strong price / cost
focus
Tougher competition
and SKF traditional
customer base under
competitive pressure

The global bearing industry is changing

SKF needs to respond to the new reality

Slow industrial growth is here to stay

Asia continues to grow and is now the

dominant market

Chinese competitors gaining market

share; supported by geographical
exposure and cost competitiveness

Source: BMI 2002-2014. Size of market calculated in EUR based on annual average exchange rate for the actual year
SKF Group

SKF Group

Two different value propositions in focus

SKF can grow with profit
Value propositions

Rotating
equipment
performance

SKF opportunities
Customer need:
I want your products and my assets
to reach technical end of life with
trouble-free operation
Total cost of ownership
Grow market size

Product

Improve equipment performance

leveraging our technologies

Customer need:
I want on-time delivery, quality and
field performance, flawless launches of
new products, technology and price
Time and delivery
Grow our market share

SKF Group

SKF Group

Competitive product offers

fulfill customer requirements

We must grow our product sales

Regain
business

Competitive
offers

Right cost,
right quality

SKF Group

SKF Group

Revisit and win back lost business, hunt for new

Simplify and strengthen collaboration between sales units and

factories

Deliver the right product for the application

Ensure it is easy to select and buy our products

World class manufacturing, optimized logistics and purchasing

Show personal accountability to service our customers and win

business

Give our customers the best technical support, with access to our
development tools and application engineering

Cost obsession, perfect quality and reliable delivery

Products you can trust

We must grow our rotating equipment

performance business with profit
Focused
offers

Enable
sales

Get new
business

SKF Group

SKF Group

Define target industries and applications to grow our market profitably

Define our rotating equipment performance offer today and tomorrow

Focus on replication of success stories

Create new ways to get paid, e.g. through performance based pricing

Enable more bearing sales

Leverage all technologies to improve customers equipment

performance

Drive consultative selling behaviour

Enable front-line sales to promote rotating equipment performance
offers to their customers

Enable distributors to find new ways to grow through SKFs rotating

equipment performance offers

Our change starts with our behaviours

Stay hungry
for results

For SKF to win

The customers
The business
The market leadership

Take purposeful action

Customer first
outside in
Break internal borders
Sense of
ownership
Personal accountability
Sense of
urgency
Willingness to change

we all need to change our behaviours

SKF Group

SKF Group

Accelerate Asia

This is SKF in Asia today

Sales 2015: ~ 20 BSEK
Beijing

Employees: ~ 12,000

Dalian
Taegu
Qingdao
Busan

Jinan

Haridwar

Changshu

Wuhu

Pinghu

Changshan

Sales offices: 66

Manufacturing Sites: 29
Distributors: ~ 800
Distributor Locations: ~ 1000

Manufacturing site
SKF Group

SKF Group

Changzhou
Ningbo

Xinchang

Ahmedabad
Pune

Global Technical Centers: 2

Shanghai

Taipei

Bengaluru
Mysore

Nilai

Jakarta

SKF in Asia
The Market

Ourselves

Our opportunities

Contains some of the worlds largest

and/or fastest growing industrial
economies

We invested
relatively much in
Asia that needs to
be better utilized,
while our global foot
print continue to
align

We are the main region to increase the

probability of success in implementing
SKFs standard competitive product
lines, and gain share profitably

Consumes half of the worlds bearing

demand, the most important region for
SKF to grow share
Global leaders are losing share to new
Asian competitors, valid for our
customers, our industry and our
suppliers
An extremely tough battlefield as home
to many strong and emerging
competitors, who all have well
established foot print likely adapting to
customers better than SKF
Its huge market demands, supply
capabilities and competition will drive
harder in speed, aggressiveness and
service mindset than other regions

SKF Group

SKF Group

We have well
established sales
operation coverage
in Asia and SKFs
distribution network
is largely mono
brand, a competitive
strength we can
better utilize

We can better connect and interact so

utilize regionally and globally available
strength, competence and invested
infrastructure to capture market
opportunities
We can develop more Asian leaders,
cascading best practices and spirit of
speed to support SKF in meeting its
globalization challenges
We are the region with the biggest
possibility to support SKF to be THE
undisputed leader in the bearing
business

The main goals of SKF Asia

Grow market share profitably by being THE
clear market leader
Sync with winning customers needs to create
and capture value
Be the cornerstone to launch SKFs competitive
product offers
Build a highly capable organization to best utilize
our invested infrastructure, develop a foot print
well aligned to the market
Capture regional synergies, re-energize and
increase productivity to win in a slowing market
growth dynamic
Improve purchasing in the region to reach a
leading position
Be THE engine in SKF to cultivate the mindset
of Service, Agility, Speed and Aggressiveness
(SASA)
SKF Group

SKF Group

Industrial Sales Asia

Industrial Sales Asia
Patrick Tong

HR Connie Cheng

Business Dev. Gavin Garland

Controlling Arun Mascarenhas

Quality NN

Industrial Sales SEA

Gavin Garland

SKF Group

SKF Group

Industrial Sales India

Shishir Joshipura

China & Industrial

Sales NEA
Patrick Tong

Our key priorities and KPIs

Key prioritized actions

Improve sales management to increase go to market speed and

performance, fully utilize and improve the invested infrastructure

Implement and deliver Competitive Product Offer to pursue competitive

value proposition, and regain lost ground

Capture regional synergies in business prospects and talents

Increase competitiveness in purchasing performance for cost saving and

cash

Drive/improve logistic projects to deliver best customer experience

Lagging KPI

Leading KPI

Gain in market share,

growth
Productivity, profitability
& cash
Locally competitive
sales ratio
Cost reduction and
savings

SKF Group

SKF Group

CRM related targets that increase opportunities, new

customers and new business pipeline performance
Customer projects (NCO etc) scale and performance
Key milestones to succeed in new standard product lines
Indexes that drive China purchasing performance
Synergy projects effectiveness, indexes of business successes
Competence gap closing, leadership succession
Behavioral indexes confirmed by business successes and
customer preferred performances

Directional targets for SKF in Asia by 2020

1/3

1/3 of SKF Group Sales

BOI increase ratio double the annual sales growth rate

Higher net cash generation efficiency to sales, after self

funded CAPEX

SKF Group

SKF Group

Driving change with purposeful actions

Asia management meeting (Mar 1-3) define direction, key goals & roll out plan
China manufacturing roll out meeting (Mar 7-8) to prioritize improvement and synergies
focuses (Cost, Quality, Service, Foot print)
China purchasing roll out meeting (Mar 11) to initiate improvement road map
Market input from Asia product managers to B&PD leaders (Mar 21-24)
Develop market picture (customer potential/need, competition) of competitive offers for main
product lines in focused OEM segment

Asia segment and value proposition development plan

Accelerate sales to increase utilization of released assortment in Asia foot print
Asia sales launch meeting (Apr 21) alongside sales leadership training
Prepare further assortment releases for invested Asian factories, validated by market potential
and total SKF Group financial benefits

Identify and develop Asian leaders and talent pool, focus on leadership that
reinforce needed mindset and behavioral changes live SASA

SKF Group

SKF Group

The Formula ONE Race

Speed is not enough, its about

ACCELERATION
while braking in areas that dont add value

Its UP TO US

SKF Group

SKF Group