2024
ANNUAL AND
SUSTAINABILITY REPORT
THIS IS SKF
SKF Group
................................................................................................................. 3
Industrial and Automotive businesses
...................................... 5
2024 in brief
........................................................................................................... 6
President’s letter
............................................................................................... 7
Why invest in SKF?
.......................................................................................... 10
Strategic focus: Separation of
our Automotive business
......................................................................... 11
STRATEGY AND VALUE CREATION
....................................... 12
Drivers for long-term sustainable growth ............................... 13
Our strategy: Intelligent and clean ................................................. 14
Growth areas ............................................................................................. 15
Growth enablers .................................................................................... 17
Strategic focus: Innovation
................................................................... 18
Long-term targets ............................................................................................ 19
THE BEARING MARKET
........................................................................ 21
The global bearing market ...................................................................... 22
The bearing market, by region ............................................................ 23
SKF’s global presence ................................................................................. 24
Strategic focus: Regionalization
...................................................... 25
RISKS AND THE SHARE
....................................................................... 26
Risk management ............................................................................................. 27
The SKF share ...................................................................................................... 29
Capital structure, financing, credit rating
and dividend policy
........................................................................................ 31
Nomination of Board members and
notice of Annual General Meeting
.................................................. 31
FINANCIAL STATEMENTS
................................................................. 32
Consolidated income statements .................................................. 33
Consolidated statements
of comprehensive income
....................................................................... 33
Consolidated balance sheets .............................................................. 35
Consolidated statements of cash flow ...................................... 37
Consolidated statements of changes in equity ............... 40
Notes to the consolidated financial statements ............ 41
FINANCIAL STATEMENTS,
PARENT COMPANY
..................................................................................... 69
Parent Company, AB SKF ......................................................................... 69
Parent Company income statements ......................................... 69
Parent Company statements of
comprehensive income
.............................................................................. 69
Parent Company balance sheets ..................................................... 70
Parent Company statements of cash flow ............................. 71
Parent Company statements of changes in equity ...... 71
Notes to the financial statements
of the Parent Company
............................................................................... 72
Proposed distribution of surplus ..................................................... 78
Auditor’s Report
................................................................................................. 79
SUSTAINABILITY REPORT
................................................................ 81
Sustainability targets .................................................................................. 82
General information ....................................................................................... 83
Environmental ...................................................................................................... 96
Social ............................................................................................................................. 124
Governance ............................................................................................................. 137
Auditor’s Limited Assurance Report on the
Sustainability Report and statement regarding
the Statutory Sustainability Report
............................................. 149
ADMINISTRATION REPORT
The Administration Report has been
audited by SKF’s external auditors.
See the Auditor’s Report on pages
79–80.
SUSTAINABILITY REPORT
Sustainability disclosures in the
Annual Report have undergone limited
assurance engagement by SKF’s
auditors. See the Auditor’s Limited
Assurance Report on the Sustainability
Report and statement regarding the
Statutory Sustainability Report on
page 149. The definition of the
Statutory Sustainability Report is
presented on page 83.
CORPORATE GOVERNANCE
REPORT
The Corporate Governance Report
examined by the auditors can be found
on pages 150–160. The Auditor’s Report
on the Corporate Governance Report
can be found on page 161.
REMUNERATION REPORT
The Remuneration Report can be
found on pages 168–174.
Contents
CORPORATE GOVERNANCE REPORT ................................ 150
Board of Directors
............................................................................................ 155
Group Management
........................................................................................ 158
Auditor’s Report on the
Corporate Governance Report
........................................................... 161
GROUP DATA
....................................................................................................... 162
Seven-year review
........................................................................................... 162
Three-year review
............................................................................................ 163
Per-share data
...................................................................................................... 163
Distribution of shareholding
................................................................. 163
Definitions
................................................................................................................ 164
Alternative performance measures
.............................................. 165
General information
....................................................................................... 167
REMUNERATION REPORT ................................................................. 168
THIS
IS SKF
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PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
around
20% of all
energy
produCed
is used to
overCome
friCtion.
Today, around 20% of all energy is spent overcoming friction. At SKF, we fight
friction to reduce energy waste and make the most of the resources around us.
As a leading technology and engineering company, we deliver value at every
step of our customers’ journey. From the design phase, integrating our solutions
into customers’ products, to ongoing support throughout their lifecycle, we
provide peace of mind.
Built on a century of expertise and a profound understanding of our customer
applications, we’ve established a global presence and a brand trusted across
industries. This allows us to offer tailored solutions – whether optimizing for
speed, durability or efficiency – paving the way for a sustainable, resource-
efficient future.
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Our offering
With hands-on experience in over 40 industries, we
provide a comprehensive portfolio and knowledge
built on our core technology platforms: bearings
and bearing units, seals, lubrication systems, intelli-
gent solutions, such as condition monitoring, and
services. By integrating these platforms, we deliver
customized solutions that combine products, tech-
nologies, and services with flexible new business
models to meet each customer’s unique needs.
Bearings and bearing units
Seals
Lubrication systems
Intelligent solutions
Services
Our presence
In 1907, SKF patented the double row self-aligning
ball bearing and became a global company in just
ten years. Today, SKF is a trusted and leading global
industrial brand with a presence in 130 countries.
We operate across four regions, to serve customers
with speed and responsiveness.
38,743
employees
130
countries
>17,000
distributors
Net sales by geographic area
China and
Northeast Asia, 18%
India and
Southeast Asia, 10%
The Americas, 31%
Europe, Middle East
and Africa, 41%
Share of Group net sales
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Our offering
• Supplying more than 40 industries globally with
The Industrial business
1) Adjusted for items affecting comparability.
2) Total value of accessible bearings market translated to SEK.
The Automotive
business
Our offering
• Customized bearings, seals and related products for
e-powertrain, driveline, engine, wheel-end, suspen-
sion, and steering applications to manufacturers of
electrical vehicles and commercial vehicles.
• Supplying the vehicle aftermarket with spare parts,
both directly and indirectly through a network of
more than 10,000 distributors.
Our position
One of the leaders in innovative bearing products
to drive the shift to electrification and ensure the
highest efficiency in electric and commercial
vehicles. A strong global position in the after market
with an extensive product assortment and distribu-
tion network.
The automotive bearings market 2024
2)
Estimated value 155–175 SEK bn
Development –3 to –5%
of net sales
70%
of net sales
30%
of operating profit
1)
89%
of operating profit
1)
11%
Our position
A leading position in industries such as railway,
aerospace, heavy industries and industrial
distribution markets, and a prominent position
in other industries.
The industrial bearings market 2024
2)
Estimated value 310–330 SEK bn
Development –5 to –7%
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2024 in brief
0
5
12
222120 23 24
15
Cash flow
2)
5.2
8.3
13.8
10.8
5.6
SEK billion
0
25
50
75
222120 23 24
120
100
Net sales
81.7
96.9
103.9
98.7
75.0
SEK billion
0
5
15
10
23 24222120
%
12.3
13.3
12.5
12.3
10.5
Operating margin
1)
Resilient margin in a soft market
We upheld a resilient adjusted operating margin
of 12.3%, driven by solid cost management and
robust price/mix actions. This was despite de -
clining volumes in a weak market environment
and significant negative currency effects. Net
sales declined by 5.4%.
Continued strong financial position
We maintained our solid financial position with
a robust balance sheet and strong cash flows.
This enabled us to continue investing in long-term
profitable growth initiatives, including innovation,
enhancing our value chain and more actively ex -
ploring smaller acquisition opportunities. As of
31 December, net debt/EBITDA was 1.1 and our
cash flow from operations was SEK 10.8 billion.
Innovation is key to profitable growth
We invested approximately 3.4% of our revenue
in R&D. Moreover, we presented technologically
innovative solutions tailored for customers in
focused industrial segments at our first virtual
Tech & Innovation Summit. This summit will now
be a yearly event introducing new innovations
bringing further value add to our customers. Inno-
vation is a cornerstone in developing our leading
customer value proposition and one of the most
important enablers for long-term, profitable
organic growth.
Sustainability is in our DNA
We reduced our CO
2
Scope 1 & 2 emissions by
59% vs 2019. The main driver has been a signifi-
cant progress in the amount of renewable elec-
tricity sourced, with the biggest contribution
from China. Also, our energy management pro-
gramme continues to contribute to reduced
energy demand. We are on track towards our goal,
to significantly cut our emissions by 2030 and
achieve net-zero greenhouse gas emissions in
our supply chain by 2050.
12.3
Net sales, SEK billion
Operating margin
1)
, %
Cash flow
2)
, SEK billion
98.7
10.8
1) Adjusted for items affecting comparability. 2) Net cash flow from operating activities.
More about SKF’s long-term targets, see pages 19–20.
SKF initiates a separation of its
Automotive business
The Board of Directors of SKF has decided to initiate
a separation of SKF’s Automotive business with the
objective of a separate listing on Nasdaq Stockholm
through a Lex Asea distribution to SKF’s share-
holders. Read more in the President’s letter, pages
7–9 and on page 11.
SKF divests non-core Aerospace operation
for SEK 2.3 billion
An agreement was signed to divest our ring and seal
operation in Hanover, USA, representing annual sales
of approximately SEK 700 million, for a total value of
approximately SEK 2.3 billion. Aerospace will remain
as one of our largest customer industries and we will
continue to invest and strengthen our position in core
Aerospace segments related to the aeroengine and
aero structure bearing offers.
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“We are Well
positioned
to Capture
profitable
groWth”
CEO Rickard Gustafson
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How has SKF navigated the dynamic market
conditions in 2024?
“The world continued to be characterized by geo-
political uncertainty and a turbulent macroeconomic
environment, leading to decreasing volumes across
most geographies and industrial verticals. In this
context, I am very pleased, that for the full year 2024,
we were able to uphold a resilient adjusted operating
margin of 12.3% despite a negative organic growth
of 5.4%.
While many of the external factors are out of our
control, I am pleased that we continued to improve
on what we can influence–our active and diligent
strategy execution. This includes staying close to our
customers through a decentralized organization and
active portfolio management where we work across
customer industries and product lines to improve our
operational performance and focus on higher margin
businesses. It also includes the ongoing regionali-
zation of our value chains where our regionalization
rates in Asia and Americas increased by five and
three percentage points respectively, reaching almost
70% in 2024. Finally, I would also like to emphasize
our customer driven innovation and diligent cost
management which also contributed to our earnings
resilience. With a proven track record within areas
such as regionalization, portfolio and cost manage-
ment, we will continue to actively drive our strategic
agenda also going forward.
All in all, we have managed to improve our competi-
tiveness and re-enforce our position as one of the
true leaders in the bearing industry. Our ability to
manage short-term challenges while, at the same
time, continuing to invest in our future, makes us well
positioned to capture profitable growth once demand
bounces back.”
Why should the Automotive business become
independent?
“Our ambition is to create a stand-alone Automotive
business and list it on Nasdaq Stockholm. This is a
natural next step from our decision in 2022 to make
the Automotive business more autonomous to ensure
greater strategic flexibility. Both our Industrial and
Automotive businesses are amongst the global lead-
ers in their respective fields, but they are in many
ways different in terms of business dynamics, end
markets and success drivers.
As stand-alone businesses, both Industrial and
Automotive will be able to have a clearer focus on
distinct opportunities enabling increased customer
value and transformation speed, as well as im proved
efficiency and competitiveness. By establishing two
focused and independent businesses, tailored to
their specific needs, we expect to unlock long-term
value and to accelerate profitable growth in both
Industrial and Automotive.“
What other strategic activities did you
implement last year?
“We have achieved a lot, but one key example is
our investment in regionalization, where we have
worked hard on optimizing our footprint, and
on creating competitive and resilient local value
chains. This, in combination with our decentralized
organizational structure, increases the agility and
accountability throughout the organization, enabling
an enhanced performance in a volatile external
market environment.
Another important strategic area is our ongoing
portfolio transformation. Apart from the Board of
Directors’ decision to initiate the creation of a sepa-
rate Automotive business, last year we also signed
an agreement to divest our ring and seal operation in
Hanover, USA, which was identified as non-strategic
in the strategic review of our Aerospace business in
2023. Aerospace will remain one of our largest indus-
trial verticals and we will continue to invest to further
strengthen our position in core Aerospace segments
to optimize our business potential.
But portfolio management is not just about carve
outs and divestments. We are also targeting to gradu-
ally accelerate profitable growth through smaller bolt-
on acquisitions and we have started to build a pipe-
line of interesting M&A prospects. The acquisition of
John Sample Group in October exemplifies this, as
it further strengthens our lubrication offering and
position in the key markets Indonesia and Australia.”
What else have you done to gear up for
intelligent and clean growth?
“Our strategy is designed to create significant cus-
tomer value in targeted markets through sustained
innovation leadership and increased agility. To sup-
port this, we have better aligned our innovation port-
folio to focus on customer needs in targeted segments,
leveraging mega trends such as electrification and
sustainability. Working closely with our customers
enables us to accelerate profitable growth and re-
enforce our position as one of the true leaders in the
bearing industry.
Innovation and technology development are at the
core of SKF, and it makes me proud every time I hear
customers explain the value they gain from our prod-
ucts and solutions, and how we contribute to their
success. We are not just bringing innovations and
new solutions to established and mature industries,
like high-speed ceramic bearings to enhance railway
fleet efficiency and reliability. We are also enabling
new industries and technologies to flourish, like
renewable sources as tidal energy.
To gear up for intelligent and clean growth, we are
also investing in decarbonization, high-speed rota-
tion, and low-friction products and services. As an
example, last year, we developed a bearing tailored
for the robotics industry with a 70% reduction in
Thanks to our diligent strategy execution in 2024, we maintained
a resilient adjusted operating margin despite challenging market
conditions. A key strategic initiative was the decision to initiate
the establishment of Automotive as an independent business.
This, along with other value-adding activities, is positioning us to
capitalize on profitable growth opportunities as demand recovers.
Our strategy is designed
to create significant
customer value in targeted
markets through sustained
innovation leadership and
increased agility.
“
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manufacturing CO
2
foot print, enabling an additional
20% reduction in the end customer application. In
another project, together with the Austrian company
Voest alpine, we successfully produced the first
proto type bearing made from steel containing hydro-
gen direct reduced iron. A true breakthrough in our
efforts to decarbonize the entire bearing production
process.
We are on track and fully committed to achieving
our target to have decarbonized global operations by
2030. I am encouraged by the recognition we receive
for our efforts, including the Platinum Medal in the
sustainability rating EcoVadis for the fifth consecu-
tive year and the highest Climate Change rating from
CDP. We also continue to support the UN Global
Compact initiative, its principles and the Global
Goals for 2030.”
What roles do your people and culture play
in the strategy execution?
“Strategy and culture are deeply interconnected, and
our culture, leadership and people are fundamental to
the successful execution of our strategy. For example,
we are now a more forward-thinking organization,
enabling us to act with greater innovation and ambi-
tion. This mindset will be essential moving forward,
not least in our task to initiate the establishment of
Industrial and Automotive as two fit-for-purpose in -
dependent businesses. Innovation also demands
bold thinking and our engineering expertise keeps us
at the forefront. I am also encouraged by our progress
in gender diversity, as diverse perspectives enhance
innovation, competitiveness and our employer value
proposition. In 2024, we increased women-in-leader-
ship positions by 4%, and we were also recognized
as a “Leader in Diversity” by Financial Times.
Since establishing our purpose in 2023, we have
made substantial progress in embedding it into our
global operations. Visiting our facilities worldwide, I am
continually impressed by how our purpose is locally
integrated into our operations and daily practices.
This does not only bring our purpose to life but also
helps us to develop as individuals and as a company.
These examples show that success ultimately
depends on people. At SKF, we are fortunate to have
exceptional individuals and I would like to extend my
heartfelt gratitude to all our dedicated employees for
your efforts throughout 2024 in managing the busi-
ness cycle, discovering breakthrough innovations
and effectively executing our strategic transformation.
These achievements would not have been possible
without your commitment and hard work.”
What will be most important for SKF in 2025?
“2025 will be another year of execution. Our primary
focus will, as always, be on working closely with our
customers and supporting them with their business
needs and sustainability efforts. We will continue to
develop our business and execute on our strategy,
with a focus on finalizing initiated activities rather
than adding new ones. One key strategic initiative will
naturally be the establishment of two independent
businesses.
In 2025, we will remain focused on making SKF
even more innovative, agile and competitive, ready
to capitalize on profitable growth opportunities as
demand improves. Together with our customers,
partners and suppliers we will continue to re-imagine
rotation for a better tomorrow.”
In 2025, we will remain
focused on making SKF
even more innovative,
agile and competitive.
“
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Why invest in SKF?
Targeting markets leveraging megatrends
Our competitive edge lies in an integrated approach,
combining advanced technology with deep industry-
specific expertise to deliver customized solutions
across more than 40 industries. As a trusted partner
to our diverse customer base, we address critical
customer needs in key industries – from electric
vehicles, mining and railway to food and beverage,
and renewable energy. We have a targeted approach
to establish leadership in markets where megatrends
such as electrification and sustainability drive
caters for recurring replacement cycles in diverse
industrial sectors. Additionally, we deliver value to our
customers through services like condition monitoring,
which optimize maintenance processes while provid-
ing SKF with growing and profitable revenue streams.
Accelerating technology development
Building on a strong track record in cutting-edge
technology and with extensive application expertise,
we accelerate technology development to sustain
our leadership in innovation. Reducing friction and
improving energy efficiency addresses a pressing
global need, as nearly 20%
1)
of all energy is used to
overcome friction. In recent years, we have trans-
formed our innovation portfolio, with over 90% of the
projects focusing on selected key segments and all
these projects target an adjusted operating margin
well above the Group’s financial target of 14%.
Our tailored solutions add value to customers by
improving performance, reducing downtime and
increasing cost efficiency, all of which build customer
loyalty and grow the aftermarket. Backed by a robust
balance sheet, we continue to invest in new technology
and smaller bolt-on acquisitions, keeping us at the fore-
front in areas like materials science, condition moni-
toring, and lubrication management.
Delivering shareholder value
Operational resilience and strong commercial exe-
cution are essential to succeeding in our targeted
segments. With the ongoing regionalization of the
manufacturing footprint and supply chains closer to
our customers, we can serve them better and faster,
as well as improve adaptability to global shifts and
cost-effectiveness. Our decentralized organization,
formed in 2022, reinforces agility and accountability
to faster adapt to changing market dynamics. In 2024,
we have further strengthened our commercial exe-
cution through focused portfolio management with
reduced complexity and improved service, as well as
implementation of value- based pricing initiatives.
In short, our strategy is designed to deliver on our
financial targets, i.e. driving margin improvement and
pur suing profitable growth, which reinforces our ability
to deliver long-term shareholder value. It remains
effective even in a softer market, as shown in 2024,
when we almost maintained our margin despite signif-
icantly lower volumes.
Building on our strengths
Extensive innovation track-record
Global customer reach
Strong brand reputation
Financial strength
We have set a clear direction
Increased focus and shifting exposure to
attractive markets, leveraging mega trends
Accelerating technology development
for sustained innovation leadership
Enhancing commercial and operational
efficiency
For margin expansion and long-term profitable growth
14%
5%
Adjusted operating
margin 14%
2)
Revenue growth
5%
2, 3)
As one of the global leaders in bearing technology and industrial solutions,
SKF combines a century of engineering expertise with a trusted brand
and strong customer relationships. Our strategy focuses on creating
significant customer value in targeted markets by leveraging megatrends
to drive growth and margin expansion. With a commitment to inno vation
and operational and commercial excellence, we have a strong platform
to progress towards our targets and deliver sustainable, long-term value.
1) Source: Review article on ‘’Influence of tribology on global energy
consumption, costs and emissions’’ by Kenneth Holmberg and Ali Erdemir
2) Financial targets to be achieved over a business cycle.
3) Sales excluding effects of currency and divested businesses.
demand, while leveraging our strong position in large-
scale industries where uptime is critical. Our extensive
geographical reach, combined with our first mover
advantage in major markets like China and India,
positions us strongly to capitalize on growth in
emerging markets.
Aftermarket a prioritized area
A key focus is to further strengthen our strong service
and aftermarket position, where our robust network
with distributors and operations across 130 countries
Prioritizing margin expansion
and improve quality of sales
Once margin target is reached,
grow profitably in selected
markets
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SKF’s Board of Directors has decided to initiate a
separation of SKF’s Automotive business with the
objective to list it on Nasdaq Stockholm, aiming to
unlock the full potential in the Auto motive and
Industrial businesses. Both businesses are amongst
the global leaders in their respective fields and,
with a clearer focus, will increase customer value
and leverage their strategies as stand-alone busi-
nesses.
Unlocking the
fUll potential
for two global
leaders
STRATEGIC FOCUS Separation of our Automotive business
The business environments,
customer bases, and growth drivers
for our Industrial and Automotive
businesses require focused strate-
gies. By establishing two fit-for-
purpose independent businesses,
we expect to accelerate profitable
growth in both.
For the Automotive business, independence will
bring increased agility, adapting faster to the trans-
forming global automotive market. By making its
own strategic decisions and investments, the
business will better capture growth opportunities
and accelerate ongoing profitability improvements.
The decision to initiate the establishment of a
standalone business is a natural progression after
we, in 2022, began developing a more autonomous
Auto motive business to enable greater strategic
flexibility.
The separation also strengthens our Industrial
business’s position as a globally focused industrial
technology leader, delivering customer value
through high-quality and sustainable solutions.
By connecting operations closer to industrial
customers’ needs, the aim is to accelerate growth,
improve efficiency, increase responsiveness and
improve end-user experiences. With a sharper
focus, the Industrial business is better positioned to
grow faster across core sectors such as aerospace,
railway, food and beverage, and high-speed
machinery.
Preliminary separation timetable
The Board of Directors intends to present
a proposal for the distribution and listing of the
Automotive business at a shareholder meeting
during 2026. If approved, shareholders of AB SKF
will receive shares in the newly independent
Auto motive business in proportion to their share-
holding in AB SKF. The intention is then to list
this business on Nasdaq Stockholm. The separa-
tion is expected to meet the Lex Asea require-
ments, allowing a share distribution exempt from
Swedish tax. More information on the ambitions
for both our Industrial and Automotive businesses
will be provided at the Capital Markets Day on
11 November 2025.
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strategy
and value
creation
Our strategy focuses on creating significant
customer value in targeted markets by
leveraging megatrends to drive growth and
margin expansion. With a commitment to
innovation and operational and commercial
excellence, we have a strong platform to
progress towards our targets and deliver
sustainable, long-term value.
Fighting friction
Did you know that SKF’s solutions help fighting
friction in the railway industry? Our low friction
railway bearings can reduce the total energy
consumption of a train by at least 1%, making
each train not only more efficient but also
cleaner, saving thousands of kWh annually.
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Drivers for long-term
sustainable growth
Long-term global shifts driven by technology,
societal changes, economic factors and environ-
mental concerns are transforming the world signifi-
cantly. Adapting to these megatrends and key shifts
is crucial for shaping our strategy and achieving
sustainable, profitable growth.
Sustainability
Leading decarbonization efforts
Addressing climate change and environmental pro-
tection is a critical global challenge, driving shifts in
energy, transportation and consumption, as well as
influencing more regulations. At SKF, we support the
transition to a sustainable economy with an exten-
sive offering, including remanufacturing and intelli-
gent solutions that help our customers reduce waste
and extend product life. We are also committed to
decarbonizing our operations, reducing greenhouse
gas emissions in the value chain and continuously
improving sus tainability practices across our pro-
cesses, meeting evolving regulations and environ-
mental demands.
Electrification
Cleaner, more effective industries
Electrification is crucial for reducing carbon emis-
sions in transportation, with electric vehicles (EVs)
and trains offering additional societal benefits such
as improved urban air quality and noise reduction.
The demand for electrification is transforming indus-
tries, especially with the rise of EVs and electric
drives in industrial sectors. At SKF, we are responding
to this shift by providing a portfolio of innovative
solutions, including low-friction, current isolating,
low-weight bearings that improve E-powertrain
efficiency and increase vehicle range. As a market
leader in railway solutions, we are also driving fleet
efficiency and reliability with cutting-edge techno-
logies and services.
Digitalization
Building intelligent value chains
The rapid advancement of technologies like artificial
intelligence (AI) and automation is transforming indus-
tries and reshaping the value chain. At SKF, we invest
in digitalization to streamline business interactions
and enable smarter decision-making within our oper-
ations. By integrating AI, we aim to boost operational
efficiency and enhance customer value. Our focus
is on building intelligent, clean value chains that en-
hance both how we operate the customer experience.
Regionalization
Adapting operations for a global shift
Geopolitical power shifts and conflicts are putting
pressure on global trade, making it necessary to adopt
a competitive region-for-region approach in sourcing,
manufacturing and sales. This strategy strengthens
supply chain resilience and ensures shorter lead
times, improved service and better availability for our
customers. For several years, we have been acceler-
ating investments in regionalizing our value chain and
operations, bringing our footprint closer to customers.
This transformation strengthens our competitive-
ness, enables us to capture profitable growth and
ensures a more resilient and adaptable supply chain.
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High-growth
segments
Services and
Aftermarket
New
technologies
Portfolio
management
Growth areas, pages 15–16 Growth enablers, page 17
Accelerate technology development
Digitalize the full value chain
Regionalized and competitive
supply chain
Operate more efficiently
– closer to customers
Our strategy:
Intelligent and clean
SKF’s strategy is centred around two key concepts:
intelligent and clean. Intelligent reflects our com-
mitment to providing connected and customized
solutions for customers while utilizing technology
to improve operational efficiency. Clean empha-
sizes our role in driving a more sustainable industry
and conducting our business transparently and
respon sibly.
Capturing profitable growth
Our approach to capturing profitable growth
focuses on several strategic priorities. First, we aim
to strengthen our position in high-growth segments
where SKF already has a strong foothold. We are
also reviewing our portfolio to concentrate on our
most profitable segments, customers and products.
In addition, we are developing solutions for emerging
industries that leverage new technologies, as well
as strengthening our service offering.
Identified growth enablers
To achieve these ambitions, we have identified
several growth enablers. One is increasing the pace
and impact of technology development, which is
critical for maintaining our competitive edge. We are
also digitalizing the entire value chain to improve
efficiency and connectivity across operations.
Continued investment in automation and regionali-
zation helps us stay agile and close to our custom-
ers, while a more efficient organizational structure
supports these efforts.
Resilience and adaptability
By operating close to our customers, our strategy
ensures resilience and adaptability. This approach
enables us to respond more swiftly to shifts in market
conditions. At the same time, we continue to
strengthen our foundation through investments in
competitive, resilient value chains, strategic and
tactical portfolio management, and positioning
ourselves as leaders in intelligent, sustainable inno-
vation – all of which set SKF on a path toward long-
term success.
Our focused commitment to innovation, portfolio
management and operational excellence is key in
driving margin expansion. These priorities, aligned
with our broader strategy, bolster our resilience in
softer market conditions and lay the foundation for
sustainable, profitable growth in the years ahead.
2024 – A year of improved resilience
in a soft market
• Focus on productivity and cost efficiency
• Strengthening the foundation to capture
industrial profitable growth
• Creating competitive and resilient value
chains
• Managing and restructuring our portfolio
on strategic and tactical levels
• Gearing up for intelligent and clean
leadership
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High-growth segments
Positioned for growth in
high-impact industries
New technologies
Advancing sustainable innovation
for emerging industries
SKF is amongst the leaders in several high-growth
industries, where structural expansion aligns with
our core strengths. We are focused on sectors where
we add significant value through our advanced
engineering capabilities, and where growth potential
is substantial. Key industries include high-speed
machinery, electrical drives, agriculture and food
& beverage, all of which benefit from trends like
automation and electrification.
Driving a sustainable future
Furthermore, we show our leadership in clean and
intelligent applications, including railway sectors.
We are well aligned with global megatrends linked to
sustainability, such as electrification, and strategi-
cally positioned to contribute to industries focused
on cleaner energy and smarter, more efficient
operations.
We are actively developing offerings to support
emerging industries such as hydrogen processing
and carbon capture, where our existing technologies,
like magnetic bearings, are unlocking new business
opportunities. Magnetic bearings, a key growth area,
are ideal for high-speed, low-vibration applications,
making them critical for industries that demand pre-
cision and efficiency. These bearings minimize energy
loss and reduce the need for maintenance, supporting
the long-term efficiency required in cutting-edge
applications such as hydrogen production.
Environmental benefits
Another example of our innovation is RecondOil,
our smart oil regeneration technology. RecondOil
provides tailored solutions across various industries,
delivering both financial and environmental benefits
by reducing waste and enhancing sustainability.
Additionally, our advancements in connectivity
enable customers to easily access data on machine
performance, leveraging AI to predict bearing failure
and improve operational efficiency.
Growth through innovation
Our strengths in innovation, quality, performance
and product range ensure we are well positioned to
outpace market growth. Recent investments in tech-
nology and innovation have boosted profitability,
partic ularly in high-growth segments like railway,
agriculture and machine tools. We are expanding
our global leadership in railway, continuing to drive
growth through tailored, application-specific solu-
tions designed for critical and demanding industrial
applications.
With a strong customer focus combined with out-
lined strategic initiatives, we are laying a solid foun-
dation at SKF to capture industrial profitable growth
and reinforce our leadership in key sectors, ensuring
we remain at the forefront of innovation and value
creation in the markets we serve.
A leader in energy efficiency
With the rise of electric applications demanding
higher voltages, frequencies, and operational
speeds, our ceramic bearings have emerged as
the optimal choice. These bearings reduce fric-
tion, extend component life and significantly
boost energy efficiency, catering to the needs
of industries transitioning towards electrified
systems, from electric vehicles to renewable
energy infrastructure.
By channelling our R&D efforts into high-
growth, high-margin segments, we are strategi-
cally transforming our portfolio to reinforce
our position as a leader in advanced, energy-
efficient solutions. Our commitment is to help
customers stay competitive while ensuring our
technologies contribute meaningfully to a
cleaner, more efficient future for both people
and the planet.
1 7.9
kilotonnes
17.9 kilotonnes of
CO2 emissions were
saved using our
RecondOil solutions.
SKF is driving a sustainable
future through leadership
in clean and intelligent
applications, including
railway sectors.
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Services and Aftermarket
Expanding excellence in
aftermarket solutions
Portfolio management
Portfolio realignment for
profitable transformation
SKF’s service and aftermarket business, represen-
ting approximately 47% of total sales, is a key area
of focus for growth and profitability. With over 17,000
distributors worldwide, we are amongst the market
leaders, supported by strong partnerships and our
expertise in application engineering, artificial intelli-
gence and machine learning.
Growing recurring revenues
Our goal is to expand this segment further, increasing
both sales and profitability by refocusing on growing
recurring revenues and appealing to a broader market.
New technologies and partnerships will provide
greater scale and easier access to our data analysis
and machine performance capabilities, strengthening
customer value.
A full-cycle support
Our comprehensive service portfolio is designed to
support customers at every stage of their equipment’s
Effective portfolio management is a critical com-
ponent of SKF’s strategy. This involves refining and
reshaping our portfolio of products, customers, and
segments to align with our strategic goals, with the
ultimate aim of improving profitability. We are shifting
our portfolio, focusing on growing profitable areas
and addressing or exiting less profitable ones. This
approach puts stricter performance requirements
on each business segment, especially in Automotive,
where we are building strong positions in growth
areas like electric vehicles, commercial vehicles,
and aftermarket services.
A more resilient portfolio
To drive this portfolio shift, we are leveraging inter-
nal repositioning, focused innovation efforts and
acquisitions to strengthen profitable segments
while phasing out or optimizing less lucrative ones.
In aerospace, we have refocused our portfolio on core
areas such as aeroengine and aerostructure, con cen-
trating on high-value, growth-oriented segments.
Meanwhile, bolt-on acquisitions in the lubrication
lifecycle – from design and installation to operation,
maintenance and eventual reuse. This full-cycle sup-
port includes predictive maintenance, remanufactur-
ing, engineering, mechanical services, and training,
ensuring that customers achieve maximum perfor-
mance and extended asset life. To add further value
to our services, we integrate cutting-edge technolo-
gies such as condition monitoring equipment and
AI-enabled solutions. These advancements allow
customers to continuously monitor their machinery
and predict potential issues before they occur,
optimizing performance, reducing downtime and
lowering maintenance costs.
In line with our commitment to sustainability, SKF’s
remanufacturing services play a significant role in
supporting cleaner industries. By extending the life
of components, particularly in industrial and railway
applications, we help customers reduce their CO
2
emissions and minimize waste, contributing to a
circular economy and global environmental goals.
systems business during 2024 have strength-
ened our offerings with advanced tech nologies
that support operational efficiency and sustain-
ability for our clients. This approach generates
a more resilient and profitable portfolio, enabling
us to remain agile and responsive to changing
market demands.
The right business mix
Our commitment to growth also includes tactical
portfolio evaluation efforts, ensuring we target
the right mix of products, customers, and services
across all divisions. By combining data-driven
insights with improving commercial capabilities,
we are strengthening our leadership in industrial
applications and positioning ourselves as a pre-
ferred provider for advanced, sustainable solu-
tions. Aligning our operations with global mega-
trends in sustainability and electrification, we
aim to set new standards in industrial innovation,
strengthening our competitiveness and resilience
for the future.
+6.6%
6.6% growth in reliability
services and solutions,
leveraging cutting-edge
condition monitoring
technologies.
Our active portfolio
management efforts have
had a significant positive
contribution to our margins.
Rickard Gustafson, CEO
“
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Accelerate technology development Regionalized and competitive supply chain
Operate more efficiently–closer to customers
Digitalize the full value chain
Increased investments in technology and inno-
vation are central to strengthening SKF’s customer
value proposition and driving profitable growth. By
working with R&D throughout the entire value chain,
we can bring new products to market faster, particu-
larly in high-growth segments in line with our long-
term strategic goals. Our external collaborations
and partnerships also provide a technological edge,
accelerating our time to market and strengthening
our competitiveness.
A strong R&D foundation
With over 100 years of innovation, SKF has built a
strong technological foundation and established
a leadership position in the industry. To maintain
and reinforce this position, we are increasing invest-
ments in key areas such as predictability, advanced
As part of our journey to become even more relevant
for our customers, we are investing in the digitaliza-
tion of our full value chain. This will enable growth,
reduce working capital and increase cost competi-
tiveness. With the ambition of becoming a data-
driven company, we are allocating significant efforts
to gain actionable insights across the value chain
through advanced analytics. Before digitalizing,
we are re-engineering processes to ensure they
To further improve our competitiveness and
support our growth ambitions, we are continuously
improving and regionalizing our manufacturing and
supply base. We are continuously investing in opti-
mizing our global footprint through strategic invest-
ments in automation, regionalization and rationali-
zation. These initiatives are designed to boost
efficiency and meet the evolving needs of our
customers more effectively.
Focus on costs and the value proposition
In addition to manufacturing, we have increased our
ambitions within purchasing, focusing on design-to-
value, regionalizing our supply chain, and unlocking
areas with untapped potential. By driving these
initiatives, we are not only reducing costs but also
strengthening our overall value proposition.
We are continuously developing our business and
ways of working to remain competitive and relevant.
Our strategy focuses on turning synergies and prio r-
ities into greater efficiency and lower fixed costs.
In 2022, we implemented a decentralized operating
model with full operational and financial account-
ability placed closer to our customers, improving both
service and relationships. In 2024, we have continued
to fine-tune this model, streamlining our organization
to enhance service to our customers. A key step in
materials, applied AI and manufacturing technolo-
gies. These investments enable us to continue
shifting our innovation portfolio toward high-growth
industries and high-margin opportunities, ensuring
we stay ahead of emerging trends.
Together with our innovation partners, we are
becoming stronger and more agile, positioning our-
selves to meet the future needs of our cus tomers
and drive long-term growth.
are efficient and effective, while also advancing auto-
mation and robotics in our operations.
In the past year, we have focused on executing our
new digital strategy, with ownership of the digital
transformation moving closer to the business and
customers. This has enabled the development of
customer facing digital tools tailored to local market
needs. Our AI Center of Excellence plays a key role
in using AI to further improve process efficiency.
In 2024, we made progress with several major
projects aimed at driving cost competitiveness
and improving lead times for customers. Exam-
ples include the extensive downsizing actions in
Germany and the regionalization efforts in key
markets such as India, China and Southeast
Asia. These are significant steps to ensure SKF’s
long-term resilience and leadership in the market.
this journey is the decision to initiate the separa-
tion of Automotive, enabling it to operate more
in dependently, which strengthens both the Auto-
motive and Industrial business.
Additionally, our drive for efficiency is sup-
ported by regionalization, digital transformation,
strong cost management and a clear set of
strategic priorities. Together, these initiatives
position us to better serve our customers and
drive sustainable growth.
3.8 SEK billion in business
benefits from our World
Class Manufacturing
initiative launched in 2019.
90%
More than 90% of the
innovation portfolio pro-
jects are focused on our
high-growth segments.
3.8
sek billion
Growth enablers
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value through
innovation
leadership
STRATEGIC FOCUS Innovation
For customers, SKF’s innovations deliver tailored
solutions that improve operational efficiency,
sustaina bility and cost-effectiveness. New prod-
ucts, such as intelligent monitoring systems, low-
maintenance seals and high-precision bearings,
cater to industry-specific needs across s ectors
like railway, machine tools and heavy industries
such as pulp and paper, metals and mining. These
solutions increase reliability, extend service life
and provide safer work environments, directly
addressing the demands for energy efficiency
and high performance as well as environmental
responsibility.
As a global leader within railway, we are com-
mitted to developing cutting-edge solutions that
With technology development
at the core, our strategy is
designed to create significant
value in targeted markets
through inno vation, efficiency
and agility.
address the demands of challenging track con-
ditions but also the need for more efficient drive
lines, helping the rail sector to continue its journey
toward greater efficiency and sustaina bility. In
2024, we introduced advanced bearings specifi-
cally designed for railway gearboxes, addressing
the demands of aging rail infra structure and
challenging track conditions. These new bearings
withstand twice as many load cycles and feature
reduced weight and friction, improving high-speed
performance and energy efficiency. With up to
20% less friction in single shaft positions, they
enable lighter, more efficient gearbox designs,
improving overall reliable performance in the rail
sector.
In 2024, SKF invested 3.3 BSEK in research and
development, resulting in a strong product and
services pipeline, bringing significant customer
value and driving profitable growth. Additionally,
SKF works closely with various universities and
start-up companies across the world to strengthen
research, develop new technologies and acceler-
ate innovation. By providing solutions to custom-
ers to minimize friction and energy waste in their
operations, SKF continues to support the global
transition toward sustainability.
90%
In recent years we have transformed
our innovation port folio so that more
than 90% of the projects are focused
on our high-growth segments. All
these projects target an adjusted
operating margin well above our
target of 14%.
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Target
5%
2024
outcome
–5.4%
2020–2024
average
1.8%
Target
<40%
2024
outcome
14.1%
2020–2024
average
13.8%
Long-term targets
SKF’s long-term targets shall be achieved over a business cycle.
1) Sales excluding effects of currency and divested businesses.
2) Excluding pension liabilities.
Adjusted operating margin Revenue growth
1)
Net debt
2)
/equity
Target
14%
2024
outcome
12.3%
2020–2024
average
12.2%
Key levers to reach the target
• Optimizing the value chain including increased
cost-competitiveness and regionalization of our
manufacturing footprint
• Enhanced commercial excellence including portfolio
and price management
• Shifting exposure to attractive markets as well as
products and solutions underpinned by innovation
leadership
2024 outcome
The adjusted operating margin was 12.3%. Positive
impact from price and customer mix as well as from
cost development. Negative impact from sales and
manufacturing volumes and currency effects.
Key levers to reach the target
• Shifting exposure to attractive markets, leveraging
mega trends
• Enhanced commercial excellence including portfolio
and price management
• Selected acquisitions
2024 outcome
Organic sales declined by –5.4% compared to 2023,
driven by challenging market conditions. Sales grew
in India and Southeast Asia and declined in all other
geographies. Industrial sales declined by –5.7% and
Automotive sales declined by –4.9%.
2024 outcome
Net debt/equity increased from 13.9% to 14.1% in 2024.
Financial assets decreased by SEK 2.4 billion driven by
repayment of loans and financial liabilities decreased
by SEK 2.1 billion.
8
4
0
12
16 %
23222120 24
5
0
–10
–5
10
15 %
23222120 24
20
10
0
30
40
50 %
23222120 24
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Adjusted ROCE Dividend pay-out ratio Decarbonized operations by 2030
2)
SKF’s long-term targets shall be achieved over a business cycle.
1) According to the Board’s proposal for the year 2024.
2) 95% reduction in scope 1 and 2 emissions by 2030 vs. 2019.
Target
16%
2024
outcome
14.2%
2020–2024
average
14 %
10
5
0
15
20 %
23222120 24
Target
50%
2024
outcome
51.2 %
2020–2024
average
55%
40
20
0
60
80 %
222120 23 24
Key levers to reach the target
• Improved profitability
• More efficient working capital management through
digitalized value chain and regionalization
2024 outcome
Return on capital employed decreased to 14.2% in 2024.
Capital employed decreased due to lower adjusted
operating profit as well as higher tangible assets.
Dividend policy
The ordinary dividend should amount to around
one half of SKF’s average net profit
2024 outcome
1)
The pay-out ratio in 2024 was 51.2% and the five-year
average was 55%.
How to reach the target
• Process improvements
• Energy efficient machinery
• Usage of renew able energy
• Phase out of fossil fuel use
2024 outcome
59% reduction vs 2019 base year – well ahead
of the 2030 goal trajectory.
2024
outcome
–59%
200
100
0
300
400
22212019 23 24
500 thousand tonnes CO
2
e
Long-term targets cont.
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Fighting friction
Did you know that SKF’s innovative and
co-created solutions help fight friction
in the aerospace industry by addressing
customer challenges and optimizing
performance?
the
bearing
market
The global bearing market, valued to nearly
SEK 500 billion, is a critical segment of the
machinery industry. The market is led by
SKF, along with other major international
players like Schaeffler, Timken, NSK, NTN,
and JTEKT. Asia- Pacific is the largest and
fastest- growing region.
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Growth, consolidation,
innovation, and sustainability
The global bearing market is experiencing steady
long-term growth, driven by demand from automotive,
aerospace, and industrial sectors, as well as emerging
applications in renewable energy, electric vehicles
(EVs), and smart infrastructure. In 2024, the market
faced negative growth. Despite this setback, the long-
term growth potential remains robust, with key players
such as SKF, Schaeffler, Timken, NSK, NTN, and
JTEKT driving innovation in high-performance and
sensor-enabled bearings.
Importance of global brands
Today’s bearing industry shows a clear trend of
consolidation, with fewer, larger, and increasingly
globalized manufacturers and distributors dominating
the space. This shift underscores the importance of
recognized global brands and high-quality products.
Market value by customer industries
1)
Distribution business ~30%
Industrial distribution and vehicle
independent aftermarket.
Automotive OEM ~30%
Industrial original equipment
bearing markets ~40%
Including manufacturers of light and
heavy industrial machines and equipment,
as well as aerospace, off-highway and
railway vehicles.
1) Total world demand of bearings 2024.
Market value by customer industries
1)
The top six manufacturers account for about 55%
of the global rolling bearing market. Chinese manu-
facturers hold about 25%, primarily in Asia-Pacific.
The remaining 20% is comprised of smaller regional
and niche bearing companies.
Largest market in Asia-Pacific
Geographically, the Asia-Pacific region stands as the
largest market, with a robust manufacturing base and
growth in automotive production, especially in China
and India. Meanwhile, Europe and North America are
seeing increased demand in aerospace, railway, and
renewable energy applications, which is also driving
innovation. SKF’s business is structured across four
key regions: the Americas; Europe, Middle East, and
Africa; India and Southeast Asia; and China and
Northeast Asia.
Rapid technology development
Technological advancements are reshaping the
bearing market. Industry 4.0 and IoT integration are
enabling sensor-equipped bearings with real-time
monitoring of critical parameters like temperature,
vibration, and load. This technology improves per-
formance and extends the lifespan of bearings in
applications like heavy industry and precision manu-
facturing. As the shift to electrification intensifies,
demand is growing for low-friction, high-efficiency
bearings designed to reduce energy losses. Growing
environmental concerns is also pushing for energy-
efficient bearing solutions and the use of sustainable
materials in manufacturing.
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The bearing market, by region
2014
2024
Market value and growth by region
0
40
80
120
160
240 BSEK
200
China and
Northeast
Asia
The
Americas
Europe, Middle
East and Africa
India and
Southeast
Asia
During the last 10 years, the highest market growth
is seen in China and Northeast Asia and India and South-
east Asia with growth rates around 50% and 100%
respectively. More limited growth is seen in Europe,
Middle East and Africa, around 35% and the Americas,
around 35%.
SKF region Market characteristics
Largest
markets
Largest customer
industries
Europe, Middle East and Africa
Approximate share of the total
world bearing market 24%
Market value SEK 110–120 bn
Market growth 2024 Large decline
Market growth 2014–2024 Low
Western Europe is the largest sub-region by size but has shown a relatively
weaker long-term growth. Here, important OEM industries are light vehicles,
renewable energy, industrial drives and trucks. Eastern Europe and Middle
East and Africa sub- regions are highly dependent on industrial and auto-
motive after markets. These sub-regions are smaller in size but have shown
a relatively higher long-term growth.
Germany,
Italy, France.
Industrial distribution,
light vehicles, trucks,
vehicle aftermarket,
industrial drives, aero-
space, and renewable
energy.
The Americas
Approximate share of the total
world bearing market 25%
Market value SEK 115–125 bn
Market growth 2024 Medium decline
Market growth 2014–2024 Low
The market in the Americas is highly dependent on the U.S. market, which is
the second largest bearing market in the world. Here, OEM segments as light
vehicles, off-highway and aerospace are large. Latin American sub-region
shows higher long-term growth than North America. Latin America is largely
depending on the industrial and automotive aftermarket since few global
OEMs are present.
USA (~75% of
regional market),
Mexico, Brazil.
Light vehicles,
industrial distribution,
vehicle aftermarket,
off- highway, aerospace,
and industrial drives.
China and Northeast Asia
Approximate share of the total
world bearing market 42%
Market value SEK 190–210 bn
Market growth 2024 Medium decline
Market growth 2014–2024 Medium
This region mainly consists of three of the top-5 bearing countries globally:
China, Japan and Korea. Together, they represent ~40% of global bearings
demand. The Chinese market represents ~30% of global demand. The region
is by far the single most important market for electrical demand. In addition,
the region has the highest global bearing demand e.g. for light vehicles,
industrial drives, heavy industries, renewable, lifts and escalators.
China (~70% of
regional market),
Japan, Korea.
Light vehicles,
industrial distribution,
industrial drives,
electrical, and
renewable energy.
India and Southeast Asia
Approximate share of the total
world bearing market 9%
Market value SEK 40–50 bn
Market growth 2024 Medium
Market growth 2014–2024 High
This region is the smallest by size. However, it has the highest global
bearings demand for the two-wheeler market. India and Southeast Asia
is largely dependent on the Indian market, with ~55% of the regional
demand and ~5% of global demand. The Southeast Asia sub-region is
largely dependent on the industrial and automotive aftermarket.
India (55% of
regional market).
Industrial distribution,
vehicle aftermarket,
light vehicles, and
two-wheeler.
Please note that the total value of accessible bearings market has been translated to SEK.
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SKF region Net sales Share of group net sales Employees
1)
SKF’s position
Europe, Middle East and Africa
18,766
One of the leaders with strong presence in all industry segments,
especially in aerospace, industrial distri bution, railway, off- highway,
and heavy industries.
The Americas
8,013
Strong position in most industry segments; industrial distribution,
vehicle aftermarket, industrial drives, aerospace, and off- highway.
China and Northeast Asia
7, 6 2 1
A growing position with a strong presence in certain industry
segments; industrial distribution, renewable energy, railway, heavy
industries, trucks, and industrial drives.
India and Southeast Asia
3,331
One of the leaders in many of the larger industry segments, especially
in industrial distribution, two- wheelers and vehicle aftermarket.
Strong position also in railway, off-highway, heavy industries and
industrial drives.
2024
2023
2022
2024
2023
2022
2024
2023
2022
2024
2023
2022
2024 39,776 MSEK
Change –6%
2024 30,758 MSEK
Change –1%
2024 18,158 MSEK
Change –11%
2024 10,030 MSEK
Change +2%
41%
31%
18%
10%
Men Women
Men Women
Men Women
Men Women
22%78%
23%77%
34%66%
12%88%
SKF’s global presence
1) Average, full time employees.
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Increased
regIonalIzatIon
for the benefIt
of our customers
STRATEGIC FOCUS Regionalization
Regionalization is transforming
SKF into a more agile, efficient
and resilient organization, bringing
tangible benefits directly to
our customers. By relocating
pro duction closer to key markets,
we are en suring faster deliveries,
improved service and ready
access to critical spare parts.
Our strategy is grounded in a competitive and
customer- centric approach. In recent years, pro-
duction has shifted from Europe to Asia, particularly
China, with expansions into India and Southeast
Asia. In China, for example, regionalization has
reduced lead times by 25% in five years, demon-
strating how we are improving service levels and
responsiveness for our customers. At the core of our
regionalization initiative is a strong commitment to
shorter lead times and improved product availabil-
ity. These advancements allow us to respond swiftly
and reliably to customer demands, while keeping
abreast of market fluctuations and regulations.
In addition to improving service, localizing produc-
tion reduces emissions and transportation costs,
supporting sustainability and boosting competitive-
ness through regional opportunities in Eastern
Europe and Asia. This approach combines respon-
siveness, efficiency and sustainability, and enabling
us to build a supply chain that is faster, smarter
and more environmentally responsible. With global
reach and local roots, we are well positioned to
deliver value and help our customers to succeed in
an ever-changing world.
–25%
Lead time
shortened by
25% since
2019 in China.
202220212020 20242023
50
60
70
80 %
2019
Average Lead Times (days)
Regionalization rate
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risks and
the share
SKF’s overall financial objective is to create value
for its shareholders. To support this, we have
applied an integrated approach to risk mitigation
and implemented an enterprise risk management
process that covers all parts of the Group.
Fighting friction
Did you know that SKF’s solutions help fight
friction in the pulp and paper industry? With
cutting-edge, innovative, highly efficient bear-
ings and automated lubrication systems, we
tackle critical cost, sustainability, and digital
transformation challenges.
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Assessments are made
by the six business areas,
Technology Development
and other Group functions.
Risk assessments
Risk management
The SKF Group considers risk management to be
essential and takes an integrated approach to risk
mitigation through inclusion in strategy execution,
business planning and operations. The SKF Group
operates in many different industries and geographical
areas. As a result, the SKF Group is exposed to various
types of risks.
SKF appreciates that there are risks associated
with the macro environment such as the geopolitical
landscape, the state of global markets and significant
industry and technological shifts. There are also
The result is shared yearly with Group Manage-
ment and the Audit Committee. There is also
a half-year internal assessment to monitor
changes and make sure mitigation actions are
in place and delivering expected result which
is presented to Group Management.
Audit Committee
SKF strategy
development
and execution
Risk owners
Annual Report
The consolidated risk
assessment is shared with
the Audit Committee.
The Business areas risk
assessments are used as
input to strategy develop-
ment and execution.
Risk owners manage risk
mitigation and follow-up.
A high level overview
is shared externally
in the Annual Report.
SKF Group ERM process
business risks including supply chain disruptions,
information and cybersecurity threats, and challenges
in attracting talent in a competitive labour market.
Additionally, there are legal and compliance risks
arising from the increased regulatory demands and
internal governance and coordination within the
Group as well as ongoing regulatory investigations
and processes.
SKF has implemented an enterprise risk manage-
ment (ERM) process that covers all parts of the Group,
see illustration below. The risk impact includes impact
on strategy, long term financial performance, as well
as brand and reputation. The Group Risk Manager
1)
,
who is part of the central group functions and reports
to the CFO and to the Audit Committee, is overall re -
sponsible for the ERM process and consolidates the
risks and the mitigating activities. The risks high-
lighted on the next page are the main risks identified
during the 2024 Group ERM process. The main areas
of opportunity are described on pages 12–17. For
information about financial risks including currency
risks, interest risks, liquidity risks and credit risks,
see Note 26 on pages 66–68. For information
about ongoing compliance related investigations,
see Note 19 on page 59.
As with other risks, SKF applies an integrated
approach to the identification and management
of risks related to sustainability. The sustainability
risks have been identified through the double
materiality assessment (DMA). More information
on the DMA on pages 89 and 95.
1) Director, Global Finance Sustainability and Operations
Business area representa-
tives consolidate the risks.
Discussions are facilitated
by the Group Risk Manager
1)
.
Risk consolidation
Group Management reviews
the consolidated assessment.
Group Management
review
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Risk Trend Mitigation
Geopolitical tensions
War and other major events, sanctions,
tariffs and other trade barriers.
Regionalize and create more flexible supply chains.
Information and cyber security
Increasing legal and customer requirements to
adhere to information security standards such
as NIS2, NIST, RED and TISAX.
A general increase in risks of information
and cyber security breaches and threats.
Continuous training and awareness of information
security. Enhance the cyber defence and resilience of
SKF’s manufacturing sites, supply chain continuity,
critical digital solutions including supplier and third-
party deliveries.
Cost increase and cost volatility
Volatility in material, logistics and energy
prices are rapidly changing the cost structure
of the company. Volatility in volumes put
further pressure on cost flexibility.
Portfolio management and pricing activities in all
regions to offset cost increases. SKF is accelerating
the work to increase flexibility and reduce fixed costs
by adjusting our organization in line with the new
operating model, reallocating production volumes
for optimization.
Speed of digitalization
Increasing demands for a fully connected value
chain and excellent digital customer experi-
ence, as well as the rapid development of
AI-based solutions are placing high demands
on the speed of the digital transformation.
Strategic initiatives in place to ramp up digitalization
including strengthening capabilities, investing
in digital talents, modernizing, harmonizing and
simplifying the IT landscape.
Supply chain effectiveness
Risk of disruption, or increasing lead times,
due to supplier/regional dependencies. Addi-
tionally, inventory management and demand
forecasting inefficiencies may arise from
market demand uncertainties .
Review of supplier localization, footprint, increase
dual sourcing alternatives, consolidation, inventory
optimization and digitalization of the supply chain.
Risk Trend Mitigation
Speed of innovation
Introduction of disruptive and quickly
changing new technologies.
Technology strategy with Technology radar to monitor
new and emerging technologies defined, populated
and implemented. Strengthening and clarifying our
Innovation portfolio, including open innovation with
external parties, where we have established a network
of start- up platforms in several geographies. Clear
portfolio follow-up to ensure pipeline.
People and leadership
There is a fierce competition in the labour
market, where the success of companies
is dependent on the ability to attract,
develop and retain critical competences
and capabilities.
SKF is committed to being the employer of choice by
prioritizing the employee experience. Key elements
include purpose, culture, engagement, leadership,
competence and work methods. Additionally, diver-
sity and inclusion are emphasized to attract a broader
recruitment base and build a more dynamic work-
force.
Manufacturing footprint and
regionalization
Risk of regional economic shifts impacting
competitiveness of global supply chains.
High levels of footprint regionalization still
required to offset risks of regional crises.
Updated manufacturing strategy and governance,
including prioritised investment planning, compe-
tence planning and regional supplier development.
Development of step-up manufacturing technologies
for scalable deployment.
Legal compliance
Antitrust risks in relation with distributors.
Regulatory requirements within trade com-
pliance, export control and international
sanctions. New and enforced legal require-
ments within information security, environ-
mental sustainability and human rights.
Increased expectations for due diligence.
Continuous training and awareness in key risk areas.
Third party risk due diligence and monitoring including
ESG compliance. Operational ownership of compli-
ance, management commitment including compre-
hensive compliance risk assessments.
Governance and internal coordination
Unclear responsibilities, mandate and
insufficient global alignment.
Strategic initiatives to clarify mandates, responsibilities
as well as creating forums for strategic coordination,
alignment and decision making.
Main risks
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The SKF share
SKF’s A and B shares are listed on the Nasdaq Stock-
holm, Large Cap stock exchange and are included in
several indexes.
In 2024, the share price increased by 2% for the
SKF A share and 3% for the SKF B share. The total
number of SKF shares traded on Nasdaq Stockholm
was 311,541,518. SKF’s B shares are also traded on
other markets outside Nasdaq Stockholm. The total
number of shares traded on these marketplaces
combined in 2024 was 933,797,027. (Source: Modular
Finance AB). SKF’s American Depositary Receipts
(ADRs) are traded on the OTC market.
As per 31 December 2024, the Company’s share
capital amounted to SEK 1,138,377,670 and the total
number of shares amounted to 28,983,999 shares
of Series A and 426,367,069 shares of Series B.
The number of votes in the Company amounted
to 71,620,705.9. Rights associated with the different
share types are further elaborated in the Corporate
Governance Report on pages 150–160.
Share conversion
Owners of A shares have an option to convert these
to B shares. In 2024, 322,934 shares were converted.
As of 31 December 2024, A shares were 6.4% (6.4) of
the total number of shares.
Dividend and total return
The Board of Directors proposes to the Annual General
Meeting that a dividend of SEK 7.75 per share be paid
for 2024. The total return from investing in the SKF A
share over the past three years was 5.0% andfor the
SKF B share 8.3%. (Source: Modular Finance AB).
Ownership structure
As per 31 December 2024, SKF had 78,082 share-
holders. Around 33.6% of the share capital was
owned by foreign investors, around 43.0% by Swedish
companies, institutions and mutual funds and around
8.8% by private Swedish investors (Source: Modular
Finance AB). Most of the shares owned by foreign
investors are registered through trustees, which
means that the actual shareholders are not officially
registered.
FAM AB, which is wholly owned by Wallenberg
Investments AB, in its turn owned by the three largest
Wallenberg Foundations, is the only shareholder
with a shareholding representing more than 10% of
the voting rights in SKF. Per 31 December 2024 the
company owned none of its own shares.
Information to shareholders
Financial reports and further information about the
share can be found at investors/skf.com. A list of
analysts following SKF and the opportunity to sub-
scribe to information from SKF is also available on
the website.
Sustainability indexes
Based on the 2024 submission, SKF has been rated
A- within the CDP rating system which signifies that
SKF is taking co ordinated action on climate issues.
SKF is also evaluated as Platinum (in the top 1%
of companies in its sector) via the EcoVadis supplier
sustainability evaluation platform which is used by
many of the Group’s global customers to understand
supplier sustainability performance.
0
75
150
225
202420232022
0
25
50
75
B share
Nasdaq Stockholm_PI
(normalized against the B share )
A share
Number of B shares traded at
Nasdaq Stockholm, million
Number of B shares traded at
Nasdaq Stockholm, million
Million 100
300 SEK
Share development 2022–2024
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The ten largest shareholders sorted by voting rights
Number
of shares
Share
capital, %
Voting
rights, %
FAM AB 68,317,539 15.0% 29.1%
Cevian Capital 36,124,429 7.9% 5.0%
AFA Försäkring 3,846,138 0.8% 4.0%
Livförsäkringsbolaget Skandia 4,019,722 0.9% 2.6%
BlackRock 13,979,116 3.1% 2.0%
Harris Associates 13,722,429 3.0% 1.9%
Vanguard 13,650,212 3.0% 1.9%
SEB-Stiftelsen 1,650,000 0.4% 1.8%
Handelsbanken Fonder 10,686,860 2.3% 1.5%
Swedbank Robur Fonder 9,947,219 2.2% 1.4%
Source: Modular Finance AB as of 31 December 2024.
Geographic ownership 2024
Others, 2.2%
Unknown country, 11.8%
Europe excl Sweden, 12.8%
USA, 19.6%
Sweden, 53.5%
–40
–20
–30
0
–10
10
20
Jan
2022
Jan
2023
Jan
2024
Dec
2024
Total return 2022−2024
Return SKF B
Total return SKF B (including dividends)
30%
Data per share
1)
SEK per share unless otherwise stated 2024 2023
Earnings per share 14.22 14.04
Dividend per A and B share 7.75
2)
7.50
Total dividends, MSEK 3,529
2)
3,415
Purchase price of B shares at year-end on Nasdaq Stockholm 207.6 201.3
Equity per share 131 116
Yield (B), % 3.7
2)
3.7
P/E ratio, B (share price/earnings per share) 14.6 14.3
Cash flow from operations, per share 23.7 30.3
Cash flow after investments before financing, per share 11.4 17.4
1) See page 164 for definitions
2) According to the Board’s proposal for the year 2024.
ADDITIONAL INFORMATION
There are no regulations under Swedish law or under the
Articles of Association limiting the transferability of SKF
shares. Furthermore, to the best of SKF’s knowledge,
no agreements exist between share holders limiting the
right to transfer SKF shares (e.g. by pre-emption or first
refusal clauses). No restrictions exist limiting the number
of votes that each shareholder may cast at a shareholders’
meeting. There are no existing agreements between SKF
and any board member or employee, allowing them to
receive special compensation in the event of resignation,
dismissal without cause, or termination of employment
as a consequence of a public take over bid for the shares
in AB SKF.
Source: Modular Finance AB as of 31 December 2024.
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Capital structure, financing,
credit rating and dividend policy
Capital structure
The capital structure target is a net debt/equity
ratio, excluding pension liabilities, below 40%. This
together with the self-funding principle in the strate-
gic framework, operating cash flow to fund invest-
ments and shareholder distribution underpins the
Group’s financial flexibility and its ability to execute
on the strategy, while maintaining a strong credit
rating. On 31 December 2024, the net debt/equity
ratio, excluding pension liabilities was 14.1% (13.9).
Financing
SKF’s policy is to have long-term financing of its
operations.
As of 31 December 2024, the average maturity of
SKF’s loans was approximately four years. SKF has
four notes issued on the European bond market.
EUR 300 million per 2025, EUR 400 million per 2028,
EUR 300 million per 2029, and one with an out-
standing amount of EUR 300 million, due in 2031.
The bonds maturing in 2028 and 2029 are both
issued under SKF’s Green Finance Framework.
According to the conditions of the notes, the notes’
interest rate may increase by 5% in case of a change
of control of the company in combination with a
rating downgrade to a non- investment grade as a
con sequence of this. Change of control meaning
any party/concerted parties acquiring more than
50% of SKF’s share capital or SKF’s shares carrying
more than 50% of the voting rights.
In addition to the bonds mentioned before, SKF
also has one bilateral loan of USD 100 million due in
2027. Furthermore, SKF has signed a long-term credit
facility of EUR 430 million, with the European Invest-
ment Bank, which by the year end was unutilized. In
addition to its own liquidity, AB SKF has one unutilized
committed credit facility of MEUR 800, syndicated
with ten banks that will expire in 2029, with one 1-year
extension option.
Credit rating
On 31 December 2024, the Group had a Baa1 rating
from Moody’s Investors Service and a BBB+ rating
from Fitch Ratings, both with a stable outlook. SKF
intends to keep a strong credit rating, which is re -
flected in its capital structure targets.
Dividend policy
SKF’s dividend and distribution policy is based
on the principle that the total dividend should be
adapted to the trend for earnings and cash flow, while
considering the Group’s development potential and
financial position. The Board of Directors’ view is that
the ordinary dividend pay-out ratio should amount to
around one half of SKF’s average net profit calculated
over a business cycle, which is reflected in SKF’s
long-term financial targets. If the financial position
of the SKF Group exceeds the targets for the capital
structure an additional distribution to the ordinary
dividend could be made in the form of a higher divi-
dend, a redemption scheme or a repurchase of the
company’s own shares. On the other hand, in periods
of more un certainty a lower dividend ratio could be
appropriate.
Based on the operating performance, cash gene-
ration capacity and outlook, the Board has decided
to propose to the Annual General Meeting a dividend
of SEK 7.75 (7.50) per share. This proposal is subject to
a resolution by the Annual General Meeting in April
2025, see page 78, Proposed distribution of surplus.
Remuneration to Group Management
The principles of remuneration for Group Manage-
ment members were adopted at the annual general
meeting in 2020 and revised in 2022 and are sum-
marized in the Annual Report 2024, Consolidated
Financial Statements, Note 23.
NOMINATION OF BOARD MEMBERS AND NOTICE OF ANNUAL GENERAL MEETING
In addition to specially appointed members and
deputies, the company’s Board of Directors shall
according to the Articles of Association, comprise
a minimum of five and a maximum of twelve
members, with a maximum of five deputies. The
Annual General Meeting shall, inter alia, determine
the number of Board members and deputy Board
members, and preside over the elections of Board
members and deputy Board members.
Notice to attend an Annual General Meeting and
notice to attend an Extra General Meeting where
an issue relating to a change in the Articles of
Association will be dealt with, shall be issued no
earlier than six weeks and no later than four weeks
prior to the General Meeting. Notice to attend an
Extra General Meeting for other matters shall be
issued no earlier than six weeks and no later than
three weeks prior to the General Meeting.
31SKF ANNUAL REPORT 2024
Fighting friction
Our innovative solutions for the food and beverage
industry help you secure contamination- free food
processing and achieve more energy efficient pro-
duction. So come dinnertime, people can enjoy
what’s served knowing it’s both safe and responsibly
produced with minimal environmental impact.
Financial
statements
Consolidated income statements and consolidated
statements of comprehensive income ........................................... 33
Comments on the consolidated income statements .............. 34
Consolidated balance sheets ............................................................. 35
Comments on the consolidated balance sheets ....................... 36
Consolidated statements of cash flow ............................................ 37
Comments on the consolidated statements of cash flow ...... 38
Consolidated statements of changes
in equity and comments ........................................................................ 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Accounting policies .......................................................... 41
Note 2 Segment information ........................................................ 42
Note 3 Acquisitions .......................................................................... 44
Note 4 Divestment of businesses .............................................. 44
Note 5 Research and development ........................................... 44
Note 6 Expenses by nature ........................................................... 45
Note 7 Other operating income and expenses .................... 45
Note 8 Financial income and financial expenses .............. 45
Note 9 Taxes......................................................................................... 46
Note 10 Intangible assets ................................................................ 47
Note 11 Property, plant and equipment ..................................... 49
Note 12 Right-of-use assets ............................................................ 51
Note 13 Inventories ............................................................................. 52
Note 14 Financial assets .................................................................. 53
Note 15 Other short-term assets .................................................. 54
Note 16 Share capital......................................................................... 55
Note 17 Earnings per share ............................................................. 55
Note 18 Provisions for post-employment benefits ............... 55
Note 19 Other provisions and contingent liabilities ............ 59
Note 20 Financial liabilities ............................................................. 60
Note 21 Other short-term liabilities ............................................. 61
Note 22 Related parties including associated
companies ............................................................................. 61
Note 23 Remuneration to key management ............................ 61
Note 24 Fees to the auditors ........................................................... 65
Note 25 Average number of employees ..................................... 65
Note 26 Financial risk management .......................................... 66
Note 27 Non-controlling interests ................................................ 68
Note 28 Assets and liabilities classified
as held for sale ..................................................................... 68
FINANCIAL STATEMENTS OF THE PARENT COMPANY
Parent Company income statements and statements
of comprehensive income ..................................................................... 69
Parent Company balance sheets ....................................................... 70
Parent Company statements of cash flow ..................................... 71
Parent Company statements of changes in equity .................... 71
NOTES TO THE FINANCIAL STATEMENTS
OF THE PARENT COMPANY
Note 1 Accounting policies ........................................................... 72
Note 2 Revenues and operating expenses ............................ 72
Note 3 Financial income and financial expenses .............. 72
Note 4 Appropriations ..................................................................... 73
Note 5 Taxes......................................................................................... 73
Note 6 Intangible assets ................................................................ 73
Note 7 Property, plant and equipment ..................................... 74
Note 8 Investments in subsidiaries ........................................... 74
Note 9 Investments in equity securities ................................. 76
Note 10 Provisions for post-employment benefits ............... 77
Note 11 Loans ........................................................................................ 77
Note 12 Salaries and wages, other remunerations,
average number of employees and men and
women in Management and Board ............................. 77
Note 13 Contingent liabilities ......................................................... 77
Note 14 Subsequent events ............................................................ 77
Amounts in MSEK unless otherwise stated. Amounts
in parentheses refer to comparable figures for 2023.
The Administration Report is presented on pages 12–78.
It has been audited by SKF’s external auditors. See the
Auditor’s Report on pages 79–80.
According to the Swedish Annual Accounts Act chapter
6, §11, SKF’s Statutory Sustainability Report is prepared
as a separate report. The scope of this Sustainability
Report is presented on page 81.
32SKF ANNUAL REPORT 2024
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| Consolidated | |||
| income statements | |||
| January–December | |||
MSEK | Note | 2024 | 2023 |
Net sales | 2 | ||
Cost of goods sold | 6 | – | – |
Gross profit | |||
Research and development expenses | 5 | – | – |
Selling expenses | 6 | – | – |
Administrative expenses | 6 | – | – |
Other operating income | 7 | ||
Other operating expenses | 7 | – | – |
Income from associated companies | |||
Operating profit | |||
Financial income | 8 | ||
Financial expenses | 8 | – | – |
Profit before taxes | |||
Income tax | 9 | – | – |
Net profit | |||
| Net profit attributable to: | |||
Shareholders of AB SKF | |||
Non-controlling interests | |||
Basic earnings per share (SEK), before and after dilution | 17 |
| Consolidated statements | |||
| of comprehensive income | |||
| January–December | |||
MSEK | Note | 2024 | 2023 |
Net profit | |||
| Items that will not be reclassified to the income statement | |||
Remeasurements of post-employment benefits | 18 | – | |
Assets at fair value through other comprehensive income | 14 | ||
Income tax | 9 | – | |
– | |||
| Items that may be reclassified to the income statement | |||
Currency translation adjustments | – | ||
Assets at fair value through other comprehensive income | 14 | – | |
Income tax | 9 | ||
– | |||
Other comprehensive income, net of tax | – | ||
Total comprehensive income | |||
Total comprehensive income attributable to Shareholders of AB SKF | |||
Non-controlling interests |
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Comments on the
consolidated income statements
General
The Group’s income statement for 2024 included the
result of the acquired John Sample Group’s Lubrica-
tion and Flow Management business for the period
1 November–31 December. It also included the result
for two of the minor acquired businesses within mag-
netic bearings for the period 1 January–31 December
and 1 May–31 December.
Net sales
In 2024, net sales amounted to MSEK 98,722 (103,881)
corresponding to a decrease of –4.9% compared
to 2023. The change of the Swedish krona towards
other currencies had a positive impact in 2024 of
+0.4%. Structural changes accounted for +0.1%.
Net sales in local currencies decreased with –5.4%.
Sales development
y-o-y, % Q1 Q2 Q3 Q4
Full
year
Organic –7.0 –6.6 –4.4 –3.1 –5.4
Structure 0.1 0.1 0.0 0.3 0.1
Currency 0.0 0.9
–3.6 3.9 0.4
Total
–6.9 –5.6 –8.0 1.1 –4.9
Operating profit
Operating profit for the year was MSEK 10,339
(11,084). Operating profit included items affecting
comparability of MSEK –1,844 (–1,893), whereof
MSEK –1,497 (–1,398) related to ongoing restructur-
ing and cost reduction activities, factory closures
and expenses related to the separation of the Auto-
motive business, and MSEK –347 (–176) related to
impairment of assets. 2023 also included MSEK 18
related to the divestment of business within lubrica-
tion and MSEK –338 related to currency devaluation
in Argentina.
Financial income and expenses, net
The financial income and expenses, net for 2024 was
MSEK –1,250 (–1,903). Exchange rate fluctuations had
a more negative effect in 2023, compared to 2024,
whereof MSEK –250 related to the devaluation in
Argentina in December 2023. For more information
about the changes year-over-year, see Note 8.
Taxe s
The effective tax rate for the year was 24.2% (26.2).
For more information, see Note 9.
Values by quarter
MSEK Q1 Q2 Q3 Q4
Full
year
Net sales 24,699 25,606 23,692 24,725 98,722
Operating profit 2,993 2,489 2,526 2,331 10,339
Profit before
taxes 2,722 2,112 2,241 2,014 9,089
Basic earnings
per share (SEK) 4.15 3.36 3.40 3.31 14.22
2023 2024
Operating profit development y-o-y
Organic sales &
manufacturing volumes
Cost development
Currency impact
Items affecting comparability
Divested businesses
0
5,000
10,000
15,000
20,000 SEK million
–839
10,339
11,084
–656
699
8
43
202220212020 20242023
Operating profit
0
2.5
5.0
7.5
10.0
12.5 SEK billion
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| Consolidated balance sheets | |||
| As of 31 December | |||
MSEK | Note | 2024 | 2023 |
| ASSETS | |||
| Non-current assets | |||
Goodwill | 10 | ||
Other intangible assets | 10 | ||
Property, plant and equipment | 11 | ||
Right-of-use assets | 12 | ||
Long-term financial assets | 14 | ||
Deferred tax assets | 9 | ||
Investments in joint ventures and associated companies | 22 | ||
Other long-term assets | |||
| Current assets | |||
Inventories | 13 | ||
Trade receivables | 14 | ||
Other short-term assets | 15 | ||
Other short-term financial assets | 14 | ||
Cash and cash equivalents | 14 | ||
Assets classified as held for sale | 28 | ||
Total assets | |||
| EQUITY AND LIABILITIES | |||
Equity attributable to shareholders of AB SKF | |||
Equity attributable to non-controlling interests | 27 | ||
| Non-current liabilities | |||
Long-term financial liabilities | 20 | ||
Long-term lease liabilities | 12, 20 | ||
Provisions for post-employment benefits | 18 | ||
Deferred tax provisions | 9 | ||
Other long-term provisions | 19 | ||
Other long-term liabilities | |||
| Current liabilities | |||
Trade payables | 20 | ||
Short-term provisions | 19 | ||
Short-term lease liabilities | 12, 20 | ||
Other short-term financial liabilities | 20 | ||
Other short-term liabilities | 21 | ||
Liabilities classified as held for sale | 28 | ||
Total equity and liabilities |
0
5
10
15
20 %
202420232022
Return on capital employed
0
10
20
30
40
50 %
202420232022
Equity/assets
0
10
20
40
30
50 %
202420232022
Gearing
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Comments on the
consolidated balance sheets
Net working capital
On 31 December 2024, net working capital as
percentage of sales was 30.6% (27.7) consisting
of the following components:
• Inventories amounted to MSEK 26,182 (23,194)
corresponding to 26.5% (22.3) of annual sales. The
increase in inventories was attributed to volumes
by MSEK 2,345, net of divestments and acquisi-
tions, and to currencies by MSEK 1,305.
• Trade receivables amounted to MSEK 16,600
(16,811) corresponding to 16.8% (16.2) of annual
sales. The change in trade receivables was attrib-
utable to volume decrease with MSEK –783, net
of divestments and acquisitions, and to currencies
with MSEK 572. The average days of outstanding
trade receivables were 67 days (64).
• Trade payables amounted to MSEK 12,553 (11,236)
corresponding to 12.7% (10.8) of annual sales. The
change attributable to volume was MSEK 884, net
of divestments and acquisitions, and the remaining
MSEK 433 was attributable to currencies.
Property, Plant and Equipment
On 31 December 2024, property, plant and equipment
amounted to MSEK 30,470 (26,820) corresponding to
30.9% (25.8) of annual sales. The change attributable
to currencies was MSEK 4,972.
Net debt
Net debt amounted to MSEK 16,472 (16,191) at the
end of 2024.
Post-employment benefit provisions totalled
MSEK 7,729 (8,578) at year-end, representing a net
decrease of MSEK 848 (net decrease of 43), which
was attributable to:
• Cash payments of MSEK –1,411 (–1,272)
• Actuarial gains and losses of MSEK –731 (297)
• Expenses of MSEK 945 (1,025)
• Acquired/divested businesses of MSEK 0 (0)
• The remainder was attributable to currency
translation differences.
Loans totalled MSEK 16,526 (18,496), at the end of
2024, representing a decrease of MSEK –1,970. The
change was primarily attributable to the repayment
of matured bonds of MSEK –2,689.
Equity
During the year, equity increased from MSEK 54,956
to MSEK 61,969. Net profit amounted to MSEK 6,887
(6,777) and dividends were MSEK 3,833 (3,357).
Currency translation had a positive effect of
MSEK 2,914 (–3,136). Remeasurements had a positive
net of tax effect of MSEK 732 (–214). The capital
structure target is a net debt/equity ratio, excluding
pension liabilities, below 40%. This together with the
self -funding principle in the new strategic framework,
operating cash flow to fund investments and divi-
dends, underpins the Group’s financial flexibility and
its ability to execute on the strategy, while maintain-
ing a strong credit rating. On 31 December 2024, the
net debt/equity ratio, excluding pension liabilities
was 14.1% (13.9).
0
10
20
30
40%
Net working capital as % of annual sales
Trade payables
Trade receivables
Inventories
Target
Net working capital
Q1
2022
Q2 Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2 Q3 Q4
0
10
20
40
% 60
50
2020 20242021 2022 2023
30
Property, Plant and Equipment as % of net sales
0
5
10
15
20
30 SEK billion
Property, Plant and Equipment
Property, Plant and Equipment
% of net sales
25
0
40
80
120
% 160
2020 2021 2022 2023 2024
Net debt/equity
0
10
20
30
40 SEK billion
Net debt
Net debt/equity ratio
36SKF ANNUAL REPORT 2024
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| Consolidated statements of cash flow | |||
| January–December | |||
MSEK | Note | 2024 | 2023 |
| Operating activities | |||
Operating profit | |||
Adjustments for Depreciation, amortization and impairment | 6 | ||
Net gain/loss on sales of businesses and property, plant and equipment | – | ||
Other non-cash items | |||
Income taxes paid | – | – | |
| Contributions to and payments under post-employment | |||
defined benefit plans | 18 | – | – |
Associated companies | – | – | |
| Changes in working capital | |||
Inventories | – | ||
Trade receivables | – | ||
Trade payables | |||
Other operating assets and liabilities, net | – | ||
Interest and other financial items | – | – | |
Net cash flow from operating activities | |||
| Investing activities | |||
Additions to intangible assets | 10 | – | – |
Additions to property, plant and equipment | 11 | – | – |
Sales of property, plant, equipment, and intangible assets | 10, 11 | ||
Acquisitions of businesses, net of cash and cash equivalents | 3 | – | |
Divestments of businesses, net of cash and cash equivalents | 4 | ||
Investment in/sale of equity securities | – | – | |
Net cash flow used in investing activities | – | – | |
Net cash flow after investments before financing |
| January–December | |||
MSEK | Note | 2024 | 2023 |
| Financing activities | |||
Proceeds from medium- and long-term loans | |||
Repayments of medium- and long-term loans | – | – | |
Payments of leases | – | – | |
Cash dividends to shareholders of AB SKF and non-controlling interests | – | – | |
Funding of post-employment benefits | – | – | |
Investments in financial assets | – | – | |
Sales of financial assets | |||
Net cash flow used in/from financing activities | – | – | |
Net cash flow | – | ||
Cash and cash equivalents at 1 January | |||
Cash effect excluding acquired/sold businesses | – | ||
Cash effect from acquired/sold businesses | |||
Translation effect | – | ||
Cash and cash equivalents on 31 December |
37SKF ANNUAL REPORT 2024
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Comments on the
consolidated statements of cash flow
The consolidated statements of cash flow have been
adjusted for exchange rate effects arising upon the
translation of foreign subsidiaries’ balance sheets
to SEK, as these do not represent cash flows. Cash
and cash equivalents comprises of cash free, cash
on time deposits at banks and debt securities matur-
ing within three months at the time of the investment.
Cash flow from operating activities
Net cash flow from operating activities, which is
the primary cash flow measure used in the Group,
amounted to MSEK 10,792 (13,783) in 2024. Other
non-cash items included expenses for which the
cash flow has not yet occurred. The decline in cash
flow from operating activities is mainly driven by
lower operating profit as well as negative changes
in working capital where the most negative impact
is coming from changes in inventories. Interest and
other financial items included interest paid of
MSEK –786 (–799), interest received of MSEK 443
(403), and the remainder related primarily to realized
derivatives on commercial flows between Group
companies.
Cash flow after investments before financing
Cash flow after investments before financing reached
MSEK 5,190 (7,916) in 2024. Adjusted for acquisitions
and divestments of businesses, the cash flow
amounted to MSEK 5,777 (7,891). During the year the
Group acquired the John Sample Group and two
smaller businesses within magnetic bearings which
generated a net cash outflow of MSEK –587 (25).
Cash flow used in financing activities
Cash flow used in financing activities included a
payment of MSEK –210 (–212), net of taxes, related
to contribution to the defined benefit retirement plan
in the USA.
20232022 2024
Cash flow from
operating activities
0
3,000
6,000
9,000
12,000
15,000 MSEK
202420232022
Additions to Property,
Plant and Equipment
0
1,500
3,000
4,500
6,000 MSEK
202420232022
Cash flow from operating activities
–1,000
1,000
2,000
3,000
4,000 MSEK
0 0
4,000
12,000
8,000
MSEK 16,000
Quarter
12-months rolling
Q4Q3 Q4 Q2 Q3 Q4Q2Q1 Q3Q2 Q1Q1
0
100
300
400
200
500 MEUR
2025
2027
2028
2029
2031
Debt structure
20232022 2024
Paid dividend
per A and B share
0
2
4
8 SEK
6
The Board of Directors’ proposed
distribution of surplus for the year
2024, which is subject to approval at
the Annual General Meeting in April
2025, includes an ordinary dividend
of SEK 7.75 per share, see Note 16.
38SKF ANNUAL REPORT 2024
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Comments on the consolidated statements of cash flow, cont.
Change in net debt
MSEK
2024
Closing balance
Cash
changes
Businesses
acquired/sold
Other non-cash
changes
Translation
effect
2024
Opening balance
Loans
1)
16,526 –2,689 5 23 691 18,496
Post-employment benefits, net
2)
7,729 –1,416 — 237 330 8,578
Lease liabilities 3,516 –885 26 1,355 184 2,836
Other short-term financial assets
3)
–268 8 — 152 –20 –408
Cash and cash equivalents –11,031 2,493 –110 — –103 –13,311
Net debt 16,472 –2,489 –79 1,767 1,082 16,191
Derivatives
4)
included in Other financing items — — — — — —
MSEK
2023
Closing balance
Cash
changes
Businesses
acquired/sold
Other non-cash
changes
Translation
effect
2023
Opening balance
Loans
1)
18,496 — — 9 141 18,346
Post-employment benefits, net
2)
8,578 –1,272 — 1,339 –110 8,621
Lease liabilities 2,836 –863 — 864 –86 2,921
Other short-term financial assets
3)
–408 –106 — 4 293 –599
Cash and cash equivalents –13,311 –3,404 — — 348 –10,255
Net debt 16,191 –5,645 — 2,216 586 19,034
Derivatives
4)
included in Other financing items — — — — — —
1) Excludes derivatives, see Note 20.
2) Other non-cash changes include remeasurements as well as expenses on defined benefit plans, see Note 18.
3) Other short-term financial assets exclude derivatives, see Note 14. Cash changes of MSEK 8 (–106) is explained by investment in financial assets
of MSEK –7 (–402) and sale of financial assets of MSEK 15 (296).
4) Financing activities to hedge short- and long-term loans. Other financing items in cash flow include cash flow from derivatives as stated in the table
and interest premium for the repayment of loans.
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| Consolidated statements of changes in equity | ||||||||
| Equity attributable to owners of AB SKF | ||||||||
| Non- | ||||||||
| Share | Share | FV OCI | Translation | Retained | controlling | |||
| MSEK | capital | premium | reserve | reserve | earnings | Subtotal | interests 1) | Total |
Opening balance 1 January 2023 | ||||||||
Net profit | ||||||||
Hyperinflation adjustment 3) | ||||||||
| Components of other comprehensive income | ||||||||
Currency translation adjustments | – | – | – | – | ||||
Change in FV OCI assets | – | – | – | |||||
Remeasurements of post-employment benefits | – | – | – | |||||
Income taxes | ||||||||
| Transactions with shareholders | ||||||||
Non-controlling interests | ||||||||
Cost for Performance Share Programmes, net 2) | – | – | – | |||||
Dividends | – | – | – | – | ||||
Other | ||||||||
Closing balance 31 December 2023 | ||||||||
Net profit | ||||||||
Hyperinflation adjustment 3) | ||||||||
| Components of other comprehensive income | ||||||||
Currency translation adjustments | ||||||||
Change in FV OCI assets | ||||||||
Remeasurements of post-employment benefits | ||||||||
Income taxes | – | – | – | |||||
| Transactions with shareholders | ||||||||
Non-controlling interests | ||||||||
Cost for Performance Share Programmes, net 2) | – | – | – | |||||
Dividends | – | – | – | – | ||||
Other | ||||||||
Closing balance 31 December 2024 |
1) See Note 27 for details.
2) See Note 23 for details.
3) See Note 1 for details.
Fair value through other comprehensive
income reserve
The fair value through other comprehensive in -
come (FV OCI) reserve accumulates changes
in the fair value of assets recognized directly in
other comprehensive income, net of tax, with the
exception of any dividends and any impairment
losses. See Note 14 for details on FV OCI assets.
Translation reserve
Exchange differences relating to the translation
from the functional currencies of the SKF Group’s
foreign subsidiaries into SEK are accumulated in
the translation reserve. Upon the sale of a foreign
operation, the accumulated translation amounts
are recycled to the income statement and in cluded
in the gain or loss on the disposal. Additionally,
gains and losses on hedging instruments meeting
the criteria for hedges of net investments in foreign
operations are recognized in the translation
reserve net of tax. See Note 26 for details.
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Notes to the consolidated financial statements
1
Accounting policies
Average rates | Year-end rates | |||||
Country | Unit | Currency | 2024 | 2023 | 2024 | 2023 |
Argentina | 1 | ARS | 0.01 | 0.04 | 0.01 | 0.01 |
China | 1 | CNY | 1.47 | 1.50 | 1.51 | 1.41 |
EMU countries | 1 | EUR | 11.44 | 11.47 | 11.46 | 11.06 |
India | 100 | INR | 12.63 | 12.84 | 12.87 | 12.02 |
Brazil | 1 | BRL | 1.97 | 2.12 | 1.78 | 2.06 |
United Kingdom | 1 | GBP | 13.53 | 13.20 | 13.83 | 12.74 |
USA | 1 | USD | 10.57 | 10.61 | 11.01 | 10.00 |
SKF ANNUAL REPORT 2024 41
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NOTES
1
Accounting policies, cont.
Climate risk assessment
SKF sees both risks and opportunities related to climate,
but no known material climate related risks affecting the
financial statements of 2024 for the SKF Group have been
identified. SKF’s core business is based on well-established
technology and the Group is diversified in terms of prod-
ucts, customers, geographic markets and industries. Based
on this diversification, SKF does not anticipate that climate
related business risks will have substantive financial or
strategic impact on Group level. Some specific market
sectors will be negatively affected, such as the demand
for SKF products for diesel and gasoline engines. However,
other sectors will be positively affected, such as the mar-
ket demand for SKF products for electric motors. Overall,
SKF believes that the climate-related business opportuni-
ties outweigh the risks.
New accounting principles
New accounting principles 2024
IASB issued several amended accounting standards that
were endorsed by EU, effective date 1 January 2024. None
of these had a material effect on the SKF Group’s financial
statements.
The Group has applied the temporary exception issued
by the IASB in May 2023 from the accounting requirements
for deferred taxes in IAS 12. Accordingly, the Group neither
recognizes nor discloses information about deferred tax
assets and liabilities related to Pillar 2 income taxes.
On 13 December 2023, the government in Sweden,
where the parent company is incorporated, enacted the
Pillar 2 income taxes legislation effective from 1 January,
2024. Under the legislation, the Parent Company will be
required to pay top-up tax on profit of its subsidiaries that
are taxed at an effective tax rate of less than 15 percent.
SKF Group has analyzed the 2024 financial figures and
concluded that the Group is not expecting any additional
material top-up tax. The Group is continuing to assess the
impact of Pillar 2 income taxes legislation on its future
financial performance. statements.
New accounting principles 2025
IASB issued several amended accounting standards that
were endorsed by EU, effective date 1 January 2025. None
of these are expected to have a material effect on the SKF
Group’s financial.
2
Segment information
2
Segment information, cont.
Net sales by customer industry – Total
Industrial distribution, 27%
1
Aerospace, 7%
2
Heavy industries, 6%
3
Other industrial, 4%
4
5
Railway, 6%
High speed machinery
and electrical drives, 5%
6
Agriculture, food
and beverage, 3%
7
Renewable energy, 3%
Off-highway, 2%
8
9
Marine, 2%
10
Traditional energy, 2%
11
Material handling, 2%
12
Automation, 1%
13
Light vehicles, 15%
1
Vehicle aftermarket, 10%
2
Commercial vehicles, 5%
3
Net sales by customer industry
– Industrial
Industrial distribution, 38%
1
Aerospace, 10%
2
Heavy industries, 8%
3
Other industrial, 6%
4
5
Railway, 8%
High speed machinery
and electrical drives, 8%
6
Agriculture, food and
beverage, 5%
7
Renewable energy, 4%
Off-highway, 3%
8
9
Marine, 3%
10
Traditional energy, 3%
11
Material handling, 2%
12
Automation, 2%
13
13
2
3
4
5
7
1
6
10
11
12
8
9
Net sales by customer industry
– Automotive
Light vehicles, 52%
1
Vehicle aftermarket, 32%
2
Commercial vehicles, 16%
3
1
2
3
1
2
3
7
6
5
8
9
2
3
1
4
13
10
11
12
SKF ANNUAL REPORT 2024 42
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DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
2
Segment information, cont.
Net sales by geographic area
– total
China and
Northeast Asia, 18%
India and
Southeast Asia, 10%
The Americas, 31%
Europe, Middle East
and Africa, 41%
Net sales by geographic area
– Industrial
China and
Northeast Asia, 19%
India and
Southeast Asia, 10%
The Americas, 30%
Europe, Middle East
and Africa, 41%
Net sales by geographic area
– Automotive
China and
Northeast Asia, 16%
India and
Southeast Asia, 11%
The Americas, 33%
Europe, Middle East
and Africa, 40%
| Net sales by | Contribution to | |||
| customer industri | profit before tax | |||
MSEK | 2024 | 2023 | 2024 | 2023 |
Industrial | 69,475 | 73,393 | 9,285 | 9,735 |
Automotive | 29,247 | 30,488 | 1,054 | 1,349 |
Subtotal operating segments | 98,722 | 103,881 | 10,339 | 11,084 |
Financial net | — | — | –1,250 | –1,903 |
Total | 98,722 | 103,881 | 9,089 | 9,181 |
| Additions to property, | ||||||
| Depreciation and | plant and equipment, intangible | |||||
| amortization | Impairments | assets and right-of-use assets | ||||
MSEK | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
Industrial | 3,580 | 3,591 | 310 | 150 | 5,039 | 5,350 |
Automotive | 506 | 556 | 36 | — | 987 | 949 |
Total | 4,086 | 4,147 | 346 | 150 | 6,026 | 6,299 |
Assets | Liabilities | |||
MSEK | 2024 | 2023 | 2024 | 2023 |
Industrial | 70,089 | 65,444 | 15,427 | 15,036 |
Automotive | 22,719 | 20,242 | 6,568 | 5,631 |
Subtotal operating segments | 92,808 | 85,686 | 21,995 | 20,667 |
Financial and tax items | 17,710 | 19,596 | 30,113 | 30,996 |
Eliminations and other unallocated items | 8,895 | 6,621 | 5,337 | 5,284 |
Total | 119,413 | 111,903 | 57,445 | 56,947 |
| Net sales by | Non-current | |||
| Geographic disclosure | customer location | assets | ||
| MSEK | 2024 | 2023 | 2024 | 2023 |
Sweden | 2,248 | 2,440 | 3,354 | 3,615 |
Europe, Middle East and Africa excl. Sweden | 37,528 | 39,859 | 18,262 | 16,716 |
The Americas | 30,758 | 31,193 | 17,826 | 15,706 |
China and Northeast Asia | 18,158 | 20,509 | 10,316 | 9,292 |
India and Southeast Asia | 10,030 | 9,880 | 2,491 | 1,558 |
Eliminations | — | — | –196 | 603 |
Total | 98,722 | 103,881 | 52,053 | 47,490 |
SKF ANNUAL REPORT 2024 43
TH IS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
3
Acquisitions
MSEK | 2024 | 2023 |
| Total fair value of net assets acquired | ||
Intangible assets, excluding goodwill | 239 | — |
Property, plant and equipment | 5 | — |
Right-of-use assets | 26 | — |
Non-current assets | 14 | — |
Current assets | 327 | — |
Non-current liabilities | –78 | — |
Current liabilities | –105 | — |
Fair value net assets acquired | 428 | — |
Goodwill | 240 | — |
Total acquisition cost | 668 | — |
Cash and cash equivalents acquired | –103 | — |
Cash outflow | 565 | — |
4
Divestment of businesses
During 2024, the Group has no divestment of businesses.
During 2023, the Group divested Spandau Pumpen,
a smaller business within lubrication, resulting in a total
| cash in-flow of MSEK 25. | ||
5
Research and development
0
1
2
3
5
4
% 6
20222021 2020 2023 2024
Research and development % of net sales
0
500
1,000
1,500
3,000 MSEK
2,500
2,000
Research and development
Research and development % of net sales
Research and development expenditure, excluding
developing IT solutions, totalled MSEK 3,326 (3,303),
corresponding to 3.4% (3.2) of annual sales.
SKF ANNUAL REPORT 2024 44
TH IS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
6
Expenses by nature
MSEK | 2024 | 2023 |
Employee benefit expenses including social charges | 28,023 | 29,242 |
Raw material and components consumed including traded products | 32,972 | 36,446 |
Change in work in process and finished goods | –1,347 | 880 |
Depreciation, amortization and impairments | 4,432 | 4,297 |
Other expenses, primarily purchased services, shop supplies and utilities | 23,959 | 22,036 |
Total operating expenses | 88,039 | 92,901 |
| Depreciation, amortization | 2024 | 2023 | ||||||
| and impairments are | ||||||||
| accounted for as (MSEK) | Depre ciation | Amortization | Impairments | Total | Depre ciation | Amortization | Impairments | Total |
Cost of goods sold | 3,014 | 84 | 196 | 3,294 | 3,037 | 97 | 146 | 3,280 |
Selling expenses | 432 | 556 | 150 | 1,138 | 453 | 560 | 4 | 1,017 |
Total | 3,446 | 640 | 346 | 4,432 | 3,490 | 657 | 150 | 4,297 |
7
Other operating income and expenses
8
Financial income and financial expenses
MSEK | 2024 | 2023 |
Interest income | 436 | 562 |
Interest expenses | –816 | –943 |
| Net gains/losses: | ||
Net interest cost on post-employment benefits | –273 | –357 |
Exchange differences, net | –396 | –1,088 |
Other financial income including dividends | 66 | 56 |
Other financial expenses 1) | –267 | –133 |
Financial net | –1,250 | –1,903 |
2024 | 2023 | |||||
| Interest | Interest | Net gains/ | Interest | Interest | Net gains/ | |
| Financial net specified by category of financial instruments (MSEK) | income | expenses | losses | income | expenses | losses |
Financial assets/liabilities at fair value through profit or loss | ||||||
Designated upon initial recognition | 264 | — | — | 238 | — | — |
Derivatives held for trading | — | –274 | –50 | — | –233 | 146 |
Financial assets classified as amortized cost | 172 | — | –264 | 324 | — | –445 |
Financial assets classified as fair value through other comprehensive income | — | — | 1 | — | — | 2 |
Other financial liabilities, primarily loans | — | –542 | –17 | — | –710 | –735 |
Other liabilities including post-employment benefits | — | — | –541 | — | — | –490 |
Total | 436 | –816 | –870 | 562 | –943 | –1,522 |
SKF ANNUAL REPORT 2024 45
TH IS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
9
Taxes
2024 | 2023 | |||||
| Other | Other | |||||
| Income | comprehensive | Total | Income | comprehensive | Total | |
| Tax expenses (MSEK) | statement | income | taxes | statement | income | taxes |
Current taxes | –2,077 | — | –2,077 | –2,373 | — | –2,373 |
Deferred taxes | –125 | –150 | –275 | –31 | 83 | 52 |
Total | –2,202 | –150 | –2,352 | –2,404 | 83 | –2,321 |
Reconciliation of the statutory tax in Sweden to the actual tax (MSEK) | 2024 | 2023 |
Tax calculated using statutory tax rate in Sweden | –1,872 | –1,891 |
Difference between statutory tax rate in Sweden and foreign subsidiaries | 253 | –403 |
Other taxes | –50 | –88 |
Tax credits and similar items | 49 | 34 |
Non-deductible/Non-taxable profit items | –914 | 127 |
Changes in tax rates | — | — |
Tax loss carry-forwards | 95 | –76 |
Current tax referring to previous years | 150 | 122 |
Other | 87 | –229 |
Tax expense in the Income Statement | –2,202 | –2,404 |
2024 | 2023 | |||
| Deferred tax | Deferred tax | Deferred tax | Deferred tax | |
| Gross deferred taxes per type (MSEK) | assets | liabilities | assets | liabilities |
Intangibles and other assets | 289 | 1,365 | 151 | 1,322 |
Property, plant and equipment | 111 | 1,388 | 72 | 1,209 |
Right of use assets | 52 | 239 | — | — |
Inventories | 743 | 622 | 643 | 499 |
Trade receivables | 109 | 3 | 71 | 3 |
Provisions for post-employment benefits | 1,559 | 140 | 1,667 | 196 |
Other accruals and liabilities | 1,324 | 41 | 1,310 | 99 |
Tax loss carry-forwards | 690 | — | 828 | — |
Tax credit carry-forwards | 339 | — | 349 | — |
Other | 137 | 92 | 179 | 55 |
Gross deferred taxes | 5,353 | 3,890 | 5,270 | 3,383 |
Net deferred taxes presented in the Consolidated balance sheet | 3,369 | 1,905 | 3,107 | 1,220 |
SKF ANNUAL REPORT 2024 46
TH IS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
10
Intangible assets
SKF ANNUAL REPORT 2024 47
TH IS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
10
Intangible assets, cont.
| 2024 | 2024 | |||||||
| Closing | Businesses | Translation | Opening | |||||
| MSEK | balance | Additions | acquired/sold | Disposals | Impairments | Other 1) | effects | balance |
| Acquisition cost | ||||||||
Goodwill | 13,148 | — | 263 | — | — | –694 | 1,000 | 12,579 |
| Patents, tradenames | ||||||||
and similar rights | 3,377 | 1 | 1 | — | — | –189 | 283 | 3,281 |
Internally developed software | 2,717 | 10 | 2 | — | — | 27 | –1 | 2,679 |
Customer relationships | 5,113 | — | 80 | — | — | –406 | 400 | 5,039 |
Leaseholds | 93 | — | 2 | — | — | –1 | 7 | 85 |
Product development | 231 | — | — | — | — | — | 8 | 223 |
Technology | 1,388 | 1 | — | — | — | –133 | 112 | 1,408 |
Other intangible assets | 319 | 2 | 154 | — | — | –29 | –8 | 200 |
Total | 26,386 | 14 | 502 | — | — | –1,425 | 1,801 | 25,494 |
| 2024 | 2024 | |||||||
| Closing | Amorti- | Businesses | Translation | Opening | ||||
| MSEK | balance | zations | acquired/sold | Disposals | Impairments | Other 1) | effects | balance |
| Accumulated amortization | ||||||||
| and impairments | ||||||||
Goodwill | 574 | — | — | — | — | –106 | 63 | 617 |
| Patents, tradenames | ||||||||
and similar rights | 580 | 26 | — | — | — | –45 | 21 | 578 |
Internally developed software | 2,049 | 171 | — | — | 127 | 6 | –1 | 1,746 |
Customer relationships | 4,370 | 309 | — | — | — | –317 | 323 | 4,055 |
Leaseholds | 28 | — | — | — | — | — | 2 | 26 |
Product development | 207 | 7 | — | — | — | — | 7 | 193 |
Technology | 1,176 | 105 | — | — | — | –131 | 93 | 1,109 |
Other intangible assets | 157 | 22 | — | — | — | –25 | –3 | 163 |
Total | 9,141 | 640 | — | — | 127 | –618 | 505 | 8,487 |
Net book value | 17,245 | 17,007 |
| 2023 | 2023 | |||||||
| Closing | Businesses | Translation | Opening | |||||
| MSEK | balance | Additions | acquired/sold | Disposals | Impairments | Other 1) | effects | balance |
| Acquisition cost | ||||||||
Goodwill | 12,579 | — | — | — | — | — | –420 | 12,999 |
| Patents, tradenames | ||||||||
and similar rights | 3,281 | 4 | — | — | — | 1 | –119 | 3,395 |
Internally developed software | 2,679 | 3 | — | –16 | — | –6 | –3 | 2,701 |
Customer relationships | 5,039 | — | — | –8 | — | –16 | –158 | 5,221 |
Leaseholds | 85 | — | — | — | — | 2 | –6 | 89 |
Product development | 223 | — | — | — | — | –79 | –5 | 307 |
Technology | 1,408 | — | — | — | — | 77 | –40 | 1,371 |
Other intangible assets | 200 | 4 | — | — | — | 3 | 2 | 191 |
Total | 25,494 | 11 | — | –24 | — | –18 | –749 | 26,274 |
| 2023 | 2023 | |||||||
| Closing | Amorti- | Businesses | Translation | Opening | ||||
| MSEK | balance | zations | acquired/sold | Disposals | Impairments | Other 1) | effects | balance |
| Accumulated amortization | ||||||||
| and impairments | ||||||||
Goodwill | 617 | — | — | — | — | — | –31 | 648 |
| Patents, tradenames | ||||||||
and similar rights | 578 | 24 | — | — | — | –14 | –5 | 573 |
Internally developed software | 1,746 | 180 | — | –13 | 4 | –8 | –3 | 1,586 |
Customer relationships | 4,055 | 302 | — | –8 | — | –25 | –129 | 3,915 |
Leaseholds | 26 | — | — | — | — | –1 | –2 | 29 |
Product development | 193 | 7 | — | — | — | –28 | –3 | 217 |
Technology | 1,109 | 105 | — | –3 | — | 41 | –36 | 1,002 |
Other intangible assets | 163 | 39 | — | — | — | 15 | –2 | 111 |
Total | 8,487 | 657 | — | –24 | 4 | –20 | –211 | 8,081 |
Net book value | 17,007 | 18,193 |
SKF ANNUAL REPORT 2024 48
TH IS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
10
Intangible assets, cont.
2024 | 2023 | |||
| Auto- | Auto- | |||
| Industrial | motive | Industrial | motive | |
Goodwill, MSEK | 12,189 | 385 | 11,571 | 391 |
Tradenames, MSEK | 2,406 | 238 | 2,307 | 228 |
| Average revenue | ||||
growth rate, % | 7.1 | 3.9 | 4.9 | 5.0 |
Discount rate, pre tax, % | 10.6 | 11.1 | 12.7 | 13.3 |
| Terminal growth | ||||
factor, % | 2.5 | 2.5 | 2.5 | 2.5 |
11
Property, plant and equipment
30%
2024
29%
2023
China and Northeast Asia
4% 7%
20242023
India and Southeast Asia
17%
2024
17%
2023
The Americas
2024
47%
2023
49%
Europe, Middle East
and Africa
2023
2024
Geographical distribution of property, plant and equipment 2023–2024
SKF ANNUAL REPORT 2024 49
TH IS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
11
Property, plant and equipment, cont.
| 2024 | Businesses | 2024 | ||||||
| MSEK | Closing balance | Additions | acquired/sold | Disposals | Impairments | Other 1) | Translation effects | Opening balance |
| Acquisition cost | ||||||||
Buildings | 13,723 | 981 | — | –43 | — | 84 | 540 | 12,161 |
Land and land improvements | 832 | 87 | — | –3 | — | 15 | 28 | 705 |
Machinery and supply systems | 44,197 | 2,800 | — | –577 | — | –268 | 1,981 | 40,261 |
Machine tooling and factory fittings | 5,979 | 364 | 6 | –191 | — | –129 | 263 | 5,666 |
Assets under construction including advances 2) | 7,239 | 845 | — | — | — | –930 | 372 | 6,952 |
Total | 71,970 | 5,077 | 6 | –814 | — | –1,228 | 3,184 | 65,745 |
| 2024 | 2024 | |||||||
| MSEK | Closing balance | Depre ciation | Businesses sold | Disposals | Impairments | Other | Translation effects | Opening balance |
| Accumulated depreciation and impairments | ||||||||
Buildings | 6,434 | 352 | — | –10 | –20 | –152 | 265 | 5,999 |
Land improvements | 129 | 10 | — | — | 18 | –196 | 18 | 279 |
Machinery and supply systems | 29,976 | 1,910 | — | –584 | 207 | –1,361 | 1,341 | 28,463 |
Machine tooling and factory fittings | 4,961 | 376 | — | –155 | 12 | 380 | 164 | 4,184 |
Total | 41,500 | 2,648 | — | –749 | 217 | –1,329 | 1,788 | 38,925 |
Net book value | 30,470 | 26,820 |
| 2023 | Businesses | 2023 | ||||||
| MSEK | Closing balance | Additions | acquired/sold | Disposals | Impairments | Other 1) | Translation effects | Opening balance |
| Acquisition cost | ||||||||
Buildings | 12,161 | 809 | — | –41 | — | 163 | –239 | 11,469 |
Land and land improvements | 705 | 1 | — | –12 | — | 26 | –342 | 1,032 |
Machinery and supply systems | 40,261 | 2,243 | –26 | –592 | — | –88 | –1,140 | 39,864 |
Machine tooling and factory fittings | 5,666 | 575 | –12 | –72 | — | –181 | –137 | 5,493 |
Assets under construction including advances 2) | 6,952 | 2,121 | –1 | –1 | — | –322 | –503 | 5,658 |
Total | 65,745 | 5,749 | –39 | –718 | — | –402 | –2,361 | 63,516 |
| 2023 | 2023 | |||||||
| MSEK | Closing balance | Depre ciation | Businesses sold | Disposals | Impairments | Other 1) | Translation effects | Opening balance |
| Accumulated depreciation and impairments | ||||||||
Buildings | 5,999 | 299 | — | –7 | 96 | –26 | –156 | 5,793 |
Land improvements | 279 | 6 | — | –1 | — | –5 | –11 | 290 |
Machinery and supply systems | 28,463 | 1,985 | –21 | –542 | 42 | –737 | –681 | 28,417 |
Machine tooling and factory fittings | 4,184 | 363 | –11 | –81 | 7 | 49 | –262 | 4,119 |
Total | 38,925 | 2,653 | –32 | –631 | 145 | –719 | –1,110 | 38,619 |
Net book value | 26,820 | 24,897 |
SKF ANNUAL REPORT 2024 50
TH IS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
12
Right-of-use assets
MSEK | 2024 | 2023 |
Short-term lease expenses | 310 | 329 |
Low-value asset lease expenses | 66 | 68 |
Variable lease payments not included in lease liability | 14 | 14 |
Other | 5 | –3 |
Total | 395 | 408 |
| 2024 | 2024 | ||||||
| Closing | Opening | ||||||
| MSEK | balance | Additions | Modi fications | Impairments | Reclassi fication 1) | Translation effects | balance |
| Acquisition cost | |||||||
Premises | 5,086 | 703 | 246 | — | –253 | 263 | 4,127 |
Vehicles | 1,040 | 189 | 41 | — | –37 | 28 | 819 |
Forklifts | 345 | 41 | 13 | — | –16 | 8 | 299 |
Machinery | 36 | 1 | — | — | 5 | — | 30 |
Office equipment | 7 | — | — | — | — | — | 7 |
Other | 375 | 1 | –7 | — | –16 | 25 | 372 |
Total | 6,889 | 935 | 293 | — | –317 | 324 | 5,654 |
| 2024 | 2024 | ||||||
| Closing | Opening | ||||||
| MSEK | balance | Depre ciation | Modi fications | Impairments | Reclassi fication | Translation effects | balance |
| Accumulated | |||||||
depreciation and impairments | |||||||
Premises | 2,210 | 536 | 11 | 2 | –223 | 110 | 1,774 |
Vehicles | 714 | 187 | 1 | — | –59 | 17 | 568 |
Forklifts | 253 | 59 | — | — | –15 | 6 | 203 |
Machinery | 43 | 4 | 1 | — | –6 | 1 | 43 |
Office equipment | 12 | 1 | — | — | –1 | — | 12 |
Other | 93 | 11 | –5 | — | –10 | 4 | 93 |
Total | 3,325 | 798 | 8 | 2 | –314 | 138 | 2,693 |
Net book value | 3,564 | 2,961 |
SKF ANNUAL REPORT 2024 51
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
12
Right-of-use assets, cont.
| 2023 | 2023 | ||||||
| Closing | Reclassi- | Translation | Opening | ||||
| MSEK | balance | Additions | Modifi cations | Impairments | fication | effects | balance |
| Acquisition cost | |||||||
Premises | 4,127 | 333 | 114 | — | –356 | –118 | 4,154 |
Vehicles | 819 | 138 | 40 | — | –98 | –6 | 745 |
Forklifts | 299 | 38 | 12 | — | –24 | –7 | 280 |
Machinery | 30 | 4 | — | — | –2 | — | 28 |
Office equipment | 7 | — | — | — | –13 | — | 20 |
Other | 372 | 26 | — | — | 2 | –24 | 368 |
Total | 5,654 | 539 | 166 | — | –491 | –155 | 5,595 |
| 2023 | 2023 | ||||||
| Closing | Reclassi- | Translation | Opening | ||||
| MSEK | balance | Depre ciation | Modifi cations | Impairments | fication | effects | balance |
| Accumulated | |||||||
depreciation and impairments | |||||||
Premises | 1,774 | 576 | –132 | — | –322 | –54 | 1,706 |
Vehicles | 568 | 159 | –1 | — | –90 | –2 | 502 |
Forklifts | 203 | 51 | — | — | –23 | –9 | 184 |
Machinery | 43 | 7 | — | — | –2 | — | 38 |
Office equipment | 12 | 8 | — | — | –12 | — | 16 |
Other | 93 | 36 | — | 1 | –1 | 6 | 65 |
Total | 2,693 | 837 | –133 | 1 | –464 | –59 | 2,511 |
Net book value | 2,961 | 3,084 |
13
Inventories
MSEK | 2024 | 2023 |
Finished goods | 14,573 | 12,709 |
| Raw materials | ||
and supplies | 9,294 | 8,390 |
Work in process | 2,315 | 2,095 |
Total | 26,182 | 23,194 |
SKF ANNUAL REPORT 2024 52
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
14
Financial assets
| Financial assets per category 2024 | Fair value through | |||||
| profit or loss | ||||||
| Fair value | ||||||
| through other | ||||||
| comprehensive | At initial | Of which | ||||
MSEK | Amortized cost | income | recognition | Trading | Total | cur rent |
Trade receivables | 16,600 | — | — | — | 16,600 | 16,600 |
Cash and cash equivalents | 6,619 | — | 4,412 | — | 11,031 | 11,031 |
Equity securities | — | 400 | — | — | 400 | — |
Marketable securities | — | — | — | 918 | 918 | — |
Trading derivatives | — | — | — | 62 | 62 | 62 |
Debt securities | — | 26 | — | — | 26 | — |
Other loans and receivables | 348 | — | — | — | 348 | 268 |
Carrying amount | 23,567 | 426 | 4,412 | 980 | 29,385 | 27,961 |
Fair value | 23,567 | 426 | 4,412 | 980 |
| Financial assets per category 2023 | Fair value through | |||||
| profit or loss | ||||||
| Fair value | ||||||
| through other | ||||||
| comprehensive | At initial | Of which | ||||
MSEK | Amortized cost | income | recognition | Trading | Total | cur rent |
Trade receivables | 16,811 | — | — | — | 16,811 | 16,811 |
Cash and cash equivalents | 8,803 | — | 4,508 | — | 13,311 | 13,311 |
Equity securities | — | 313 | — | — | 313 | — |
Marketable securities | — | — | — | 769 | 769 | — |
Trading derivatives | — | — | — | 333 | 333 | 333 |
Debt securities | — | 30 | — | — | 30 | 6 |
Other loans and receivables | 467 | — | — | — | 467 | 403 |
Carrying amount | 26,081 | 343 | 4,508 | 1,102 | 32,034 | 30,864 |
Fair value | 26,081 | 343 | 4,508 | 1,102 |
SKF ANNUAL REPORT 2024 53
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
14
Financial assets, cont.
| Fair value hierarchy for financial | ||||||||
assets at fair value (MSEK) | Level 1 | Level 2 | Level 3 | 2024 | Level 1 | Level 2 | Level 3 | 2023 |
Fair value through other comprehensive income | ||||||||
Equity securities | 400 | — | — | 400 | 313 | — | — | 313 |
Debt securities | 26 | — | — | 26 | 30 | — | — | 30 |
Fair value through profit or loss | ||||||||
Trading securities | — | — | 918 | 918 | — | — | 769 | 769 |
Cash and cash equivalents | 4,412 | — | — | 4,412 | 4,508 | — | — | 4,508 |
Hedging derivatives | — | 62 | — | 62 | — | — | — | — |
Trading derivatives | — | — | — | — | — | 333 | — | 333 |
Total | 4,838 | 62 | 918 | 5,818 | 4,851 | 333 | 769 | 5,953 |
| Cash and Cash equvialents | ||
(MSEK) | 2024 | 2023 |
Cash | 6,434 | 6,200 |
Cash Equivalents | 4,597 | 7,110 |
11,031 | 13,311 |
| Past due, net of allowance | ||||||
| Carrying | Not yet | 1–30 | 31–60 | 61–90 | ||
| Trade receivables by due date (MSEK) | amount | due | days | days | days | > 91 days |
2024 | 16,600 | 14,448 | 1,528 | 371 | 150 | 103 |
2023 | 16,811 | 14,191 | 1,677 | 485 | 199 | 259 |
| Specification of reserve for credit losses | ||
(MSEK) | 2024 | 2023 |
Opening balance 1 January | 403 | 446 |
Additions | 474 | 115 |
Reversals | –382 | –115 |
| Changes through the income | ||
statement | 92 | — |
| Allowances used to cover | ||
write-offs | –69 | –25 |
Acquired/Divested companies | 3 | 2 |
Currency translation adjustments | 15 | –20 |
Closing balance 31 December | 445 | 403 |
15
Other short-term assets
MSEK | 2024 | 2023 |
Value added tax receivables, net | 2,364 | 2,326 |
Income tax receivables | 1,555 | 1,265 |
Prepaid expenses | 897 | 951 |
Accrued income | 231 | 208 |
Advances to suppliers | 316 | 467 |
Other current receivables | 694 | 642 |
Total | 6,057 | 5,859 |
SKF ANNUAL REPORT 2024 54
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
16
Share capital
| Number of shares authorized and outstanding | ||||
| Share capital | ||||
A Shares | B Shares | Total | (MSEK) | |
Opening balance 1 January 2023 | 29,403,933 | 425,947,135 | 455,351,068 | 1,138 |
Conversion of A shares to B shares | –97,000 | 97,000 | — | — |
Closing balance 31 December 2023 | 29,306,933 | 426,044,135 | 455,351,068 | 1,138 |
Conversion of A shares to B shares | –322,934 | 322,934 | — | — |
Closing balance 31 December 2024 | 28,983,999 | 426,367,069 | 455,351,068 | 1,138 |
17
Earnings per share
2024 | 2023 | |
Net profit attributable to owners of AB SKF (MSEK) | 6,474 | 6,395 |
Weighted average number of ordinary shares outstanding | 455,351,068 | 455,351,068 |
Basic earnings per share (SEK) | 14.22 | 14.04 |
Dilutive shares from Performance Share Programmes | — | — |
Weighted average diluted number of shares | 455,351,068 | 455,351,068 |
Diluted earnings per share (SEK) | 14.22 | 14.04 |
18
Provisions for post-employment benefits
SKF ANNUAL REPORT 2024 55
THI S
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BAC K T O
START
NOTES
18
Provisions for post-employment benefits, cont.
| 2024 | |||||||
| USA | USA | Germany | United Kingdom | Sweden | |||
| Amounts recognized in the consolidated balance sheet (MSEK) | pension | medical | pension | pension | pension | Other | Total |
Present value of unfunded defined benefit obligation | 315 | 519 | 633 | — | 280 | 793 | 2,540 |
Present value of funded defined benefit obligation | 7 ,007 | — | 9,608 | 2,984 | 2,403 | 1,750 | 23,752 |
Less: Fair value of plan assets | –6,479 | — | –5,927 | –3,677 | –884 | – 1,601 | –18,568 |
Impact of asset ceiling | — | — | — | — | — | 5 | 5 |
Total | 843 | 519 | 4,314 | –693 | 1,799 | 947 | 7,729 |
| Reflected as: | |||||||
Other long-term assets | — | — | — | — | — | –773 | –773 |
Provisions for post-employment benefits | 843 | 519 | 4,314 | –693 | 1,799 | 1,720 | 8,502 |
Total | 843 | 519 | 4,314 | –693 | 1,799 | 947 | 7,729 |
| 2023 | |||||||
| USA | USA | Germany | United Kingdom | Sweden | |||
| Amounts recognized in the consolidated balance sheet (MSEK) | pension | medical | pension | pension | pension | Other | Total |
Present value of unfunded defined benefit obligation | 367 | 518 | 627 | — | 288 | 733 | 2,533 |
Present value of funded defined benefit obligation | 6,958 | — | 9,039 | 3,205 | 2,431 | 1,547 | 23,180 |
Less: Fair value of plan assets | –6,399 | — | –5,201 | –3,378 | –772 | –1,375 | –17,125 |
Impact of asset ceiling | — | — | — | — | — | –10 | –10 |
Total | 926 | 518 | 4,465 | –173 | 1,947 | 895 | 8,578 |
| Reflected as: | |||||||
Other long-term assets | — | — | — | — | — | –219 | –219 |
Provisions for post-employment benefits | 926 | 518 | 4,465 | –173 | 1,947 | 1,114 | 8,797 |
Total | 926 | 518 | 4,465 | –173 | 1,947 | 895 | 8,578 |
SKF ANNUAL REPORT 2024 56
THI S
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BAC K T O
START
NOTES
18
Provisions for post-employment benefits, cont.
United Kingdom
The major plans in the U.K. represent around 92% of the
total U.K. obligation. Benefits under these plans are based
on length of service and a career average revalued earn-
ings basis, and are indexed when paid. As of April 2012,
these plans are closed to new entrants, who instead are
entitled to defined contribution pension solutions.
Responsibility for the governance of the plan lies jointly
with the subsidiary and a board of trustees comprised of
representatives of the subsidiary as well as plan partici-
pants in accordance with the Plan constitution. The plan is
subject to statutory funding objectives based on the local
pension cal culation, which in the case of funding deficits
have an agreed recovery plan to achieve full funding in
ten years.
Sweden
The major plan in Sweden is the ITP plan and it represents
around 90% of the total Swedish obligation. Benefits are
based on final salary and are indexed when paid. Benefits
are established in accordance with a collective agreement
established between participating Swedish companies.
The plan is closed for employees born after 1978, who
instead are entitled to a defined contribution pension solu-
tion. The Swedish subsidiaries are required to have credit
insurance which covers all pension obligations in case of
insolvency. For the Swedish subsidiaries, the portions of
the ITP pension financed through insurance premiums to
Alecta only cover family pension, health insurance and
TGL and as such are immaterial. There are no regulatory
funding requirements, however, voluntary funding has
been provided for the plans through a foundation, which
is governed jointly by the company and employee repre-
sentatives. The foundation must comply with government
regulations.
Other
The most significant plans include the funded pension
plans in Switzerland, Canada and Belgium. Additionally,
there are retire ment indemnity plans in France and termi-
nation indemnity plans in Italy, where lump sum payments
are made upon retirement and termination respectively.
2024 | 2023 | |||||
| Present value | Fair value of | Present value | Fair value of | |||
| MSEK | of obligation | plan assets | Total | of obligation | plan assets | Total |
Opening balance 1 January | 25,713 | –17,135 | 8,578 | 25,719 | –17,098 | 8,621 |
Interest expenses/(income) | 980 | –707 | 273 | 1,092 | –735 | 357 |
Current service cost | 492 | — | 492 | 460 | — | 460 |
Past service cost | 2 | — | 2 | 42 | — | 42 |
Settlements | –3 | 2 | –1 | –4 | 2 | –2 |
Other | 160 | 19 | 179 | 153 | 15 | 168 |
Subtotal expenses | 1,631 | –686 | 945 | 1,743 | –718 | 1,025 |
Difference between actual return and interest (income)/expenses | — | –897 | –897 | — | –336 | –336 |
Actuarial (gains)/losses – demographic assumptions | 70 | — | 70 | –129 | — | –129 |
Actuarial (gains)/losses – financial assumptions | 28 | — | 28 | 694 | — | 694 |
Experience adjustments (gains)/losses | 89 | — | 89 | 74 | — | 74 |
Change in asset ceiling | — | —21 | –21 | — | –6 | –6 |
Subtotal remeasurements in OCI | 187 | –918 | –731 | 639 | –342 | 297 |
Employer contribution | — | –686 | –686 | — | –578 | –578 |
Employee contribution | 42 | –6 | 36 | 21 | 4 | 25 |
Benefit payments | –1,676 | 910 | –766 | –2,005 | 1,286 | –719 |
Subtotal cash flow 1) | –1,634 | 218 | –1,416 | –1,984 | 712 | –1,272 |
Other | 61 | –25 | 36 | –34 | 51 | 17 |
Translation differences | 334 | –17 | 317 | –370 | 260 | –110 |
Closing balance 31 December | 26,292 | –18,563 | 7,729 | 25,713 | –17,135 | 8,578 |
1) Cash outflows for 2025 are expected to be some MSEK 876 which include contributions to funded plans as well as payments made
directly by the companies under unfunded plans and partially funded plans.
Components of total post-employment benefit expenses (MSEK) | 2024 | 2023 |
Post-employment defined benefit expenses | 945 | 1,025 |
Post-employment defined contribution expenses | 693 | 555 |
Total post-employment benefit expenses | 1,638 | 1,580 |
| Whereof amounts charged to: | ||
Cost of goods sold | 736 | 731 |
Selling expenses | 498 | 394 |
Administrative expenses | 131 | 98 |
Financial expenses | 273 | 357 |
Total | 1,638 | 1,580 |
SKF ANNUAL REPORT 2024 57
THI S
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BAC K T O
START
NOTES
18
Provisions for post-employment benefits, cont.
2024 | 2023 | |||||
Plan asset composition (MSEK) | Quoted | Unquoted | Total | Quoted | Unquoted | Total |
Government bonds | 4,600 | — | 4,600 | 1,535 | — | 1,535 |
Corporate bonds | 6,356 | — | 6,356 | 6,193 | — | 6,193 |
Equity instruments | 3,237 | 1,837 | 5,074 | 3,739 | 229 | 3,968 |
Real estate | 260 | 827 | 1,087 | 205 | 2,497 | 2,702 |
Other, primarily cash and other financial receivables | 373 | 1,078 | 1,451 | 1,600 | 1,127 | 2,727 |
Total | 14,826 | 3,742 | 18,568 | 13,272 | 3,853 | 17,125 |
To enable consistent, proactive and effective management
of the post-employment benefits in line with its business
strategy and values, the SKF Group established a Global
Pension Committee, a governance body who is responsible
to align post-employment benefits to SKF Global Pension
Policy. SKF Global Pension Policy sets out principles for
managing SKF’s pension and other long-term employee
benefits within SKF globally.
The SKF Group strives to balance risk in the invest-
ments of plan assets by aiming for a range of 30–50% in
equity instruments, with the remainder in lower risk/fixed
income investments such as corporate and government
bonds.
The investment positions for the major pension plans
are managed within the asset-liability matching frame-
work. Within this framework, the Group’s objective is to
match plan assets to the pension obligations by investing
in securities with maturities that align with the benefit
payments as they fall due, and in the appropriate currency.
SKF Treasury Centre regularly monitors how the duration
and the expected yield of the investments are matching
the expected cash outflows arising from the pension
obligations. Final investment decisions are taken by the
local subsidiary/trustee together with SKF Treasury Centre.
| 2024 | ||||||
| Significant weighted-average assumptions | USA | USA | Germany | U.K. | Sweden | |
| at end of year | pension | medical | pension | pension | pension | Other |
Discount rate | 5.4 | 5.4 | 3.4 | 5.7 | 3.5 | 3.1 |
Pension increase rate 1) | n/a | n/a | 2.0 | 3.2 | 2.0 | n/a |
Salary growth rate 2) | n/a | n/a | 2.2 | 3.2 | 3.4 | 4.4 |
Longevity male/female 3) | 20.8/22.5 | 20.7/22.7 | 20.8/24.2 | 21.5/23.4 | 20.0/24.3 | 19.7/23.1 |
| Weighted average duration | ||||||
of the plan (in years) 4) | 8.2 | 7.1 | 14.6 | 13.5 | 17.5 | 8.5 |
| 2023 | ||||||
| Significant weighted-average assumptions | USA | USA | Germany | U.K. | Sweden | |
| at end of year | pension | medical | pension | pension | pension | Other |
Discount rate | 4.9 | 4.9 | 3.4 | 4.3 | 3.2 | 2.9 |
Pension increase rate 1) | n/a | n/a | 2.0 | 3.0 | 2.0 | n/a |
Salary growth rate 2) | n/a | n/a | 2.3 | 3.0 | 3.4 | 6.6 |
Longevity male/female 3) | 20.7/22.6 | 20.6/22.6 | 20.7/24.1 | 21.9/23.9 | 20.0/25.0 | 18.9/22.3 |
Weighted average duration of the plan (in years) 4) | 8.7 | 7.5 | 15.1 | 16.0 | 18.4 | 5.9 |
1) Pension increase rate refers to indexation primarily tied to inflation.
2) Salary growth rate for the U.S. pension is n/a as no additional service cost will be accrued for these plans.
3) Longevity is expressed as the life expectancy of a current 65 year old in number of years.
4) Represents the average number of years remaining until the obligation is paid out.
n/a = assumptions not applicable or not significant for the plan.
| Impact on defined benefit obligations, | ||
Sensitivity analysis of significant assumptions | Change in actuarial assumption | MSEK |
Discount rate | +1% | –2,451 |
–1% | 3,052 | |
Salary growth rate | +0.5% | 224 |
–0.5% | –211 | |
Pension increase rate | +0.5% | 893 |
–0.5% | –801 | |
Longevity | +1 year | 819 |
–1 year | –632 |
The sensitivity analysis is based on the change in one
assumption while holding all other assumptions constant,
see notes to previous table. In practice, this is unlikely to
occur, and changes in some of the assumptions may be
correlated. When calculating the sensitivity analysis of
the defined benefit obligations to changes in assumptions
the same method has been applied as when calculating
the pension liability recognized within the obligation.
The sensitivity analysis considers the most significant
plans in USA, Germany, U.K. and Sweden, and it has been
prepared consistently with prior years.
SKF ANNUAL REPORT 2024 58
THI S
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BAC K T O
START
NOTES
19
Other provisions and contingent liabilities
| 2024 | Reversal | 2024 | |||||
| Closing | Provisions | Utilized | unutilized | Translation | Opening | ||
| MSEK | balance | for the year | amounts | amounts | Other | effect | balance |
Claims | 267 | 164 | –103 | –56 | 1 | 8 | 253 |
Other employee benefits | 687 | 138 | –203 | –3 | –33 | 32 | 756 |
Restructuring | 1,037 | 1,363 | –1,376 | –23 | –31 | 47 | 1,057 |
Other | 590 | 242 | –86 | –110 | 8 | 18 | 518 |
Total | 2,581 | 1,907 | –1,768 | –192 | –55 | 105 | 2,584 |
| 2023 | Reversal | 2023 | |||||
| Closing | Provisions | Utilized | unutilized | Translation | Opening | ||
| MSEK | balance | for the year | amounts | amounts | Other | effect | balance |
Claims | 253 | 123 | –76 | –6 | –21 | –5 | 238 |
Other employee benefits | 756 | 420 | –325 | 57 | 34 | –10 | 580 |
Restructuring | 1,057 | 1,171 | –1,020 | –44 | — | –9 | 959 |
Other | 518 | 151 | –67 | –62 | –24 | –8 | 528 |
Total | 2,584 | 1,865 | –1,488 | –55 | –11 | –32 | 2,305 |
| 2024 | |
| MSEK | Of which current |
Claims | 204 |
Other employee benefits | 55 |
Restructuring | 622 |
Other | 276 |
Total | 1,157 |
| 2023 | |
| MSEK | Of which current |
Claims | 166 |
Other employee benefits | 146 |
Restructuring | 690 |
Other | 243 |
Total | 1,245 |
SKF ANNUAL REPORT 2024 59
THI S
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BAC K T O
START
NOTES
20
Financial liabilities
2024 | 2023 | ||||
MSEK | Maturity | Carrying amount | Fair value | Carrying amount | Fair value |
| Long-term financial liabilities | |||||
MUSD 3 | 2025 | — | — | 3 | 3 |
MEUR 300 | 2025 | — | — | 3,177 | 3,192 |
MUSD 100 | 2027 | 1,101 | 1,128 | 1,000 | 1,033 |
MEUR 400 | 2028 | 4,557 | 4,617 | 4,363 | 4,422 |
MEUR 300 | 2029 | 3,429 | 3,224 | 3,307 | 3,051 |
MEUR 300 | 2031 | 3,307 | 3,048 | 3,275 | 2,865 |
Long-term lease liabilities | 2026 and thereafter | 2,714 | 2,714 | 2,207 | 2,207 |
Other long-term loans | 2026–2030 | 200 | 200 | 200 | 201 |
Derivatives held for hedge accounting | 91 | 91 | 362 | 362 | |
Derivatives held for trading | — | — | — | — | |
Subtotal long-term financial liabilities | 15,399 | 15,022 | 17,894 | 17,336 | |
| Short-term financial liabilities | |||||
MSEK 900 | 2024 | — | — | 900 | 894 |
MSEK 2,100 | 2024 | — | — | 2,100 | 2,116 |
MUSD 3 | 2025 | 3 | 3 | 13 | 13 |
MEUR 300 | 2025 | 3,444 | 3,400 | — | — |
Trade payables | 2025 | 12,553 | 12,553 | 11,236 | 11,236 |
Of which trade payable under vendor financing arrangement | 1,546 | 1,546 | 1,806 | 1,806 | |
Short-term lease liabilities | 2025 | 802 | 802 | 629 | 629 |
Short-term loans | 2025 | 485 | 485 | 158 | 158 |
Derivatives held for hedge accounting | 2025 | — | — | — | — |
Derivatives held for trading | 2025 | 627 | 627 | 260 | 260 |
Subtotal short-term financial liabilities | 17,914 | 17,870 | 15,296 | 15,306 | |
Total | 33,313 | 32,892 | 33,190 | 32,642 |
SKF ANNUAL REPORT 2024 60
THI S
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BAC K T O
START
NOTES
21
Other short-term liabilities
MSEK | 2024 | 2023 |
Employee related accruals | 3,700 | 4,144 |
Accrual for rebates | 1,728 | 1,577 |
Income tax payables | 949 | 965 |
Deferred income | 449 | 368 |
Customer advances | 415 | 434 |
Value added taxes payables, net | 659 | 916 |
Other current liabilities | 925 | 795 |
Other accrued expenses | 2,105 | 1,874 |
Total | 10,930 | 11,073 |
22
Related parties including associated companies
| Transactions with Associated | ||
companies (MSEK) | 2024 | 2023 |
Sales of goods and services | 41 | 39 |
Purchases of goods and services | 528 | 511 |
Receivables as of 31 December | 92 | 95 |
Liabilities as of 31 December | 17 | 4 |
23
Remuneration to key management
Salaries and other remunerations for SKF Board
of Directors, President and Group Management
Principles of remuneration for Group Management
In March 2022, the Annual General Meeting adopted the
Board of Director’s proposal for principles of remuneration
for Group Management, which are summarized below.
Group Management is defined as the President and the
other members of the management team. The principles
shall apply to remuneration agreed and amendments to
remuneration already agreed, after the adoption of the
principles by the Annual General Meeting 2022, and, in
other cases, to the extent permitted under existing agree-
ments.
The objective of the principles is to ensure that the SKF
Group can attract and retain the best people in order to
contribute to the SKF Group’s mission and business strat-
egy, its long-term interests and sustainability. Remunera-
tion for Group Management shall be based on market com-
petitive conditions and at the same time support the
shareholders’ best interests.
The total remuneration package for a Group Manage-
ment member shall consist of the following components:
fixed salary, variable salary, pension benefits, conditions
for notice of termination and severance pay, and other
benefits such as a company car. The components shall
create a well-balanced remuneration reflecting individual
performance and responsibility as well as the SKF Group’s
overall performance.
Additionally, the Annual General Meeting 2024,
irrespective of the principles of remuneration for Group
Management, resolved on SKF’s Performance Share Pro-
gramme 2024 for senior managers and key employees,
where Group Manage ment is included. For more informa-
tion on SKF’s Performance Share Programme 2024,
see page 63.
Fixed salary
The fixed salary of a Group Management member shall
be at a market competitive level. It shall be based on
competence, responsibility, experience and performance.
The SKF Group shall use an internationally well-recognized
evaluation system in order to evaluate the scope and
responsibility of the position. Market benchmarks shall
be conducted on a yearly basis.
The performance of Group Management members shall
be continuously monitored during the year and shall be
used as a basis for annual reviews of fixed salaries.
Variable salary
The variable salary of a Group Management member
shall run according to a performance-based programme.
The purpose of the programme shall be to motivate and
compensate value-creating achievements in order to
support operational, financial and sustainability targets
and thereby promote the SKF Group’s business strategy,
sustain ability and long-term interests.
The performance-based programme shall have pre-
determined and measurable criteria which can be both
financial and non-financial and which contribute to the
company’s longterm and sustainable development. The
criteria shall primarily be based on the annual financial
performance of the SKF Group, such as financial result,
growth and capital efficiency, and shall promote sustaina-
bility targets of the SKF Group.
The satisfaction of criteria for awarding variable salary
shall be measured over a period of one year.
The maximum variable salary shall vary between 50%
to 70% of the accumulated annual fixed salary of Group
Management members.
Other benefits
The SKF Group may provide other benefits to Group
Manage ment members in accordance with local practice.
Premiums and other costs relating to such benefits shall
depend on and follow local conditions and local practice
but shall represent, as a general rule, a limited value and
may amount to not more than 10% of the accumulated
annual fixed salary of the members of Group Management.
Other benefits can for instance be a company car
or health and medical insurance.
SKF ANNUAL REPORT 2024 61
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
23
Remuneration to key management, cont.
Pension
The SKF Group shall strive to establish pension plans
based on defined contribution models, which means that
a premium is paid amounting to a certain percentage of
the employee’s annual salary. The commitment in these
cases is limited to the payment of an agreed premium to
an insurance company offering pension insurance.
A Group Management member shall normally be covered
by, in addition to the basic pension (for Swedish members
usually the ITP pension plan), a supplementary defined
contribution pension plan. By offering this supplementary
defined contribution plan, it is ensured that Group Man-
agement members are entitled to earn pension benefits
based on the fixed annual salary above the level of the
basic pension. The normal retirement age for Group
Management members shall be 65 years.
For employments governed by rules other than Swedish,
pension benefits and other benefits may be duly adjusted
for compliance with mandatory rules or established local
practice, taking into account, to the extent possible, the
overall purpose of the principles. For employments gov-
erned by Swedish rules, the premium for the supplemen-
tary pension plan shall be linked to age and amount to
a maximum of 40% of the accumulated annual fixed
salary not covered by any other pension plan.
Notice of termination and severance pay
A Group Management member may terminate his/her
employment by giving six months’ notice. In the event of
termination of employment at the request of the company,
employment shall cease imme diately. The Group Manage-
ment member shall, however, receive a severance payment
related to the number of years’ of service, provided that it
shall always be maximized to two years’ fixed salary.
Salary and terms of employment for employees
When preparing the principles, the Board of Directors has
paid regard to the salary and terms of employment of the
employees of the company. Information about employees’
total remuneration, the components of the remuneration
and the growth and growth rate over time have been part
of the basis for the Board of Director’s and the Remunera-
tion Committee’s evaluation of the fairness of the principles
of remuneration and the limitations which the principles
entail.
The decision-making process to determine, review
and implement the principles
The Board of Directors has established a Remuneration
Committee. The Committee consists of a maximum of four
Board members. The Remuneration Committee prepares
all matters relating to the prin ciples of remuneration for
Group Management, as well as the terms of employment
for the President.
The principles of remuneration for Group Management
are presented by the Remuneration Committee to the
Board of Directors that, at least every fourth year, submits
a proposal for such principles to the Annual General Meet-
ing for approval. The principles of remuneration shall be
valid until new principles have been adopted by the Annual
General Meeting. The Board of Directors must approve the
terms of employment for the President. The Remuneration
Committee shall also monitor and evaluate programmes
for variable remuneration for Group Manage ment, the
application of the principles of remuneration for Group
Management and applicable remuneration structures and
levels of the SKF Group.
The members of the Remuneration Committee are inde-
pendent of the SKF Group and Group Management. The
President and other members of Group Management shall
not be present when the Board of Directors process and
resolve on remuneration related matters in so far as they
are affected by such matters.
The Board of Directors’ right to derogate from the
principles of remuneration
The Board of Directors may derogate from the principles
of remuneration decided by the Annual General Meeting, in
whole or in part, if in a specific case there is special cause
for the derogation and a derogation is necessary to serve
the SKF Group’s long-term interests, including its sustaina-
bility, or to ensure the SKF Group’s financial viability.
As set out above, the Remuneration Committee’s tasks
include preparing the Board of Directors’ resolutions in
remuneration related matters. This includes any resolu-
tions to derogate from the guidelines.
During 2024 the Board of Director’s decided to derogate
from the principles of remuneration during one occasion.
More information under the heading “Incentive program in
connection with the creation of two robust and high-per-
forming businesses” further down on this page.
President and Chief Executive Officer
Rickard Gustafson, President and Chief Executive Officer
of AB SKF has received remuneration from the company
during 2024 governed by the remuneration principles
decided upon by the Annual General Meeting; salary and
other remunerations amounted to a total of 24,906,228
SEK of which 15,997,871 SEK was fixed annual salary and
other benefits.
The pension arrangement for Rickard Gustafson is a
combination of the ITP scheme and a defined contribution
of 40% of the annual fixed salary above 30 income base
amounts. The retirement age for the President and Chief
Executive Officer is 65 years.
Rickard Gustafson’s shareholdings (own and/or held by
related parties) in the company is listed in the Corporate
Governance Report.
Group Management
The SKF’s Group Management, consisting of 12 people
at the end of the year, received in 2024 (exclusive of the
President) salary and other remunerations amounting to
a total of SEK 95,287,924 of which SEK 67,904,423 was
fixed annual salary, SEK 27,383,501 was variable salary
related to 2023 year’s performance, and SEK 11,564,178
was allotment of shares under the Performance Share
Programme 2021.
The variable salary for Group Management was accord-
ing to a short-term performance-based programme primar-
ily based on the financial performance of the SKF Group
with criteria such as operating profit and cash flow.
SKF’s Performance Share Programmes are further
described on page 63.
In the event of termination of employment at the request
of the company of a person in Group Management, that
person will receive a severance payment amounting to a
maximum of two years’ salary.
For Group Management the Board has decided on a
defined contribution supplementary pension plan. The
plan entitles Group Management members covered to
receive an additional pension over and above the basic
pension (for Swedish members usually the ITP pension
plan). The contributions paid for Group Management mem-
bers covered by the defined contribution plan are based
on each individual’s pensionable salary (normally the fixed
monthly salary excluding holiday pay, converted to yearly
salary) exceeding the level of the basic pension (for Swedish
members 30 income base amounts). Group Management
members are never covered by both defined benefit pen-
sion and defined contribution pension for the same part
of their pension entitlements. The normal retirement age
is 65 years.
Incentive program in connection with the creation of
two robust and high-performing businesses
As communicated in September 2024, the Board of Direc-
tors of AB SKF has decided to initiate a separation of the
Group’s Automotive business with the objective of a sepa-
rate listing on Nasdaq Stockholm. In order to incentivize
sustained dedication, focus and commitment from Group
Management to reach the ambitious goals to timely, effi-
ciently and successfully create two robust and high-per-
forming businesses and at the same time drive business
result and growth, the Board of Directors has decided to
implement a separate incentive programme. The carrying
out of a transformative project as described above while
at the same time drive business result is deemed by the
Board of Directors to constitute a special cause to moti-
vate a deviation from the principles of remuneration and
introduce an additional remuneration component to meet
SKF’s long-term interests.
By investing in this programme, SKF creates a powerful
motivator to, as far as possible, ensure successful execu-
tion of the separation and listing initiatives as well as the
SKF ANNUAL REPORT 2024 62
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
23
Remuneration to key management, cont.
CDP Climate Change score | Performance achievement |
A | 100% |
A– | 75% |
B | 50% |
<B | 0% |
SKF ANNUAL REPORT 2024 63
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
23
Remuneration to key management, cont.
Board of Directors
The Chair of the Board and the Board members are remu-
nerated in accordance with the decision taken at the
Annual General Meeting. At the Annual General Meeting of
AB SKF held in 2024 it was decided that the Board should
be paid fees according to the following: – an allotment of
SEK 2,750,000 to the Chair of the Board, of SEK 1,375,000
to the Vice Chair of the Board and with SEK 900,000 to
each of the other Board members; and – an allotment of
SEK 350,000 to the Chair of the Audit Committee, with
SEK 250,000 to each of the other members of the Audit
Committee, with SEK 200,000 to the Chair of the Remu-
neration Committee and with SEK 150,000 to each of the
other members of the Remuneration Committee, with
SEK 200,000 to the Chair of the Sustainability and Ethics
Committee and with SEK 150,000 to each of the other
members of the Sustainability and Ethics Committee.
A prerequisite for obtaining an allotment is that the Board
member is elected by the Annual General Meeting and
not employed by the company.
Fixed salary and other benefits 1) / | Short-term | Performance | Remuneration for | Gross | |||||||||
| fixed Board remuneration | variable salary | Share Programmes | committee work | pension costs 2) | |||||||||
| Amounts | |||||||||||||
| Amounts | Amounts | paid in 2024 | Amounts | Amounts paid | Amounts | Amounts | Amounts | Amounts | Total | Total | |||
| paid | expensed | related to | expensed | in 2024 related | expensed | paid | expensed | expensed | expensed | expensed | |||
| Amounts in SEK | in 2024 3) | in 2024 3) | 2023 3) | in 2024 3) | to prior years 3) | in 2024 3) | in 2024 3) | in 2024 3) | in 2024 3) | in 2024 | in 2023 | ||
| Board of directors of AB SKF | |||||||||||||
Hans Stråberg | 2,680,000 | 2,750,000 | — | — | — | — | 450,000 | 450,000 | 3,200,000 | 2,997,000 | |||
Håkan Buskhe | 1,340,000 | 1,375,000 | — | — | — | — | 600,000 | 600,000 | 1,975,000 | 1,905,000 | |||
Hock Goh | 875,000 | 900,000 | — | — | — | — | 150,000 | 150,000 | 1,050,000 | 985,000 | |||
Geert Follens | 875,000 | 900,000 | — | — | — | — | 400,000 | 400,000 | 1,300,000 | 1,202,000 | |||
Susanna Schneeberger | 875,000 | 900,000 | — | — | — | — | 150,000 | 150,000 | 1,050,000 | 985,000 | |||
Beth Ferreira | 875,000 | 900,000 | — | — | — | — | 150,000 | 150,000 | 1,050,000 | 850,000 | |||
Therese Friberg | 875,000 | 900,000 | — | — | — | — | 250,000 | 250,000 | 1,150,000 | 1,067,000 | |||
Richard Nilsson | 875,000 | 900,000 | — | — | — | — | 350,000 | 350,000 | 1,250,000 | 1,067,000 | |||
Niko Pakalén | 875,000 | 900,000 | — | — | — | — | 300,000 | 300,000 | 1,200,000 | 1,120,000 | |||
CEO | 15,977,871 | 17,075,338 | 8,928,357 | 4,581,503 | 6,297,000 | 3,602,616 | — | — | 6,013,109 | 31,272,565 | 35,088,009 | ||
Group Management 5) | 67,904,423 | 69,889,569 | 27,383,501 | 22,140,627 | 11,564,178 | 6,469,571 | — | — | 14,820,695 | 113,320,462 | 106,800,352 | ||
whereof AB SKF | 38,564,057 | 40,549,203 | 15,402,658 | 9,386,021 | 11,564,178 | 6,388,556 | — | — | 13,090,969 | 69,414,748 | 70,066,872 | ||
Total 2024 | 94,027,294 | 97,389,907 | 36,311,858 | 26,722 | 130 | 17,861,178 | 10,072,187 | 2,800,000 | 2,800,000 | 20,833,804 | 157,818,027 | — | |
whereof AB SKF | 64,686,928 | 68,049,541 | 24,331,015 | 13,967,524 | 17,861,178 | 9,991,171 | 2,800,000 | 2,800,000 | 19,104,078 | 113,912,314 | — | ||
Total 2023 | 82,245,037 | 86,675,133 | 14,710,992 | 29,745,575 | 3,169,146 | 17,608,516 | 2,313,000 | 2,313,000 | 17,724,137 | — | 154,066,361 | ||
whereof AB SKF | 56,220,823 | 60,650,919 | 11,528,956 | 22,566,321 | 3,169,146 | 15,567,093 | 2,313,000 | 2,313,000 | 16,235,548 | — | 117,332,881 | ||
1) Other benefits include for example company car and medical insurance.
2) Represents premiums paid under defined contribution plans as well as gross service costs under
defined benefit plans.
3) Amounts paid represent the cash outflow and are amounts received by the individual during a specific
calendar year. These amounts include remuneration for services rendered during given calendar year
such as salary, but can also in clude remuneration for services rendered in a prior year where payment
occurs subsequent to that year, for example the variable salary programmes. Amounts expensed refer
primarily to the costs for the Group for services rendered during a specific calendar year by the individ-
ual, but can also include adjustments or reversals related to prior years. Consequently, differences
between amounts paid and amounts expensed can arise as timing of the expense can be occurring
in a different calendar year than the cash outflow to the individual.
4) Total pension obligations, for SKF Group, related to Group Manage ment (including CEO) were MSEK 73.
5) Exclusive of CEO.
2024 | 2023 | |||
| Number of | Whereof | Number of | Whereof | |
| Men and women in Board of Directors and Group Management | persons | men | persons | men |
| The Group | ||||
| Board of Directors of the Parent Company elected | ||||
by the AGM incl. CEO | 10 | 70% | 10 | 70% |
Board of Directors of the Parent Company incl. CEO | 12 | 75% | 12 | 75% |
Group Management incl. CEO | 13 | 77% | 13 | 77% |
2024 | 2023 | |||
| Number of | Whereof | Number of | Whereof | |
| Men and women in Board of Directors and Group Management | persons | men | persons | men |
| Parent Company | ||||
| Board of Directors of the Parent Company elected | ||||
by the AGM incl. CEO | 10 | 70% | 10 | 70% |
Board of Directors of the Parent Company incl. CEO | 12 | 75% | 12 | 75% |
Group Management incl. CEO | 12 | 75% | 12 | 75% |
SKF ANNUAL REPORT 2024 64
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
24
Fees to the auditors
Fees to the SKF Group statutory auditors were split as follows (MSEK) | 2024 | 2023 |
| Deloitte | ||
Audit fees | 66 | 64 |
Where of Deloitte AB | 13 | 13 |
Audit related fees | 2 | 2 |
Where of Deloitte AB | 2 | 2 |
Tax fees | 2 | — |
Where of Deloitte AB | — | — |
Other fees | 1 | 2 |
Where of Deloitte AB | 1 | 2 |
71 | 68 |
The Parent Company’s share (MSEK) | 2024 | 2023 |
| Deloitte | ||
Audit fees | 11 | 10 |
Audit related fees | 2 | 2 |
Tax fees | — | — |
Other fees to auditors | 1 | 2 |
14 | 14 |
Audit fees are related to examination of the Annual Report and financial reporting, the administration by the Board
and the President as well as other tasks related to the duties of a company auditor.
Audit related fees are mainly attributable to the review of the SKF’s Sustainability Report. Tax fees are related
to tax consultancy and tax compliance services. All other assignments are defined as other.
25
Average number of employees
2024 | 2023 | |||
| Number of | Whereof | Number of | Whereof | |
| employees | men, % | employees | men, % | |
Parent Company in Sweden | 652 | 62 | 653 | 63 |
Subsidiaries in Sweden | 1,854 | 80 | 1,920 | 79 |
Subsidiaries abroad | 35,225 | 77 | 37,099 | 77 |
37,731 | 77 | 39,672 | 77 |
2024 | 2023 | |||
| Geographic specification of average number of employees | Number of | Whereof | Number of | Whereof |
| in subsidiaries abroad | employees | men, % | employees | men, % |
France | 2,386 | 80 | 2,289 | 80 |
Italy | 2,723 | 77 | 3,261 | 78 |
Germany | 4,889 | 87 | 4,666 | 87 |
Other Western Europe excluding Sweden | 3,145 | 81 | 3,302 | 82 |
Central and Eastern Europe | 2,760 | 62 | 3,320 | 63 |
USA | 3,201 | 74 | 3,522 | 73 |
Canada | 184 | 76 | 190 | 76 |
Mexico | 1,955 | 66 | 1,984 | 67 |
Latin America | 2,673 | 88 | 3,050 | 89 |
China | 7,046 | 70 | 7,347 | 70 |
India | 2,148 | 91 | 2,007 | 89 |
Other Asian countries/Pacific | 1,758 | 79 | 1,818 | 82 |
Middle East and Africa | 357 | 72 | 343 | 71 |
35,225 | 77 | 37,099 | 77 |
SKF ANNUAL REPORT 2024 65
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
26
Financial risk management
Key figures 1) | 2024 | 2023 |
Total equity, MSEK | 61,969 | 54,956 |
Gearing, % | 30.9 | 35.2 |
Equity/assets ratio, % | 51.9 | 49.1 |
| Net debt/equity ratio, excluding | ||
post- employment benefits, % | 14.1 | 13.9 |
| Adjusted return on capital | ||
employed 2) , % | 14.2 | 15.4 |
Net currency flows (MSEK) | 2024 | 2023 |
CAD | 1,049 | 1,021 |
CNY | 1,523 | 1,998 |
DKK | 461 | 547 |
EUR | –8,009 | –8,816 |
AUD | 598 | 592 |
THB | 594 | 604 |
TRY | 1,564 | 1,543 |
USD | 6,345 | 5,947 |
Other 1) | 2,207 | 2,106 |
SEK | –6,332 | –5,542 |
−600
−450
−
300
−150
0
300
150
THBAUDEUR USDTRYCAD DKKCNY
Effect of transactional currency flows on
operating profits of a 5% weaker SEK
450 MSEK
Other
1)
1) Other is a sum comprising 11 different currencies.
INRGBP USDCNY EUR
Effect of translation on operating profits
to SEK of a 5% weaker SEK
–50
50
0
100
250 M
SEK
200
150
Other
1)
1) Other is a sum comprising 44 different currencies.
SKF ANNUAL REPORT 2024 66
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
26
Financial risk management, cont.
2024 | Cash flows | |||
| 2027– | 2030 and | |||
MSEK | 2025 | 2026 | 2029 | thereafter |
Loans | –4,197 | –312 | –9,491 | –3,317 |
Trade payables | –12,553 | — | — | — |
Derivatives, net | –308 | — | –16 | — |
Lease liabilities | –817 | –647 | –1,356 | –1,189 |
Total | –17,875 | –959 | –10,863 | –4,506 |
Credit risk (MSEK) | 2024 | 2023 |
Trade receivables | 16,600 | 16,811 |
Other receivables | 1,292 | 1,267 |
Derivatives | 62 | 333 |
Cash and cash equivalent | 11,031 | 13,311 |
Total | 28,985 | 31,722 |
SKF ANNUAL REPORT 2024 67
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
26
Financial risk management, cont.
| Financial | Financial | |
| MSEK | expense 2024 | expense 2023 |
| Financial liabilities | ||
(hedged items) | –118 | –278 |
| Cross-currency interest-rate | ||
swaps (hedging instruments) | 128 | 275 |
Difference (inefficiency) | 10 | –3 |
Derivative net (MSEK) | Category | 2024 | 2023 |
| Interest rate and | |||
| currency swaps | |||
Fair value hedges | Hedge | ||
accounting | –456 | –349 | |
Economic hedges | Trading | — | — |
| Currency forwards/ | |||
| currency options | |||
Economic hedges | Trading | –202 | 57 |
| Share swaps | |||
Economic hedges | Trading | 1 | 5 |
–657 | –287 |
27
Non-controlling interests
Significant non-controlling interests
During 2024, there has been no change in significant
non-controlling interests.
The largest non-controlling interest is SKF India Ltd.
The non-controlling interests holds a 47.4% (47.4) share-
holding in the company. This represents 2.3% (2.4) of the
Group’s total equity. The tables present the summarized
financial information of SKF India Ltd.
27
Non-controlling interests, cont.
| Summarized income statement | January–December | |
| (MSEK) | 2024 | 2023 |
Net sales | 6,106 | 5,640 |
Operating profit | 947 | 920 |
Net income | 656 | 636 |
Other comprehensive income | 167 | –154 |
Total comprehensive income | 824 | 482 |
Profit allocated to NCI | 311 | 302 |
Dividends paid to NCI | –369 | –122 |
| As of 31 December | ||
Summarized balance sheet (MSEK) | 2024 | 2023 |
Non-current assets | 994 | 787 |
Current assets | 3,610 | 3,493 |
Total assets | 4,604 | 4,280 |
Equity attributable to shareholders of AB SKF | 1,607 | 1,584 |
Equity attributable to NCI | 1,449 | 1,427 |
Non-current liabilites | 16 | 36 |
Current liabilities | 1,532 | 1,233 |
Total equity and liabilities | 4,604 | 4,280 |
28
Assets and liabilities classified as held for sale
Assets and liabilities held for sale
Assets and liabilities classified as held for sale amounted
to net MSEK 1,461 (—) as of December 31, 2024. It relates
to the planned divestments within our Aerospace business
in Hanover, Pennsylvania, USA and Elgin, Illinois, USA.
| Assets classified | As of 31 December | |
| as held for sale MSEK | 2024 | 2023 |
| Non-current assets | ||
Goodwill | 583 | — |
Other Intangible assets | 240 | — |
Property, plant and equipment | 58 | — |
| Current assets | ||
Inventories | 536 | — |
Trade receivables | 175 | — |
Other current assets | 1 | — |
Assets classified as held for sale | 1,594 | — |
| Liabilities classified | As of 31 December | |
| as held for sale MSEK | 2024 | 2023 |
| Non-current liabilities | ||
Other long-term provisions | 3 | — |
| Current liabilities | ||
Trade payables | 61 | — |
Short-term provision | 28 | — |
Other short-term liabilites | 40 | — |
| Liabilities classified | ||
as held for sale | 133 | — |
SKF ANNUAL REPORT 2024 68
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
NOTES
is the Parent Company of the SKF Group , is a registered
The headquarters’ address is AB SKF, SE-415 50 Gothenburg,
AB SKF is the company within the Group that makes
the strategic decisions and pays for the research and
development. AB SKF owns and controls the Intellectual
Property Rights within the Group. Subsidiaries perform
tasks decided by AB SKF and, thus, have a limited com-
mercial liability.
Dividend income from consolidated subsidiaries
amounted to MSEK 3,187 (2,054).
Net investments in subsidiaries decreased by
MSEK –1,634 (–11), whereof MSEK –500 (–5) is attributable
to impairments, MSEK 125 (5) to capital contributions and
MSEK 0 (–11) to capital repayments. Shares with a booked
value of MSEK –1,259 (0) were sold during the year.
Risks and uncertainties in the business for the Group
are de scribed in the Administration Report for the Group.
The financial position of the Parent Company is dependent
on the financial position and development of the subsidi-
aries. A general decline in the demand for the products
and services provided by the Group could mean lower
residual profit and lower dividend income for the Parent
Company, as well as a need for write-down of the values
in the shares in subsidiaries. Due to the wide spread of
the subsidiaries operate, the risk that the financial position
for the Parent Company will be negatively affected is
assessed as small.
Unrestricted equity in the Parent Company amounted
to MSEK 22,839 (23,198).
Parent Company, AB SKF Parent Company income statements
Parent Company statements of
comprehensive income
January–December
MSEK Note 2024 2023
Revenue 2 7,362 7,782
Cost of revenue 2 –5,528 –6,052
General management and administrative expenses 2 –1,639 –1,919
Other operating income and expenses, net 2 17 9
Operating profit 212 –180
Financial income and expenses, net 3 2,499 1,894
Profit after financial items 2,711 1,714
Appropriations 4 400 705
Profit before tax 3,111 2,419
Income taxes 5 –86 –41
Net profit 3,025 2,378
January–December
MSEK Note 2024 2023
Net profit 3,025 2,378
Items that will not be reclassified to the income statement
Assets at fair value through other comprehensive income 9 78 —
Items that may be reclassified to the income statement
Assets at fair value through other comprehensive income 9 — –85
Other comprehensive income, net of tax 78 –85
Total comprehensive income 3,103 2,293
SKF ANNUAL REPORT 2024 69
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
PARENT COMPANY
Parent Company balance sheets
As of 31 December
MSEK Note 2024 2023
ASSETS
Non-current assets
Intangible assets 6 712 1,021
Property, plant and equipment 7 63 73
Investments in subsidiaries 8 20,797 22,431
Long-term receivables from subsidiaries 12,483 15,281
Investments in jointly controlled and associated companies 2 —
Investments in equity securities 9 331 253
Other long-term receivables 17 65
Deferred tax assets 5 524 466
34,929 39,590
Current assets
Short-term receivables from subsidiaries 8,207 6,176
Other short-term receivables 217 180
Prepaid expenses and accrued income 328 323
Cash and cash equivalents 12 2
8,764 6,681
Total assets 43,693 46,271
As of 31 December
MSEK Note 2024 2023
EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital 1,138 1,138
Statutory reserve 918 918
2,056 2,056
Unrestricted equity
Fair value reserve 140 63
Retained earnings 19,674 20,757
Net profit 3,025 2,378
22,839 23,198
24,895 25,254
Untaxed reserves 4 — —
Provisions
Provisions for post-employment benefits 10 727 721
Other provisions 4 20
731 741
Non-current liabilities
Long-term loans 11 12,480 15,278
12,480 15,278
Current liabilities
Short-term loans 11 3,446 3,012
Trade payables 531 466
Short-term liabilities to subsidiaries 781 724
Other short-term liabilities 239 147
Accrued expenses and deferred income 590 649
5,587 4,998
Total equity and liabilities 43,693 46,271
SKF ANNUAL REPORT 2024 70
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LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
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THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
PARENT COMPANY
Parent Company
statements of changes in equity
Restricted equity Unrestricted equity
MSEK
Share
capital
1)
Statutory
reserve
Fair value
reserve
Retained
earnings Total
Opening balance 1 January 2023 1,138 918 148 23,913 26,117
Net profit — — — 2,378 2,378
Components of other comprehensive
income
Change in assets to fair value through
other comprehensive income — — –85 — –85
Capitalized development reserve — — — — —
Transactions with shareholders
Cost under Performance Share
Programmes
2)
— — — 31 31
Dividends — — — –3,187 –3,187
Closing balance 31 December 2023 1,138 918 63 23,135 25,254
Net profit — — — 3,025 3,025
Components of other comprehensive
income
Change in assets to fair value through
other comprehensive income — — 77 — 77
Capitalized development reserve — — — — —
Transactions with shareholders
Cost under Performance Share
Programmes
2)
— — — –46 –46
Dividends — — — –3,415 –3,415
Closing balance 31 December 2024 1,138 918 140 22,699 24,895
1) The distribution of share capital between share types and the quota value is shown in Note 16 to the Consolidated financial statements.
2) See Note 23 to Consolidated financial statements for information about Performance Share Programmes.
Restricted equity includes share capital and statutory
reserves which are not available for dividend payments.
Unrestricted equity includes retained earnings which can
be distributed to shareholders. It also includes the fair
value reserve which accumulates the changes in fair value
of available-for-sale assets.
Parent Company
statements of cash flow
January–December
MSEK Note 2024 2023
Operating activities
Operating loss/profit 212 –180
Adjustments for
Depreciation, amortization and impairments 6, 7 324 225
Other non-cash items 170 285
Payments under post-employment defined benefit plans 10 –58 –50
Income taxes paid/received 41 –20
Changes in working capital
Trade payables 65 –29
Other operating assets and liabilities, net 1,633 1,042
Interest received 343 399
Interest paid –428 –471
Other financial items –181 –92
Net cash flow from operating activities 2,121 1,109
Investing activities
Additions to intangible assets 6 — —
Additions to property, plant and equipment 7 –5 –7
Sales of property, plant and equipment 7 — —
Dividends received from subsidiaries 3 3,187 2,054
Investments in subsidiaries 8 –125 –5
Sales of shares in subsidiaries 8 1,259 —
Capital repayments from subsidiaries 8 — 11
Investments in equity securities –2 —
Net cash flow used in investing activities 4,314 2,053
Net cash flow after investments before financing 6,435 3,162
Financing activities
Proceeds from medium- and long-term loans — 27
Repayment of medium- and long-term loans –3,010 –10
Cash dividends to AB SKF’s shareholders –3,415 –3,187
Net cash flow used in financing activities –6,425 –3,170
Increase(+)/decrease(–) in cash and cash equivalents 10 –8
Cash and cash equivalents at 1 January 2 10
Cash and cash equivalents at 31 December 12
2
.
SKF ANNUAL REPORT 2024 71
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STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
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THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
PARENT COMPANY
Notes to the financial statements
of the Parent Company
Basis of presentation
The financial statements of the Parent Company are pre-
pared in accordance with the Annual Accounts Act and
The Swedish Financial Reporting Board recommendation
RFR 2, Accounting for Legal Entities, as well as their inter-
pretation (UFR). In accordance with RFR 2, IFRS is applied
to the greatest extent possible under Swedish legislation,
but full compliance is not possible. The areas in which
the Parent Company’s accounting policies differ from
the Group’s are described below. For a description of the
Group’s accounting policies, see Note 1 to the Consoli-
dated financial statements.
Post-employment benefits
AB SKF reports pensions in the financial statements in
accordance with RFR 2. According to RFR 2, IAS 19 shall
be adopted regarding supplementary disclosures when
applicable.
Investments in subsidiaries
Investments in subsidiaries are recorded at acquisition
cost, reduced by any impairment.
Untaxed reserves
The tax legislation in Sweden allows companies to make
pro visions to untaxed reserves. Hereby, the companies
may, with certain limits, allocate and retain profits in the
balance sheet instead of immediate taxation. The untaxed
reserves are taken into taxation at the time of their dis-
solution. In the event that the business shows losses, the
untaxed reserves may be dissolved in order to cover the
losses without any taxation.
Intangible assets
According to Swedish legislation, goodwill has a definite
useful life. The useful life amounts to eight years and the
amortization follows a linear pattern.
Leases
RFR 2 allows an exception from IFRS 16 which the Parent
Company has applied. Lease contracts are reported as
operational leases.
1
Accounting policies
2
Revenues and operating expenses
3
Financial income and financial expenses
AB SKF is the company within the Group that makes the
strategic decisions and pays for the research and develop-
ment and is as such entitled to residual profits. Consequently
the revenues are comprised of residual profits and royalties
MSEK 2024 2023
Income from participations in Group companies
Dividends from subsidiaries 3,187 2,054
Other financial income from investments in subsidiaries –8 —
Impairment and disposals of investments in subsidiaries –500 –5
Total 2,679 2,049
Financial income
Interest income from subsidiaries 343 399
Interest income from external parties 2 1
Other financial income — 2
Total 345 402
Financial expenses
Interest expenses to subsidiaries –99 –94
Interest expenses to external parties –355 –405
Other financial expense –71 –58
Total –525 –557
from subsidiaries. Cost of revenue include research and
development expenses totalling MSEK 2,950 (2,957).
Of the total operating expenses, MSEK 4,395 (4,402)
was invoiced from subsidiaries.
SKF ANNUAL REPORT 2024 72
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LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
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THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
PARENT COMPANY
Appropriations (MSEK) 2024 2023
Paid/received group contribution 400 705
Untaxed reserves
Change in accelerated depreciation reserve — —
400 705
Untaxed reserves
Accelerated depreciation reserve — —
Taxes on profit before tax (MSEK) 2024 2023
Current taxes — —
Other taxes –144 –109
Deferred tax 58 68
–86 –41
Net deferred assets per type net (MSEK) 2024 2023
Provisions for post-employment benefits 131 123
Tax credit carry-forwards 393 343
Tax loss carry-forwards — —
Deferred tax assets 524 466
Reconciliation of the statutory tax in Sweden and the actual tax (MSEK) 2024 2023
Tax calculated using the statutory tax rate in Sweden –641 –498
Non-taxable dividends and other financial income 655 424
Tax referring to previous years –9 32
Other non-deductible and non-taxable profit items, net –91 1
Actual tax –86 –41
The corporate statutory income tax rate in Sweden is 20.6% (20.6).
MSEK
2024
Closing balance Additions Impairments Derecognitions
2024
Opening balance
Acquisition cost
Goodwill 42 — — — 42
Technology, Intellectual property
and similar items 1,058 — — — 1,058
Internally developed software 2,308 — — — 2,308
3,408 — — — 3,408
MSEK
2024
Closing balance Amortization Impairments Derecognitions
2024
Opening balance
Accumulated amortization
Goodwill 38 1 — — 37
Technology, Intellectual property
and similar items 984 19 — — 965
Internally developed software 1,674 162 127 — 1,385
2,696 182 127 — 2,387
Net book value 712 1,021
MSEK
2023
Closing balance Additions Impairments Derecognitions
2023
Opening balance
Acquisition cost
Goodwill 42 — — — 42
Technology, Intellectual property
and similar items 1,058 — — — 1,058
Internally developed software 2,308 — — — 2,308
3,408 — — — 3,408
MSEK
2023
Closing balance Amortization Impairments Derecognitions
2023
Opening balance
Accumulated amortization
Goodwill 37 6 — — 31
Technology, Intellectual property
and similar items 965 21 — — 944
Internally developed software 1,385 186 — — 1,199
2,387 213 — — 2,174
Net book value 1,021 1,234
See Note 10 to the Consolidated financial statements for information on the internally developed software including
impairment. Technology and similar items are amortized over eight years.
4
Appropriations
5
Taxes
6
Intangible assets
SKF ANNUAL REPORT 2024 73
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STRATEGY AND
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SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
PARENT COMPANY
MSEK
2024
Closing balance Additions Disposals Other
2024
Opening balance
Acquisition cost
Buildings 5 — — — 5
Machine toolings and factory fittings 105 — –27 11 121
Assets under construction
including advances 10 5 — –11 16
120 5 –27 — 142
MSEK
2024
Closing balance Depreciation Disposals Other
2024
Opening balance
Accumulated depreciation
Buildings 3 — — — 3
Machine toolings and factory fittings 54 12 –24 — 66
57 12 –24 — 69
Net book value 63 73
MSEK
2023
Closing balance Additions Disposals Other
2023
Opening balance
Acquisition cost
Buildings 5 — — — 5
Machine toolings and factory fittings 121 — — 35 86
Assets under construction
including advances 16 7 — –35 44
142 7 — — 135
MSEK
2023
Closing balance Depreciation Disposals Other
2023
Opening balance
Accumulated depreciation
Buildings 3 — — — 3
Machine toolings and factory fittings 66 12 — — 54
69 12 — — 57
Net book value 73 78
Investments in subsidiaries
held on 31 December (MSEK) 2024 Additions Impairment
Disposals
and capital
repayments 2023 Additions Impairment
Disposals
and capital
repayments 2022
Investments in
subsidiaries 20,797 125 –500 –1,259 22,431 5 –5 –11 22,442
The Group is composed of 175 legal entities (subsidiaries),
where AB SKF is the ultimate parent either directly or in -
directly via intermediate holding companies. The vast
majority of the Group’s subsidiaries perform activities
related to manufacturing and sales. A limited number are
involved in central Group functions such as treasury or re-
insurance, or as previously mentioned, act as intermediate
holding companies. This legal structure is designed to
effectively manage legal requirements, administration,
financing and taxes in the countries in which the Group
operates. In contrast, the Group’s operational structure
described in the Administration Report gives a better over-
view of how the Group runs its business. See also Note 2
to the Consolidated financial statements.
The tables on the next pages list, firstly, the subsidiaries
owned directly by the Parent Company, and secondly, the
most significant of the remaining subsidiaries of the Group.
Taken together these subsidiaries account for more than
90% of the Group’s sales and for more than 90% of the
Group’s manufacturing facilities.
7
Property, plant and equipment
8
Investments in subsidiaries
SKF ANNUAL REPORT 2024 74
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STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
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THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
PARENT COMPANY
Book value (MSEK)
Name of directly owned subsidiaries
Country/
Region
Registration
number
No. of
shares
%
ownership 2024 2023
Main
activities
1)
SKF Argentina S.A. Argentina — 14,677,299 86.25
2)
94 94 M, S
SKF Australia Pty. Ltd. Australia — 96,500 100 — — S
SKF Österreich AG Austria — 200 100 176 176 M, S
SKF Belgium NV/SA Belgium — 1,778,642 99.9
2)
109 109 S
SKF Logistics Services
Belgium NV/SA Belgium — 29,907,952 99.9
2)
28 28 O
SKF do Brasil Ltda. Brazil — 517,294,748 99.9
2)
626 626 M, S
SKF Bearings Bulgaria EAD Bulgaria — 24,664,309 100 202 202 M, S
SKF Canada Ltd. Canada — 130,000 100 58 58 M, S
SKF Chilena S.A.I.C. Chile — 88,191 99.9
2)
— — S
SKF (China) Co. Ltd. China — 133,400 100 1,135 1,135 O
SKF China Ltd. China — 11,000,000 100 15 15 S
SKF CZ, a.s. Czech
Republic — 430 100 10 10 S
SKF Danmark A/S Denmark — 5 100 7 7 S
Oy SKF Ab Finland — 48,400 100 12 12 M, S
SKF Holding France S.A.R.L. France — 1 100 3,371 3,371 O
SKF GmbH Germany — 200 20
2)
315 1,573 M, S
SKF Holding Deutschland GmbH Germany — 2,500 100 27 — O
SKF Lubrication Systems
Germany GmbH Germany — 2,574 10.1
2)
223 223 M, S
SKF Hellas S.A. Greece — 2,000 100 — — S
SKF Svéd Golyóscsapágy Zrt Hungary — 20 100 — — S
SKF Engineering and Lubrication
India Private Ltd. India — 1,196,450 52.8
2)
314 314 M, S
SKF India Ltd. India — 22,666,055 45.8
3)
87 87 M, S
PT. SKF Indonesia Indonesia — 53,411 60 26 26 M, S
PT. SKF Industrial Indonesia Indonesia — 2,455 96.3
2)
5 5 S
SKF AI Ltd Israel — 2,413,322 100 220 220 S
SKF Industrie S.p.A. Italy — 465,000 100 912 912 M, S
SKF Japan Ltd. Japan — 32,400 100 174 174 M, S
SKF Malaysia Sdn. Bhd. Malaysia — 1,000,000 100 57 57 S
SKF de México, S.A. de C.V. Mexico — 375,623,529 99.9
2)
101 600 M, S
SKF New Zealand Ltd. New
Zealand — 375,000 100 — — S
SKF Norge AS Norway — 50,000 100 — — S
SKF del Peru S.A. Peru — 2,564,903 99.9
2)
— — S
SKF Philippines Inc. Philippines — 8,395 100 20 20 S
SKF Business Center Sp. z o.o. Poland — 100 100 37 37 O
SKF Polska S.A. Poland — 3,701,466 100 156 156 M, S
Book value (MSEK)
Name of directly owned subsidiaries
Country/
Region
Registration
number
No. of
shares
%
ownership 2024 2023
Main
activities
1)
SKF Portugal-Rolamentos, Lda. Portugal — 64,843 100 5 5 S
SKF Korea Ltd. Republic
of Korea — 128,667 100 74 74 M, S
SKF Sealing Solutions
Korea Co. Ltd.
Republic
of Korea — 153,320 51 15 15 M, S
SKF Asia Pacific Pte. Ltd. Singapore — 1,000,000 100 97 — S
Barseco (PTY) Ltd. South Africa — 1,422,480 100 157 157 O
SKF Española S.A. Spain — 3,650,000 100 383 383 M, S
SKF Förvaltning AB Sweden 556350-4140 124,500 99.6
2)
4,144 4,144 O
SKF International AB Sweden 556036-8671 20,000 100 1,320 1,320 O
Återförsäkringsaktiebolaget SKF Sweden 516401-7658 30,000 100 125 125 O
Bagaregården 16:7 KB Sweden 916622-8529 — 99.9
2)
98 99 O
SKF Eurotrade AB Sweden 556206-7610 83,500 100 12 12 S
SKF Lager AB Sweden 556219-5288 2,000 100 — — O
Kvarteret Gösen AB Sweden 556210-0148 1,000 100 — — O
The Waste Company Sweden AB Sweden 559128-2016 50,000 100 — — O
SKF Verwaltungs AG Switzerland — 500 100 502 502 O
SKF Taiwan Co. Ltd. Taiwan — 169,475,000 100 102 102 S
SKF (Thailand) Ltd. Thailand — 1,847,000 92.4
2)
37 37 S
SKF B.V The
Netherlands — 1,450 100 304 304 S
SKF Holding Maatschappij
Holland B.V
The
Netherlands — 60,002 100 423 423 O
Trelanoak Ltd. United
Kingdom — 6,965,000 100 120 120 O
PSC SKF Ukraine Ukraine — 1,267,495,630 100 207 207 M, S
SKF USA Inc. USA — 1,000 100 4,155 4,155 M, S
SKF Venezolana S.A Venezuela — 20,014,892 100 — — O
20,797 22,431
1) M=Manufacturing, S=Sales, O=Other incl treasury, reinsurance, holding and/or dormant activities.
2) Parent Company together with subsidiares own 100%.
3) Parent Company together with subsidiaries own 52.6%.
8
Investments in subsidiaries, cont.
SKF ANNUAL REPORT 2024 75
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STRATEGY AND
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SUSTAINABILITY
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REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
PARENT COMPANY
Name of indirectly owned subsidiaries
Country
/Region
%
Ownership
Owned by
subsidiary in
Main
activities
1)
Alemite LLC USA 100 USA M, S
Beijing Nankou SKF Railway Bearings Co. Ltd. China 51 China M, S
Cooper Roller Bearings Co. Ltd. United Kingdom 100 United Kingdom M
JSG Industrial Systems Pty Ltd Australia 100 Australia S
Kaydon Corporation USA 100 USA M, S
Kaydon S de R.L. de C.V. Mexico 100 The Netherlands M
Lincoln Industrial Corporation USA 100 USA M, S
M3M S.A.S France 100 France M
Ningbo General Bearing Ltd. China 100 Barbados M, S
Orsco Inc USA 100 USA S
PEER Bearing Company, Changshan (CPZ1) China 100 China M
Pilgrim International Ltd. United Kingdom 100 United Kingdom M, S
SKF (China) Sales Co. Ltd. China 100 China S
SKF (Dalian) Bearings and Precision Technologies Co. Ltd. China 100 China M
SKF (Jinan) Bearings & Precision Technology Co. Ltd. China 100 China M
SKF (Schweiz) A.G. Switzerland 100 Switzerland S
SKF (Shanghai) Automotive Technologies Co. Ltd. China 100 China M
SKF (U.K.) Ltd. United Kingdom 100 United Kingdom M, S
SKF (Xinchang) Bearings and Precision Technologies China 100 China M
SKF (Zambia) Ltd. Zambia 100 Sweden S
SKF Aeroengine France S.A.S. France 100 France M, S
SKF Aerospace France S.A.S. France 100 France M, S
SKF Bearing Industries (Malaysia) Sdn. Bhd. Malaysia 100 The Netherlands M
SKF Distribution (Shanghai) Co. Ltd. China 100 China S
SKF Economos Deutschland GmbH Germany 100 Austria S
SKF France S.A.S. France 100 France M, S
SKF Kenya Ltd. Kenya 100 Belgium S
SKF Latin Trade S.A.S Colombia 100 Chile S
SKF Lubrication Systems CZ s.r.o Czech Republic 100 Germany M
SKF Magnetic Mechatronics S.A.S. France 100 France M, S
SKF Marine GmbH Germany 100 Germany M, S
SKF Marine Singapore Pte Ltd. Singapore 100 Germany S
SKF Mekan AB Sweden 100 Sweden M
SKF Metal Stamping S.R.L Italy 100 Italy M, S
Name of indirectly owned subsidiaries
Country
/Region
%
Ownership
Owned by
subsidiary in
Main
activities
1)
SKF Sealing Solutions Austria GmbH Austria 100 Austria M, S
SKF Sealing Solutions GmbH Germany 100 Germany M, S
SKF Sealing Solutions S.A. de C.V. Mexico 100 USA M, S
SKF Sealing Solutions (Wuhu) Co. Ltd. China 100 China M, S
SKF Seals Italy S.p.A. Italy 100 Italy M, S
SKF Slovensko, spol. S.r.o. Slovakia 100 Sweden S
SKF South Africa (Pty) Ltd. South Africa 70 South Africa S
SKF Steyr Liegenschaftsvermietungs GmbH Austria 100 Austria O
SKF Sverige AB Sweden 100 Sweden M, S
SKF Türk Sanayi ve Ticaret Limited Sirketi Turkey 100 Belgium S
SKF Uruguay S.A Uruguay 100 Argentina S
SKF Vietnam Co. Ltd. Vietnam 100 Singapore S
Stewart Werner Corporation of Canada Canada 100 USA S
Tenute S.R.L Italy 100 Italy M, S
Venture Aerobearings LLC. USA 51 USA M, S
Vesta Si Sweden AB Sweden 100 Sweden M
1) M=Manufacturing, S=Sales, O=Other incl treasury, reinsurance and/or holding activities.
Name and location (MSEK)
Holding in
percent
Number
of shares Currency
2024
Book value
2023
Book value
Wafangdian Bearing Company Limited, China 19.7 79,300,000 HKD 309 231
Other SEK 22 22
Total 331 253
8
Investments in subsidiaries, cont.
9
Investments in equity securities
SKF ANNUAL REPORT 2024 76
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PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
PARENT COMPANY
Amount recognized in the balance sheet (MSEK) 2024 2023
Present value of funded pension obligations 907 834
Fair value of plan assets –344 –297
Net obligation 563 537
Present value of unfunded pension obligations 164 184
Net provisions 727 721
Change in net provision for the year (MSEK) 2024 2023
Opening balance 1 January 721 602
Defined benefit expense 64 169
Pension payments –58 –50
Closing balance 31 December 727 721
Components of expense (MSEK) 2024 2023
Pension cost 89 155
Interest expense 22 20
Return on plan assets –47 –6
Defined benefit expense 64 169
Defined contribution expense 103 95
Total post-employment benefit expense 167 264
All white collar workers of the Company are covered by the
ITP-plan according to collective agreements. Additionally,
the Company sponsors a complementary defined con-
tribution (DC) scheme for a limited group of managers.
This DC scheme replaced the previous supplementary
defined benefit plan which from 2003 is closed for new
participants.
The calculation of defined benefit pension obligations
has been made in accordance with regulations stipulated
by the Swedish Financial Supervisory Authority, FFFS
2007:24 and FFFS 2007:31.
The discount rate for the ITP-plan was 2.85% (2.85)
and for the other defined benefit plan it was 6.48% (10.84).
Next year’s expected cash outflows for pension obliga-
tions are MSEK 166.
2024 2023
MSEK Maturity Interest rate
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Bonds
MSEK 900 2024 1.13 — — 900 894
MSEK 2,100 2024 5.03 — — 2,100 2,116
MUSD 3 2024 0.00 — — 13 13
MUSD 3 2025 0.00 3 3 3 3
MEUR 300 2025 1.25 3,443 3,399 3,307 3,192
MUSD 100 2027 4.06 1,101 1,128 1,000 1,033
MEUR 400 2028 3.13 4,549 4,617 4,385 4,422
MEUR 300 2029 0.88 3,429 3,224 3,307 3,051
MEUR 300 2031 0.25 3,401 3,048 3,275 2,865
Total 15,926 15,419 18,290 17,589
MSEK 2024 2023
Salaries and wages, and other remuneration 768 757
Social charges (whereof post- employment benefit expense) 396 (167) 488 (264)
See Note 23 to the Consolidated financial statements for
information on remuneration to the Board and the President
as well as men and women in management and the Board.
Refer to Note 25 to the Consolidated financial statements
for the average number of employees and to Note 24 to the
Consolidated financial statements for fees to the auditors.
MSEK 2024 2023
General partner 1 1
Other contingent liabilites 37 34
Total 38 35
General partner relates to liabilities in limited partner ship Bagaregården 16:7. Other contingent liabilities refer to guarantee
commit ment regarding pension liabilities in the Swedish subsidiaries.
10
Provisions for post-employment benefits
11
Loans
13
Contingent liabilities
12
Salaries and wages, other remunerations, average number of employees
and men and women in Management and Board
In February 2025 the equity securities in Wafangdian Bearing Company Limited, China, was transferred to an NGO.
Please see note 9 Investments in equity securities for more information.
14
Subsequent events
SKF ANNUAL REPORT 2024 77
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
PARENT COMPANY
Proposed distribution of surplus
Fair value reserve SEK 140,423,341
Retained earnings SEK 19,673,083,334
Net profit for the year SEK 3,025,257,841
Total surplus SEK 22,838,764,516
The Board of Directors recommend
to the shareholders, a dividend of SEK 7.75 per share
1)
SEK 3,528,970,777
2)
to be carried forward:
Fair value reserve SEK 140,423,341
Retained earnings SEK 19,169,370,398
SEK 22,838,764,516
The results of operations and the financial position of the Parent Company, AB SKF, and the Group
for the year 2024 are given in the income statements and in the balance sheets together with
related notes.
The Board of Directors and the President certify that the annual financial report has been pre-
pared in accordance with generally accepted accounting principles in Sweden and that the con-
solidated accounts have been prepared in accordance with the international set of accounting
standards referred to in Regulation (EC) No 1606/2002 of the European Parliament and of the
Council of 19 July 2002 on the application of international accounting standards, and give a true
and fair view of the position and profit or loss of the Company and the Group, and that the manage-
ment report for the Company and for the Group gives a fair review of the development and perfor-
mance of the business, position and profit or loss of the Company and the Group, and describes
the principal risks and uncertainties that the Company and the companies in the Group face.
Gothenburg, March 7, 2025
Hans Stråberg, Chair
Håkan Buskhe, Vice chair
Hock Goh, Board member
Geert Follens, Board member
Susanna Schneeberger, Board member
Rickard Gustafson, President and CEO, Board member
Beth Ferreira, Board member
Therese Friberg, Board member
Richard Nilsson, Board member
Niko Pakalén, Board member
Jonny Hilbert, Board member
Zarko Djurovic, Board member
Our auditors’ report for this Annual Report and the consolidated Annual Report was issued March 7, 2025.
Deloitte AB
Hans Warén
Authorized Public Accountant
1) Suggested record day for right to dividend, 3 April 2025.
2) Board Members’ statement: The members of the Board are of the opinion that the proposed dividend is justifiable considering the demands
on Company and Group equity imposed by the type, scope and risks of the business and with regards to the Company’s and the Group’s
financial strength, liquidity and overall position.
SKF ANNUAL REPORT 2024 78
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IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
FINANCIAL
STATEMENTS
BACK TO
START
PARENT COMPANY
Auditor’s report
To the general meeting of the shareholders of AB SKF
(publ) corporate identity number 556007-3495
Report on the annual accounts and
consolidated accounts
Opinions
We have audited the annual accounts and consolidated
accounts of AB SKF (publ) for the financial year 1 January
–31 December 2024. The annual accounts and consoli-
dated accounts of the company are included on pages
12–78 in this document.
In our opinion, the annual accounts have been prepared
in accordance with the Annual Accounts Act and present
fairly, in all material respects, the financial position of the
parent company as of 31 December 2024 and its financial
performance and cash flow for the year then ended in
accordance with the Annual Accounts Act. The consoli-
dated accounts have been prepared in accordance with
the Annual Accounts Act and present fairly, in all material
respects, the financial position of the group as of 31 Decem-
ber 2024 and their financial performance and cash flow
for the year then ended in accordance with International
Financial Reporting Standards (IFRS), as adopted by the
EU, and the Annual Accounts Act.
The statutory administration report is consistent with
the other parts of the annual accounts and consolidated
accounts.
We therefore recommend that the general meeting of
shareholders adopts the income statement and balance
sheet for the parent company and the group.
Our opinions in this report on the annual accounts and
consolidated accounts are consistent with the content of
the additional report that has been submitted to the parent
company’s audit committee in accordance with the Audit
Regulation (537/2014) Article 11.
Basis for Opinions
We conducted our audit in accordance with International
Standards on Auditing (ISA) and generally accepted audit-
ing standards in Sweden. Our responsibilities under those
standards are further described in the Auditor’s Responsi-
bilities section. We are independent of the parent company
and the group in accordance with professional ethics
for accountants in Sweden and have otherwise fulfilled
our ethical responsibilities in accordance with these
requirements. This includes that, based on the best of
our knowledge and belief, no prohibited services referred
to in the Audit Regulation (537/2014) Article 5.1 have been
provided to the audited company or, where applicable, its
parent company or its controlled companies within the EU.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinions.
Key Audit Matters
Key audit matters of the audit are those matters that, in our
professional judgment, were of most significance in our
audit of the annual accounts and consolidated accounts of
the current period. These matters were addressed in the
context of our audit of, and in forming our opinion thereon,
the annual accounts and consolidated accounts as a
whole, but we do not provide a separate opinion on these
matters.
Valuation of Goodwill
As of 31 December 2024, AB SKF (publ) accounts for good-
will in the consolidated balance sheet amounting to SEK
12,574 M. The value of the goodwill is dependent on future
income and profitability in the cash-generating units, to
which the goodwill refers, and is assessed for impairment
at least once a year. Management bases its impairment
test on several judgements and estimates such as growth,
EBIT development and cost of capital (WACC) as well as
other complex circumstances. Incorrect judgements and
estimates may have a significant impact on the Group’s
result and financial position. Management has not identi-
fied any need for impairment for any of the cash-generating
units within the Group.
For further information, see Note 1 about critical judg-
ments and estimates and Note 10 about intangible assets.
Our audit procedures included, but were not limited to:
• Review and assessment of SKF’s procedures and model
for impairment tests of goodwill and evaluation of judge-
ments and estimates made, that the procedures are
consistently applied and that there is integrity in
calculations;
• Verification of input data in calculations including
information from business plans for the forecast period;
• Test of head room for each cash-generating unit by
performing sensitivity analyses; and
• Review of the completeness in relevant disclosures
to the financial reports.
When performing the audit procedures our valuation
experts have been involved.
Other information than the annual accounts and
c onsolidated accounts
This document also contains other information than
the annual accounts and consolidated accounts and is
found on pages 1–11, 81–145 and 162–174. The Board of
Directors and the Managing Director are responsible for
this other information.
Our opinion on the annual accounts and consolidated
accounts does not cover this other information and we do
not express any form of assurance conclusion regarding
this other information.
In connection with our audit of the annual accounts
and consolidated accounts, our responsibility is to read
the information identified above and consider whether
the information is materially inconsistent with the annual
accounts and consolidated accounts. In this procedure we
also take into account our knowledge otherwise obtained
in the audit and assess whether the information otherwise
appears to be materially misstated.
If we, based on the work performed concerning this
information, conclude that there is a material misstate-
ment of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and the
Managing Director
The Board of Directors and the Managing Director are
responsible for the preparation of the annual accounts
and consolidated accounts and that they give a fair
presen tation in accordance with the Annual Accounts Act
and, concerning the consolidated accounts, in accordance
with IFRS as adopted by the EU. The Board of Directors and
the Managing Director are also responsible for such inter-
nal control as they determine is necessary to enable the
preparation of annual accounts and consolidated accounts
that are free from material misstatement, whether due to
fraud or error.
In preparing the annual accounts and consolidated
accounts, The Board of Directors and the Managing
Director are responsible for the assessment of the com-
pany’s and the group’s ability to continue as a going
concern. They disclose, as applicable, matters related
to going concern and using the going concern basis of
accounting. The going concern basis of accounting
is however not applied if the Board of Directors and
the Managing Director intend to liquidate the company,
to cease operations, or have no realistic alternative but
to do so.
The Audit Committee shall, without prejudice to the
Board of Director’s responsibilities and tasks in general,
among other things oversee the company’s financial
reporting process.
Auditor’s responsibility
Our objectives are to obtain reasonable assurance about
whether the annual accounts and consolidated accounts
as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that
includes our opinions. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit con-
ducted in accordance with ISAs and generally accepted
auditing standards in Sweden will always detect a material
misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these annual accounts and consolidated
accounts.
A further description of our responsibilities for the audit
of the annual accounts and consolidated accounts is
located at the Swedish Inspectorate of Auditors website:
www.revisorsinspektionen.se/revisornsansvar This descrip-
tion forms part of the auditor’s report.
Report on other legal and regulatory requirements
Opinions
In addition to our audit of the annual accounts and consol-
idated accounts, we have also audited the administration
of the Board of Directors and the Managing Director of
AB SKF (publ) for the financial year 1 January–31 December
2024 and the proposed appropriations of the com pany’s
profit or loss.
We recommend to the general meeting of shareholders
that the profit to be appropriated in accordance with the
proposal in the statutory administration report and that
the members of the Board of Directors and the Managing
Director be discharged from liability for the financial year.
SKF ANNUAL REPORT 2024 79
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Basis for Opinions
We conducted the audit in accordance with generally
accepted auditing standards in Sweden. Our responsibili-
ties under those standards are further described in the
Auditor’s Responsibilities section. We are independent
of the parent company and the group in accordance with
professional ethics for accountants in Sweden and have
otherwise fulfilled our ethical responsibilities in accord-
ance with these requirements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinions.
Responsibilities of the Board of Directors and the
Managing Director
The Board of Directors is responsible for the proposal
for appropriations of the company’s profit or loss. At the
proposal of a dividend, this includes an assessment of
whether the dividend is justifiable considering the require-
ments which the company’s and the group’s type of opera-
tions, size and risks place on the size of the parent com-
pany’s and the group’s equity, consolidation requirements,
liquidity and position in general.
The Board of Directors is responsible for the company’s
organization and the administration of the company’s
affairs. This includes among other things continuous
assessment of the company’s and the group’s financial
situation and ensuring that the company’s organization is
designed so that the accounting, management of assets
and the company’s financial affairs otherwise are con-
trolled in a reassuring manner. The Managing Director shall
manage the ongoing administration according to the Board
of Directors’ guidelines and instructions and among other
matters take measures that are necessary to fulfill the
company’s accounting in accordance with law and handle
the management of assets in a reassuring manner.
Auditor’s responsibility
Our objective concerning the audit of the administration,
and thereby our opinion about discharge from liability, is to
obtain audit evidence to assess with a reasonable degree
of assurance whether any member of the Board of Directors
or the Managing Director in any material respect:
• has undertaken any action or been guilty of any omission
which can give rise to liability to the company, or
• in any other way has acted in contravention of the
Companies Act, the Annual Accounts Act or the Articles
of Association.
Our objective concerning the audit of the proposed appro-
priations of the company’s profit or loss, and thereby our
opinion about this, is to assess with reasonable degree of
assurance whether the proposal is in accordance with the
Companies Act.
Reasonable assurance is a high level of assurance but
is not a guarantee that an audit conducted in accordance
with generally accepted auditing standards in Sweden will
always detect actions or omissions that can give rise to lia-
bility to the company, or that the proposed appropriations
of the company’s profit or loss are not in accordance with
the Companies Act.
A further description of our responsibilities for the
audit of the management’s administration is located
at the Swedish Inspectorate of Auditors website:
www.revisorsinspektionen.se/revisornsansvar
This description forms part of the auditor’s report.
The auditor’s examination of the Esef report
Opinions
In addition to our audit of the annual accounts and con-
solidated accounts, we have also examined that the Board
of Directors and the Managing Director have prepared the
annual accounts and consolidated accounts in a format
that enables uniform electronic reporting (the Esef report)
pursuant to Chapter 16, Section 4 a of the Swedish
Securities Market Act (2007:528) for AB SKF (publ) for
the financial year 1 January–31 December 2024.
Our examination and our opinion relate only to the
statutory requirements.
In our opinion, the Esef report has been prepared in
a format that, in all material respects, enables uniform
electronic reporting.
Basis for opinion
We have performed the examination in accordance with
FAR’s recommendation RevR 18 Examination of the Esef
report. Our responsibility under this recommendation is
described in more detail in the Auditors’ responsibility sec-
tion. We are independent of AB SKF (publ) in accordance
with professional ethics for accountants in Sweden and
have otherwise fulfilled our ethical responsibilities in
accordance with these requirements.
We believe that the evidence we have obtained is suffi-
cient and appropriate to provide a basis for our opinion.
Responsibilities of The Board of Directors and the
Managing Director
The Board of Directors and the Managing Director are
re sponsible for the preparation of the Esef report in accord-
ance with the Chapter 16, Section 4 (a) of the Swedish
Securities Market Act (2007:528), and for such internal
control that the Board of Directors and the Managing
Director determine is necessary to prepare the Esef report
without material misstatements, whether due to fraud
or error.
Auditor’s responsibility
Our responsibility is to obtain reasonable assurance
whether the Esef report is in all material respects prepared
in a format that meets the requirements of Chapter 16,
Section 4 (a) of the Swedish Securities Market Act
(2007:528), based on the procedures performed.
RevR 18 requires us to plan and execute procedures
to achieve reasonable assurance that the Esef report is
prepared in a format that meets these requirements.
Reasonable assurance is a high level of assurance,
but it is not a guarantee that an engagement carried out
according to RevR 18 and generally accepted auditing
standards in Sweden will always detect a material mis-
statement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually
or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of the Esef report.
The firm applies International Standard on Quality
Management 1, which requires the firm to design, imple-
ment and operate a system of quality management
including policies or procedures regarding compliance
with ethical requirements, professional standards and
applicable legal and regulatory requirements.
The examination involves obtaining evidence, through
various procedures, that the Esef report has been prepared
in a format that enables uniform electronic reporting of the
annual accounts and consolidated accounts. The proce-
dures selected depend on the auditor’s judgment, includ-
ing the assessment of the risks of material misstatement
in the report, whether due to fraud or error. In carrying out
this risk assessment, and in order to design audit proce-
dures that are appropriate in the circumstances, the audi-
tor considers those elements of internal control that are
relevant to the preparation of the Esef report by the Board
of Directors and the Managing Director, but not for the
purpose of expressing an opinion on the effectiveness of
those internal controls. The examination also includes an
evaluation of the appropriateness and reasonableness
of assumptions made by the Board of Directors and the
Managing Director.
The procedures mainly include a validation that the Esef
report has been prepared in a valid XHMTL format and a
reconciliation of the Esef report with the audited annual
accounts and consolidated accounts.
Furthermore, the procedures also include an assess-
ment of whether the consolidated statement of financial
performance, financial position, changes in equity, cash
flow and disclosures in the Esef report have been marked
with iXBRL in accordance with what follows from the Esef
regulation.
Deloitte AB was appointed auditor of AB SKF (publ) by
the general meeting of the shareholders on 25 March 2021
and has been the company’s auditor since 25 March 2021.
Gothenburg, March 7, 2025
Deloitte AB
Signature on Swedish original
Hans Warén
Authorized Public Accountant
SKF ANNUAL REPORT 2024 80
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STRATEGY AND
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sustainability
report
GENERAL INFORMATION
Sustainability targets .................................................................... 82
Basis for preparation ..................................................................... 83
Governance ........................................................................................ 83
Strategy ............................................................................................... 86
Material sustainability matters ................................................ 95
ENVIRONMENTAL
EU Taxonomy disclosures .......................................................... 96
Climate change adaptation and mitigation ..................... 102
Resource use and circular economy ................................... 120
SOCIAL
Own workforce ............................................................................... 124
Workers in the value chain ....................................................... 134
GOVERNANCE
Business conduct .......................................................................... 137
ADDITIONAL INFORMATION
Water ............................................................................................... 140
Pollution of air .................................................................................. 141
Biodiversity........................................................................................ 141
Policies ............................................................................................... 142
TCFD index ...................................................................................... 143
GRI content index .......................................................................... 144
Fighting friction
Did you know SKF’s agriculture solutions can
help reduce friction while improving applica-
tion durability? Many SKF agriculture solutions
are tailored to specific applications, driving
development of high-performance designs
while avoiding excess features or friction.
SKF ANNUAL REPORT 2024 81
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LETTER
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BAC K TO
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2024
outcome
–59%
200
100
0
300
400
22212019 23 24
500 thousand tonnes CO
2
e
Bearing manufacturing Goods transportation
Sustainability targets
Climate target Climate target Climate target
How to reach the target
Increased energy efficiency, in creased share of
renewable energy, reduced use of fossil fuels.
2024 outcome
A 76% improvement reflects increased share of
renewable energy use, as well as improved energy
and overall efficiency.
How to reach the target
Regionalization, airfreight avoidance, fuel
switching and electric vehicle solutions,
optimization.
2024 outcome
We experienced a 20% increase in trans portation
work (ton/km) for ocean freight due to geopolitical
disturbances, as we had to find new routes and
ship longer distances by ocean.
Target
2025
–40%
2024
outcome
–76%
–40
–80
–60
–20
0 %
222120 23 24
% CO
2
e (scope 1 and 2)
reduction per tonne
of sold bearings
compared to 2015.
Target
2030
–35%
2024
outcome
–3%
–40
–20
0
40 %
20
222120 23 24
–35% absolute CO
2
reduction vs 2019.
Safety
Social target
How to reach the target
Global management system and focus on
risk elimination and right safety behaviors.
2024 outcome
The rate reached an all-time low of 0.59 (com-
pared to 0.64 in the previous year), demon strating
that our ongoing efforts in health and safety,
including focus on proactive reporting and man-
agement, are driving continuous performance
improvements.
Target
zero
2024
outcome
0.59
222120 23 24
0.25
0
0.50
0.75
1.00 Accident rate
Accident rate
per 200,000
worked hours.
Decarbonized operations by 2030
1)
1) 95% reduction in scope 1 and 2 emissions by 2030 vs. 2019.
How to reach the target
• Process improvements
• Energy efficient machinery
• Usage of renew able energy
• Phase out of fossil fuel use
2024 outcome
59% reduction vs 2019 base year
– well ahead of the 2030 goal trajectory.
These graphs show four of the selected sustainability targets. Further information on these
as well as additional targets related to sustainability are presented in the coming sections.
SKF ANNUAL REPORT 2024 82
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SKF recognizes and welcomes the increasing stakeholder
expectations related to sustainability and the Environmen-
tal, Social and Governance (ESG) topics. The Group has
during 2024 reviewed its Code of Conduct, which is the
foundation for SKF’s business and sustainability activities,
and updated it with regards to the increased expectations
and new regulatory requirements, that SKF is subject to,
including ESG. The updated SKF Code of Conduct clarifies
SKFs responsibilities within:
• Governance, Ethics & Compliance
• People, Social and Human Rights
• Environment, Climate and Resources.
The updated SKF Code of Conduct is available on skf.com.
SKF defines sustainability through the SKF Care frame-
work, which comprises four perspectives for value creation
and sustainability integration in everything the Group
does: Business Care, Environmental Care, Employee Care
and Community Care.
The role of the administrative, management and
supervisory bodies
The SKF Board of Directors has the ultimate responsibility
for the Group’s organisation and for the oversight of the
management of the Group’s affairs and is, together with
the President and Group Management defining and contin-
uously monitoring SKF’s purpose, strategy, values and
drivers. The President, who also is the Chief Executive
Officer (CEO) handles the day-to-day management of the
company’s business and is supported by the Group Man-
agement (see pages 158–159). It is the President and CEO’s
responsibility to implement and ensure that the SKF strat-
egy, purpose, long term financial targets and operational
objectives determined by the Board of Directors are carried
out and that effective governance and control is main-
tained. The President and CEO is also responsible for
General information
Basis for preparation Governance
General basis for preparation of the sustainability
statement
Level of reporting
SKF welcomes the new EU regulation for sustainability
reporting, the Corporate Sustainability Reporting Directive
(CSRD). In preparation for reporting in compliance with
CSRD for the sustainability report for the fiscal year 2025,
SKF has taken significant steps already in this report for
2024 to adjust the reporting to CSRD and the related Euro-
pean Sustainability Reporting Standards (ESRS). All data
and information reported in the sections for Environmen-
tal, Social and Governance topics have been assessed as
material in SKF’s double materiality assessment (DMA).
Furthermore, some supplementary data and information is
disclosed in the section Additional Information. In addition
to the information provided in this report, related topics
can be found at skf.com.
SKF’s Sustainability Report is produced annually, and
the reporting period corresponds to the fiscal year 1 Janu-
ary to 31 December 2024. The previous report was pub-
lished on 4 March 2024.
The Board of Directors are ultimately responsible for this
report as part of the Annual Report.
This report is prepared in accordance with GRI Stand-
ards 2021 and according to the Swedish Annual Account
Act chapter 6, § 11 on sustainability reporting and includes
the topics Business model pages 12–17, Anti-corruption
page 139, Climate and environment pages 102–123,
Employees pages 124–133, Human rights and other
relevant social topics pages 133–139. Risks associated
with the topics above are found in connection with the
outcome from SKF’s DMA on pages 90–94.
This report is prepared for AB SKF, and all its legal enti-
ties are included in the scope of the report, see note 8 in
the financial statements. The scope of the sustainability
report remains consistent with last year’s, making them
comparable. SKF has also included the upstream and
downstream value chain in the reporting wherever relevant
according to the Group’s double materiality assessment.
SKF’s value chain is visualized on page 86.
While preparing this report, SKF has considered the
expectations of all main stakeholder groups, to ensure that
the themes most significant to them are covered. No rele-
vant information has been excluded due to reasons related
to classified or sensitive data and intellectual property
matters.
Assurance on sustainability information
To ensure that SKF’s stakeholders and readers of the
Group’s Sustainability Report are confident in the trans-
parency, credibility and materiality of the information pub-
lished, this report has been subject to limited assurance by
SKF’s auditors in accordance with the standard ISAE
3000. Please refer to the Auditor’s Limited Assurance
Report on the Sustainability Report and the statement
regarding the Statutory Sustainability Report on page 149.
Contact points
Contact points for questions regarding the report are:
Magnus Rosén, Head of Sustainability
email: magnus.rosen@skf.com
Susanne Lager, Head of Sustainability Reporting
email: susanne.lager@skf.com
Disclosures in relation to specific circumstances
Changes in reporting
In 2024, reporting of the gender pay gap is based on
tota remuneration paid out during the fiscal year for all
employees employed during the year. This is a change
compared to the reporting for fiscal year 2023, which
was based on base salaries for white collar employees
effective as of 31 December 2023.
SKF ANNUAL REPORT 2024 83
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preparing materials to the Board of Directors before the
Board meetings and keeping the Board informed on SKF’s
financial position, development, risks and opportunities.
This includes information to the Board of Director’s about
new developments, requirements and regulations within
the sustainability and ethics area as well as about how
SKF is working for a sustainable development based on
SKF Care and the SKF Code of Conduct.
The SKF Board of Directors has established a Sustain-
ability & Ethics Committee, to ensure an increased focus on
sustainability topics. The Sustainability and Ethics Com-
mittee oversees SKF’s strategy related to ethics and sus-
tainability. The work also includes to review, monitor and
keep informed on the strategic objectives, initiatives, and
the implementation thereof for a sustainable development,
mitigation and action on impacts, risks and opportunities
of SKF and monitoring of progress against externally com-
municated sustainability targets see page 82. Based on
SKF Care the committee also handles items relating to
SKF’s values, employee organization including talent
acquisition, development, retention and planning, business-
and work ethics, compliance, community care, environment,
health and safety. The Sustainability and Ethics Committee
held three meetings in 2024. Further details about the
composition and diversity of the members in the Board
of Directors and the Sustainability and Ethics Committee,
as well as their roles and responsibilities, expertise and
skills are found in the Corporate Governance Report on
pages 150–160.
SKFs sustainability work is operationally led by the
Chief Sustain ability Officer (CSO) who reports directly to
the CEO and is part of SKF’s Group Management team.
SKF has a Sustainability Steering Group consisting of the
CEO, CFO, CSO, CTO and the Head of Sustainability who
meets bi-monthly to discuss emerging sustainability
actions, events, and expec tations to promote a proactive
and leading approach in sustainability. The Head of Sus-
tainability has the task to assure that all relevant aspects
of sustain ability are addressed and integrated into opera-
tions and activities throughout the SKF Group as estab-
lished by adopted policies, strategies and targets related
Governance, cont.
to SKF’s overall sustainability performance. These in
turn drive and support the integration of sustainability
into business practices, processes, operations, and staff
functions.
SKF has established a number of decision bodies gov-
erning their respective sustainability-related areas, includ-
ing oversight and monitoring of Group targets and strate-
gies related to material impacts, risks and opportunities.
• Environment, Health and Safety (EHS), Energy, Climate
Transformation, Circularity, and Responsible Business
topics are governed by Group EHS and Group Sustain-
ability, led by the CSO and the Sustainability, Quality &
EHS Director. High level reviews are conducted every six
months with the CSO and each Business Area President
and their relevant staff. The purpose of these reviews is
to follow up on the various strategic targets and related
performance and address any gaps.
• People and Social topics focusing on SKF’s own work-
force are governed by the People Experience Manage-
ment Team, led by the Senior Vice President People
Experience. Bi-yearly, people business review meetings
are held with all Business Areas, covering topics such
as diversity & inclusion, talent development, and suc-
cession planning. Different People Experience Commit-
tees and subject matter experts support the realization
of strategies.
• Governance, Ethics and Compliance topics are governed
by Group Compliance and the Compliance Committee,
led by the Chief Ethics & Compliance Officer and the
General Counsel. The Chief Ethics & Compliance Officer
maintains monthly meetings with all Business Areas,
and keeps Group Management, the General Counsel and
the CEO updated regarding strategies, KPI’s as well as
key activities, risks and incidents related to for example
corporate culture, sanctions, corruption and bribery.
These decision bodies have the competence, experience
and mandate to take decisions for their respective areas,
including climate, energy, EHS, responsible sourcing,
corporate governance, compliance and ethical business
conduct, diversity, equity and inclusion, sustainable opera-
tions and the integration of sustainability in business strat-
egy and processes. When needed, relevant experts from
the organization are invited to participate in the meetings
and discuss directly with the respective decision bodies.
SKF has a long history of addressing sustainability topics
and has a group of experts driving the development as SKF
is pioneering the field of sustainability.
Sustainability topics are managed by corporate func-
tions such as Group Sustainability, Group EHS, Group
People Experience, and Group Compliance, with strong
alignment and collaboration with the Business Areas and
other relevant Group functions.
Sustainability performance is the responsibility of the
line organization and shall be delivered in accordance
with the strategic direction, business plan and under the
accountability framework set within the SKF Group. The
implementation of the sustainability initiatives in the line
organization is driven by the respective SKF Business Areas,
their business units or by country organizations, with
direction and coordination from formal, cross-functional,
decision- making bodies and working-groups, such as the
Sustainability Board, the Group Health & Safety Committee,
the Global Energy Sourcing Committee, the Responsible
Sourcing Committee, the Group Ethics and Compliance
Committee, the Community Care Committee and topic-
specific People Experience committees.
Further information about controls and procedures
applied to the management of impacts, risks and oppor-
tunities are provided on page 89.
Information provided to and sustainability matters
addressed by the undertaking’s administrative,
manage ment and supervisory bodies
Material impacts, risks and opportunities were defined
through the DMA which is further described on page 95.
The validation of the DMA follows SKF’s sustainability
governance model. The summarized results can be found
under on page 89.
Based on the results from the DMA, including material
impacts, risks and opportunities, as well as other strategic
input, the Group has during 2024 run three sustainability-
related strategic programs: Climate Transformation,
Circularity and Responsible Business. The Group has also
continued its strong focus on the zero accidents program
and other initiatives related to its employees and the social
impact, such as diversity, equity and inclusion, and equal
and fair compensation including living wages. Furthermore,
the Group has continued to run the compliance program,
with dedicated work related to human rights, export controls,
information security and privacy, fair competition and
anti-corruption as well as whistleblowing.
Members of Group Management and the relevant func-
tion heads are actively involved in the program steering.
Status updates are shared with the program steering as
well as the Board of Director’s Sustainability and Ethics
Committee and the Audit Committee. The following topics
were addressed with the Sustainability and Ethics Com-
mittee during 2024, to keep the committee members
informed and to review progress and implementation of
policies, strategies and targets:
• The Group’s plan for industrial leadership in sustain-
ability, including strategic programs such as Climate
Transformation and the actions and investments to
reach decarbonized operations by 2030.
• Corporate culture, corruption and bribery, sanctions
compliance, whistleblowing, awareness and trust of the
whistleblowing process, updated SKF Code of Conduct.
• Diversity, equality and inclusion, equal and fair com-
pensation including living wages, skills-driven people
practices, and Community Care.
Integration of sustainability-related performance
in incentive schemes
As a part of SKF’s commitment to sustainability,
sustainability- related performance has been integrated
into the incentive schemes for the Group’s long-term
and short-term variable salary programs. The incentive
schemes align the long-term interests of the participants
and shareholders, thereby strengthening SKF’s ability
to attract and retain top talent and contribute to the
business strategy, long-term interests, and sustainability,
including climate.
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Governance, cont.
The variable salary programme, also called the SKF per-
formance share programme, which covers senior managers
and key employees in the Group, including Group Manage-
ment, offers the opportunity to be allotted SKF B shares
free of charge but subject to local tax regulations. The
allotment of shares is related to the achievement of the
Total Value Added (TVA) target, as defined by the Board of
Directors, and the SKF Group’s CDP Climate Change score.
The TVA performance measure is weighted 80% and the
CDP Climate Change score performance measure is
weighted 20%. More on the programme can be found in
the Remuneration Report pages 168–174 and note 23 in
the financial statements.
The CDP Climate Change score is a well-recognized and
easily comparable metric of success in climate work, pro-
viding a transparent and objective measure of SKF’s pro-
gress against other companies. The CDP Climate Change
score covers all aspects of SKF’s climate change strategy
and enables every function within SKF to contribute to
sustainability goals, reinforcing the Group’s commitment
to climate change mitigation. The CDP Climate Change
score, determined by an external party, is dynamic, with
the bar being raised annually to mirror increasing stake-
holder expectations which requires continuous improve-
ments for successful performance achievement.
The short-term variable salary program, offers a bonus
based on salary. Local conditions determine which
employees are eligible for the program. The bonus above
economic and other targets weighted 90%, is directly
linked to the performance against the trajectory of SKF’s
decarbonization target 2030, with the climate- related
component currently constituting 10% of the total amount.
This scheme provides a clear link and monetary reward
between the participants’ work in areas such as energy
efficiency, material efficiency, and renewable energy, and
the reduction in absolute GHG emissions needed to reach
the decarbonization target 2030. Full pay out of this 10%
is given if the 2024 target is met or exceeded. Zero payout
is given if the target is not met.
Finally, the performance of every SKF employee is
evaluated on a yearly basis. Individual goals are defined,
and, in some cases, these may be related to climate.
The level of achievement and other goals then forms part
of the overall performance rating of the employee, and this
impacts on salary level and other conditions.
Risk management and internal controls
over sustainability reporting
In response to the increasing regulatory demands for
transparency and accountability in sustainability report-
ing, SKF is working proactively to prepare for future rea-
sonable assurance in its reporting practice. Recognizing
the importance of this objective, SKF has commenced
this journey, laying the groundwork for its internal control
framework which is based on the established system
developed by the Committee of Sponsoring Organizations
(COSO) for Internal Control over Sustainability Reporting
(ICSR). ICSR is based on the same principles as the SKF
Internal Control Standard (SICS).
Control environment
SKF’s control environment sets the tone of the organiza-
tion and is established and communicated through organi-
zational structure, ethical values and integrity, policies and
procedures, as well as instructions and routines. Roles and
responsibilities for topics have been defined to ensure
accountability and effective oversight of sustainability
topics, ensuring that the work within these areas is carried
out efficiently. Governing documents, including internal
policies, guidelines, and manuals, are under development
to guide consistent and ethical reporting practices and
provide employees with clear guidance on SKF’s opera-
tions. Additionally, tools are evaluated, templates are
created, and internal controls are designed and will be
implemented across all material topics, encompassing
both quantitative and qualitative disclosure requirements.
Risk assessment
SKF utilizes the double materiality assessment (DMA) to
identify material topics for which process maps and robust
internal controls should be developed and improved,
ensuring that SKF can meet the increasing regulatory and
stakeholder requirements. For more information on how
the DMA is conducted, see Description of the process to
identify and assess material impacts, risks, and opportu-
nities on page 95.
A risk analysis is then performed for each process
within the material topics, including the evaluation of risks
such as fraud, irregularities, and data accuracy and com-
pleteness. Internal controls are developed on site-level,
tailored to address the specific operational risks and data
integrity issues, ensuring accurate and reliable information
at the source. Internal controls at Group-level are designed
to oversee the aggregation and consolidation of the data
from all sites, providing a comprehensive and cohesive
view of sustainability performance across the entire
organization.
Control activities
SKF’s control activities include policies, guidelines, proce-
dures, organizational structures, and process-level control
activities. The control activities are embedded within
SKF’s business processes to prevent errors and ensure the
reliability of reported information. SKF has implemented
both preventive and detective measures, such as the four-
eyes principle during data collection and review activities,
to validate the accuracy and completeness of data prior to
public disclosure.
In 2024, SKF initiated the development and improve-
ment of process maps and internal controls for sustaina-
bility reporting and undertook a pilot for a number of quan-
titative disclosure requirements in two topics to identify
key take-aways and learnings, which subsequently allowed
refinement and enhancement of the approach. Following
the pilot, additional quantitative disclosure requirements
for which data is obtainable have been mapped and internal
controls have been designed.
Information and communication
SKF has initiated a comprehensive CSRD program to
emphasize the organization’s commitment to sustainability
reporting and compliance. Regular updates are provided
to the Board of Director’s Audit Committee to keep them
informed about the progress and activities within the
sustainability reporting program and other sustainability
reporting matters.
Monitoring
SKF aims to be a sustainability leader in the industry and
has set ambitious sustainability goals along with associ-
ated strategies. To support these strategies, SKF has
established key performance indicators (KPIs) to monitor
progress. Responsibility for the quality of information has
been distributed to the individuals responsible for sustain-
ability topics. Going forward, SKF will utilize the new imple-
mented digital tool and process for ICSR to continuously
monitor and enhance the internal control system related
to sustainability reporting.
Membership associations
SKF endorses or subscribes to a number of internation-
ally recognized principles, charters and guidelines which
promote sustainable and ethical business practices.
The main ones are: The United Nations Global Compact,
The International Labour Organization (ILO), The Interna-
tional Chamber of Commerce (ICC) and The Organization
for Economic Co-operation and Development (OECD).
SKF endorses and works to apply the OECD Guidelines
for Multinational Companies. By doing this, SKF commits
to conducting business in a global context in a responsible
manner, consistent with applicable laws and internationally
recognized standards. SKF’s involvement in initiatives re -
lated to SKF’s climate strategy and ambitions are described
under Climate change adaptation and mitigation.
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Material
processing
End of life
Manufacturing
of products
Development of
service offerings
R&D, sales, marketing, administration
Investors and analysts
Civil society
Business partners
Customers
Remanufacturing by SKF
Recycling
Natural
resource
extraction
Raw material
preparation
Use of SKF’s
products and services
by customer industries
Direct or indirect
use of SKF’s
products and
services in society
Suppliers of indirect materials and
services throughout the value chain
Employees and
union organizations
Suppliers of direct materials
throughout the value chain
Consumers
Upstream transportation
Downstream transportation
Upstream SKF’s operations Downstream
ACTIVITIESSTAKEHOLDERS
Strategy, business model and value chain
SKF is a leading global industrial brand with almost 39,000
employees in 130 countries, across four key geographical
regions: the Americas; Europe, Middle East and Africa;
India and Southeast Asia; and China and Northeast Asia.
In over 40 industries, SKF provides a comprehensive
portfolio and knowledge built on the company’s core tech-
nology platforms: bearings and units, seals, lubrication
systems, intelligent solutions such as condition monitoring
and services. By combining these platforms, SKF delivers
customized solutions, blending products, technologies,
and services with flexible new business models to meet
each customer’s unique needs.
The operations are structured in two business units.
The Industrial business supplies customers globally with
products and services, both directly and indirectly through
a network of more than 7,000 distributors. The offering
includes a broad product range of bearings, seals, lubrica-
tion systems and power transmission products, as well as
rotating shaft services and solutions for machine health
assessment, reliability engineering and circular solutions.
The Industrial business generates 70% of SKF’s net sales
and 89% of the adjusted operating profit.
The Automotive business supplies the vehicle after-
market with spare parts, both directly and indirectly
through a network of more than 10,000 distributors. The
offering comprises customized bearings, seals and related
products for e-powertrain, driveline, engine, wheel-end,
suspension, and steering applications to manufacturers
of electrical vehicles and commercial vehicles. The Auto-
motive business generates 30% of SKF’s net sales and
11% of the adjusted operating profit.
For more information on turnover and financial results,
see pages 32–78. For more information on employees, see
pages 124–133.
SKF’s strategy is centered around two key concepts:
intelligent and clean. Intelligent reflects the commitment
to providing connected and customized solutions for cus-
tomers while utilizing technology to improve operational
efficiency. Clean emphasizes SKF’s role in driving a more
sustainable industry and conducting its business trans-
parently and responsibly. For more information on strategy
and goals, see pages 12–20.
Impacts, risks, and opportunities in the value chain
SKF has identified impacts, risks, and opportunities
across the value chain. The highest level of influence is in
the Group’s own operations, but SKF also takes responsi-
bility and seeks to drive improvements both upstream and
downstream in the value chain.
Upstream
The main upstream environmental impact comes from the
sourcing of metal components and is associated with
scarcity of resources, energy and emissions. SKF can
influence this by focusing on material efficiency in the
manufacturing processes, extending the useful life of both
SKF’s products and the products of customers, and by
working with suppliers who can reduce these upstream
impacts with a mix of short- and long-term measures.
Strategy
Based on conducted life cycle assessments SKF has
concluded that raw materials have significant environ-
mental impacts. To decrease this impact SKF has initiated
a Circularity programme showing a strategic commitment
to transitioning into a circular company. It lays out well-
defined objectives aiming at improving the circularity
of the supply chain and refining operational practices,
including optimizing material utilization, reducing waste,
and fostering sustainable resource cycles.
Social impact risks such as those related to human
rights and labour practices exist in the upstream supply
chain and these are addressed via SKF’s Responsible
Sourcing programme. The programme covers all SKF’s
suppliers but uses a risk-based approach focusing
auditing on tier one and sometimes tier two or three
suppliers. SKF also has a grievance mechanism in place
for incidents at suppliers’ operations. This is coordinated
by SKF’s Responsible Sourcing Committee and reported in
an aggregated overview of deviations from supplier audits.
Human rights risks in the supply chain are addressed
systematically via the Responsible sourcing programme
as well as when highlighted through the whistle-blower
programme.
Own operations
SKF has direct operational control of its own operations
and therefore has the means and responsibility to directly
drive improvements in environmental and social perfor-
mance. Safety always comes first and SKF is convinced
that all work-related accidents can be prevented.
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Strategy, cont.
The Group has a global management system with focus on
risk elimination and correct safety behaviours. The Group’s
Zero Accidents programme, supported by proactive near
miss reporting, aims to avoid all workplace accidents.
By in creasing energy efficiency within its operations
and the share of renewable energy utilized, SKF can
reduce its environmental impact. A roadmap has been
developed, defining the transition towards 100% renewable
electricity, systematic improvement in energy efficiency
and the near elimination of fossil fuel use at all SKF units
using > 2GWh of energy per year. By avoiding wasted
material at SKF, the waste associated with the embedded
energy and emissions upstream are also avoided. SKF also
strives to increase the use of renewable, low-carbon or
recycled materials.
Periodic audits of compliance to the SKF Code of Con-
duct are performed and a whistle-blowing process is avail-
able at local and global levels, to ensure human rights
respect for employees at SKF and in the value chain. SKF
also integrates equality into the people processes, for
example learning and development, succession planning
and recruitment.
Downstream
SKF works to continuously reduce any negative down-
stream impact relating to its business. This starts with
ensuring compliance with laws and regulations and
avoiding materials and substances hazardous to people
and the environment. The purpose of SKF’s products and
solutions is to make things work better and run faster,
longer, cleaner and more safely.
SKF believes that business can drive prosperity and
growth to overcome social issues over time. The work
related to human rights focuses on adhering to export con-
trol regulation and ensuring that SKF’s distributors adhere
to the SKF Code of Conduct.
In the product development phase, there is increasing
focus on designing for circularity to enable reuse, remanu-
facturing and refurbishment. Products are designed for
disassembly, modularity, repairability, or recyclability. The
design also aims to increase material efficiency to reduce
material input and optimize manufacturing and supply
chains to reduce waste generation.
SKF enables improvements in customers’ sustainability
performance through products, services, business models
and value propositions. The improvements include for
example increased energy efficiency, reduced greenhouse
gas emissions and improved safety. The Group also
develops new cleantech solutions through partnerships,
business development, and acquisitions. The focus is on
technologies that help enable cleantech areas such as
renewable energy, electric vehicles, and railway applica-
tions, which will help to improve performance of current
cleantech solutions as well as enable new innovations.
The Group aims to support the growth of these technol-
ogies and industries, which in turn will help to reduce envi-
ronmental impact on a large scale. SKF is also growing its
circular solutions such as bearing remanufacturing, a sys-
tem for re-using oil (RecondOil) and Laser Metal Deposi-
tion (LMD). Bearing remanufacturing avoids the need of
replacement with a new bearing and therefore the large
majority of the greenhouse gas emissions from bearing
production. In addition to emissions associated with raw
materials and energy use being avoided, it also provides
the customers with lower costs and in many cases, better
availability compared to replacing with new products. SKF
RecondOil is a service that provides a solution for the
complete recovery and reuse of industrial oil. It uses Dou-
ble Separation Technology (DST) to remove contaminants
from the oil, allowing it to be used again and again. This
reduces the environmental impact of industrial oil use and
can save on maintenance costs.
Upstream and downstream logistics
SKF’s global upstream and downstream logistics require-
ments and networks are large and complex. SKF strives
to reduce emissions and at the same time improve cost
efficiency. This is done by reducing transport demand,
optimizing transport efficiency and making use of trans-
port decarbonization opportunities.
Interests and views of stakeholders
SKF aims to align its business practices with the needs
and expectations of its stakeholders. Stakeholder groups
are defined as entities or individuals that may influence
and/or be influenced by SKF’s activities. These different
stakeholders have specific concerns for sustainability-
related topics. Through ongoing dialogues, SKF aims to
understand the stakeholder groups’ positions, concerns,
and expectations. This continuous interaction informs the
Group’s sustainability efforts, projects, and processes,
allowing alignment with the interests and views expressed
by stakeholders.
Guided by the principle of being a responsible company,
SKF’s stakeholder engagement adheres to international
norms and codes, including the United Nations Guiding
Principles on Business and Human Rights and the OECD
Guidelines for Multinational Enterprises on Responsible
Business Conduct. The input to SKF’s sustainability activi-
ties is collected from customers, investors and analysts,
employees, union organizations, and representatives from
civil society, and is collected via interviews, surveys, con-
ferences, meetings, and data analysis. The work to engage
with the stakeholder groups is conducted by the respec-
tive functions within the Group. The insights are used to
inform both the due diligence processes and the double
materiality assessment. SKF further ensures that the views
of stakeholders are communicated to the Board of Direc-
tor’s Sustainability & Ethics Committee.
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Strategy, cont.
Stakeholders’ interests and views on SKF’s sustainability- related activities and initiatives
Stakeholder How engagement is organized and purpose of engagements Summary of insights from engagement
Examples of how outcomes of the engagement
are taken into account by SKF
Customers Customers’ input is sought and received via sales, marketing operations and activities carried out by
the Group. These range from global discussions with key account managers to daily conversations
between customer representatives and SKF’s local account managers. SKF also collects key issues
and concerns from customer surveys and assessments.
Customers are expecting SKF to be a business partner with
strong ethics and engineering expertise that provides innova-
tive and reliable products that contribute to the customers’
climate targets and energy efficiency.
Development of new innovative products and services
and improvements in existing portfolio.
Investors and
analysts
SKF takes an active approach in communicating the Group’s strategy and performance to existing
and potential investors, analysts and media. Information is provided through various channels, such
as the quarterly financial reports, meetings with investors, ESG ratings, the com pany’s website and
press releases. Capital Markets Days are held to present the strategy, targets and the different busi-
nesses in more detail. SKF receives feedback from investors via discussions during investor meetings.
For SKF to be a long-term profitable investment, investors
expect the Group to deliver on its sustainability targets, con-
tribute to the climate transition and future-proof its opera-
tions and product portfolio.
Improvement plans for ESG ratings and incorporating sustain-
ability activities and progress in quarterly financial reporting.
Employees
and union
organizations
SKF holds an annual World Union Council meeting during which employee representatives meet with
Group Management. This is a form of social dialogue to make sure that the framework based on the
SKF Code of Conduct is deployed across the Group. Employee representatives are also members of
SKF’s Board, see SKF’s Corporate Governance Report, on pages 150–160. In addition, SKF carries out
periodic employee feedback surveys to drive continuous improvements of the working climate.
Employees and union organizations expect SKF to be a
responsible company and employer with clear focus on
employee health and safety, training and development,
and diversity and inclusion as well as being an industry
leader in sustainability.
Global and local initiatives for training and development
and general improvements and action plans.
Civil society The communities in which SKF operates are important stakeholders for the company and their input
helps shape local SKF activities. Local SKF organizations interact with their surrounding communi-
ties through various activities and initiatives ranging from business related matters to volunteer work,
charity work, sponsoring and local networks collaboration. Local media is also considered to repre-
sent civil society. Formal and informal networks are used to share experiences and ideas with other
companies, topic experts and non-governmental organizations (NGOs).
Civil society expects SKF to be a responsible corporate
citizen and that the Group contributes positively to the
communities in which it operates.
Aligning business model and strategy with legal requirements
and engagement in local and global initiatives.
Suppliers Suppliers’ input on material topics is managed via SKF’s Responsible Sourcing programme. Local
sourcing offices enable close communication on daily operations. On-site audits and training provide
feedback to SKF on suppliers’ performance related to quality and sustainability as part of a total cost
assessment of supplier development. The SKF Code of Conduct for suppliers and sub-contractors is
the standard used during audits and screening.
Suppliers expect SKF to be a transparent business partner
that collaborates on sustainability topics such as decarbon-
izing the supply chain and upholding strong due diligence
practices.
Collaborations for developing low-carbon products and
materials and updated supplier sustainability standards.
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Strategy, cont.
Impact materiality
Financial materiality
Pollution
Water & marine resources
Biodiversity & ecosystems
Affected communities
Consumers and end-users
Workers in the value chain Climate change
Circular economy
Own workforce
Business conduct
Low
High
High
Material impacts, risks and opportunities and their
interaction with strategy and business model
SKF has for several years performed materiality assess-
ments annually to identify impacts on the environment
and society as well as sustainability-related risks and
opportunities. In 2024, SKF performed a double materiality
assessment covering impact materiality as well as finan-
cial materiality. The outcome is aggregated and presented
per ESRS topic, showing that Climate change, Circular
economy, Own workforce, Workers in the value chain and
Business conduct are the Group’s material sustainability
topics.
For environmental topics, the Group’s material negative
impacts are related to the use of energy and materials in
the development and manufacturing of products. Both
transitional and physical climate risks are material to SKF.
However, SKF’s efforts related to circularity and decarbon-
ization are aiming at mitigating negative impacts while
also contributing to positive impacts beyond the mitigat-
ing activities. Here, SKF has material opportunities when
increasing energy efficiency for its customers and provid-
ing products with improved circular performance such as
remanufactured bearings and re-using oil.
For SKF’s own workforce, material impacts are primarily
related to health and safety and diversity and inclusion.
Being a global company with complex supply chains
and providing solutions and operating in all industries,
SKF is automatically subject to potential risks related to
business conduct and potential negative impacts on work-
ers in the value chain. To reduce any potential negative
impacts and risks, SKF is continuously implementing
mitigating activities such as being a responsible business
partner to both suppliers and customers where SKF can
contribute with positive impacts and capture opportuni-
ties. Furthermore, the material impacts, risks and opportu-
nities have a clear link to the Group’s strategic sustainabil-
ity efforts, targets, and ambitions of caring for people and
ensure health and safety for own workforce (S1) and work-
ers in the value chain (S2), achieving net-zero by 2050 for
climate change (E1) and doing business responsibly for
business conduct (G1) as well as the pursuit of circularity
for circular economy (E5).
For more information on the impacts, risks, and oppor-
tunities (IRO’s) on sub-topic level as well as SKF’s response
to these IROs, please see the next pages and the topical
sections.
In this report only topics reaching the thresholds
of the materiality analysis described on page 95
are presented in full.
Limited information on some of the topics
that did not reach the thesholds is available on
pages 140–141.
The result of the double materiality clearly follows SKF’s
purpose “Together, we re-imagine rotation for a better
tomorrow” and the Group’s long- lasting sustainability
framework SKF Care;
• Business Care A clear focus on customers, financial
performance and shareholder returns – combined with
the highest standards for sustainability and ethical
behaviour.
• Employee Care Sustaining a safe work environment,
personal development, health and well-being of
employees at SKF, as well as people in the supply chain.
• Environment Care Continuously reducing the environ-
mental impact from SKF’s operations, and those of
suppliers and customers.
• Community Care Making positive contributions to
the communities in which SKF operates.
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Climate change
IRO number Description of material IRO Type of material IRO Value chain Time horizon Description of the IRO’s in relation to SKF
Climate change mitigation
1 Innovating and providing prod-
ucts for the climate transition
Positive impacts Downstream Short-term SKF has a portfolio of products and services that mitigate customers’ negative impacts such as greenhouse gas emissions or pollution.
However, SKF’s most significant positive impact lies in its ability to innovate and provide products that enables the transition to
a low-carbon economy. Specifically, SKF is providing solutions that enable the growth of cleantech industry, electrification, and
renewable energy as well as the demand for products with improved circular performance.
2 Greenhouse gas emissions from
own operations and value chain
(scope 1, 2, 3)
Negative impacts Full value chain Short-term SKF’s operations and value chain generates greenhouse gas emissions. SKF has a long track-record of responding to its negative
impacts through mitigating activities aimed at both its own operations as well as upstream and downstream value chain.
3 Cost of decarbonization Risks Upstream and
own operations
Mid-term Climate change mitigation requires investments to reduce the emissions in both scope 1, 2, and 3. SKF is responding to this risk by for
example investing 3 billion SEK for the phase-out of fossil fuels in own operations by 2030. For scope 3, transitional risks such as
increased steel prices due to limited supply of green steel may be a financial risk. SKF is responding to this risk by close collaboration
with suppliers and engagements in cross-industry collaborations such as Responsible Steel and SteelZero.
4 Winning business by providing
products and services that
enable the climate transition
Opportunities Downstream Long-term With a strong focus on innovative, energy efficient and low-carbon product and services, SKF has the opportunity to be a preferred busi-
ness partner to its customers. Climate change mitigation is a significant financial opportunity for SKF. By providing innovative products,
SKF is likely to benefit from the growth of electrification and renewable energy as well as other emerging technologies like energy storage,
hydrogen and carbon capture.
Climate change adaptation
5 Physical climate risks Risks Own operations
and upstream
Long-term As global warming escalates, physical climate-related risks are increasingly likely to disturb both SKF’s operations and supply chain
leading to increased costs of operations and materials. Climate-related disasters such as flooding, droughts and extreme weather
events are already becoming more and more common. SKF is responding to any potential risks by improving scenario analysis and
implementing necessary protection mechanisms.
Energy
6 Reducing friction and increasing
energy efficiency
Positive impacts Downstream Short-term SKF’s products aim to reduce friction, which leads to increased energy efficiency for customers and thus significantly contributes to
society and planet.
7 Use of fossil energy Negative impacts Full value chain Short-term SKF still has depencency on fossil energy in its own operations and its upstream and downstream value chain. SKF is aiming to mitigate
this actual negative impact through energy efficiency as well as to phase out fossil fuels in its own operations.
8 Energy price fluctuations Risks Own operations
and upstream
Short-term Energy price fluctuations pose a material financial risk for SKF. For instance, geopolitics can cause energy crises which may affect the
energy costs of SKF’s own operations and upstream supply chain, especially for energy-intensive materials like steel. SKF is mitigating
these risks for example by investing in energy efficiency within its own operations.
9 Winning business by providing
energy efficient solutions
Opportunities Downstream Short-term Energy efficiency is a significant financial opportunity for SKF. For instance, SKF can enable energy efficiency improvements for its
customers in various sectors, such as compressors, chillers, heat pumps, automotive and industrial drives, by providing innovative
products and solutions like magnetic bearings, hybrid bearings and low-carbon products.
Strategy, cont.
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Resource use and circular economy
IRO number Description of IRO Type of material IRO Value chain Time horizon Description of the IRO’s in relation to SKF
Resource inflows
10 Increasing demand for products
and business models with
improved circular performance
Positive impacts Full value chain Mid-term By providing more circular solutions like a system for re-using oil (RecondOil), SKF reduces the demand for virgin materials, same for
remanufactured bearings and other services and therefore has an important positive impact on the planet. Even though these products
with improved circular performance are still a smaller part of the business, SKF believes that the future potential positive impact of this
is important. In addition, SKF is collaborating with suppliers and customers as well as engaging in cross-industry collaborations such as
Responsible Steel and Steel Zero to increase material utilization, reducing waste and fostering sustainable resource cycles.
11 Use and reliance on virgin raw
materials such as steel
Negative impacts Upstream Short-term SKF’s sourcing of raw materials has a significant negative impact from a lifecycle perspective. The main upstream environmental impact
comes from the sourcing of metal components and is associated to scarcity of resources, energy and emissions. In addition to steel,
SKF sources materials for lubricants and seals that often originates from non-renewable sources. SKF has initiated a circularity program
showing a strategic commitment to transitioning into a circular company. The program includes improving the circularity of the supply
chain and refining operational practices, including optimizing material utilization, reducing waste and fostering sustainable resource
cycles.
Resource outflows
12 Designing, developing
and providing solutions
for circularity
Positive impacts Downstream Mid-term SKF is developing products and services that have an important positive impact on the circularity transition and the planet. Further,
during the product development phase, SKF is increasing the focus on designing for circularity to enable reuse, remanufacturing and
refurbishment. Products are designed for disassembly, modularity, repairability or recyclability. The design also aims to increase material
efficiency to reduce material input and optimize manufacturing and supply chains to reduce waste generation.
13 Limited closed-loop product
flows for all SKF’s products
Negative impacts Full value chain Short-term Even though SKF is pushing for more circularity of products, most of the products and materials leaving its operations are not in a
closed recycling loop. While steel is usually recycled at end-of-life, it is often melted down to a lower quality than what SKF can re-use
as a bearing steel. Furthermore, seals and lubricants are usually not re-cycled. Therefore, SKF considers its negative impact in this
area as material. SKF is responding to the impact by engaging with customers, suppliers and cross-industry collaborations such as
ResponsibleSteel and SteelZero to increase material utilization, reduce waste and foster sustainable resource cycles.
14 Winning business
in a circular economy
Opportunities Downstream Short-term SKF is increasing its readiness for a circular economy that is necessary to meet not only the Paris agreement but also mitigating risks
of geopolitics and resource scarcity. SKF can provide products and services that meet customer circularity targets as well as climate
targets. SKF therefore sees significant financial opportunities related to resource outflows.
Waste
15 Waste generated in
own operations
Negative impacts Own operations Short-term SKF generates waste in its own operations and has an important actual negative impact on the planet. SKF is responding to this
negative impact by increasing recycling rates and other circular solutions such as increasing material utilization and fostering
sustainable resource cycles.
Strategy, cont.
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Own workforce
IRO number Description of IRO Type of material IRO Value chain Time horizon Description of IRO’s in relation to SKF
Working conditions
16 Work-related injuries and
ill health of own workforce
Negative impacts Own operations Short-term SKF recognizes that work-related injuries and ill health occur in the workplaces even if the health and safety of employees, contractors, agency
workers and visitors is a top priority for SKF. Safety always comes first and SKF is convinced that all work- related injuries and ill-health can be
prevented by proactively assessing health and safety risks to eliminate hazards, reduce risks and ultimately improve the work environment.
SKF has a Group-wide EHS management system that supports this approach. Along with the Zero Accidents program and proactive reporting
of near misses and unsafe conditions, it aims to prevent all workplace accidents. SKF’s active measures reduce the likelihood of critical inci-
dents, but the potential severity still makes SKF consider the impact significant.
17 Secure employment,
collective bargaining and
freedom of association
Positive and nega-
tive impacts
Own operations Mid-term SKF’s approach to secure employment, collective bargaining agreements, and freedom of association prevents unfair treatment based on
gender, culture, ethnicity and other factors. This can be seen as an initiative to mitigate important negative impacts. At the same time, by
creating a more secure, attractive and engaging work environment, these measures also serve to create a potential important positive impact
for the own workforce as well as their families, communities and society as a whole.
18 Inability to attract and
retain critical competences
and capabilities
Risks Own operations Short-term There is fierce competition in the labour market, and the success of companies is dependent on their ability to attract, develop and retain critical
competences and capabilities. If SKF does not succeed in providing good working-conditions, this can lead to high employee turnover rates,
which can generate financial risks caused by weakened results. SKF is responding to this risk by taking a holistic approach in strengthening
the Group as an employer of choice, putting the employee experience at the center, including providing safe and healthy working conditions.
Purpose, culture, employee engagement, leadership, health and safety, competence and way of working are all key building blocks in this area.
Equal treatment and opportunities for all
19 Enabling a diverse and
inclusive workplace
Positive impacts Own operations Short-term SKF takes a holistic approach in strengthening diversity of thoughts. SKF commits to providing equal opportunities irrespective of ethnic back-
ground, race, religion, age, gender, disability, sexual orientation, outlook or social status. The Group wants everyone in the workforce to feel
welcome to come as they are. Purpose, culture, employee engagement, leadership, competence and ways of working are all key building blocks
in this area. By working with this purpose, SKF contributes with actual positive impacts beyond mitigating negative impacts.
20 Discrimination and non-
equal treatment of own
workforce
Negative impacts Own operations Mid-term Employees who experience discrimination or unequal treatment may suffer from stress, anxiety and other mental health issues. This can nega-
tively affect the employee’s overall well-being and quality of life. The potential negative impact is deemed material based on its severity to the
individual’s health. SKF is mitigating any potential negative impact through, for example, the quarterly SKF Team Pulse survey, where SKF can
estimate the employee experience from an equal opportunity perspective. Furthermore, employees are requested to report any behaviour that
is not in line with the SKF Code of Conduct to their manager, the local People Experience channels or to other senior managers. Employees can
also raise concerns or seek advice through the third-party hosted SKF Ethics and Compliance Reporting Line.
21 Diversity and inclusion
increasing innovation and
business performance
Opportunities Own operations Mid-term Research shows that diverse and inclusive teams are more productive, increase market shares and are more likely to expand into new markets.
Further, they are important for attracting and retaining talent. By fostering diverse teams and inclusive leadership SKF can enable an innova-
tive environment that contributes with important financial opportunities for the Group. SKF takes a holistic approach in strengthening diversity
of thoughts. Purpose, culture, employee engagement, leadership, competence and ways of working are all key building blocks in this area.
Other work-related rights
22 Human rights of
own workforce
Negative impacts Own operations Short-term Other work-related rights include human rights such as zero tolerance against child labour and forced labour. The important severity of such
a negative impact makes it material for SKF, despite its low likelihood. SKF is responding to this potential negative impact by adhering to inter-
national standards and guidelines and implements the SKF Code of Conduct in all operations. Periodic code of conduct compliance audits are
performed and a whistle-blowing process is available at local and global levels.
Strategy, cont.
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Workers in value chain
IRO number Description of IRO Type of material IRO Value chain Time horizon Description of IRO’s in relation to SKF
Working conditions
23 Improving working conditions
together with suppliers
Positive impacts Upstream Short-term The SKF Code of Conduct for suppliers and sub-contractors mandates fair work conditions and health and safety standards. Through
SKF’s Responsible Sourcing Programme, the Group is actively collaborating with suppliers to improve working conditions in risk regions,
resulting in positive impacts for workers in the value chain.
24 Unsafe working conditions
for workers in the value chain
Negative impacts Upstream Mid-term SKF’s upstream value chain for both direct and indirect materials is widespread both geographically and across sectors, where some
regions and sectors come with potential risks related to working conditions. SKF is responding to these potential negative impacts by
conducting audits and actively improving working conditions in risk regions and sectors. Further, these risks are addressed by SKF’s
Responsible Sourcing Programme that covers all of SKF’s suppliers but uses a risk-based approach. SKF also has a grievance mechanism
in place for incidents at supplier sites.
Equal treatment and opportunities for all
25 Responsible Sourcing Programme
improving equal treatment
Positive impacts Upstream Mid-term The SKF Code of Conduct for suppliers and sub-contractors mandates a harassment-free workplace. Through SKF’s Responsible
Sourcing Programme, the Group is actively collaborating with suppliers to improve equal treatment and opportunities for all which
has an actual positive impact for workers in the value chain.
26 Harassment and
discrimination
Negative impacts Upstream Mid-term Equal treatment in the workplace includes discrimination of persons with disabilities and measures against violence and harassment.
SKF’s upstream value chain for both direct and indirect materials is widespread both geographically and across sectors, where some
regions and sectors comes with potential risks related to discrimination. SKF recognizes its responsibility to mitigate these potential
important negative impacts. The SKF Code of Conduct for suppliers and sub-contractors highlights the importance of a harassment-
free environment, and these issues are therefore considered critical checkpoints for the SKF Code of Conduct for suppliers and
sub-contractors audits.
Other work-related rights
27 Violations of human rights Negative impacts Upstream Mid-term SKF’s upstream value chain for both direct and indirect materials is widespread both geographically and across sectors, where some
regions and sectors comes with potential risks related to human rights including forced labour and child labour. While the likelihood of
certain rights violations, such as child labor, may be low, the severity of the potential negative impact makes the impact material for SKF.
SKF is responding to these potential negative impacts by conducting audits and actively working to improve working conditions in risk
regions and sectors. Further, these risks are addressed by SKF’s Responsible Sourcing Programme that covers all of SKF’s suppliers but
uses a risk-based approach focusing auditing on tier one and sometimes tier two or three suppliers. SKF also has a grievance mechanism
in place for incidents at supplier sites.
Strategy, cont.
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Business conduct
IRO number Description of IRO Type of material IRO Value chain Time horizon Description of IRO’s in relation to SKF
Corporate culture
28 Fostering a strong corporate
culture for a better tomorrow
Positive impacts Own operations Short-term SKF’s corporate culture entails the Groups purpose, values, and policies where the SKF Code of Conduct is fundamental. Successfully
fostering a strong corporate culture leads to increased efficiency and a more positive influence on the world. SKF’s corporate culture
guides its business conduct, ensuring that all decisions made align with the Group’s core values and principles. This adherence to a strong
ethical framework, including anti-corruption and anti-bribery programs, results in better decision-making across the company contributing
with a positive impact not only to the own operations and value chain, but also society at large.
29 Breaches against the SKF
Code of Conduct
Negative impacts Own operations Short-term Breaches against the SKF Code of Conduct, are considered to have an important negative impact. Despite it being assessed as unlikely
due to SKF’s efforts of fostering a strong corporate culture, its severity is still considered material. SKF responds to this by fully incor-
porating its values in the corporate culture in all regions via training and awareness, risk assessments, investigations, audits and internal
controls.
Protection of whistle-blowers
30 Protection of whistle-blowers Positive impacts Full value chain Short-term SKF provides a globally available whistle-blowing service, the SKF Ethics and Compliance Reporting Line, which is also accessible exter-
nally for suppliers and customers. SKF’s Group Whistle-blowing policy prohibits any retaliation towards anyone raising concerns in good
faith. SKF goes beyond legal requirements as the Group is convinced that protecting whistleblowers is integral to fostering a culture of
transparency and trust within the company. The positive impact is therefore considered material.
Corruption and bribery
31 Corruption and bribery
leading to fines and/or
reputational damage
Risks Own operations Short-term SKF recognizes the significant financial risk associated with corruption and bribery. In response, SKF has over many years had a strong
focus on business ethics in its corporate values and continues to incorporate these values in the corporate culture in all regions through
training and awareness, risk assessments, investigations, audits and internal controls.
Strategy, cont.
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Description of the process to identify and assess
material impacts, risks and opportunities
Double materiality assessment
SKF’s double materiality assessment (DMA) considers
both impact materiality and financial materiality. The
assessment therefore takes into account both how SKF
affects society and the planet and how a sustainability
topic impacts SKF through financial risks or opportunities.
By evaluating the Group’s materiality from both perspec-
tives, SKF can identify and report on the most relevant
sustainability matters as well as to allocate resources
efficiently and shape strategies accordingly.
Methodologies and assumptions
SKF’s DMA follows the European Sustainability Reporting
Standards (ESRS) 1 requirements as regulated within the
Corporate Sustainability Reporting Directive (CSRD). The
following steps were conducted for the process of identify-
ing sustainability related impacts, risks, and opportunities.
For more information on stakeholder views and interests
please see Interests and views of stakeholders on page 87.
Criteria for assessing impacts, risks, and
opportunities
• Scale of impact: How severe the negative impact is or
how beneficial the positive impact is to people or the
environment. The scale ranges from none to significant.
• Scope of impact: How widespread the negative or posi-
tive impact is. When it comes to environmental impact,
the extent can be understood as the extent of environ-
mental damage or geographical spread. When it comes
to the impact on people, the extent can be understood
as the number of people who are negatively affected.
The scope ranges from minimal to global.
• Irremediability of impact: Whether the negative impact
can be remedied, meaning that the environment or the
affected persons are restored to their previous state.
The irremediability ranges from very easy to remediate
to irreversible.
• Likelihood: Impacts, risks, and opportunities have been
identified as actual or potential. Likelihood for potential
impacts ranges from unlikely to high.
• Financial risks or opportunities: Considers how a sus-
tainability topic affects, among other things, current and
future price/cost, availability, supply and demand for re -
sources, management of resources and policy/regulatory
constraints, which can affect the company’s economic
value and market share. The assessment also considers
the future ability for continued relationships and ex -
changes with, among other things, financial institutions,
suppliers, contractors, customers, and society at large.
A. Understanding SKF’s business context
The understanding of SKF’s context builds on the Group’s
long history of identifying and managing sustainability
related impacts, risks and opportunities, as well as research,
benchmarking and internal projects and programmes. In
this step, SKF analyzed previous materiality assessments,
business plans, strategy, financial statements and other
information. Furthermore, the step included mapping of
SKF’s value chain in line with the Group’s due diligence pro-
cess, including for example geographic locations of its own
activities as well as affected stakeholders. SKF has also
examined the legal and regulatory landscape, media reports,
sector-specific benchmarks, global sustainability risks
such as the triple planetary crisis and scientific articles.
B. Identify SKF’s actual and potential impacts, risks,
and opportunities
For this step, SKF used the list of topics presented in
ESRS 1 paragraph AR16 as a foundation for identifying its
actual and potential impacts, risks and opportunities
across the Group’s own operations and in its upstream and
downstream value chain. Through the understanding of the
context, SKF has identified both actual and potential posi-
tive and negative impacts as well as financial risks and
opportunities relating to environmental, social and govern-
ance matters.
C. Assessment of impacts, risks and opportunities and
defining thresholds
The process, criteria and thresholds for impact materiality
assessment differ from financial materiality assessment.
Impact materiality assessment and thresholds
Each identified actual or potential impact was assessed
based on severity and likelihood. The criteria considered
for severity of an actual negative impact are scale, scope
and irremediable character. For actual positive impacts,
the criteria are scale and scope. All assessment criteria
can make an impact material. Potential positive and nega-
tive impacts also include an assessment on likelihood of
occurrence in a short-term, medium-term, and/or long-term
time horizon. SKF defines short-term as within a year,
medium-term as between one and five years and long-term
as beyond five years. In the case of a potential negative
impact on human rights, the severity of the impact takes
precedence over the probability.
Based on the criteria, a positive or negative impact can
be assessed as minimal, informative, important, signifi-
cant, or crucial. SKF’s threshold for impact materiality is
from important and up, meaning that the impact is consid-
ered material if it is important, significant or crucial.
Financial materiality assessment and thresholds
Each identified actual or potential sustainability-related
risk and opportunity was assessed based on its likelihood
and impact on SKF’s financial results and performance.
The threshold for financial materiality follows SKF’s
ERM process and thresholds for risk to the Group’s finan-
cial results. Thus, a risk or opportunity can be assessed
as minimal, informative, important, significant or crucial.
As for impact materiality, SKF’s threshold for financial
materiality is from important and up, hence the risk or
opportunity is considered material if the impact is impor-
tant, significant or crucial.
D. Summary and validation of material ESRS subtopics
The results of the impact and financial materiality of the
ESRS subtopics were consolidated on Group level and
reviewed together with sustainability representatives
from SKF’s Business Areas, Group functions related to
sustainability and relevant subject matter experts. Further-
more, the results were validated against stakeholder views
and expectations. The validation of the DMA follows SKF’s
sustainability governance model. The summarized results
for SKF’s DMA can be found under Material impacts, risks
and oppor tunities and their interaction with strategy and
business model on page 89.
Material sustainability matters
D
A
B C
B C
Summary
and validation
of material
sustainability
topics
Context,
business model,
value chain,
business
relationships
Impact
materiality
Identify actual
and potential positive
and negative impacts
related to sustain-
ability topics
Assessment
of impacts
and defining
thresholds
Financial
materiality
Identify actual and
potential sustainability-
related risks and
opportunities to
the company
Assessment
of risks and
opportunities and
defining financial
thresholds
Stakeholders' views and interests
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Environmental
Contextual Information
The EU Taxonomy is part of EU’s Green Deal and is a key
enabler for delivering on the EU’s environmental goals by
2050. It is a classification system that defines and quanti-
fies how environmentally sustainable economic activities
support the transition towards an economy consistent with
the EU´s six environmental objectives: Climate change
mitigation, Climate change adaptation, Sustainable use of
water and marine resources, Transition to a circular econ-
omy, Pollution prevention and Protection of biodiversity
and ecosystems.
SKF is eligible for six economic activities under the EU
Taxonomy covering manufacturing of components for the
Automotive Industry, Railway Industry, Magnetic Bearings,
Condition Monitoring hardware and services and Owner-
ship and leasing of company cars and buildings.
During 2024 SKF has assessed EU Taxonomy alignment
for the economic activities in scope. Economic activities
are reported as Taxonomy-aligned if they:
1. have a significant contribution to one or more of the
six environmental objectives,
2. do no significant harm (DNSH) to any of the other
environmental objectives, and
3. meet the minimum safeguards criteria related to
human rights and business ethics.
Summary
SKF launched a cross-functional project in 2024 to
reassess eligibility and evaluate the technical screening
criteria for alignment with SKF’s in-scope activities. The
findings from this project serve as the foundation for this
year’s reporting and the improvement initiatives that are
planned to increase alignment.
The assessment for the first requirement shows that
SKF’s products and services for fully electric vehicles and
electric railways make significant contributions to Climate
Change Mitigation.Additionally, SKF’s Condition Monitor-
ing services significantly contribute to Circular Economy
by assisting customers in monitoring the performance of
the rotating shaft, thereby enabling measures to extend
the lifespan of components.
The assessment for the second requirement shows that it
is not possible for SKF to claim full alignment for all eligible
SKF products, primarily due the pollution requirements
concerning use of substances of concern in relevant prod-
ucts. These requirements extend beyond current legisla-
tion and will require efforts throughout the supply chain to
achieve alignment.
The assessment for the third requirement shows that
SKF fulfills the requirements and, consequently, SKF can
claim alignment for condition monitoring services, and
has identified actions to further align the Group’s products
with the EU Taxonomy read about the minimum safe-
guards on page 97.
Substantial contribution to climate change mitigation
SKF’s products manufactured for the automotive industry
are eligible under CCM 3.18 Manufacture of automotive
and mobility components. By manufacturing components
specifically designed for zero-emission vehicles in cate-
gories M, N, and L, SKF makes a substantial contribution
to Climate change mitigation.
SKF’s products manufactured for the railway industry
are eligible under CCM 3.19 Manufacture of rail rolling stock
constituents. The components supplied for electric trains
that meet the technical screening criteria make a substan-
tial contribution to Climate change mitigation.
SKF’s magnetic bearing portfolio is eligible under
CCM 3.6 Manufacture of low carbon technologies. Mag-
netic bearings are designed to minimize friction, resulting
in reduced emissions and thus substantially contributing
to Climate change mitigation. However, this contribution
has not yet been validated through a third-party verified
Life Cycle Assessment (LCA), even though peer reviewed
academic studies reflect these results of lower emission
relative to conventional bearings.
In addition to manufacturing activities, SKF’s purchased
and leased company cars are eligible under CCM 6.5
Transport by motorbikes, passenger cars and light com-
mercial vehicles. SKF fulfils the substantial contribution
criteria for all fully electric vehicles. However, there are
challenges collecting data to verify DNSH criteria, particu-
larly regarding tires, resulting in non-alignment.
SKF’s acquisition and ownership of buildings, such as
office space, are eligible under CCM 7.7 Acquisition and
ownership of buildings. SKF has a Sustainable Buildings
Policy which requires all new large constructions (includ-
ing significant refurbishments), which are to be owned
or leased by SKF, to be certified according to LEED
(Leadership in Energy and Environmental Design) Gold
at a minimum. The policy also states that EU Taxonomy
alignment should be evaluated. EU Taxonomy alignment
is however not mandatory but could complement the
LEED certification.
Substantial contribution to circular economy
SKF’s condition monitoring solutions, including both
services and hardware, are captured under activity CE 4.1
Provision of IT/OT data-driven solutions. By offering remote
monitoring and predictive maintenance, the condition
monitoring solutions aim to detect and diagnose potential
issues or abnormalities before they lead to equipment
failure, downtime, or safety hazards which in turn signifi-
cantly contributes to the Circular economy.
SKF EU Taxonomy Eligible activities and KPIs
EU Taxonomy activities
eligible for SKF SKF Activity Turnover Capex Opex
CCM 3.6 Manufacture of
other low carbon technologies
Manufacturing of Magnetic Bearings Eligible Eligible Eligible
CCM 3.18 Manufacture of
automotive and mobility
components
Manufacturing of components for selected
vehicle categories within the Automotive
industry segment
Eligible Eligible Eligible
CCM 3.19 Manufacture of
rail rolling stock constituents
Manufacturing of rail rolling stock constituents
within the Railway industry segment
Eligible Eligible Eligible
CE 4.1 Provision of IT/OT
data-driven solutions
Condition monitoring solutions, including
both the hardware and services
Eligible Eligible Eligible
CCM 6.5 Transport by
motorbikes, passenger cars
and light commercial vehicles
Leased and acquired company cars Eligible
CCM 7.7 Acquisition and
ownership of buildings
Leased and acquired buildings Eligible
EU Taxonomy disclosures
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The condition monitoring solutions include various
methods for monitoring machinery during operation.
Techniques such as vibration analysis, acoustic emission,
thermography and lubrication analysis are employed to
predict maintenance needs and identify abnormalities.
These techniques ensure optimal performance and
expand the lifespan of equipment.
Condition monitoring solutions typically consist of two
components: a hardware component, such as a sensor,
and a service component, like data analysis. The hardware
is engineered for high durability to meet customer require-
ments regarding the lifetime of the hardware. There is also
an instruction on how to handle waste at the hardware’s
end of life, in addition to the WEEE label. However, addi-
tional actions to verify design aspects and waste manage-
ment have been identified and is planned to be conducted
for SKF to fully meet the substantial contribution criteria.
Minimum Safeguards
The Minimum Safeguards ensure that companies meet
certain standards when it comes to human rights including
workers’ rights, taxation, fair competition and prevention
of bribery.
SKF has during the year assessed Minimum Safeguard
criteria and concluded alignment against applicable
criteria. SKF is committed to conducting its business
in accordance with applicable laws and regulations
and adheres to international standards and guidelines
in cluding OECD guidelines for Multinational Companies,
UN guiding principles on business and human rights,
the International Bill of Human Rights, Global Compact’s
Ten principles, ILOs Declaration on Fundamental Prin-
ciples and Rights at Work and the International Chamber
of Commerce (ICC) Charter. These applicable laws and
regulations on human rights are reflected in the SKF
Code of Conduct, publicly available on skf.com.
As part of the due diligence process, SKF has identified
human rights impacts through a Human Rights Impact
Assessment, carried out during 2023. The assessment
included evaluation and determination of these impacts.
Read more about identified impacts on page 89.
The human rights impact assessment is planned to be
updated in 2025 to ensure continuous improvement and
further strengthening due diligence efforts.
In terms of anti-corruption, SKF has robust measures
and processes to combat bribery and corruption, which
are detailed further on page 137. SKF business activities
are carried out in accordance with applicable competi-
tion laws, and training on this topic is mandatory for all
employees. Regarding taxation, SKF applies all relevant
tax regulations and follows a publicly available tax policy,
operating in line with internationally recognized standards
including OECD guidelines. By maintaining these safe-
guards, SKF ensures transparency, accountability and
ethical practices across all operations, reinforcing our
commitment to sustainable and responsible business
conduct.
DNSH Climate change adaptation
Based on this year’s assessment, SKF has determined that
manufacturing sites and real estate facilities partially fulfil
the Do No Significant Harm (DNSH) Climate change adap-
tation criteria. Currently, there is a loss prevention process
in place to address existing physical climate risks. Addi-
tionally, SKF has invested in a system designed to account
for future physical climate risks across various scenarios
projected up to the year 2100. SKF has an ongoing project
for further embedding physical climate risks into existing
procedures and developing site level adaptation plans
where significant risks are identified.
SKF’s current efforts related to Climate Change Adapta-
tion are outlined in more detail on pages 102–119.
DNSH Water and marine resources
Based on this year’s assessment, SKF manufacturing sites
fulfil the DNSH Water and marine resources criteria.
SKF operations are not considered to be water intensive,
however, water is relevant at specific locations. Water is
sourced primarily from municipal supplies and other
sources like wells and surface water, adhering to regional
regulations. Performance is monitored for sites located in
areas of actual and potential water stress.
SKF leverages the Aqueduct Water Risk Atlas (World
Resources Institute) framework for water stress and scar-
city assessments, identifying 18 sites in water-stressed
areas. These sites are required to implement plans to mini-
mize water usage.
SKF’s EHS management system includes a procedure
on wastewater and storm water discharge to avoid dis-
charging polluted water and to minimize water usage.
After use, water is treated and discharged into surface
water or sewage systems, meeting local quality standards
to mitigate environmental impacts. These measures are
expected to also secure that SKF manufacturing sites do
not hamper marine waters.
SKF also works with upstream water users, such as steel
and energy suppliers, to reduce water use, for example by
requiring that suppliers adopt the ISO 14001 standard.
Given the low water intensity of SKF’s operations and
the adherence to wastewater treatment standards, the
Group’s impact on local community water availability and
quality is low.
DNSH Biodiversity
Based on this year’s assessment, SKF has concluded that
further investigations are necessary to verify compliance
with the DNSH biodiversity criteria.
SKF’s operations are not considered to have significant
risk of impacting biodiversity. The manufacturing facilities
are situated in industrial areas, which are typically charac-
terized by low levels of biodiversity. Moreover, all SKF
manufacturing sites are certified according to ISO 14001
Environmental Management System. The EHS Management
system includes processes for identifying environmental
risks and opportunities, however, biodiversity is not spe-
cifically addressed. SKF plans to integrate biodiversity
components in these processes.
In 2023, SKF improved its understanding of biodiversity
impacts and has initiated the use of a biodiversity assess-
ment tool to evaluate proximity of its manufacturing facili-
ties to biodiversity-sensitive areas. SKF will evaluate
the possibility to scale the use of the tool across the
organization.
DNSH Circular economy
Based on this year’s assessment, SKF has concluded that
manufacturing sites fulfil the DNSH Circular economy cri-
teria with the exception to certain identified improvement
areas pertaining to magnetic bearings (CCM 3.6) which
need to be addressed to further strengthen current efforts.
The requirements of the DNSH criteria related to Circu-
lar economy are specific to economic activities CCM 3.6,
CCM 3.18, and CCM 3.19. To meet these requirements, SKF
must evaluate, and where possible, implement techniques
that promote the a) reuse of secondary raw materials and
components, b) design of products for high durability, re -
cyclability, easy disassembly and adaptability, c) prioriti-
zation of recycling over disposal in waste management and
d) ensurance of information and traceability of substances
of concern throughout the product lifecycle. SKF’s current
recycling guidelines and Sustainability Design Aspect doc-
uments address points a-c in the DNSH criteria for circular
economy and are implemented within the automotive
and railway business areas (CCM 3.18 and CCM 3.19).
SKF has identified improvement areas against current
efforts pertaining to design aspects and waste manage-
ment processes for magnetic bearings (CCM 3.6) which
are needed to fully align with the criteria.
Regarding the traceability of substances (point d),
SKF ensures traceability of substances of concern until
products are delivered to customers, providing information
through for example REACH/RoHS certificates. Addition-
ally, SKF has a hazardous substances policy covering
traceability in the value chain, and sustainability stand-
ards for suppliers.
DNSH Pollution
Based on this year’s assessment, it was concluded that
while SKF follows all applicable legal requirements for
restricted and declarable substances in products, this
does not fully align with the EU Taxonomy requirements
for Substances of very high concern (SVHC), as well as
other substances with similar hazard classes as SVHCs.
This is a challenge, requiring extensive efforts throughout
the supply chain.
EU Taxonomy disclosures cont.
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SKF regularly engages with suppliers on the presence of
SVHCs and substances of concern. Data is systematically
managed within a compliance database and operations
are ISO 9001 and 14001 certified, ensuring validated sup-
porting processes. SKF also has a Restricted Substances
List (RSL), to help assess alternatives as new restricted
substances are added through legal requirements. When
technically feasible, SKF takes efforts to eliminate SVHCs
and seek alternative non-hazardous substances.
To fully meet the DNSH Pollution criteria, SKF must
exceed the legal requirements. SKF will continue exploring
potential alternative substances to replace hazardous
materials. In addition to this research, an engagement
program will be implemented with suppliers to assess the
feasibility of eliminating SVHCs from the supply chain.
Accounting Policies
Total turnover corresponds to net sales in the consolidated
financial statement. Eligible turnover for CCM 3.6, CCM
3.18, CCM 3.19 and CE 4.1 corresponds to the net sales for
specific products and services sold.
Total capital expenditures (Capex) covers investments
in tangible assets, intangible assets and right-of-use
assets considered before depreciation, amortization and
any re-measurements and correspond to the additions in
Note 10, 11 and 12 to the consolidated financial statement.
Capital expenditures resulting from business mergers and
acquisitions is also included and is part of the reported
amount for businesses acquired/sold in Note 10 and
Note 11.
Total operational expenditures (Opex) correspond to
research and development costs, short-term leases, main-
tenance and repair costs, including building renovation
and day-to-day servicing of assets and property. Eligible
Capex and Opex are allocated based on net sales for
turover generating activities, since a majority of SKF’s
factories produce both eligible and non-eligible products.
The reporting on aligned Turnover, Capex and Opex for
condition monitoring services is impacted by the possi-
bility to separate services and hardware in the sales data.
Revenue streams that include both services and hardware
have been excluded for the cases where a separation has
not been possible.
EU Taxonomy disclosures cont.
Mandatory table related to nuclear and fossil gas activities
Row Nuclear energy related activities
1. The undertaking carries out, funds or has exposures to research, development, demonstration and
deployment of innovative electricity generation facilities that produce energy from nuclear processes
with minimal waste from the fuel cycle.
No
2. The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear
installations to produce electricity or process heat, including for the purposes of district heating or
industrial processes such as hydrogen production, as well as their safety upgrades, using best available
technologies.
No
3. The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations
that produce electricity or process heat, including for the purposes of district heating or industrial
processes such as hydrogen production from nuclear energy, as well as their safety upgrades.
No
Fossil gas related activities
4. The undertaking carries out, funds or has exposures to construction or operation of electricity
generation facilities that produce electricity using fossil gaseous fuels.
No
5. The undertaking carries out, funds or has exposures to construction, refurbishment, and operation
of combined heat/cool and power generation facilities using fossil gaseous fuels.
No
6. The undertaking carries out, funds or has exposures to construction, refurbishment and operation
of heat generation facilities that produce heat/cool using fossil gaseous fuels.
No
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Financial year 2024 Year
Substantial
contribution criteria
DNSH criteria
(Do No Significant Harm)
Economic activites
Code/codes (a)
Turnover
MSEK
Proportion of Turnover, 2024
%
Climate change mitigation
Y; N;
N/EL
Climate change adaption
Y; N;
N/EL
Water
Y; N;
N/EL
Pollution
Y; N;
N/EL
Circular Economy
Y; N;
N/EL
Biodiversity
Y; N;
N/EL
Climate change mitigation
Y/N
Climate change adaption
Y/N
Water
Y/N
Pollution
Y/N
Circular Economy
Y/N
Biodiversity
Y/N
Minimum
safeguards
Y/N
Proportion of
taxonomy aligned
(A1) or eligible (A2)
turnover, 2023
%
Category
(enabling
activity)
E
Category
(transitional
activity)
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy- aligned)
Turnover of environmentally sustainable activities
Taxonomy-aligned (A.1)
Of which Enabling E
Provision of IT/OT data-driven solution CE 4.1 212 0 N/EL N/EL N/EL N/EL Y N/EL Y Y Y Y Y Y Y 0 E
Of which Transitional T
A.2 Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Manufacture of other low carbon technologies CCM 3.6 1,145 1 EL N/EL N/EL N/EL N/EL N/EL 0
Manufacture of automotive and mobility components CCM 3.18 28,625 29 EL N/EL N/EL N/EL N/EL N/EL 29
Manufacture of rail rolling stock constituents CCM 3.19 5,393 5 EL N/EL N/EL N/EL N/EL N/EL 5
Provision of IT/OT data-driven solution CE 4.1 2,239 2 N/EL N/EL N/EL N/EL EL N/EL 2
Turnover of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2) 37,402 38 EL N/EL N/EL N/EL EL N/EL 37
A. Turnover of Taxonomy-eligible activities (A.1+A.2) 37,614 38 EL N/EL N/EL N/EL EL N/EL 37
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy- non-eligible activities (B) 61,108 62
Total (A + B) 98,722 100
EL = Eligible
N/EL = Non eligable
Proportion of turnover/Total turnover
%
Taxonomy-aligned
per objective
Taxonomy-eligible
per objective
CCM 36
CCA
WTR
CE 2
PPC
BIO
EU Taxonomy disclosures cont.
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EU Taxonomy disclosures cont.
Financial year 2024 Year
Substantial
contribution criteria
DNSH criteria
(Do No Significant Harm)
Economic activites
Code/codes (a)
CapEx
MSEK
Proportion of CapEx , 2024
%
Climate change mitigation
Y; N;
N/EL
Climate change adaption
Y; N;
N/EL
Water
Y; N;
N/EL
Pollution
Y; N;
N/EL
Circular Economy
Y; N;
N/EL
Biodiversity
Y; N;
N/EL
Climate change mitigation
Y/N
Climate change adaption
Y/N
Water
Y/N
Pollution
Y/N
Circular Economy
Y/N
Biodiversity
Y/N
Minimum
safeguards
Y/N
Proportion of
taxonomy aligned
(A1) or eligible (A2)
CapEx, 2023
%
Category
(enabling
activity)
E
Category
(transitional
activity)
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmental sustainable activities (Taxonomy- aligned)
CapEx of environmental sustainable activities
Taxonomy-aligned (A.1)
Of which Enabling E
Provision of IT/OT data-driven solution CE 4.1 14 0 N/EL N/EL N/EL N/EL Y N/EL Y Y Y Y Y Y Y 0 E
Of which Transitional T
A.2 Taxonomy-eligible but not environmental sustainable activities
(not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Manufacture of other low carbon technologies CCM 3.6 30 0 EL N/EL N/EL N/EL N/EL N/EL 0
Manufacture of automotive and mobility components CCM 3.18 1,743 27 EL N/EL N/EL N/EL N/EL N/EL 34
Manufacture of rail rolling stock constituents CCM 3.19 389 6 EL N/EL N/EL N/EL N/EL N/EL 4
Provision of IT/OT data-driven solution CE 4.1 99 2 N/EL N/EL N/EL N/EL EL N/EL 2
Transport by motorbikes, passenger cars and light
commercial vehicles CCM 6.5 24 0 EL N/EL N/EL N/EL N/EL N/EL 0
Acquisition and ownership of buildings CCM 7.7 304 5 EL N/EL N/EL N/EL N/EL N/EL 2
CapEx of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned
activties) (A.2) 2,588 40 EL N/EL N/EL N/EL EL N/EL 41
A. CapEx of Taxonomy eligible activities (A.1+A.2) 2,602 40 EL N/EL N/EL N/EL EL N/EL 41
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy- non-eligible activities (B) 3,933 60
Total (A + B) 6,535 100
EL = Eligible
N/EL = Non eligable
Proportion of CapEx/Total CapEx
%
Taxonomy-aligned
per objective
Taxonomy-eligible
per objective
CCM 38
CCA
WTR
CE 2
PPC
BIO
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Financial year 2024 Year
Substantial
contribution criteria
DNSH criteria
(Do No Significant Harm)
Economic activites
Code/codes (a)
OpEx
MSEK
Proportion of OpEx , 2024
%
Climate change mitigation
Y; N;
N/EL
Climate change adaption
Y; N;
N/EL
Water
Y; N;
N/EL
Pollution
Y; N;
N/EL
Circular Economy
Y; N;
N/EL
Biodiversity
Y; N;
N/EL
Climate change mitigation
Y/N
Climate change adaption
Y/N
Water
Y/N
Pollution
Y/N
Circular Economy
Y/N
Biodiversity
Y/N
Minimum
safeguards
Y/N
Proportion of
taxonomy aligned
(A1) or eligible (A2)
OpEx, 2023
%
Category
(enabling
activity)
E
Category
(transitional
activity)
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmental sustainable activities (Taxonomy- aligned)
OpEx of environmental sustainable activities
Taxonomy-aligned (A.1)
Of which Enabling E
Provision of IT/OT data-driven solution CE 4.1 9 0 N/EL N/EL N/EL N/EL Y N/EL Y Y Y Y Y Y Y 0 E
Of which Transitional T
A.2 Taxonomy-eligible but not environmental sustainable activities
(not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Manufacture of other low carbon technologies CCM 3.6 139 3 EL N/EL N/EL N/EL N/EL N/EL 0
Manufacture of automotive and mobility components CCM 3.18 1,315 25 EL N/EL N/EL N/EL N/EL N/EL 23
Manufacture of rail rolling stock constituents CCM 3.19 299 6 EL N/EL N/EL N/EL N/EL N/EL 5
Provision of IT/OT data-driven solution CE 4.1 235 4 N/EL N/EL N/EL N/EL EL N/EL 5
OpEx of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned
activities) (A.2) 1,988 38 EL N/EL N/EL N/EL EL N/EL 33
A. OpEx of Taxonomy eligible activities (A.1+A.2) 1,997 38 EL N/EL N/EL N/EL EL N/EL 33
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy- non-eligible activities (B) 3,288 62
Total (A + B) 5,285 100
EL = Eligible
N/EL = Non eligable
Proportion of OpEx/Total OpEx
%
Taxonomy-aligned
per objective
Taxonomy-eligible
per objective
CCM 33
CCA
WTR
CE 5
PPC
BIO
EU Taxonomy disclosures cont.
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SKF’s climate approach
SKF bases its climate position and strategy on science,
and is committed to the Paris Agreement’s goal of limiting
global warming to 1.5 °C. The Group’s full value chain cli-
mate goals were approved 2023 by the Science Based
Targets initiative (SBTi).
SKF’s largest contribution to the transformation to a
net-zero future lies in what can be achieved with, and for,
it’s customers. With a strategic focus on clean technology
industries at all stages of industrialization, SKF is develop-
ing products, solutions and services that enable these
technologies to develop, making them competitive and
supporting the need for rapid growth in the coming years.
SKF can contribute to significant energy and carbon
savings for customers in all industries by optimizing the
design of it’s products. This is done by making them e.g.
lighter, more efficient, longer-lasting and repairable, as well
as improving the performance of the customers’ products
by optimizing system designs through advanced modelling
and simulation. For example. SKF’s service offering,
including condition monitoring, reliability services and
asset optimization, is fundamentally focused on the
removal of waste from customer processes and value
chains. Such contracts aim to eliminate energy, material,
and transportation waste, and consequently reduce emis-
sions. With a combination of these approaches, SKF has
the potential to make a profound contribution to the transi-
tion to a net-zero world and, at the same time drive innova-
tion and growth for SKF and its customers.
However, SKF’s moral and business obligations are not
limited to its ability to enable transformation with custom-
ers. SKF must of course address carbon emissions of its
own operations and activities, as well as those in its
extended supply chain. While the scale of these impacts
may be relatively small compared to those of its customers’
products, processes, and systems, they are still significant.
By addressing them, SKF sets a positive example for cus-
tomers, suppliers and other stakeholders, and creates long-
term competitive advantages by reducing costs and risks.
SKF has been measuring and acting on carbon emis-
sions from its own production activities for more than
20 years, and has in that time achieved continued eco-
nomic growth while reducing its greenhouse gas emissions
impact in real terms. The Group has also been working for
several years to understand and reduce the carbon impact
of its suppliers, as well as other activities such as logistics
and business travel.
Material impacts, risks and opportunities and their
interaction with strategy and business model(s)
SKF performs resilience analysis on its own operations,
strategy, business model and value chain in various ways.
This includes resilience analysis relating to risks and
opportunities coming from climate mitigation conducted
on the full value chain, including upstream supply chain,
SKF’s direct operations and customers. Resilience analysis
of adaptation and physical climate risks is primarily
focused on SKF operations and, to an increasing extent,
on the upstream supply chain.
Downstream physical risks are not yet in the scope of
the resilience analysis, mainly due to the highly diversified
(both regionally and industry-wise) and global nature of
SKF’s customer base – which effectively decreases many
of the relevant physical risks. Resilience is evaluated
based on scenario input in short (0-1 years), medium
(1–5 years) and long term (5–30 years).
In general, SKF performs resilience analysis for climate
topics by using externally published scenarios. Depending
on the topic, one or more scenarios are applied, including
the IEA SDS, IEA Net Zero, RCP 2.6, 6.0 and 8.5 and other
industry specific scenarios.
Cross-functional teams make use of the scenarios to
identify and quantify specific SKF risks and opportunities,
which are then addressed within the relevant strategies,
organisations and processes. The set-up of the cross-
functional teams depends on the topic, but may for
example include Sales and Marketing, Business Develop-
ment, Manufacturing Operations, Loss Prevention & Risk,
Purchasing, Group Legal, Group Real Estate and Facility
Management and Group Sustainability.
Short-term climate risks and opportunities are inte-
grated into the yearly operational business planning and
follow-up. Medium-term and long-term climate risks and
opportunities are integrated into the strategic business
planning. The Group’s climate targets typically cover a
longer time horizon, for example, the target to decarbonize
SKF’s operations by 2030 and achieve net-zero green-
house gas emissions in the value chain by 2050. This is to
make sure that long-term climate-related risks and oppor-
tunities are proactively identified.
In some cases, individual strategic initiatives are con-
ducted to investigate specific risks, opportunities and
impacts, and find ways to address these in existing strate-
gies and business models.
Naturally, the future orientation of resilience analysis
means that it is subject to uncertainties. For example, the
speed and scale of the implementation of many aspects of
industrial decarbonization in the industries and regions
which SKF serves is heavily dependent on government
interventions, such as incentives and taxes. If these
policies do not materialise, or if they develop more slowly
or quickly than predicted, this can impact the prospects
for SKF’s growth.
There are also uncertainties around which technology
paths that will be followed. For example, it is uncertain how
quickly and to what extent carbon capture and storage
(CCS) will scale up as a major technology to allow the con-
tinued use of fossil fuels. SKF tries to address these types
of uncertainties by using a range of climate scenarios in
the formulation of the Group’s strategy.
As a result of the processes described above the main
climate-related risks and opportunities have been identi-
fied and are highlighted below.
• Opportunities for business growth resulting from the
climate transformation (renewable energy, energy
storage, energy efficiency, electrification, circular
business models etc.)
• Current and emerging regulatory risks relating to
increased energy and raw materials costs in SKF
operations and upstream supply chain, increased
reporting requirements etc.
• Physical risks to continuity of production and supply
posed by increased occurrence of extreme weather
events, flooding, water scarcity etc.
Risks which exist but do not meet the materiality threshold
include;
• Risks of contraction of certain industries (unabated
coal, oil and gas for example) resulting in loss of
business for SKF.
• Reputational risks and opportunities.
Climate change adaptation and mitigation
Material impacts, risks and opportunities
IRO and value chain Description
Climate change mitigation
Positive impacts
Downstream
Innovating and providing products
and services for the climate
transition
Negative impacts
Full value chain
Greenhouse gas emissions from
own operations and value chain
(scope 1, 2, 3)
Risks
Upstream and
own operations
Cost of decarbonization
Opportunities
Downstream
Winning business by providing
products and services that enable
the climate transition
Climate change adaptation
Risks
Own operations
and upstream
Physical climate risks
Energy
Positive impacts
Downstream
Reducing friction and increasing
energy efficiency
Negative impacts
Full value chain
Use of fossil energy
Risks
Own operations
and upstream
Energy price fluctuations
Opportunity
Downstream
Winning business by providing
energy efficient solutions
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Examples of how the risks and opportunities have been
identified are presented below;
Opportunities for business growth resulting from the
climate transformation
SKF uses several scenarios, including IEA SDS, IEA Net
Zero and other industry specific scenarios, to inform and
check the robustness of key aspects of the Group strategy.
For example, several years ago, such input helped the
Automotive Business Area to identify electrification as a
key climate-related trend within the passenger car indus-
try. This led to a focus on innovation and development of
competitive solutions needed to enable electric vehicle
drivetrains. Several partnerships between SKF and key
OEMs and tier one suppliers were established and as a
result, SKF can now provide a complete package offering
of bearings and seals featuring high speed, thin sections
and electric current insulation options. Power density and
friction reduction are some of the main drivers of current
and new vehicles, and SKF has become a leader by devel-
oping low friction bearings for electric vehicles.
Similar work is ongoing within SKF’s industrial business.
For example, during 2024 a comprehensive study was
completed, looking at industrial climate-related technolo-
gies, including the synergies between SKF’s offering and
projections of growth potential based on IEA Net Zero and
other scenarios. The output of this study has validated
some existing aspects of SKF’s growth strategy, such as
the focus on developing solutions for the emerging green
hydrogen industry. The study also identified new opportu-
nities for growth within other fast evolving technologies
related to decarbonization.
As part of the Group’s climate and strategic objectives,
SKF provides yearly aggregated revenue data from SKF
customer solutions enabling cleantech growth in areas
where SKF’s customer solutions clearly contribute to cli-
mate change mitigation and circular economy, including:
renewable energy, electric vehicles, electric railway, recy-
cling industry, bearing remanufacturing, RecondOil and
magnetic bearing solutions. The total revenue from cus-
tomer solutions enabling cleantech amounted to SEK 10.2
billion in 2024.
SEK billion 2024 2023
1)
2022
1)
Total revenues from customer
solutions enabling cleantech 10.2 10.6 10.1
1) Previously published figures have been restated based on
adaptation of the scope to better reflect and align with the
sectors of the EU Taxonomy.
Current and emerging regulatory risks relating to
increased energy and raw material costs in SKF
operations and upstream supply chain, increased
reporting requirements etc – risk identification
Carbon taxes and increasing cost of steel
The production of steel is energy and greenhouse gas
emission intensive. For many years, SKF has been working
actively in collaboration with suppliers to reduce green-
house gas emissions in the supply chain. As the EU
Carbon Border Adjustment Mechanism (CBAM) moves
into deployment, this will increase costs for some raw
materials, mainly steel, imported to the EU by SKF. Dis-
cussions to introduce similar mechanisms are ongoing in
the United States, although taxation might not be the pre-
ferred method there. The effect will be higher on steel with
high embodied greenhouse gas emissions.
During the last few years, SKF has simulated potential
outcomes of the CBAM to understand the potential impact.
SKF has also accelerated the collection of energy and
greenhouse gas emission data from its major steel and
forging suppliers, representing most of the value, weight
and environmental impact in the upstream supply chain.
Through scenario analysis and financial simulation on cost
increase at different levels of greenhouse gas emission
taxation, SKF has increased the understanding of this risk,
the potential financial impact to SKF and actions the
Group can deploy to mitigate this risk. SKF has prepared
the process and systems needed to comply with the CBAM
and is addressing the implications of this and other poten-
tial legislations in its global sourcing strategy.
Increasing cost of energy
A structural transformation is expected in the energy
sector and massive investments are planned globally to
develop a more efficient and clean energy production.
One of the most immediate and obvious financial risks,
related to climate change for SKF and its value chain, is
an increased cost of energy. This is linked to, for example,
carbon taxation but also to an increasing demand due to
an increase in products that run on electricity. Based on
the IEA SDS and Net Zero scenarios, SKF has analysed the
impact from an increased cost of energy and defined
actions to minimize that impact.
The best way to mitigate this risk is to reduce the energy
demand. In 2024, SKF continued to focus on energy effi-
ciency within its operations, delivering a 3.5% improvement
in efficiency. In terms of spend, electricity makes up most
of the energy cost, together with a smaller share of natural
gas, heat, fuel oil, LPG and biomass. To give an indication
of the potential financial impact, based on 2024 data, a
20% increase in costs related to energy used in SKF opera-
tions would impact the Group’s result by around MSEK 320
million. SKF also works to improve energy and carbon effi-
ciency in its supply chain, as described later in this section.
Physical risks to continuity of production and supply
posed by increased occurrence of extreme weather
events, flooding, water scarcity etc – risk identification
SKF has developed a bottom-up and top-down approach
towards physical risk scenario analysis. The bottom-up
approach is long standing and based on the Group’s EHS
management system and loss prevention processes. Oper-
ating units are required to identify physical risks including
those related to climate change and develop mitigation
measures based on this.
The top-down approach is based on the the high-
emissions RCP8.5 global warming scenario published by
the IPCC. A cross-functional team has performed a quanti-
tative and qualitative assessment of the potential risks
and the effectiveness of existing mitigation measures.
Further development of both the bottom-up and top-
down processes is underway. Going forward, the RCP 8.5
scenario will be used in order to apply the precautionary
approach in defining mitigation measures. The tool con-
siders all the main climate-related hazards as defined in
the EU delegated regulation (EU 2021/2139) and provides
location-based indications of the hazards in the short,
medium and long term.
Risks of contraction of certain industries, resulting
in loss of business for SKF – risk identification
This is below the materiality threshold, the sale of products
and solutions to coal, oil and gas extraction and process-
ing, and use in power generation represents less than 2%
of SKF’s total revenues. Under scenarios such as IEA Net
Zero and IEA SDS, a sharp reduction in demand for una-
bated coal, oil and gas use can be anticipated, which
could translate to a reduction in SKF’s business in these
sectors. These impacts have been considered in the
formulation of related strategies.
Reputational risks and opportunities
SKF identifies and manages climate-related reputational
risks through continuous monitoring of environmental
trends and stakeholder expectations. By incorporating cli-
mate considerations into strategic planning, SKF ensures
its operations meet global sustainability standards. Trans-
parent communication with stakeholders is maintained to
demonstrate SKF’s commitment to environmental respon-
sibility and proactive risk management. This approach
helps protect the company’s reputation and supports its
goal of a sustainable future.
Management of climate risks in strategy
and operations
Measures are in place to mitigate the identified risks to
assets and business activities. These are integrated into
relevant strategies, processes and plans.
Current and emerging regulatory risks relating to
increased energy and raw material costs in SKF
operations and upstream supply chain, increased
reporting requirements etc. – risk management
Operations
SKF has a globally certified energy management system
for its major manufacturing locations according to
ISO50001 and a centralized function to manage strate-
gic energy sourcing decisions. To increase focus and
drive improvements in both energy and greenhouse gas
emission performance, SKF has defined yearly energy
efficiency targets for all major manufacturing units.
Climate change adaptation and mitigation cont.
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Progress towards these targets is followed up monthly for
each unit. In addition to this, SKF has defined policies and
allocated investment frames to decarbonize its operations
by 2030 as explained in the section on SKF’s own opera-
tions – scope 1 and 2 on page 104. SKF includes climate
performance in both short- and long-term variable salary
bonus schemes, see page 84.
Supply chain
The GHG emissions resulting from extraction and process-
ing of the raw materials and components that SKF buys are
significantly larger than those resulting from the Group’s
direct manufacturing operations. For several years, SKF
has worked to influence energy intensive suppliers to
implement energy management systems certified accord-
ing to ISO 50001.
SKF has accelerated the collection of energy and green-
house gas emission data from its major steel and forging
suppliers representing most of the value, weight and
environmental impact in the upstream supply chain.
Organizational carbon footprints of SKF show that, of all
the raw material inputs, steel production generates the
most significant greenhouse gas impact, from raw material
to finished product. SKF is acting to measure and reduce
this impact in accordance with its net-zero strategy. This
involves working directly with steel suppliers as well as
advocating for the needed changes through active mem-
bership of multi-stakeholder initiatives such as SteelZero
and the ResponsibleSteel initiative. SKF is also applying
internal shadow carbon pricing as described on page 119.
The Group also works to reduce emissions from trans-
portation.
To reduce environmental impact, as well as costs,
SKF works to develop new business models. One example
is the efforts to predict maintenance needs and enable
cost efficient repairs and services within the customers’
processes. This reduces unplanned shutdowns, which are
often linked to significant waste of energy, materials and
related greenhouse gas emissions. In addition, SKF works
to collect bearings and units for refurbishment or remanu-
facturing, which can cut energy and emissions by up to
90%, compared to the production of a new bearing.
Physical risks to continuity of production and supply
posed by increased occurrence of extreme weather
events, flooding, water scarcity etc. – risk management
As described above, SKF works to mitigate the physical
climate risks in two main ways, bottom-up and top-down.
Bottom-up, SKF units are required to understand rele-
vant climate risks by making use of a third-party tool which
defines the level of risk from different chronic or acute
physical climate aspects, based on the unit’s location.
This shall then be integrated in the sites overall planning
for risk mitigation, which may for example include
improved flood resilience measures.
Top-down, the same tool is utilized in SKF’s manu-
facturing footprint program, where a specific location’s
vulnerability to climate related chronic and acute risks is
part of the overall evaluation of long-term viability and
investment planning.
Risks of contraction of certain industries resulting in
loss of business for SKF – risk management
Like many global industrial companies with a diversified
customer base, SKF operates in sectors associated with
fossil fuel extraction and energy generation, specifically,
the coal, oil and gas sectors. The Group’s business in
these sectors represents a small proportion of the overall
business. It is anticipated that these sectors will gradually
transform or become less relevant in the coming years
depending on how widely carbon capture and storage
technologies (CCS) are adopted.
SKF anticipates significant growth in revenues from
cleantech areas such as renewable energy, electrification
and hydrogen. This growth is expected to more than offset
the loss from the fossil fuel business.
The Group’s business in transportation sectors, such
as automotive, rail, shipping and air is significant and
growing. Many of these sectors still use fossil fuels. How-
ever, a major part of SKF’s R&D work is focused on improv-
ing the energy and carbon efficiency of these sectors.
Description of the processes to identify and
assess material climate-related impacts, risks and
opportunities
SKF has worked with life cycle assessments (LCA) since
the early 2000s and, over the years, has conducted numer-
ous studies on a broadly representative sample of prod-
ucts and solutions. The knowledge acquired by doing this,
together with a recently executed organizational carbon
footprint study, allows SKF to estimate the size of green-
house gas impacts for all significant activities occurring
along the full value chain. These are visualized in the graph
on this page.
To make the greatest impact on reducing global emis-
sions, prioritization is necessary. Therefore, the focus is
on activities that make the greatest material impact. Near
term (2030) targets are applied, and primary data is used
to follow the performance wherever possible. Relatively
small impacts, or those which are not possible to influence
directly, are reported mainly using secondary data.
Based on this the following sub-targets and approaches
have been established.
SKF operations scope 1 and scope 2
This covers scope 1 and 2 emissions from electricity, gas,
district heat and other energy sources used at SKF facili-
ties as well as other greenhouse gas emissions related to
the process, for example emissions from process gases.
All SKF factories, testing and research centres, larger
warehouses and offices around the world are included.
SKF’s detailed approach to addressing these emissions is
described in section Transition plan for climate change
mitigation including actions and resources in relation to
climate change policies starting on page 108. See the
table on page 118 for an explanation of emission scopes.
Calculations are based on CO
2
and other GHG gases, when
available. For Scope 1&2 emissions SKF uses the opera-
tional control approach,
Scope 3, category 1 (direct and indirect materials)
Direct material is the most significant contributor to SKF’s
upstream scope 3 emissions and covers bought materials
Tonnes CO₂e
End of Life Treatment of Sold Products
Waste Generated in Operations
Business Travel
Use of Sold Products
Employee Commuting
Downstream Transportation and Distribution
Scope 1
Scope 2
Scope 3
Fuel and Energy Related Activities
Upstream Transportation and Distribution
Purchased Goods and Services
Capital Goods
0
2,400,000
3,600,000
1,800,000
1,200,000
600,000
3,000,000
Estimated GHG emissions (tonnes), base year 2019
Climate change adaptation and mitigation cont.
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and components that are directly applied in SKF’s prod-
ucts. This includes mainly steel, but also other materials
that are purchased in large volumes, such as rubber, where
the embodied emissions are high. It covers impacts that
occur at all stages of the supply chain, from raw material
extraction and scrap sourcing to steel production and sub-
sequent processing. SKF’s detailed approach to addressing
these emissions is described starting on page 112 of this
report.
SKF also purchases indirect materials, such as work
clothes, consumables such as hydraulic oil and other
process media and grinding wheels. Performed LCA and
carbon footprint studies have shown that the emissions
associated with the production of these items are small in
comparison to the other aspects listed above. Therefore,
indirect material is not included in the scope of emission
reporting. However, SKF communicates its ambitions and
requirements to these suppliers and includes these
requirements in the supplier selection criteria.
SKF uses IT services, such as servers and cloud storage,
through various arrangements. The emissions associated
with providing these services are estimated to be around
22,000 tonnes a year which is insignificant compared to
emissions in other scope 3 categories.
Together with suppliers, SKF will continue the work to
find low and, eventually, zero carbon solutions.
Scope 3, category 3 (fuel and fuel related energy)
This refers to the GHG emissions resulting from the activi-
ties which occur pre-energy generation and from the distri-
bution and transmission of the energy which SKF uses in
its operations, such as the extraction, processing and
transportation of fuels used in power stations.
Scope 3, category 4 (upstream transportation and
distribution)
This covers the emissions from about 80% of the outbound
flows contracted by SKF, and around 70% from inbound
contracted flows.
The Group intends to further improve the process for
collecting data on the upstream emissions for these cate-
gories in the coming years. SKF’s detailed approach to
addressing these emissions is described on page 113.
Scope 3, category 6 (business travel)
This covers the emissions associated with business travel,
which includes visits to customers, suppliers, SKF facili-
ties and other stakeholders. SKF works to reduce this
impact in several ways, including using virtual meeting
tools, promoting lower carbon transportation such as rail
instead of air travel, and providing low carbon company
vehicles.
Scope 3, category 7 (employee commuting)
This covers emissions caused by SKFs employees travel-
ling to and from work, and currently results in around
48,000 tonnes per year. SKF is already working on reduc-
ing this in different ways, such as increasing the use of
digital workplaces, encouraging lower carbon transporta-
tion and providing bus services for employees in certain
countries. This work will be intensified, primarily through
national management teams, as each country has different
challenges and opportunities.
Scope 3, category 11 (direct emissions from customer
use phase)
Although the majority of SKF’s products have indirect
use phase emissions, a few products have direct ones.
Examples of such products are magnetic bearings, in -
cluding the corresponding electric motors when provided
along with magnetic bearings, lubrication systems, sys-
tems for re-using oil and some solutions for the marine
business. Some of these products are classified as inter-
mediate products, like magnetic bearings and electric
motors. Others can be a stand-alone product system like
the system for re-using oil.
Climate related hazards Upstream supply chain SKF operations Logistics
Customer
operations
Chronic Heat Stress
Sea level rise
Water Stress
Coastal erosion
Risk
Could impact long term viability of critical
supplier locations.
Mitigation
Working to map critical supplier risks in this regard.
Risk
Could impact long term viability of SKF sites
in at risk locations.
Mitigation
Identification of at risk locations, driving local
mitigation measures
Risk
Limited due to highly
diversified customer base
(geography, industry).
Acute Cold wave
Wildfire
Cyclones
Hurricanes
Typhoons
Storms
Tornado
Heavy precipitation
Flood
Avalanche
Risk
Supply chain disruption due to extreme
weather events.
Mitigation
Multi-sourcing for strategic materials / components.
Overall supply chain risk management.
Risk
SKF production disruption due to extreme
weather events.
Mitigation
Diversified production locations, local emergency
response planning and mitigation planning.
Climate change adaptation and mitigation cont.
Summary of physical climate risks in the SKF value chain
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Scenario analysis
SKF uses scenario analysis to help identify and quantify
climate related risks in the full value chain. Depending on
the topic, one or more scenarios are applied, examples
include the IEA SDS, IEA Net Zero, RCP 2.6, 6.0 and 8.5
and other industry specific scenarios. Cross functional
teams then make use of the scenarios to identify and
quantify specific SKF implications (risks or opportunities)
and these are then addressed within the relevant strate-
gies, organisations, and processes. The make-up of the
cross-functional teams depends on the topic but, for
example may include Sales and Marketing; Business
Development; Manufacturing Operations; Loss Prevention
& Risk; Purchasing; Group Legal; Group Real Estate and
Facility Management; and Group Sustainability.
Short-term (less than one year) climate risks and oppor-
tunities are integrated into yearly operational business
planning and follow-up.
Medium-term (one to five years) and long-term (>five
years) climate risks and opportunities are integrated into
strategic business planning. The Group’s climate targets
typically cover a longer time horizon, for example, the target
to decarbonize SKF’s operations by 2030 and achieve net-
zero greenhouse gas emissions in the value chain by 2050,
This is to make sure that long term climate-related risks
and opportunities are proactively identified.
In some cases, individual strategic initiatives have been
initiated to investigate specific risks, opportunities and
impacts and find ways to address these in existing strate-
gies, business models etc.
Depending on the topic, SKF makes use of multiple sce-
narios, or a combination of them ranging from optimistic
(IEA Net Zero) to pessimistic (RCP 8.5).
Typically, each scenario will have underlying assump-
tions about the speed and scale of different mitigation
technologies and approaches, and these form the basis
of SKF’s evaluation of future opportunities and risk. For
example, when seeking to understand the speed and scale
of increases in climate mitigation technologies, a future
business growth range is established – based on the opti-
mistic (Net Zero) and less optimistic (Published Policy
Scenario). This range may be further adapted based on
other specialist input. Factors which influence the speed
and scale of specific mitigation technologies industrialisa-
tion include government policy, incentives, thresholds,
technology readiness, market readiness and regional
variations.
When seeking to understand and quantify climate phys-
ical risks SKF applies the precautionary principle and
assumes the worst scenario RCP 8.5. SKF has acquired a
tool from a third party which takes the specific coordinates
of SKF locations and those of critical suppliers and pro-
vides input on the relevant physical risks in terms of
expected severity, frequency etc. During 2024, all SKF’s
critical production and warehousing facilities have been
evaluated using this tool. This evaluation confirmed that a
number of locations are in high-risk areas and these will be
addressed in the top-down approach to climate physical
risk management described previously,
Where applicable the output of these scenarios is uti-
lized to understand implications on aspects such as
potential future revenue growth, risk of supply chain dis-
ruptions etc.
Risks and opportunities based on climate related transi-
tion events are addressed in various aspects of the Group
and Business Area strategy. They are identified as part of
the strategic planning process using tools such as sce-
nario analysis and resilience analysis described on page
89. A variety of scenarios are applied including IEA Net
Zero scenario which is aligned with the Paris agreement.
As explained on page 89, overall, the opportunities pre-
sented by transition related events significantly out-weigh
the risks.
The type, impact magnitude and timing of climate-
related transition events is typically dependent on the
scenario being considered. For example, under the IEA
Net Zero scenario, specific government policies aimed
at incentivizing low carbon energy generation, energy
efficiency and penalizing high carbon activities can be
anticipated and SKF’s response to these forms part of the
strategy. Other anticipated climate-related transition
events such as technology changes and market changes
are also extrapolated from scenario inputs and utilized in
strategy development. For example, SKF’s strategy towards
the global steel industry addresses the deployment of iron
ore carbon reduction technologies, SKF’s strategy towards
the energy sector anticipates a rapid increase in the share
of renewable electricity generation in most regions.
Climate change adaptation and mitigation cont.
Summary of climate transition risks and opportunities
Category Description Potential risk Mitigation measures Opportunities Capitalization measures
Legal and policy Changes in laws and regulations related
to climate change.
Increased energy and raw material costs Focus on energy and carbon efficiency
in SKF operations and supply chain.
Increased demand for solutions
improving energy efficiency, circularity.
Focus on development of energy
efficient, circular offers.
Market Shifts in market demand towards
low- carbon products and services.
Loss of market share, reduced revenue
in unabated fossil fuel sectors.
The at risk sectors are a small part of
overall business. Ongoing work to grow
cleantech business.
Growth in cleantech, low carbon
industries – renewable energy,
hydrogen etc.
Focus on cleantech industries.
Technology Technological advancements that may
replace current technologies e.g. internal
combustion engines.
SKF misses opportunities to grow by
enabling emerging green technologies.
SKF is bound to locked-in carbon tech-
nologies.
Focus on cleantech industries in full
range of TRL. Proactive approach, for
example development of solutions for
e-drive in automotive.
Growth in cleantech, low carbon
industries – electrification, renewable
energy, hydrogen etc.
Strategic focus on cleantech industries.
Reputation Negative public perception due to
inadequate climate action.
Loss of brand value, customer trust. Enhancing transparency, proactive
communication strategies.
Enhanced brand loyalty, attracting
eco-conscious customers.
Clear focus on promoting SKF's
climate solutions and approach with
transparency and credible communi-
cations.
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Towards net-zero emissions
SKF has been reporting and reducing its greenhouse gas emissions since the early
2000s, and has for many years demonstrated a decoupling of its revenue growth from
scope 1 and 2 emissions. The Group’s current net-zero targets and strategy are validated
and approved by the Science Based Targets initiative and are aligned with the Paris
agreement’s 1.5 °C scenario.
2019 Base year
2030 2050
Examples of activities
• Play a leading role in improving
energy and material efficiency, the
enabling of cleantech and decarbon-
ization solutions for customers.
• Drive the emission reduction plans
with suppliers.
• Reduce the embodied greenhouse
gas emissions from components and
materials such as forgings, rings and
rolling elements that SKF purchases,
primarily through the increased use
of re newable energy by suppliers.
• Optimize logistics efficiency and
decarbonize transportation.
2050
Net-zero greenhouse
gas emissions
in the entire
value chain
Examples of activities 2024
• Shadow carbon price policy
published.
• Airfreight avoidance policy
published.
• Laser metal depostion enhances
the circularity of bearings.
• Significant increase of renewable
electricity sourcing in India and
China
• Accelerated deployment of de -
carbonization investment frame
with 373 MSEK allocated
Examples of activities 2019–2023
• Energy and material efficiency
improvements and increasing share
of renewable energy.
• Working to promote and advocate
the decarbonization of steel pro-
duction with other industrial steel
consumers in the SteelZero and
ResponsibleSteel initiatives.
• Developing and delivering solutions
to enable cleantech growth – e.g.
EV’s, wind, hydrogen.
• Optimized design of products
resulting in significant energy and
carbon savings for customers.
• Climate work and reduction of green-
house gas emissons as part of the
company’s short- and long-term
bonus program.
• Issued the first Green Bond in 2019
and the second in 2022, making
sure we invest in projects that sup-
port the transformation journey.
• Deployment of decarbonization
investment frame
2030
Decarbonized operations
= 95% reduction in scope 1 and 2
emissons by 2030 vs. 2019
32%
reduction in emissions from
purchased direct materials
35%
reduction in emissions from
inbound and outbound logistics
Climate change adaptation and mitigation cont.
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Transition plan for climate change mitigation
including actions and resources in relation to
climate change policies
SKF is a relatively energy intensive business directly using
energy, mainly in the form of electricity and gas, in its
operations around the world (scope 1 and 2). In addition,
SKF utilizes materials and services which can be energy
and carbon intensive, such as transports and raw material
in production and processing (scope 3 upstream). Certain
SKF products also generate indirect emissions during the
use-phase (scope 3 downstream). The combined impact
of these direct and indirect emissions (scope 1, 2 and 3
upstream and downstream) is more than three million
metric tons of greenhouse gas emissions per year.
SKF has been working to measure, report and reduce
its greenhouse gas emissions since the early 2000s, with
good results. Throughout SKF’s more than 20-year focus
on climate, it has always sought credible and independent
third-party input on its climate strategy and goals.
As such, in 2021, SKF committed to having its climate
targets validated and approved by the Science Based
Target initiative (SBTi). This validation process involved
detailed discussions and exchanges with the SBTi
between July 2021 and March 2023. In March 2023, the
SBTi validated SKF’s long- and short-term targets. The
approved targets are aligned with the 1.5 °C trajectory
which was agreed at COP 21 in Paris 2015.
Levers and actions
SKF has defined several strategic levers and related
actions and objectives which, when applied in combina-
tion, aim to reach the Groups SBTi approved climate goals.
These are focused on the most significant impacts,
specifically scope 1 and 2, and scope 3 categories 1, 3, 4
and 11.
SKF own operations – scope 1 and 2
SKF’s goal to decarbonize its operations requires, as veri-
fied by SBTi, a 95% reduction in the scope 1 and 2 emis-
sions by 2030 compared to 2019. The main strategic levers
to achieve this include a focus on energy efficiency, the
sourcing and generation of renewable energy and phasing
out direct fossil fuel use through electrification or the use
of bio-fuels.
During 2024 there has been significant progress in the
development, understanding and aggregation of the plans
for decarbonization. Each factory has developed a decar-
bonization road map which sets the emissions reduction
trajectory for the site, and the investments needed, to
achieve the 2030 decarbonization objectives, addressing
all three of the described strategic levers. For energy effi-
ciency and fossil fuel phase out, these plans are further
defined in a Group-wide database in which the detailed
actions, investments and expected improvements are
described.
Energy efficiency – levers to reduce scope 1 and 2 emissions
SKF has an energy management system globally certified
according to ISO 50001:2018. The certificate covers the 47
most energy intensive operations making up more than
80% of the Group’s total energy use. SKF applies a Group-
wide energy efficiency improvement target to all units
within the scope of the ISO 50001 standard, of 5% com-
pared to the factory, Business Area or Group energy base-
line.
The baseline is established using linear regression of
the previous two years’ monthly energy use compared to
value added (a measure of production activity, which is
known to correlate with energy demand). This KPI reduces
distortions associated with more simplistic measurements
of energy performance such as production volume varia-
tions, and allows a focus on the real underlying energy per-
formance. In 2024, the performance against this target was
3,5% compared to the 5.0% target indicating an underlying
energy efficiency saving of 33 GWh. This includes all types
of energy except energy used for building heating and
cooling.
To drive development and planning of energy savings
activities, the Group-wide database with detailed actions
is used to show if factories, Business Areas and the Group
has defined and planned sufficient actions to meet the
objectives for future periods. In addition, looking at the
2030 time horizon, the decarbonization road map requires
the sites to plan for continually improving energy effi-
ciency.
Factory, Business Area and Group performance towards
the energy efficiency target is followed up on a monthly
basis using the energy efficiency KPI, and the Group-wide
database. A high-level review of the performance and
plans is conducted by the Chief Sustainability Officer
together with each Business Area President on a half-year
basis.
Renewable energy – levers to reduce scope 2 emissions
SKF has a centralized function to manage strategic energy
sourcing decisions for the Group, including the sourcing of
renewable energy, primarily electricity. Through this func-
tion, a roadmap defining the transition towards 100%
renewable electricity for all SKF units by 2030 has been
defined and is being deployed and followed up. The Group
is a member of the RE100 initiative and follows their tech-
nical criteria when purchasing renewable electricity. In its
work to define and deploy the renewable electricity road-
map SKF is also supported by a third-party energy service
provider.
Various approaches are applied in the sourcing of
renewable electricity, including the use of power purchase
agreements, virtual power purchase agreements, bundled
and un-bundled environmental attribute certificates and
long-term Renewable Energy Certificate agreements
(RECs).
Although the most significant contribution will come
from the Group’s renewable electricity sourcing approach,
SKF is also expanding the use of on-site solar panel instal-
lations for self-generation of renewable electricity.
Some SKF locations make use of district heating to pro-
vide building heating. Due to the very specific and local
nature of the district heating systems, the work to decar-
bonize district heating supply is driven at site-level, with
the anticipated results, actions and investments included
in the site-level decarbonization roadmap,
Fossil fuel phase out – levers to reduce scope 1 emissions
SKF makes direct use of fossil fuels at the majority of its
locations around the world, primarily fossil natural gas,
which is burnt for both building and process heating.
These emissions must be reduced from around 53,000
tonnes per year in 2019 to close to an estimated 10,000
tonnes by 2030 to achieve SKF’s scope 1 and 2 decarboni-
zation objective. The main strategic levers applied to
Climate change adaptation and mitigation cont.
SKF Scope 1 and 2 – Mitigation activities
Increase in activity
Scope of reporting
Efficiency electricity
Reductions by 2024
Baseline 2019
Renewable district heat
Process changes in HT
HT furnaces electrification
and utilization improvements
Electrification of heating
Efficiency HVAC
Renewable electricity
Residual emmissions
SBTi commitment
Reductions scope 1
fugutive and diffuse
Renewable fuels
150,000
0
200,000
250,000
50,000
100,000
450,000 Tonnes CO₂e
400,000
350,000
300,000
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achieve this are a ban on any future investments in plant
or equipment running on fossil fuels and the establishment
of a specific investment frame which is intended to fund
electrification of assets using fossil fuel or switching to
sustainable bio-based alternatives such as biomethane.
The Group Fossil fuel phase out policy bans any new
investment in equipment to be used in SKF which requires
fossil fuel and requires that any remaining fossil fuel use is
phased out before 2030.
An investment frame of 3,000 MSEK was established in
2023 and is to be applied at the latest by 2028 exclusively
for investments needed to deliver on the decarbonization
plan in general and the fossil fuel phase out in particular.
Further, SKF has a Sustainable buildings policy setting
requirements for new buildings in terms of decarbonization
and the use of the USGBC’s LEED 4.1 standard.
As with energy efficiency, Group progress towards the
fossil fuel phase out target is followed up on a monthly
basis and a high-level review of the performance and plans
is conducted by the Chief Sustainability Officer together
with each Business Area president on a half-year basis.
To drive development and planning of fossil fuel phase-
out activities, the Group-wide database with detailed
actions is used to show if factories, Business Areas and
the Group, has defined and planned sufficient actions to
meet objectives for future periods.
The relative contribution of these strategic levers
toward the achievement of the decarbonized operations
2030 goal is described in the graph on page 108.
Upstream emissions from SKF suppliers – scope 3,
category 1
SKF’s goal is to reduce the upstream, scope 3, category 1
emissions by 32% by 2030 compared to 2019 and to
achieve net-zero by 2050 or before, requiring a 90% reduc-
tion in scope 3 emissions by 2050.
There are several strategic levers which SKF utilizes to
achieve these goals, focusing on improving material effi-
ciency, increasing circularity, increasing the use of second-
ary materials, increasing the use of renewable energy in
the supply chain and the use of emerging and new tech-
nologies to produce very low carbon embodied materials.
In 2024, SKF’s procurement strategy continued to focus
heavily on steel and steel components, which constitute
the most significant volume of materials sourced, both in
terms of weight and value. During this period, SKF pur-
chased approximately 586,000 tonnes of steel and steel
components. In comparison, the Group sourced around
4,727 tonnes of rubber which, next to steel, is one of the
most important materials for SKF, utilized in finished seals
or as a raw material for producing seals.
Product carbon footprint studies for materials and com-
ponents of bearings have shown that the embodied carbon
in the steel materials and components purchased by SKF
accounts for approximately 70% of the total emissions
generated across the value chain, from raw material
extraction to the delivery of finished products to customers.
SKF has prioritized the decarbonization of its upstream
value chain for steel and so far the majority of the meas-
ures are focused on this area. As progress is made in the
decarbonization of steel, SKF plans to extend its efforts to
other critical purchased materials and components.
A more detailed exploration of each of the strategic
levers is provided below.
Improving material efficiency
SKF has been working on all aspects of material efficiency
in its operations and supply chain for many years. This is
driven both by the environmental imperative and by the
need for cost efficiency in a competitive market. The work
covers aspects such as improved process control and
quality, leading to the avoidance of scrap. It also focuses
on optimizing component design and tolerancing, to mini-
mize the amount of material needed to be removed before
arriving at the finished product. Alternative process routes
which allow near-net shape components to be produced
are also utilized where feasible.
Increased circularity
SKF’s focus on developing solutions toward the circular
economy decreases upstream direct material emissions
in a number of ways.
Examples of this include the increased use of re-
manufacturing of used bearings. This allows bearings
which would potentially have been scrapped and replaced
with new ones to be put back into service, avoiding emis-
sions that would have been generated in production of a
new bearing, both in the upstream value chain and in SKF.
Increasing the use of secondary materials
The production of virgin steel, that is steel produced
mainly from reduced iron ore, is far more carbon intensive
than producing steel from re-melting of scrap. Therefore,
increasing the use of scrap-based steel production is an
important lever in the reduction of direct material (scope 3,
category 1) emissions. SKF’s Business Areas include this
aspect in the development of their steel sourcing road-
maps. Currently around 54% of the total volume of steel
sourced by SKF comes from scrap-based steel and it is
expected that this will increase significantly in the coming
years. While SKF recognizes that increasing the utilization
of scrap is needed as part of the overall global transforma-
tion towards very low embodied carbon steel, it is impor-
tant to recognize that the limited availability of scrap com-
pared to the global demand, means that it is only one of
several measures needed.
Increased use of renewable energy in the supply chain
SKF promotes the use of renewable energy by its suppliers
as a means to reduce the carbon intensity of their produc-
tion processes and the products which they supply. SKF’s
sustainability standard for suppliers summarizes the
Group’s expectations on suppliers to evaluate and make
use of renewable electricity. SKF also supports suppliers
in their development of renewable energy sourcing
approaches through training and other means.
Use of emerging and new technologies
The dominance of iron and steel production in the total
upstream greenhouse gas emissions impact of SKF results
in a focus on emerging technologies that enable a drastic
reduction of these emissions, often referred to as green
steel technologies. SKF is actively involved in the develop-
ment and evaluation of such solutions with selected part-
ners such as Voestalpine (hydrogen reduced iron) and
Ovako (Electric Arc Furnace with 97% recycled content,
powered by renewable electricity).
Communication of SKF’s requirements and
expectations to suppliers
SKF’s sustainability standard for suppliers was updated in
2024 and sets out in detail the Group’s expectations and
requirements in these aspects.
Suppliers are required to provide SKF with scope 1, 2,
and 3 (upstream) emissions data in CO
2
e for the materials
and products supplied. This data must be reported in
accordance with SKF’s Greenhouse gas reporting supplier
guideline, following the Greenhouse Gas (GHG) Protocol.
Suppliers are encouraged to procure renewable electricity
and must follow the GHG Protocol for their scope 2 report-
ing requirements. SKF does not accept the purchase of
carbon offsets or climate compensation as a means to
reduce supplier scope 1, 2, or 3 impacts.
Additionally, suppliers of steel and steel products must
achieve specific certifications or targets by 2030, such as
Responsible Steel certification, SBTi approved targets, or
delivery of low embodied carbon steel according to the
SteelZero definition. All suppliers are expected to set
reduction targets aligned with SKF’s goals, prioritize
energy and material efficiency and source renewable or
low carbon energy. They must also share planned and
completed actions towards these targets upon SKF’s
request. Energy management is another key requirement,
with suppliers needing to monitor and manage their energy
performance, set goals for improved energy efficiency, and
provide relevant details to SKF when requested.
The relative contribution of these strategic levers
toward the achievement of the 2030 mid-term net-zero
objective is summarized below.
Upstream fuel and energy related activities – scope 3,
category 3
This refers to the greenhouse gas emissions resulting from
activities that occur before energy generation, as well as
from the distribution and transmission of the energy used
in SKF’s operations. These activities include the extrac-
tion, processing and transportation of fuels used in power
stations, as well as emissions resulting from transmission
and distribution. The impact of these emissions is signifi-
cant, amounting to 60,372 tonnes in 2024.
SKF aims to reduce these emissions through three
strategic levers.
Climate change adaptation and mitigation cont.
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Firstly, as part of SKFs decarbonised operations pro-
gram, the group will reduce energy demand by improving
energy-efficiency of its operations. At the same time SKF
increases the sourcing of renewable energy by transition-
ing away from fossil fuels to eliminate the upstream
impacts associated with extraction, processing and trans-
portation, which constitute the largest portion of these
emissions.
Secondly, SKF is addressing emissions from power
generation, distribution and transmission equipment by
collaborating with customers in relevant sectors. For
instance, SKF is assisting the cement and steel industries
in their decarbonization journey by offering solutions that
help avoid waste and emissions.
Thirdly, SKF is actively engaging in multi-stakeholder
initiatives such as SteelZero and RE100. Through these
initiatives, SKF promotes and advocates for the systemic
changes necessary to achieve significant reductions in
emissions across these industries.
Emissions from logistics – scope 3, category 4
Considering SKF contracted logistics flows, SKF covers
about 80% of outbound and 70% of inbound transporta-
tion. The Group focuses on reducing transportation green-
house gas emissions in four main areas:
Airfreight avoidance: SKF implemented a global air-
freight avoidance policy in 2024 with the objective to
reduce airfreight and promote less carbon intensive trans-
port modes. The Group also works closely with customers
and suppliers to shift from airfreight to sea and rail trans-
portation.
Decrease transports: SKF aims to accelerate inter- regional
activities, thereby lowering the need for global transports.
Decarbonizing transportation: SKF focuses on reduction
of airfreight by shifting to other less carbon intensive
modes, e.g. ocean, rail. SKF also works on introducing
electric vehicle solutions in collaboration with suppliers.
Another lever is to use less carbon intensive fuel types,
e.g. HVO100 instead of diesel.
Optimizing transportation: SKF will further reduce
emissions by improving fill rates and optimizing transport
modes.
The relative contribution of these strategic levers toward
the achievement of the 2030 mid-term net-zero objective is
summarized below.
Emissions from business travel – scope 3, category 6
SKF works to reduce emissions from business travel in two
main ways. Firstly, the use of virtual meetings is promoted
as an alternative to physical meetings. SKF has invested
heavily in the IT infrastructure needed to make this feasible.
Secondly, through the Group’s travel policy and on-line
travel booking solutions, SKF encourages employees to use
more carbon efficient transport modes where it is feasible
to do so.
Emissions from use of sold products – scope 3,
category 11
As part of the Group’s SBTi approved net-zero goal, SKF is
reporting on the downstream greenhouse gas impacts
resulting from the use of products and services (category
11). This relates only to the directly powered electrical sys-
tems which SKF delivers to some customers – mainly mag-
netic bearing and electric motor systems, and lubrication
systems. Very often these systems enable improved energy
efficiency for the customers.
As an example, in a plant in China SKF used a magnetic
bearing solution for chillers. Compared to chillers with tra-
ditional screw compressors installed at the same factory
the new solution will save around 40% energy or more than
60,000 MWh over their life span. With the current average
carbon intensity of electricity generation in China, this
represents more than 35,000 tonnes of avoided CO
2
e in
the lifetime of the machines.
While there is not yet a widely adopted framework for
the accounting of such avoided emissions, solutions of
this kind play a significant role in reducing customer and,
therefore, global emissions.
Following this, and since these systems directly con-
sume electricity, the associated emissions are reported
under scope 3, category 11. Assuming the global average
electricity emission factor and allocation factor to account
for the energy used by SKF’s products, the Group esti-
mates that they result in direct use-phase emissions
totaling around 1 million tonnes CO
2
e annually.
While SKF continually works to further improve the
energy efficiency of these systems, the main lever for
reducing the related emissions is the utilization of low
carbon and renewable electricity by the customers and
end-users buying and operating the systems. This is
beyond the control of SKF, although SKF actively promotes
a transition to decarbonized power through the participa-
tion in the RE100 and WeMeanBusiness coalitions. As
these decarbonization efforts continue, emissions can be
anticipated to be reduced accordingly.
Investments to support the transition plan
Execution of the various strategic levers described above
requires investments in various forms such as CapEx and
additional organizational resources and competence.
These investments are executed utilizing two main
mechanisms:
SKF internal allocation of climate specific
investment frames
• Decarbonization investment frame
Targeted financing of investments focused on
sustainability
• Green Finance (bond issuance and utilization)
• EIB credit facility
The decarbonization investment frame
The near elimination of direct fossil fuel use in SKF (scope
1 emissions) is a particularly challenging aspect of the
overall transition plan. For comparison, scope 2 emissions
(which mainly relate to electricity use), can be avoided rel-
atively simply and cost effectively through the purchase of
renewable electricity, whereas scope 1 emission reduction
often requires significant capital investment at the site.
Examples of the needed investments include electrifica-
tion of building heat using heat pumps or process heating
and associated system improvements which are needed to
increase feasibility.
In many cases the financial payback of these types of
investments is longer than normal and therefore an inter-
vention from SKF is required to make sure that the invest-
ments take place.
Based on a detailed understanding of the situation at
SKF’s factories around the globe, it was estimated that
during 2023 to 2028 around EUR 300 million will be needed
to achieve our 2030 scope 1 reduction objective. SKF then
defined an investment frame and process for the alloca-
tion and follow up of its utilization. During 2023 and 2024
a total of EUR 33 millions of this frame has been utilized,
with the remainder planned to be utilized during 2025 to
2028. Note that some of this is funded at a Group financ-
ing level via the green bonds (see table on the next page).
Climate change adaptation and mitigation cont.
–3
100
68
–17
–10
–2
0
20
40
100
1)
80
60
Expected contribution of strategic levers
to the achievement of S3, C1 2030 goal
Switch to scrap
H2 DRI
Inc. RE use
2030 objective
Supplier efficiency
2019 Scope 3, C1
–15
100
65
–10
–7
–3
0
20
40
100
1)
80
60
Relative contribution of strategic levers
to the achievement of S3, C4 2030 goal
Airfrieght avoidance
Optimization
Fuel switching
and EV solutions
2030
Regionalization
2019 Scope 3, C4
1) Base year 2019 =100
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Upstream
The Group’s main upstream greenhouse gas impacts relate
to the production and processing of raw materials and
components, mainly steel, used to produce finished prod-
ucts. While steel production is energy and carbon inten-
sive, the SKF scope 3, category 1 strategy outlined above
mitigates the risk of locking in greenhouse gas emissions.
For example, SKF’s sourcing roadmaps include plans to
move to less carbon intensive steel production routes
– using increased scrap content and EAF type furnaces
rather than the far more energy and carbon intensive ore-
based BOF process, switching to alternative iron reduction
technologies such as hydrogen when it becomes available,
and promoting renewable energy use in the full upstream
value chain. In addition, SKF’s use of shadow carbon pric-
ing when making significant steel and steel component
sourcing decisions gives information on the future cost of
carbon and helps promote the selection of lower carbon
intensity supply options.
SKF operations
SKF production facilities use electricity as the main energy
source (~70%), however fossil fuels are still used in some
cases in applications such as building and process heating.
As outlined in the section above on fossil fuel phase out,
future investments and assets designed to run on fossil
fuels are prohibited by the fossil fuel phase-out policy.
The policy also requires that existing fossil fuel using
assets to be phased out before 2030 and the EUR 300 mil-
lion investment frame is set aside to assure the investments
needed to make this happen. Therefore, the risk of locked-
in emissions in SKF operations is effectively mitigated.
Downstream – customers
SKF has a highly diversified customer base both geograph-
ically and in terms of the variety of industries served. The
Group’s business towards the coal, oil and fossil gas indus-
tries amounts to less than 2% of total turnover. Under sev-
eral published climate scenarios, for example the IEA Net
Zero, a significantly reduced demand for unabated use of
fossil fuel can be anticipated, which would translate into
lower demand for SKF products and solutions towards
these sectors. However, SKF’s strategy to focus growth
of business that enables cleantech industries such as
renewable energy generation, energy storage, biofuels and
carbon capture and storage should more than offset the
reduction in demand from unabated fossil fuel sectors.
Certain SKF products such as the system for re-using oil
(RecondOil), magnetic bearings and lubrication systems
make direct use of energy and as such generate scope 3,
category 11 emissions. In most cases the power source for
these machines is electricity, therefore, as power grids are
decarbonized, these emissions will reduce.
Strategy behind transition plan
The strategy to identify, prioritize and address the various
opportunities and risks related to the climate transition is
integrated with the overall business strategy of the Group.
Below are some examples of how this is being achieved.
Material and component purchasing
Modelling of the impact of carbon pricing and customer
demands for lower embodied carbon materials is incorpo-
rated into the formulation of the overall strategic context.
This, along with other important contextual information
informs the overall direct materials sourcing strategy as
well as marketing and promotion of lower embodied car-
bon products to customers. Based on this, each Business
Area has developed a direct material sourcing decarboni-
zation roadmap. The performance and planning of these
are reviewed bi-annually.
SKF operations
Top-down, the investments needed to finance the de -
carbonization of SKF operations in accordance with the
Group objectives have been defined, and specific invest-
ment frames have been allocated. Bottom-up, each factory
has formulated a decarbonization roadmap in which the
investments and resources needed to achieve the factories’
decarbonization objectives are defined. These bottom-up
roadmaps are consolidated at Business Area and Group
level in order to validate them and confirm that the overall
objectives can be achieved within the defined timeframe.
The plans are then integrated in the factory and Business
Area business plans and strategies. Progress is followed
up using a mix of lagging KPI’s such as energy efficiency
improvement, scope 1 and 2 reduction and leading KPI’s
such as the utilization of the investment frame.
Logistics
Key to achieving the Group’s targets for reduction of
logistics- related emissions is the realization of SKF’s
global footprint strategy. This involves the consolidation
and rationalization of SKF factories, warehouses, and
other operations as well as the upstream supply chain.
The overall aim is to be more closely aligned geographi-
cally with the Group’s customer footprint. In addition to
financial and operational improvements, the footprint
strategy will significantly reduce the logistics demand in
terms of transport distance inbound and outbound. Each
Business Area has developed a footprint plan. The overall
footprint program is coordinated at Group level, and the
investments and resources needed to deliver on these plans
are integrated into yearly business plans and strategy at
Business Area and Group level.
Climate change adaptation and mitigation cont.
Green Finance
Categories
Total value
euro million
Allocation
2019-2023
Allocation
2024
Planned
allocation
2025-2028
Financial
mechanism
Decarbonization
investment frame
Electrification & related topics 300 5 33 200 SKF internal
allocation
Green Bond SKF World Class Manufacturing, Investments and acquisitions in production capacity, technology,
testing and tooling for cleantech, Green buildings, Renewable energy, Improving process/facility
energy or resource efficiency, Cleantech R&D, Product and process related R&D
700 633 67 TBD Use of
proceeds
Green Finance
SKF’s Green Bonds are significant financial instruments
that aligns with the company’s sustainability commitment
and climate targets. Two such bonds have been issued, the
first for EUR 300 million in November 2019 and the second
for EUR 400 million in September 2022. These are used to
fund eligible projects in accordance with SKF’s Green
Finance Framework. These include capital investments in
plant and equipment and product research and develop-
ment related to cleantech.
As such, the green bonds play a crucial role in financing
SKF’s transition plan for climate change mitigation. By the
end of 2024, SKF had financed 220 projects amounting to
EUR 700 million. These projects span across various
regions and sectors.
EIB credit facility
On the 22nd of November 2024, SKF secured a EUR 430
million credit facility from the European Investment Bank
(EIB), to support its R&D efforts focused on sustainable
technologies which was unutilized by the year end.
This financing will enable SKF to accelerate the design
and development of technologies that contribute to the
green transition and sustainability. The EIB is considered
the climate bank of the European Union, and their financ-
ing supports the European Green Deal, the EU’s plan to
achieve net zero emissions by 2050.
Locked-in greenhouse gas emissions
The potential for locked-in greenhouse gas emissions
along the SKF value chain has been evaluated and can
be summarised as follows.
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Business development, research and development
SKF has defined several global strategic customer indus-
tries and has established corresponding organizations and
processes. The aim is to assure the identification of impor-
tant trends as well as technical and commercial require-
ments for these industries, and to assure that SKF has a
suitable range of products and solutions to meet the exist-
ing and anticipated needs of each customer industry. The
climate transformation is an important trend in most of the
customer industries, as well as the implications of this in
terms of growth opportunities and the need of new offers
are integrated into the related strategies and business
plans and followed up as an integral part of the overall
business planning and review process.
The transition plan has been developed and continues
to evolve with a cross-functional approach. This work is
coordinated by Group Sustainability with the objective to
ensure effective ownership and integration of the relevant
aspects in the Business Areas, regions and various Group
functions.
The plan has been reviewed and approved by Group
Management and the Board, and regular updates are pro-
vided via the various governance forums described in the
section General information on page 83.
Implementation of the transition plan
2024 saw a continuation of the successful deployment of
SKF’s climate transition plan. Progress can be summarized
and evaluated based on actual performance development
and actions and decisions taken which will support future
deployment and performance. It is important to recognize
that some elements of the transition plan are quite mature
– for example SKF has been working to reduce scope 1 and
2 emissions for more than 20 years, while others are rela-
tively new. As an example, the ability to measure scope 3
category 1 emissions was only realized in the last three
years. However, even if the level of maturity differs the
overall trajectory of implementation is positive in almost
all cases.
Considering a value chain approach, progress can be
summarized as follows:
Scope 1 and 2 (SKF operations)
2024 strategic decisions and actions
Building on SKF’s more than 20-year focus on reducing
scope 1 and 2 emissions, a number of important strategic
decisions and actions were taken during 2024.
Bottom-up and top-down decarbonization roadmaps at
site and Business Area level were further refined. Projects
and actions have been identified as input to these road-
maps. The execution of the roadmaps has again been
followed up at Business Area and Group level through
governance forums such as the half-year EHS and net-
zero reviews. Read more in the Governance section on
page 137.
A continued focus on energy efficiency has delivered
an improvement in performance of 3.5%. The Energy Effi-
ciency and Decarbonization Investment frame (3 BSEK
announced in 2023) to be invested between 2023 and
2028 was further utilized to fund reduction and elimination
activities targeting emissions within scope 1 and district
heating in scope 2.
Progress was made on the switch to renewable electric-
ity, with notable contracts being signed in Europe and
Asia. For example, in June 2024, SKF signed a long-term
renewable electricity strip agreement in India. These are
so called long term renewable electricity certificate (REC)
strip agreements, signed with project developers that
invest and build solar plants.
2024 performance
The combined scope 1 and 2 emissions from 2024 were
reduced by 82,382 tonnes compared to 2023. The figure
below on the left shows that this result puts SKF ahead of
the reduction trajectory to achieve a 95% reduction by
2030. The main contributors to this result are as follows;
• A 3.5% improvement in energy efficiency.
• The share of renewable electricity used increased to
72%. In addition to electricity consumption defined in
table Energy consumption and mix on page 117, a total
of 28 GWh electricity use came from self-generated
non-renewable fuel-based sources.
• An increase from 64% (2023) to 72% (2024) in the
amount of renewable energy sourced provides the most
significant contribution.
• Production activity has decreased slightly but it has
a low impact on reduced energy demand.
• A 7% reduction of emissions related to fossil fuels and
district heating following decarbonization activities.
Climate change adaptation and mitigation cont.
16 18 20 22 24 26 28 2030
0
100,000
200,000
500,000
600,000
400,000
300,000
700,000
Scope 1 Scope 2 Target Scope 1 and 2
Base year for 2030 goal
95% reduction
vs 2019
Year
Scope 1 and 2 greenhouse gas emissions
Tonnes performance and outlook
20222021 2020 2023 20242019
Scope 3, Category 1 development
0
500,000
1,000,000
2,500,000
2,000,000
1,500,000
Tonnes of greenhouse gas emssions
Tonnes of metal purchased
0
200,000
400,000
800,000
600,000
1,000,000
Scope 3, Category 1 (direct material supplies)
2024 strategic decisions and actions
During 2024, a number of important decisions related to
scope 3, category 1 emissions reductions were made.
As described on page 119, in July 2024 SKF introduced
mandatory shadow carbon pricing for certain categories of
steel sourcing. This is intended to sensitize SKF colleagues,
suppliers and customers to the potential impact of future
carbon pricing and to steer supplier and process selection
towards lower carbon options.
SKF Business Areas are developing roadmaps for the
achievement of the 2030 scope 3, category 1 objective
(a 32% reduction compared to 2019) using the various
strategic levers outlined on page 112.
SKF’s sustainability standard for suppliers was updated
in July of 2024, introducing more detailed and precise
requirements on supplier reporting and reduction of green-
house gas emissions. These include:
• A clear instruction that the use of carbon offsetting or
climate compensation is not accepted by SKF as a
means to reducing supplier emissions.
• More clarity on the definition of green/low carbon
electricity is provided.
• Clarification on the need for suppliers to identify and
mitigate for relevant climate physical risks.
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2024 performance
The scope 3, category 1 emissions from SKF’s direct
material purchases in 2024 was 1,410,542 tonnes, with
a reduction of 177,939 tonnes compared to 2023.
The main contributors to this result were:
• Due to market conditions and reduced demand the
overall volume of steel (by weight) and steel compo-
nents purchased by SKF was reduced by 13%.
• The use of scrap-based steel increased by 5% from
49% to 54%
The graph on the previous page shows the development
of these emissions and the purchased weight of direct
materials over time.
Scope 3, category 4 (logistics)
2024 strategic decisions and actions
During 2024, SKF continued the footprint and regionaliza-
tion strategy, which aims to assure that SKF’s production
facilities are closer to regional customers and suppliers,
thereby reducing the need for long-distance transports
and the associated emissions.
2024 also saw the introduction of an air-freight avoid-
ance policy which aims to minimize the use of airfreight
due to its significant environmental and financial impacts.
Based on SKF specific data, airfreight emissions are
approximately 40 times greater than sea freight, 35 times
greater than rail freight, and 8 times greater than road
freight. The policy applies to the entire Group for both
inbound and outbound transportation. Planned airfreight
should be reduced by evaluating and utilizing alternative
transport modes, and unplanned airfreight should only be
used in urgent situations to avoid major disruptions. All
unplanned airfreight cases must be reported and analyzed
using problem-solving techniques to prevent future occur-
rences.
During 2024, SKF has also started working with external
specialist consultants to map and prioritize the various
types of green transport solutions which are developing in
the market so as to inform any future use of these
solutions.
2024 performance
Transport emissions KPI increased 2024 by +3% compared
to 2023.
In spite of good efforts in reducing transport emission
footprint in all transport modes except ocean freight, these
were wiped out by increased transport work in our global
ocean freight lanes due to geopolitical circumstances.
Transport work (tonnes/km) increased by 20%, due to
increased freight lane distances on eastbound lanes.
Ocean freight volumes only increased by 6–7%, so main
reason for increased tonnes/km is increased distances.
Due to this the emissions for ocean freight increased by
approximately 30%.
Climate change adaptation and mitigation cont.
Avoiding airfreight
In a significant move towards decarbonization
and cost efficiency, Anastasiya Merkulova,
Sustainability and Logistics Project Manager
within EMEA, spearheaded a project to avoid
airfreight for the sales unit in Kazakhstan follow-
ing a warehouse closure. By shifting the supply
chain to truck shipments from Schweinfurt via
the Caspian Sea, the initiative resulted in sub-
stantial environmental and financial benefits.
The project achieved monthly greenhouse gas
emissions savings of approximately 350 tonnes,
equivalent to removing 300 new European cars
from the road for a year, and reduced shipping
costs by EUR 2.6 million annually. Despite an
increase in delivery time from 3–7 days to
24–35 days, the market successfully adapted to
the new schedule, demonstrating the feasibility
of sustainable logistics solutions.
First bearing produced from green steel
During 2024, SKF and Voestalpine Wire Tech-
nology announced the successful production of
the first spherical roller bearing using green
steel made from hydrogen direct reduced iron
(H-DRI). The bearings are now under rig testing
with the aim to demonstrate the technical via-
bility of this new, potentially very low carbon
steel production method.
20222021 2020 2023 20242019
Scope 3, Category 4 development
0
50,000
100,000
250,000 CO₂e, K tonnes
200,000
150,000
Air
Express Ocean Rail Road
Weight
0
200,000
400,000
800,000
600,000
K tonnes transported 1,000,000
20222021 2020 2023 20242019
Scope 3, Category 6 development
0
3,000
6,000
15,000 Tonnes CO₂e
12,000
9,000
Air
Scope 3, category 6 (business travel)
2024 performance
The scope 3 category 6 emissions from 2024 increased by
1 207 tonnes compared to 2023 due to a corresponding
increase in business travel.
The table below shows the development of these
emissions over time.
During 2024, SKF continued to communicate the impor-
tance of questioning the need for business travel to all
employees, only using it when virtual meetings options are
not feasible. In addition the selection of lower carbon
modes of transport was also highlighted.
In 2024, Group Management also approved a new KPI
for measuring and following up business travel. The KPI is
defined as tonnes of CO
2
e from business travel (flights) /
number of white collar employees.
The focus will be on white collars (staff) since this is the
employee category doing the majority of travel. SKF will
introduce a yearly target to improve this KPI which is –5%
per annum.
Business travel (air travel)
Tonnes 2024 2023 2022
CO
2
e emissions
from air travel
(scope 3, category 6) 11,593 10,386 6,395
Policies related to climate change mitigation and
adaptation
SKF has defined and implemented a number of policies,
management systems, procedures and instructions
intended to address climate change mitigation, climate
change adaptation and energy efficiency. These are
summarized on pages 114–115.
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Climate change adaptation and mitigation cont.
Policy
Instruction
Management
system
Mitigation
Adaptation
Energy
efficiency
How policy adresses topic
Linkage to IRO
Time horizon
Publicly
available
Fossil fuel phase out
policy
To accelerate the decarbonization of SKF’s operations and to reach the Group’s 2030 decarbonization goal
(95% reduction of Scope 1 and 2 greenhouse gas emissions by 2030 vs 2019), and thereby support the goal for
2050 in the full value chain, the following rules apply to all SKF manufacturing, warehouse, R&D and larger sales
facilities:
• No investments shall be made in new assets which use fossil fuel. Any deviations from this policy must be
reviewed with SKF’s Net-Zero team and approved by the Group Investment Committee.
• It is mandatory to stop the use of fossil fuels and fossil-based district heat (in existing facilities and assets)
within 2029. Direct fossil gas use may be replaced with electrification (using renewable electricity) or approved
non-fossil fuel alternative. When processes are outsourced to subcontractors, an evaluation should be made to
determine if this results in an increase in upstream use of fossil fuels. For decisions where this is the case, they
should be approved by the Business Area’s sustainability and supply chain managers.
• A specific investment frame – the ‘Decarbonization investment frame’ shall, where a pplicable, be used to fund
the necessary investments to achieve this.
Reduces reliance of
fossil fuels, associated
environmental impact
and future carbon costs.
Avoids carbon lock-in.
2030 N
Group EHS Policy
SKF should systematically work to understand and address sustainability impacts of our operations and supply
chain, and of our customers, so that sustainability is truly embedded in the way business is made. Through
the policy, SKF commits to proactively assess health and safety risks, environmental and energy impacts and
systematically define, document and implement improvement plans which aim to eliminate hazards, reduce
risks, and avoid or reduce impacts.
Energy performance should be continually improved by applying or promoting technological and organisa-
tional measures along the full value chain.
Assures energy and
environmental performance
consistently improves
and compliance
obligations are met.
Ongoing Y
Group Energy Sourcing
Committee (GESC)
The GESC is a forum with ultimate authority to decide on commercial and environmental issues to energy
sourcing across SKF. The aim is to reduce cost and carbon intensity in the energy supply for the SKF Group.
This group and related instruction drives the deployment or renewable energy at SKF.
The representatives from relevant SKF functions shall meet regularly (at least quarterly).
The environmental aspects related to sourcing of renewable energy, for electricity, should be compliant
with RE100 criteria.
Reduces reliance of fossil
fuels, associated environ-
mental impact and future
carbon costs.
2030 N
Shadow Carbon Pricing
Policy
This policy aims towards internalizing the environmental cost of steel and steel components within SKFs
supply chain by implementing a Shadow Carbon Price (SCP). The SCP, while not a direct expense, should be
calculated and used in conjunction with other parameters to influence supplier selection for all major direct
material sourcing decisions related to steel bar, tube and wire. Steel tube, bar and wire are in the initial scope
due to their high greenhouse gas emissions impact and relative ease of shadow carbon price calculation.
Other components and materials will be added later.
Reduces reliance on carbon
intensive material and/or
suppliers and associated
environmental impact and
future carbon costs.
Ongoing N
Airfreight Policy
Planned airfreight should be kept to the minimum. Supply chains should be based on road & ocean freight as
standard. Deviation from this must be aligned and approved by BA president.
Customer delivery leadtimes should not be based on airfreight delivery. Air freight should only be considered
if it provides a vital solution for timely delivery. If such need occurs, quantity should be kept to the minimum
(possible order split considered).
Reduces greenhouse
gas emissions impact
of logistics and related
costs for transportation.
Ongoing N
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Climate change adaptation and mitigation cont.
Policy
Instruction
Management
system
Mitigation
Adaptation
Energy
efficiency
How policy adresses topic
Linkage to IRO
Time horizon
Publicly
available
Sustainable Buildings
Policy
The policy sets out the sustainability requirements which shall be applied in the design and construction of major
new facilities which are to be owned or leased by SKF.
All new constructions (including significant refurbishments) with a total gross area (TGA) > 2500 M2 which
are to be owned or leased by SKF, shall be decarbonized and shall be certified according to LEED v4.1 Gold level
or better. Deviations from this requirement must always be approved by the Group’s investment committee.
Avoids carbon-lock in,
increased robustness
in the face of future energy
and carbon costs.
Ongoing Y
SKF Group Business
Travel Policy
This policy sets out the requirements which all SKF employees shall follow for business travel. Environmental
impact should be limited. Virtual meetings should be the first choice for both external and internal meetings.
All travellers should strive to choose the most environmentally friendly travel option when feasible.
Reduces greenhouse gas
emissions impact of
business travel and related
costs for transportation.
Ongoing N
SKF Group Instruction
on the provision of
sustainability information
to customers
Increasingly, customers are motivated to understand their suppliers’ sustainability approach and performance
and are therefore requesting that their suppliers provide them with related information.
Information should be provided in a consistent and transparent way. This Group Instruction therefore defines
the way in which SKF shall respond to such customer requests.
Protects against
reputational damage.
Ongoing N
Energy Management
System
SKF has an energy management system globally certified according to ISO 50001:2018. The certificate covers
the 47 most energy intensive operations making up about 80% of the Group’s total energy use and helps drive
continual improvement in energy performance by utilizing the plan-do-check-act cycle.
Increased resilience vs.
future energy and carbon
cost increases,
Ongoing N
Environmental
Management system
SKF has an environmental management system globally certified according to ISO 14001:2015. The certificate
covers all significant SKF manufacturing, warehouse and research and development operations and helps drive
continual improvement in environmental performance by utilizing the plan-do-check-act cycle.
Assures compliance with
applicable legislation.
N
SKF Sustainability
standard for suppliers
The SKF Sustainability Standard for Suppliers covers SKF’s requirements and expectations in respect of social
responsibility and human rights, health and safety and environmental protection – including climate change
mitigation and adaptation and ethical and compliant business conduct.
Reduces reliance on carbon
intensive material and/or
suppliers and associated
environmental impact and
future carbon costs.
Y
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Targets related to climate change mitigation and
adaptation
SKF has defined GHG emission reduction targets for all
material impacts and these have been approved both in
the short term (2030) and long term (2050) as aligned with
the 1.5 degree scenario by the SBTi.
The GHG reduction targets are presented in the table.
Please read in more detail on how SKF tracks the overall
progress towards the adopted targets over time starting on
page 108.
The targets are set through dialogues with selected
external stakeholders such as the SBTi, combined with
input from internal experts who represent stakeholders’
views using existing channels of interaction. Read more
about how the targets were established in the ‘Reporting
Principles’ section on the next page.
In addition to these objectives, SKF has also estab-
lished a number of sub-targets which are helpful in the
drive and follow up of strategic levers such as energy
efficiency and renewable electricity use and these are
summarized below.
Please refer to the policy matrix on pages 114–115 to
understand how the targets are interconnected with
the respective policies.
Summary of SKF’s climate goals, including those approved by the SBTi
Purchased direct material Logistics Other upstream impacts SKF’s own operations Downstream
GHG Reporting
scope
Scope 3,
category 1
Scope 3,
category 4
Scope 3, other Scope 1 & 2 Scope 3,
category 11
2025 15% absolute reduction in
emissions from forgings and
rings suppliers vs 2019.
40% reduction in CO
2
e
emissions per tonne
of goods shipped to
end customers, base
year 2015.
TBD 40% absolute reduction
of CO
2
e emissions from
manufacturing per
tonne of bearings sold,
base year 2015.
TBD
2030 32% absolute reduction in
emissions from direct material
vs 2019.
35% absolute reduction
vs 2019.
TBD 95% absolute reduction
vs 2019.
2035 43% absolute reduction in
emissions from direct material
vs 2019.
55% absolute reduction
vs 2019.
TBD
2040 60% absolute reduction in
emissions from direct material
vs 2019.
77% absolute reduction
vs 2019.
TBD
2050 Net-zero emissions through 95% reduction of scope 1 and 2, and 90% reduction of scope 3 vs 2019.
Remaining emissions addressed via Carbon Dioxide Removals.
Description
% Target Timeframe Purpose 2024 2023 2022 2021 2020
Manufacturing energy
efficiency improvement
5% Improvement Year-on-Year Drive focus on energy efficiency
at unit and BA level
3.5 4.7 3.8 1.7 2.3
100% renewable electricity
use
100% 2030 Drive the increase in renewable
electricity use in accordance
with RE 100 requirements
72 64 54 49 39
Scope 1 &2 reduction 95% Reduction 2030
(2019 base year)
Drive focus on fossil fuel phase
out related to energy used in
SKF operations
59 39 26 12 9
Scope 1 & 2 reduction
pertonnes of sold bearings
40% Reduction 2025
(2015 base year)
Previous goal
(set before SBTi targets)
76 66 60 51 36
Logistics Scope 3, C4
emissions per tonnes of
goods shipped
40% Reduction 2025
(2015 base year)
Previous goal
(set before SBTi targets)
7 10 +6 +27 +2
Climate change adaptation and mitigation cont.
Reporting principles
SKF follows the GHG protocol corporate reporting stand-
ard. In common for all scopes and categories is that
primary data is preferred over secondary data, and that
mass allocation is preferred over economic allocation.
SKF’s reported scope 2 emissions are calculated based
on the market-based method. The base year is 2019 for
all the SBTi-approved targets. This was a fairly typical year
in terms of demand, production output etc. prior to the
disruption caused by the pandemic. Building heating is
relatively small (~20%) of the total energy use related to
scope 1 and 2, and comes mainly from the operations
in Europe and North America. 2019 was not a particular
outlier in terms of average degree days for these regions.
The table Energy consumption and mix, data for
re newable energy has been accounted for only where
supplier specific statements are available. Non-renewable
grid mixes accounted for as fossil energy unless data for
nuclear grid mix (only 2024) has been possible to acquire.
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Climate change adaptation and mitigation cont.
SKF uses a cross-sector emission pathway in line with
limiting global warming to 1.5°C. Targets are determined
using 1.5˚C-aligned pathways from the SBTi. The most
important scenario is the IEA Net Zero Emissions (NZE)
scenario.
The targets have been established in the context of a
solid understanding of potential future changes in sales,
production volume and the impact of technological, opera-
tional and market-related changes. For example, in deter-
mining the achievability of the 2030 goals for scope 3,
category 1 (direct materials) the impact of moving to lower
carbon intensity steel production techniques (scrap-based
steel combined with the use of renewable energy) has
been anticipated. Similarly, the feasibility of the 2030 goal
for scope 3, category 4 was evaluated in the light of antici-
pated impacts of SKF’s regionalization and manufacturing
footprint plans, bringing SKF’s production locations closer
to customers and suppliers.
The targets are consistent with the GHG reporting
boundaries with the following exceptions:
• Scope 3 categories 2, 5, 8, 10, 12, 13, 14 and 15 are not
considered material and therefore only 2050 targets are
defined for the time being.
• Scope 3 categories 3 and 7 have a material impact,
however targets medium-term have not yet been
defined. In the case of scope 3, category 3 this is due to
the very low possibility for SKF to measure the direct
results of its efforts to support the reduction of this
impact. In the case scope 3, category 7 SKF has not yet
defined a target or direct way to measure this impact.
Notes on scope 3, category 1 (purchased goods
and services)
Measuring, reporting and reducing the upstream scope 3
category 1 emissions from direct material production is a
critical challenge. It is, however, a relatively new dimension
for both SKF and the industry as a whole and the majority
of the Group’s suppliers, and their suppliers. Along with
partners in the supply chain, SKF is therefore learning and
evolving its approach so that the completeness, accuracy
and value of this data as a management tool is improving
every year. SKF’s reporting makes use of primary data
(information collected from suppliers on their full value
chain carbon intensity multiplied by weight supplied to
SKF), directly from suppliers, whenever possible and where
this is not possible, credible secondary data sources are
applied.
The main data SKF requests from suppliers is their
greenhouse gas intensity (kg of CO
2
e by kg of product).
This is then multiplied by the total weight of products
delivered to SKF to give the total emissions. Although more
complex and challenging to collect, primary data is pre
-
ferred since it captures specific supplier performance year
on year and shows the impact of supplier choice, which is
not possible when using secondary data.
As a result of the increased use of primary data com
-
pared to the approach taken in the 2023 report, the accu-
racy of the reporting has improved and the annual emis-
sions from 2019 to 2023 have been re-calculated. This has
changed the previous years reported values, with a base
-
line (2019) increase of approximately 8%. In a small number
of cases, steel suppliers were not able to provide their
upstream scope 3 emissions. In these cases, SKF applies
an assumption of the upstream scope 3 impact. This is
made using the experience gathered by SKF in collecting
primary data from other, similar suppliers. On average, this
assumption increases the total scope 1 and 2 impact for
the suppliers by +65%. In the meantime SKF works to
assure that the suppliers provide direct declarations for
their scope 3 impact.
It is also important to note that SKF has focused on the
main raw material inputs to the Group which is the steel
used in the rings and rolling elements of rolling bearings.
As previously stated, during 2024 more categories have
been investigated such as rubber and plastics, and these
are also being introduced into the reporting scope.
Notes on scope 3, category 4 (logistics)
Considering scope 3 category 4, emissions from upstream
and downstream transportation, SKF covers approximately
80% of the emissions resulting from outbound flows (where
SKF controls the transport), and around 70% inbound.
SKF uses emission factors coming from NTM, the Swedish
Network for transport measures. SKF intends to further
improve the process for collecting emissions for these
categories during 2024 to achieve a more complete cover-
age of this aspect.
Depending on the data availability, SKF applies one of
two methods to calculate and aggregate these emissions.
Method 1: Transport statistics are collected from transport
suppliers and the emissions are calculated using a tool
developed by SKF. The tool calculates emissions based on
modelling of the SKF transport network and uses emission
factors per mode of transport combined with the distance
and weight shipped.
Method 2: Transport emission reports are collected
directly from transport suppliers and aggregated.
Method 1 is used for all SKF-operated transports except
for express shipments, where method 2 is used. In both
cases, the emissions reported are greenhouse gases with
a well-to-wheel scope.
Energy consumption and mix
GWh 2024 2023 2022 2021
Fuel consumption from coal and coal products 0 0 0 0
Fuel consumption from crude oil and petroleum products 5.1 5.5 6.1 7.6
Fuel consumption from natural gas 222.7 241.0 268.6 274.8
Fuel consumption from other fossil sources 16.6 19.1 18.6 17.7
of which Fuel consumption from LPG 16.6 19.1 18.6 17.7
Consumption of purchased or acquired electricity,
heat steam and cooling from fossil sources
278.2 491.0 703.2 814.0
of which Purchased electricity (fossil sources) 223.3 409.6 589.0 672.6
of which Purchased heat and cooling (fossil sources) 54.9 81.4 114.2 141.4
Total fossil energy consumption 523 757 996 1,114
Share of fossil sources in total energy consumption, % 35 49 59 63
Consumption from nuclear source 70
1) 1) 1)
of which Purchased electricity (nuclear) 70
1) 1) 1)
Total consumption from nuclear sources 70
1) 1) 1)
Share of consumption of nuclear sources in total energy consumption, % 5
1) 1) 1)
Fuel consumption from renewable sources, including biomass 28.2 17.9 19.4 20.1
of which Fuel consumption from biomethane and biogas (renewable) 17.3 17.9 19.4 20.1
of which Fuel consumption from biomass (renewable) 10.9
1) 1) 1)
Consumption of purchased or acquired electricity, heat steam
and cooling from renewable sources
838.3 759.0 661.5 623.1
of which Purchased electricity (renewable) 790.8 734.5 661.5 623.1
of which Purchased heat and cooling (renewable) 47.4 24.5
1) 1)
Consumption of self-generated non-fuel renewable energy 35.3 23.5 16.5 6.9
of which Self-generated electricity (non-fuel renewable) 35.3 23.5 16.5 6.9
Total renewable energy consumption 902 800 697 650
Share of renewable sources in total energy consumption, % 60 51 41 37
Total energy consumption 1,494 1,557 1,694 1,764
1) Data is not available or not possible to verify historically.
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Energy & GHG intensity based on net revenue
All SKF activities are considered to be in high climate
impact sectors.
2024 2023 2022
Net revenue 98,722 103,881 96,933
GWh 1.494 1,557 1,694
Total CO
2
e, tonnes
(Scope 1 and 2) 171,358 253,740 310,331
GHG intensity
tonnes/MSEK 1.74 2.44 3.20
Energy intensity
MWh/MSEK 15.14 14.99 17.47
Carbon intensity continues to reduce reflecting further
increases in renewable energy sourcing and improvements
in efficiency. Energy intensity increased slightly due to
reduced volume, however energy efficiency improved.
Gross Scopes 1, 2, 3 and total GHG emissions
Targets
Base year
2019 2024
% change
2024 vs 2023 2030 (2050)
Annual % target/
base year
Comment on
development
Scope 1
Gross scope 1 58,135 45,853 –7.8
8.6 1
% from ETS 9.17 2
Scope 2
Gross location-based 518,500 392,255 –12 1
Gross market-based 360,873 125,505 –38
8.6 3
Significant scope 3 GHG
emissions
1. Purchased goods
and services 1,675,800 1,410,542 –11 2.9 1
2. Capital goods 16,500 25,385 –12 4
3. Fuel- and energy-related
activities (not included
in scope 1 or 2) 97,527 60,372 –3.1 5
4. Upstream transportation
and distribution 171,802 167,448 2.1
3.2 1
5. Waste generated
in operations 37,019 34,433 –21 6
6. Business travel 12,954 11,593 12 1
7. Employee commuting 56,132 48,429 –4.8 7
8. Upstream leased assets 0 0 0 NA
9. Downstream transportation
and distribution NA NA NA NA
10. Processing of sold products 8,398 8,885 –11 9
11. Use of sold products 1,012,016 1,217,202 12
2.5 10
12. End-of-life treatment of
sold products 21,713 22,119 –9.2 11
13. Downstream leased assets NA NA NA NA
14. Franchises NA NA NA NA
15. Investments NA NA NA NA
Total GHG emissions
Total location-based 3,686,496 3,444,517
Total market-based 3,528,869 3,177,767
Climate change adaptation and mitigation cont.
Comments on the development (reference in right hand
column in the table).
• 1 and 3 See comments included under ‘2024 performance’
in relevant section of ‘Implementation of transition plan’
• 2 Only one boiler system at SKF’s factory in Airasca, Italy
is included in the EU ETS, with annual emissions of 4,206
tonnes of CO
2
e.
• 5 and 7 Scope 3 categories 3 and 7 have a material
impact, however targets medium-term have not yet been
defined. In the case scope 3, category 7, SKF has not yet
defined a target or direct way to measure this impact.
• 10 The change vs. 2023 reflects mainly change in number
of sold products which generate scope 3, category 11
emissions.
• 4, 6, 9 and 11 No significant impacts, the estimated green-
house gas emissions is based on secondary data.
Additional notes on the calculation of Scope 3 emissions
This table shows GHG emissions aggregated per scope and
category. They can be reported directly by suppliers or, calcu-
lated using data collected from suppliers or SKF operations
or, a combination of both.
When emissions factors are used, they are evaluated and
selected from commercial datasets or SKF LCA studies. Mass
allocation is used except for data categories for which mass
data is unavailable, for these economic allocation is used.
Estimates can be used for data categories with a small con-
tribution and influence on the overall carbon footprint.
More specifically;
Scope 3, category 2 – an emission factor based on a selection of repre-
sentative production machines is derived and leveraged for calculating
emissions for all capex investments.
Scope 3, categories 3 and 5 – calculated using waste data and energy
data published on skf.com, combined with emissions factors selected
from commercial datasets.
Scope 3, category 6 – covers air travel in most regions based on data
obtained from travel agencies.
Scope 3, category 7 – based on number of employees, region and
typical commuting patterns.
Scope 3 category 10 and 12 – the weights of sold products are
l everaged and assumptions are applied related to product mounting
and end-of-life treatment method.
Scope 3, Category 11 – based on estimation of the total direct energy
use by relevant SKF products multiplied by a global average electricity
emission factor.
The reporting methodology for other scope 1, 2 and 3 categories is
described on page 116.
Sources of emissions
Tonnes, conversion factors
in tonne per unit in brackets 2024 2023 2022
Direct (scope 1)
LPG (3.0 per tonne) 3,638 4,197 3,696
Fuel oil (3.0 per tonne) 1,477 1,639 1,543
Natural gas
(0.002 per cubic meter) 40,621 43,880 47,576
Biomass (0.04 per
tonne) 117 – –
Supplied (scope 2),
market-based
Electricity 117,817 195,978 239,866
District heating
and cooling 7,688 8,046 17,650
Total CO
2
e emissions,
market-based 171,358 253,740 310,331
Scope 1 emission factors have been derived from DEFRA, except
Gothenburg where the local RED-Cert standard has been applied.
Scope 2 contractual emission factors have been provided
by relevant electricity suppliers. Scope 2 location based emission
factors have been taken from IEA, DEFRA and other recognized data
sources.
Emission factors from DEFRA are used for district heat except
certain sites in Germany, Sweden and Poland where specific
emission factors from suppliers are provided by the local district
heat provider.
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Additional underlying data – useful to better understand Scope 1, 2 and 3 trends
Scope 3, Category 1
Table showing total weight of materials components purchased
Year
GHG emissions from steel material and related
components, Scope 3 cat. 1 (tonnes CO
2
e)
Steel material and related components,
Scope 3 cat. 1 (tonnes shipped)
2024 1.410.542 586,062
2023 1.588.482 676,747
2022 1,891,851 737,3 58
Scope 3, Category 4
Year
GHG emissions from transports
Scope 3 (tonnes CO
2
e)
Transport Works
(tonnes shipped)
2024 167,448 298,102
2023 163,991 300,092
2022 213,061 330,904
2021 227,228 295,249
2015 155,611 257,023
Baseline recalculated from 2015 due to methodology change of counting inbound volumes in India and USA
Transport Mode
Transport Works
(tonnes shipped, % of total)
GHG emissions
(% of total)
Tonne* Kilometer
(% of total)
Road 70 23 9
Sea 29 46 90
Air 1 26 1
Rail
1)
0 0 0
Express <1 4 n/a
1) No rail connection available between Europe-Asia due to war in Ukraine.
Biogenic scope 1 emissions
Tonnes COe
2
, biogenic 2024
Solid biomass 3,853
Biomethane 3,456
Scope 1 Total 7,310
Scope 2 Total Data has not yet been possible to acquire.
Scope 3 Total Data has not yet been possible to acquire.
Climate change adaptation and mitigation cont.
GHG removals and GHG mitigation projects
financed through carbon credits
SKF does not make use of carbon credits and
has no plans to do so.
Internal carbon pricing
Shadow Carbon Price for direct material purchasing
Scope 3, category 1 emissions from direct material
purchasing account for approximately 1.5 million tonnes
of CO2e annually, representing 80% of the total cradle-
to-gate greenhouse gas emissions for the SKF Group.
A significant portion (90%) of these emissions is attributed
to the sourcing of steel and steel components.
SKF has set ambitious goals to reduce these emissions
by 32% by 2030, compared to a 2019 baseline. The primary
levers to achieve this reduction are described in the transi-
tion plan section above.
While efficiency gains and re-manufacturing are driven
by cost and growth perspectives, transitioning to less
carbon-intensive steel and renewable electricity is more
complex. Currently, there are limited external economic
drivers for these changes, except in specific industries,
for example, the automotive industry and in certain
regions, such as the EU. Therefore, SKF has determined
that internal intervention is needed in the form of a
shadow carbon pricing approach.
Lower carbon intensity steel often incurs higher costs
due to increased production expenses and regional price
differentials. Executing these lower carbon strategies pre-
maturely could reduce SKF’s competitiveness if customers
are not ready to recognize the value or if legislation has not
yet mandated it.
Certain sectors already require lower embodied gren-
house gas emissions in steel. EU policies like the Carbon
Border Adjustment Mechanism (CBAM) and the phasing
out of free emissions allocations in the EU Emissions Trad-
ing Scheme (ETS) are expected to create a carbon price of
EUR 100-150 per tonne by the late 2020s. For other regions
and industries, the timing of customer demands or legisla-
tion is less clear. Therefore, SKF is developing a shadow
carbon price to raise awareness among purchasing, prod-
uct line, sales and marketing functions without yet incor-
porating it into standard cost calculations and pricing.
Policy approach
The policy mandates that the shadow carbon price shall
be included in customer discussions whenever possible,
providing examples of how to apply the principles.
The purchasing team in SKF are responsible for calculating
the embodied carbon of materials and the shadow carbon
price.
The initial focus is on bar, tube, and wire, which repre-
sent 70–80% of the total upstream greenhouse gas emis-
sions impact from steel. Manual calculations will be per-
formed by nominated Business Area personnel for these
categories. The calculation of a shadow carbon price is
mandatory for sourcing decisions exceeding 10 MSEK
annually.
Carbon price application
SKF is applying a CO
2
e price of EUR 100 per tonne, based
on anticipated EU ETS carbon prices for the next year or
two. This price may be adjusted going forward. Compliance
has been required from 1 July 2024.
Shadow carbon pricing applied in energy saving
investments
As well as the shadow carbon price applied for direct
material purchases, SKF also applies a form of shadow
carbon pricing in the investment process, when there is an
impact on energy use. This approach requires that the
baseline financial scenario for any investment uses an
anticipated cost for Energy Attribute Certificates (EAC).
Considering RE100’s technical requirements for EACs for
renewable electricity or additional cost of sourcing
approved renewable fuel alternatives, such as e.g. sustain-
able bio methane, SKF anticipates significantly higher EAC
costs, which will vary depending on the region. The inclu-
sion of an anti cipated future cost of EACs in the financial
baseline (the calculation of what happens if the invest-
ment is not made) significantly improves the payback time
for the energy or carbon-saving investment and therefore
increases the probability that it will be approved.
All energy-saving or GHG-reducing investment projects
are tracked in a central database known as the FTJ Energy
and Carbon Savings Tracker. Specific instructions are pro-
vided to the units explaining how this shadow EAC price
should be included in the financial payback calculation.
All investments are scrutinized at the Business Area level,
and a sample of them at the Group level.
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Resource use and circular economy
Material impacts, risks and opportunities
IRO and value chain Description
Resource inflows
Positive impacts
Full value chain
Increasing demand for products
and business models with improved
circular performance
Negative impacts
Upstream
Use and reliance on virgin raw
materials such as steel
Resource outflows
Positive impacts
Downstream
Designing, developing and
providing solutions for circularity
Negative impacts
Full value chain
Limited closed-loop product
flows for all SKF’s products
Opportunities
Downstream
Winning business in a circular
economy
Waste
Negative impacts
Own operations
Waste generated in
own operations
Description of the processes to identify and assess
material resource use and circular economy- related
impacts, risks and opportunities
Impacts
The transition from a linear to a circular business cuts
across the whole of SKF, from managing resource inflows
in the global supply chains, through the factories, to reduc-
ing outflows like waste created in the delivery of products
and services to customers. Within SKF’s own operations,
itis necessary to eliminate waste, improve waste treat-
ment and ensure efficient use of materials by focusing on
circular economy strategies such as remanufacturing and
recycling. SKF has screened its assets and activities and
engaged with stakeholders, including customers, employ-
ees, suppliers and civil society, to identify actual and
potential impacts in the Group’s own operations and the
upstream and downstream value chain. Customers empha-
size decarbonization and energy efficiency, aligning with
SKF’s sustainability goals, while suppliers focus on trans-
parent sustainability practices, and civil society expects
SKF to reduce environmental impacts and support circular
economy objectives. There is ongoing consultation with
communities local to sites, with no significantly affected
communities identified in relation to SKF’s resource use.
More on stakeholder dialogue on page 88.
Risks
Risks related to circularity extend to resource inflows,
resource outflows and waste management amidst growing
regulatory pressure and focus on resources and waste.
SKF relies on materials like steel, primarily from recycled
sources, but faces challenges in availability and consist-
ency of global supplier data.
A significant environmental challenge comes from SKF’s
reliance on virgin raw materials, which poses pollution,
processing, energy, transport and emissions-related risks.
Remaining in a linear business model poses further risks
such as rising material costs, supply chain disruptions and
the risk of regulatory non-compliance as governments
increasingly tighten circular economy regulations.
There are also reputational risks if SKF does not shift
more rapidly towards circularity, given the increasing focus
on sustainability from stakeholders and customers alike.
Risks extend to other materials such as rubber, oils and
greases compounded by growing regulatory pressure and
attention on resource scarcity.
Opportunities
Transitioning to a circular economy presents opportunities
to optimize material flows, reduce costs, and position SKF
as a leader in sustainable manufacturing. The company is
actively increasing recycling, remanufacturing and waste
reduction efforts across its business units. Key units
include manufacturing, supply chain and procurement,
R&D and innovation, and service and maintenance, all of
which are working to scale circular solutions that extend
product life-cycles, improve resource efficiency and mini-
mize waste.
By designing products for circularity, ensuring modular-
ity, repairability and recyclability, SKF is creating solutions
that will have a significant positive impact on the circular
economy transition. In leveraging these strategies, SKF
aims to increase the proportion of revenues from circular
business models and help its customers transition towards
circularity, thus reducing both the environmental footprint
and dependency on virgin materials.
Circular solutions, such as remanufacturing and the
RecondOil offer growth potential by extending product
life-cycles, reducing waste and lowering costs for customers.
As industries adopt circular economy practices, demand
for reuse will increase, positioning SKF as a leader in
this space.
Policies
SKF has established policies to manage key impacts, risks
and opportunities related to resource use and the circular
economy across its operations and value chain. These
policies are designed to ensure the identification, assess-
ment and remediation of material impacts and risks in
alignment with circular economy principles.
The policies are continually reviewed and updated to
address new risks and opportunities as identified through
materiality assessments. These policies also drive the
implementation of circular economy strategies such as
recycling and waste treatment ensuring SKF and its value
chain are aligned with sustainability objectives. More
information about SKF’s policies can be found on page 142.
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Resource use and circular economy cont.
Actions and resources related to resource use
and circular economy
Circularity will eventually transform SKF’s materials, pro-
duction, supply chain, business models and culture. SKF
has therefore defined a multitude of actions driven locally
and globally based upon the known impacts, risks and
opportunities presented by the circular economy. SKF’s
Circularity programme identified over 100 initiatives taking
place throughout the business relating to circularity.
Key areas of action include:
• Remanufacturing at SKF promotes circularity by
extending the lifespan of products across industries
including the railway, metals and aerospace industries.
A bearing typically replaced every three years can be
remanufactured twice to last up to nine years, effectively
performing the function of three new bearings. Addition-
ally, remanufacturing ensures that high-quality steel
remains in the recycling loop, either by reusing it in
bearings or recycling it into high-quality steel for new
products.
• RecondOil double separation technology (DST)
en hances the circularity of industrial oil by re generating
it into a reusable asset, preventing it from aging and
eliminating the need for new oil purchases. By removing
even the smallest contaminants, DST allows the same
oil to be used indefinitely across various industries,
reducing waste and carbon footprint. This technology
not only saves costs but also improves perfor mance and
extends machine life.
• Laser metal deposition (LMD) enhances the circu-
larity of bearings by allowing for repeated use through
the application of metallurgically bonded coatings
that resist wear and corrosion. The process uses only
15% of the steel needed for new bearings and the sub-
sequent remanufacturing also reduces CO
2
emissions
by up to 80%. Tested in real-life manufacturing condi-
tions, LMD-coated bearings demonstrate high durability
and minimal wear.
These actions are aligned with SKF’s objectives to miti-
gate material impacts and risks, particularly in relation
to resource inflows and outflows. For example, remanufac-
turing directly addresses the risks of resource scarcity and
Circular solutions
/Business models
Remanufacturing
as a service
Bearing for improved
circularity
Housing for improved
circularity
Performance solution
100/100 contract for
remanufacturing and
supply in railway
Certified Pre-owned
Collect and sell
remanufacturable
bearings
RecondOil
Circular oil for life
Predictive maintenance
Offer maintenance
activities to ensure
extended life of bearings
Eliminate waste and pollution
Legal – ensures compliance, protects immaterial assets and creates clear framework
for circular business models.
Data & AI – optimizes the process, including predictive maintenance, optimizing
remanufacturing processes and efficiency improvements in material flows.
Upskilling – equipping the workforce with the necessary skills for a circular economy,
such as experience in remanufacturing, data analysis, and sustainable practices.
Re-imagine
circularity
for a better
tomorrow
Green and efficient supply
• Embed circularity in supplier
relationships and increase
yield of steel
• Secondary materials first
• Recyclable/bio-based materials
Circulate materials
• Recycling and reuse of
grinding swarf
• Recirculate components
• Recycling and reuse of oil
and grease
• Cycle back (e.g. paper, packaging)
SKF’s operations SKF’s offering
Material efficiency
• Increase direct material
efficiency
• Standardize material
sourcing
• Reduction of indirect
materials purchased
Equipment lifecycle
• Refurbishment and
reuse of equipment
• Repair and maintenance
of equipment
• Recycling of equipment
Technological and
product development
• Design for
remanufacturing
• Standardization of
design and technology
• AI supported Data
Management and
Analytics
Circularity cuts across SKF’s whole business
To help visualize and communicate the company wide
transformation and the ongoing circularity related
activities SKF developed the following framework:
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rising costs by extending product lifecycles, while Recond-
Oil and LMD tackle the potential impacts of waste.
By implementing these circular economy strategies,
SKF not only mitigates risks but also capitalizes on busi-
ness opportunities, such as meeting the increasing
demand for circular products and services. These actions,
amongst others, help ensure compliance with evolving reg-
ulatory requirements and achieve the objectives outlined
in SKF’s sustainability policies, particularly regarding
reuse and sustainable resource utilization to help mitigate
material risks.
Targets related to resource use and circular economy
SKF’s circularity targets focuses on resource inflows and
improving waste management. The volontary targets
reflects SKF’s proactive approach to sustainability and
directly address the most material impacts, risks and
opportunities. To ensure focus the Group has chosen
to prioritize two targets relating to circularity this year
— specifically addressing circular material use (inflows)
and waste management. By focusing on reducing SKF’s
reliance on primary materials like steel, improving re -
source utilization, and fostering sustainable resource
cycles, the aim is to mitigate the upstream environmental
impacts associated with resource scarcity, energy use
and emissions.
In the coming years, SKF will evaluate and introduce
additional targets to further focus efforts and address
material impacts, risks and opportunities across the value
chain.
Target 1 – Buy and use 100% net zero steel by 2050,
or earlier
SKF’s largest material inflow, by far, is steel. The Group’s
target is to buy and use 100% net-zero steel by 2050, or
earlier. This target is aligned with the SteelZero initiative,
a global collaboration aimed at transitioning to a net-zero
steel industry. Until new technologies are scaled, the best
way to reduce emissions is to increase the use of recycled
steel and reduce the production of virgin steel. This target
addresses key material impacts related to steel produc-
tion. By transitioning to net-zero steel, SKF aims to reduce
its total environmental footprint by supporting sustainable
steel production methods. This commitment extends glob-
ally across SKF’s supply chain to ensure access to net-zero
steel in all operational geographies.
The timeframe includes interim milestones to track
progress towards this long-term goal, acknowledging the
challenges in transforming the steel industry, but ensuring
continuous improvements along the way. The approach
necessitates cleaner production methods and higher
Resource use and circular economy cont.
Non-renewable material
2024
Tonnes
2023
1)
Tonnes
2022
1)
Tonnes
Metal as raw material from external suppliers 410,644 475,686 621,794
Rubber as raw material from external suppliers 4,727 4,956 5,087
Oils 7,188 8,054 8,982
Greases 2,134 2,322 2,424
recycling rates, supported by collaboration with other
SteelZero participants to drive industry-wide change.
Regular reviews will assess whether SKF is on track or if
adjustments are needed to accelerate progress, ensuring
the target’s alignment with the Group’s broader sustain-
ability and circular economy objectives.
Target 2 – A recycling rate above 80% for grinding swarf
Grinding swarf is a mix of small metal particles and abra-
sives mixed with emulsion. The Group objective is to
achieve recycling at a rate above 80% year by year. Grind-
ing swarf is a focus area for SKF and other metalworking
companies due to its classification as hazardous waste,
which can pose environmental risks if not properly man-
aged. However, it also presents an opportunity to recover
valuable metal content for reuse in other applications.
The target to achieve and maintain an 80% recycling
rate applies to all SKF sites that generate grinding swarf
as a waste material. While SKF has historically achieved
this target, maintaining it has proven difficult due to, for
example, variations in regional legislation or volatile scrap
prices. Progress towards this objective is closely moni-
tored through governance forums, such as the half-year
EHS reviews conducted with Business Areas. SKF is con-
stantly working to find business partners who can use
grinding swarf as input to their production, both as direct
and indirect material. During 2024, the rate of recycled or
reused grinding swarf decreased to 65% compared to 66%
the previous year.
Resource inflows
SKF uses various materials in production, including
metals (predominantly steel), rubber, solvents, hydraulic
oil and grease. Much of the steel purchased by the Group
is produced by re-melting steel scrap, as this provides
favourable material properties. SKF does not report any
renewable materials or recycled input material. The most
significant part of the material used comes from compo-
nents which have been machined and refined along the
value chain. This means that SKF does not have direct
influence over the source of the material but only the spec-
ified quality. In general, the steel used by SKF during 2024
is made from around 54% of scrap, and SKF is working to
increase this percentage.
Resource outflows
Products
As the shift to circularity gathers pace, customers are
increasingly seeking re-use solutions for their products.
Some of this volume will be given a next service life in
SKF’s remanufacturing centres, but SKF is also actively
involved with customers who are developing their own or
third-party recovery and re-use capacity which in turn will
increase the economic viability of re-use.
When SKF’s products are dismounted at the end of their
first service life, it needs to be feasible that preparation for
re-use can take place. SKF has assessed a sample of the
Group’s product families for repairability using the DIN
(German Institute for Standardization) Quality Classifica-
tion for Circular Processes. DIN scores range from 0 to 1,
where 0 signifies purely linear products and 1 perfectly
circular products. In the estimate of repairability across 11
product families, over two thirds of the products reviewed
scored 0.80. This analysis provides insight for SKF’s prod-
uct and engineering teams about where improvements in
durability can be made by better enabling remanufacturing
and refurbishment.
There is no industry benchmark available to analyze the
expected durability of SKF’s products in relation to indus-
try average. However, SKF has, developed a lifecycle model
of bearings, analyzing the expected durability.
2024 saw the introduction of circular design principles
into the product development process. Building on existing
environmental guidelines, these design principles include
emphasizing the design of products for durability and easy
repair to extend their lifespan.
1) Past data are restaded for divested units and data amendment
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Biological materials and packaging
Much of SKF’s packaging materials are marked with re -
cycling symbols. Local markets have different legislation
regarding symbols and certification on packaging material.
SKF follows local legislation on the printing of packaging
symbols. Additionally, SKF is actively encouraging cus-
tomers to adopt reusable packaging solutions. These can
be returned and reused, minimizing waste and promoting
a more sustainable, circular approach.
Resource use and circular economy cont.
By promoting both reuse and recycling, SKF maximizes
the lifecycle of its packaging, aligning with the cascading
use of materials to reduce waste and enhance sustaina-
bility. In a single-stage cascade, packaging that cannot
be reused can still be recycled, extending its utility. In
a multi- stage cascade, SKF’s focus on return and reuse
allows packaging to be repurposed multiple times before
disposal or recycling. Even when it reaches the end of its
material life, the high recyclability of SKF’s packaging
ensures it can still contribute to resource conservation.
Recyclable packaging material
Packaging material Waste Hierarchy Type
Carton boxes Recyclable as paper Product packaging
Industrial KLT Returnable to SKF for reuse Product packaging
Industrial packing cartons Recyclable as paper Product packaging
Plastic Recyclable as plastic Product packaging
Plastic tubes Recyclable as plastic Product packaging
Plywood boxes Recyclable as wood Product packaging
Pouches Recyclable as plastic Product packaging
ProofBox Returnable to SKF for reuse
or recycle as plastic
Product packaging
Corrugated transport box Recyclable as paper Transport packaging
Corrugated paper pallet Recyclable as paper Transport packaging
One-way plywood box Recyclable as wood Transport packaging
One-way pallet Recyclable as wood Transport packaging
Plastic strapping Recyclable as plastic Transport packaging
Standard SKF pallet and collar Returnable to SKF for reuse
or recycle as plastic
Transport packaging
Waste
SKF works to avoid waste generation in several ways.
Upstream, this includes the use of near-net shape produc-
tion technologies such as cold rolling, thereby minimizing
the amount of material which needs to be removed in sub-
sequent processes. Examples within SKF’s operations
include avoidance of scrap and excessive material use
through optimized processes. Downstream, SKF works
with its remanufacturing approach to extend the life of SKF
products and the systems in which they operate, thereby
avoiding waste. Almost all recycling, reuse and recovery
of waste which is diverted from disposal is undertaken by
external companies such as steel plants, waste manage-
ment and recycling companies. SKF is performing recycling
of lubrication oil at some sites using SKF’s RecondOil
solution, but this is not yet reported separately.
As part of the Group’s overall responsible sourcing
approach, SKF requires that waste management compa-
nies and other companies making use of SKF’s residual
materials operate in full compliance with the SKF Code
of Conduct and therefore all applicable local legislation.
The Group reports disposal methods by reuse, recycling
and incineration with and without energy recovery and
landfill. Local objectives are required to be established by
the Group and these shall drive sites upwards in the waste
hierarchy. The amounts of residual material and recycling
rate are disclosed below, and in more detail in the Environ-
mental data spreadsheet available at skf.com. SKF reports
all significant residuals and waste site-by-site.
In this report, SKF highlights the most significant residu-
als, recycling rates and the amount of waste sent to land-
fill. The data on weight of waste generated comes from
both SKF measurements and those made by the waste
management companies, depending on the fraction and
the location.
Non-hazardous waste
Tonnes 2024 2023
1)
2022
1)
Total residuals
generated 106,924 130,567 132,856
Recycled or reused 82,946 97,949 106,880
Recycling rate, % 78 75 80
Incinerated with
energy recovery 7,600 8,159 8,629
Incinerated without
energy recovery 1,861 2,255 1,970
Landfill 14,518 22,204 15,377
1) Past data are restated for divested units and data amendment.
Hazardous waste, grinding swarf
Tonnes 2024 2023
1)
2022
1)
Total 19,833 21,362 23,709
Recycled or reused 12,826 14,125 16,328
Recycling rate, % 65 66 69
Incinerated with
energy recovery 619 653 430
Incinerated without
energy recovery 3,198 4,310 5,076
Landfill 3,190 2,274 1,875
1) Past data are restated for divested units and data amendment.
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Material impacts, risks and opportunities
and interaction with strategy and business model
To stay competitive, and to deliver on the strategy and
objectives set out by the Group, SKF needs to attract,
develop and retain a diverse and effective workforce with
critical competences and capabilities.
SKFs’ people ambitions are an integral part of the over-
all strategy and are clarified in the SKF 2030 People
Agenda, which is valid for all parts of the Group. The top
three strategic priorities are Culture & Leadership, Work-
force for the Future, and Employee Experience. The strate-
gic priorities are further broken down into the following
strategic areas:
• Purpose
• Values & Employee Value Proposition (EVP)
• Leadership development
• Diversity, trust and inclusion
• Organize for growth & innovation
• Future dimensioning of workforce
• High-performing organization
• Wellbeing in change
• People engagement
• Reward & recognition
The strategic priorities and the strategic areas serve as
the framework when yearly ambitions, activities and
targets are defined and followed up. The People Experience
function is represented in SKF’s Group Management by the
Senior Vice President People Experience & Communication.
SKF commits to providing equal opportunities irre-
spective of ethnic background, race, religion, age, gender,
disability, sexual orientation, outlook or social status.
By working with this purpose, SKF contributes with actual
positive impacts beyond mitigating negative impacts.
By fostering diverse teams and inclusive leadership SKF
can enable an innovative environment that contributes
with important financial opportunities for the Group.
Purpose, culture, employee engagement, leadership, com-
petence and ways of working are all key building blocks in
this area.
Safety always comes first and SKF is convinced that all
work-related accidents can be prevented. Being a manu-
facturing company with a large number of employees, SKF
has a potential negative impact on the own workforce’s
health and safety. The Group has a global management
system with focus on hazard elimination and risk mitiga-
tion. SKF’s zero accidents program, supported by proactive
reporting of unsafe conditions, aims to prevent all work-
place accidents. Implementing measures to mitigate nega-
tive impacts reduces the likelihood of critical consequences.
Due to the severity of health and safety incidents, SKF
considers these impacts significant.
SKF’s approach to secure employment, collective bar-
gaining agreements and freedom of association, prevents
unfair treatment based on gender, culture, ethnicity or
other factors. This can be seen as an initiative to mitigate
important negative impacts. At the same time, by creating
a more secure, attractive and engaging work environment,
these measures also serve to create a potential positive
impact for the workforce as well as for their families, com-
munities and society as a whole.
Other work-related rights include human rights such
as zero tolerance against child labour and forced labour.
The severity of such a negative impact makes it material
for SKF, despite its low likelihood. SKF is responding to
this potential negative impact by adhering to international
standards and guidelines and enforcing the SKF Code of
Conduct policy in all its operations. Periodic Code of
Conduct compliance audits are performed and a whistle-
blowing process is available at local and global levels. SKF
has conducted a human rights impact assessment, and
while these impacts are predominantly linked to the supply
chain, they are also relevant to SKF’s own operations for
the impacts identified for own workforce. For further infor-
mation, please see “Workers in the value chain – material
impacts, risks and opportunities and their interaction with
strategy and business model” on page 134.
If SKF does not succeed in providing good working con-
ditions, this can lead to high employee turnover rates that
can generate financial risks through weakened results.
Negative consequences could also include reduced
investments, fewer innovations, decreased market share
and poor wellbeing. SKF is responding to this by taking
a holistic approach in strengthening the Group as an
employer of choice, by putting the employee experience
at the center, including providing safe and healthy working
conditions, well-being, purpose and values as well as a fair
and transparent reward and recognition system.
SKF Group Management and People Experience have a
regular dialogue with the SKF World Union Council (WUC)
and the European Work Council (EWC) according to the
global framework agreement based on the SKF Code of
Conduct. Issues relating to significant changes at SKF are
always handled in close collaboration between Group
Management, the WUC, the EWC and local unions.
As SKF Group operates under Swedish legislation and
the Swedish Corporate Governance Code, employee repre-
sentatives are part of the Board of Directors of AB SKF.
Among other things, this means that employee representa-
tives from white and blue collar unions have direct insight
on Board level issues and the strategic outlook for the
Group. As the trade unions in SKF play an integral part in
shaping the methods and content of employee engage-
ment, a people follow up is always on the agenda when
the WUC meets the company representatives at the annual
summit.
Employees who experience discrimination or unequal
treatment may suffer from stress, anxiety and other mental
health issues. This can negatively affect the employee’s
overall well-being and quality of life. The potential negative
impact is deemed material based on its severity to the
individual’s health. SKF is mitigating any potential nega-
tive impact through, for example, the quarterly SKF Team
Pulse survey, where SKF can measure the employee
experience from wellbeing. Furthermore, employees are
requested to report any behaviour that is not in line with
SKF Code of Conduct to their manager, the local People
Experience channels or to other senior managers.
Social
Own workforce
Material impacts, risks and opportunities
IRO and value chain Description
Working conditions
Negative impacts
Own operations
Work-related injuries and
ill health of own workforce
Positive and
negative impacts
Own operations
Secure employment, collective
bargaining and freedom of
association
Risks
Own operations
Inability to attract and retain
critical competences and
capabilities
Equal treatment and opportunities for all
Positive impacts
Own operations
Enabling a diverse and
inclusive workplace
Negative impacts
Own operations
Discrimination and non-equal
treatment of own workforce
Opportunities
Own operations
Diversity and inclusion
increasing innovation and
business performance
Other work-related rights
Negative impacts
Own operations
Human rights of
own workforce
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Employees can also raise concerns or seek advice through
the third-party hosted SKF Ethics and Compliance
Reporting Line.
Policies related to own workforce
SKF gives top priority to the health and safety of employ-
ees, contractors, agency workers and visitors. This is
clearly stated in the Group EHS policy together with SKF’s
commitment to provide safe and healthy working condi-
tions to prevent work-related injury and ill health, as well
as to assure well-being in the work environment, as
described in SKF’s Employee Wellbeing policy. This com-
mitment is supported by the Group’s occupational health
and safety management system. Related procedures and
programs are designed to maintain and continually
improve a safe and healthy work environment by proac-
tively assessing health and safety risks and eliminate
hazards, reduce risks and ultimately improve the work
environment.
The Group EHS Policy is available both internally and
externally. To ensure focus and awareness of the aim and
ambition in the Group EHS Policy, a mandatory e-learning
and policy commitment is part of employee induction and
is renewed periodically.
The Group EHS Policy includes a commitment to assure
well-being in the work environment, and is complemented
by SKF’s Employee Well-being policy, which includes psy-
chological health, life balance and healthy life choices.
The overall EHS governance in SKF emphasizes line
ownership for health and safety. EHS managers are
appointed in the regions, Business Areas and local man-
agement teams across SKF. Working as part of the opera-
tional management teams, these individuals make sure
that appropriate attention, resources and investments are
given to health and safety in their respective units. They
are supported in this work by the long established EHS
country coordinators who provide local expertise, guid-
ance and support to the sites.
At SKF Group, the Equal Pay Policy is established to
ensure that all employees are treated fairly by receiving
equal pay for equal work. The policy aims to ensure that all
employees receive equal pay for equal work, regardless of
their race, gender, age, national origin, disability, religion,
sexual orientation, union membership or political affilia-
tion, by conducting regular audits, monitoring starting
salaries, providing training and addressing any instances
of pay discrimination.
Processes for engaging with own workforce and
workers’ representatives about impacts
To strengthen the position as an employer of choice as
well as the employee experience, SKF is intensifying
employee involvement to develop an attractive workplace.
Regular business area townhalls and team meetings with
Q&A opportunities ensure ongoing workforce dialogue
across the organization. The quarterly employee satisfac-
tion survey SKF Team Pulse, is recognized as an essential
tool and has a global reach. Since Q3 2023, diversity and
inclusion, as well as health and well-being related ques-
tions have been incorporated into the SKF Team Pulse.
This employee survey is anonymous and allows each
employee to give a score on a scale of 0 to 10 (with 10
being most positive) to assess how SKF is doing on those
drivers. In the most recent Team Pulse survey (Q4 2024),
SKF’s Diversity & Inclusion score was 8.1, aligning with
the manufacturing benchmark, which is derived from the
employee survey system comparing results across the
industry. The Health & Well-being score of SKF was at 8.0,
which is 0.2 points above the manufacturing benchmark.
Each team gives input on a quarterly basis and receives
a team result (teams with less than five employees get an
elevated report, due to anonymity requirements). The teams
are encouraged to work with improvement activities. The
tool covers staff and workers, and participation is encour-
aged from the top of SKF.
The SKF Engagement score in Q4 2024 was 7.9 which
is 0.4 points higher compared to the manufacturing
benchmark.
Managers are organizing quarterly team meetings to
collaboratively review their team’s survey dashboard for
each driver, assess trends and identify areas for improve-
ments.
The SKF Team Pulse has demonstrated to be a power-
ful tool to analyze what is going well and what can be
improved. Beyond the score, employees can also leave
anonymous comments which give valuable insights on
their overall employee experience. Going forward, a new
“wellbeing-in change” roadmap is being developed to
further incorporate well- being into the entire organization,
fostering a sense of belonging in a healthy inclusive
environ ment, with a healthy work-life balance for all.
Restricted only by rules of anonymity, SKF uses the data
to better understand how the employees perceive their
working conditions and to determine improvement areas
and actions. The result is also used to understand per cep-
tions using different demographic parameters, such as
age and gender.
The overall aggregated response rate is 78%, but SKF
is challenged to increase the share of respondents among
the worker category. This was observed by the Group
Manage ment, and easier access to digital tools remains
a priority for 2025. The Digi4All project aims at including
all employees in the digital landscape.
The SKF Team Pulse survey results and participation
rates are now part of the “Let’s Talk” Quarterly calls with
the SKF’s Group CEO open to the entire SKF workforce,
where not only financial results are presented, but also
people related topics.
During 2024 the SKF Team Pulse has been further
developed, to incorporate additional questions regarding
diversity, equity, inclusion, health and well-being and spe-
cific SKF questions. The dashboard results are shown in
the table on page 128.
SKF is a truly international company, with organizations
present in many different cultures and contexts. Account-
ability and mandate are moved as close to the business
as possible. Decentralization comes with the risk of differ-
ences in practice also in the labour relations area. This
could impact the employee experience at SKF and the
overall SKF brand. Labour relations have a strong presence
in the SKF Code of Conduct and strong labour affair rela-
tions are a foundation that SKF needs to maintain and
develop. Open information sharing and dialogue builds
a strong culture, with high loyalty and trust. This is pro-
tected by the Global Framework Agreement and by having
the Labour Affairs Director as part of the Global People
Experience Management team.
Own workforce cont.
SKF Team Pulse
SKF is using the Team Pulse survey to understand
the perceptions of all employees and encourage them
to actively contribute to making SKF a great place to
work. The survey is a quick and simple way to capture
opinions, create dialogue within teams and influence.
• Performed quarterly.
• Score from 1 to 10.
• 18 rotating questions out of 44, covering
engagement, health and well-being, and
diversity and inclusion.
• Multiple touchpoints such as QR code, emails
and SMS messages to encourage participation.
• Strictly anonymous.
• Report only generated for teams of 5 and over.
• Workday Peakon is the external supplier of the
SKF Team Pulse. The manufacturing benchmark
is provided by Workday Peakon and is an average
ofindustry standard.
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The main priority of the relationship between labour
and management is to ensure that the Global Framework
Agreement between SKF and the unions works in practice.
This is based on the SKF Code of Conduct and the work
focuses on labour management relations between SKF
Group and workers within SKF Group and its subsidiaries.
SKF also collaborates with other companies in formal and
informal networks. Issues relating to significant changes
at SKF, such as acquiring, divesting, or consolidating oper-
ations, are always discussed and resolved openly and con-
structively with union leaders locally and with the leader-
ship of the SKF World Union Council (WUC).
The precise approach must be adapted to the specific
conditions of each occasion. The European Work Council
(EWC) directive is the base for European related issues.
SKF makes it clear in its Code of Conduct that all
employees have the right to join a union and bargain col-
lectively. Continuous dialogue is ongoing to ensure that
it works for both SKF and the union members. The WUC,
which today includes 20 countries, listed in section Collec-
tive bargaining coverage and social dialogue on page 130,
meets every year to openly discuss labour issues and to
share what is on the Group’s agenda. An EWC meeting
involving only European delegates is held in conjunction
to the WUC meeting. All countries fulfilling the EWC/WUC
agreement requirements and with major operations, have
the right to send appointed union officials or observers to
the SKF EWC/WUC meeting.
In 2024, the annual EWC and WUC meeting was held
in the third week of October following normal procedures.
It was held in Poznan with online translations. During this
one-week event, the EWC meeting was conducted sepa-
rately, according to the EU directive. This was followed
by the WUC meeting with representatives from Group
Manage ment and included a factory tour as well as inter-
nal meetings between the delegates. The main topics for
the day with Group Management were the initiated separa-
tion of the Automotive business, and the implications this
could have on the organization, flexibility and digitalization.
The focus areas were employment, environment, health
and safety and digitalization. Overall, SKF’s setup with
the WUC is seen as a forum for addressing and deploying
global initiatives between Group Management and the
unions.
All WUC meetings are followed up with lessons learned
discussions, to have new practices introduced at the next
meeting. The chairperson of WUC is continuously inter-
acting with representatives in the different countries and
Group Management. When needed the chairperson brings
issues to the Steering Committee, which includes internal
and external union representatives.
Worker participation, consultation and communication
on occupational health and safety
The employees are key stakeholders for occupational
health and safety, and as part of the governance structure,
health and safety committees are available on all sites
certified according to ISO 14001/ISO 45001 with more
than 50 employees, to ensure effective communication
with employee representatives.
SKF health and safety committees operate on site or on
unit management level with the objective to bring together
employee and management representatives to discuss
and agree on needed measures to improve the health and
safety performance at the site or unit. The committees
meet at least once per quarter and decisions taken shall
be communicated to the workforce and acted and followed
up on.
The committees are often involved in accident and
incident investigations and may define additional correc-
tive or preventative measures based on this. Employee
representatives are appointed to the health and safety
com mittees by the employees in line with SKF WUC
processes.
A Group level health and safety committee is also estab-
lished with representatives from the World Union Council,
Group EHS and Group People Experience. This committee
meets formally once per quarter, however more frequent
update meetings are conducted as needed.
Processes to remediate negative impacts and
channels for own workforce to raise concerns
SKF employees are requested to report behaviour that is
not in line with the SKF Code of Conduct to their manager,
local People Experience function or to other senior manag-
ers. Employees can also raise concerns or seek advice via
the SKF Ethics and Compliance Reporting Line, read more
on page 138. The SKF Ethics and Compliance Reporting
Line is also available to external parties, such as suppliers
and distributors, through skf.com.
SKF has a Group Whistle-blowing policy, which is based
on the EU Whistle-blowing Directive and prohibits retaliation
towards anyone raising concerns in good faith.
During 2024, 456 concerns were reported to the central
functions via the SKF Ethics and Compliance Reporting
Line or via other channels.
The major types of concerns reported were workforce
management 25%, leadership issues 17% and discrimi-
nation or harassment 16%. In addition to the concerns
reported to the central functions, grievances related to
ethics and compliance are reported to, and managed by,
local management. All reported concerns are reviewed
and assessed by Group Compliance, for assignment to an
appropriate investigator. Concerns deemed as critical are
communicated on a case-by-case basis to the General
Counsel, to the Board of Director’s Sustainability & Ethics
Committee and/or to the Audit Committee.
Additional reviews related to human rights and
working ethics in own operations
SKF’s manufacturing units are subject to an ethics review
including relevant aspects on the SKF Code of Conduct
with a risk-based periodicity. In 2024, 15 such reviews
were carried out. In addition, sites undergo audits on
specific topics and most audits related to human rights
focus on health and safety. SKF also carries out site audits
at suppliers.
Taking action on material impacts on own workforce,
and approaches to managing material risks and
pursuing material opportunities related to own
workforce, and effectiveness of those actions
Health and safety
Occupational health and safety management system
At SKF, creating a safe work environment is not just a
legal and ethical obligation, it is also a strategic advantage
that leads to significant improvements in performance.
SKF has established and deployed a Group-wide health
and safety management system according to the ISO
45001:2018 standard. High-level requirements on health
and safety are defined in the Group’s EHS Policy and
detailed instructions and procedures are integrated within
the environment, energy, health and safety management
system at Group, country and site level.
The system drives compliance with legal requirements
and those defined by the Group, its customers and other
stakeholders. The system also provides a framework to
drive continuous improvement in health and safety per-
formance.
The scope of the management system includes physical
and psychological health and safety. It covers employees
at SKF sites, in commute or working for SKF off-site (such
as maintenance engineers at a customer to SKF), contrac-
tors, and visitors at SKF sites.
The health and safety of SKF’s employees is seen as
a paramount asset, and the Group’s EHS Management
System is designed to uphold and maintain a safe and
healthy work environment for all employees and others
working on or visiting SKF premises. When SKF employees
feel secure and valued, they are more likely to be engaged
and motivated.
For more information on the management system and
its coverage, se page 132. More information on the metrics
related to health and safety can be found under “Health
and safety metrics” on page 132.
Hazard identification, risk assessment and incident
investigation
SKF and its subsidiaries apply tools and processes as
prescribed in the management system and according to
legal requirements to prevent accidents and ill-health.
Risk assessments are carried out on a regular basis at
all levels from shop floor to office. The quality of the risk
assessments is assured by defined Group requirements
and provision of training for EHS staff and other persons
under taking them. Risk assessments are a part of internal
and external audits, where typically a sample of risk
assessments and corrective and preventative actions
are reviewed.
Measures to mitigate or eliminate the identified risks
are defined and implemented and risk assessments are
reviewed and updated periodically or after an accident or
serious near miss has occurred. Recordable accidents are
reported and followed up both at the unit level and further
up in the organization all the way up to the Group level.
Own workforce cont.
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Thorough investigations, which result in corrective and
preventative actions, must be deployed after each record-
able accident. In cases where the issue is linked to risks
which may be relevant for other units, the causes of the
accident and the corrective and preventative measures to
avoid repeating it are shared within the organization. In
certain cases, changes may be needed in the Group-level
management system as part of a preventative measure.
All employees are required to report accidents, inci-
dents and unsafe conditions and behaviours, as they are
vital sources of improvements and indicate opportunities
to better control the associated risk.
Health and safety incidents reported must be addressed
at the local level but are not required to be reported in detail
further up in the organization. Only the total number of such
cases should be reported for the unit as this gives an indi-
cation of the level of safety-related activity. No distinction
is made between SKF employees, agency workers or other
persons on-site for the identification and control of risks.
SKF employs Health and safety coordinators with exper-
tise to support team leaders and managers at all levels in
the organization. Training is also organized on health and
safety procedures, roles and responsibilities.
Based on the risk assessment carried out for a specific
machine, process or role, employees receive training so
that they understand the risks and how to manage them by
following defined procedures or wearing personal protec-
tive equipment, for example. Any employee who intention-
ally ignores the defined safety rules will face disciplinary
measures to protect themselves and their colleagues from
unsafe behaviours.
When defining corrective or preventative actions in
response to identified risks, SKF’s management system
requires that the hierarchy of control measures principles
are applied. The first option is hazard elimination. If this
is not possible, substitution, engineering controls, admin-
istrative controls and, finally, personal protective equip-
ment. SKF’s employees also work at customers’ sites, at
suppliers or other locations outside SKF premises. As part
of the process of defining such off-site activities, SKF
assesses health and safety risks. Occasionally, risks not
previously identified by the customer or supplier are found,
and in such cases, control measures must be agreed
before work commences.
Worker training on occupational health and safety
All employees and agency workers are provided health and
safety training, as well as other Code of Conduct training
as part of the introduction process. More specific training
is provided depending on the job description. Specific
training for potentially hazardous jobs, such as working
with electricity, at heights, hot work and so on is manda-
tory for employees working with these aspects. These jobs
are identified at each site or unit based on risk assess-
ments and legal requirements to ensure applicable cover-
age and provision of adequate training. All trainings are
provided during work hours. The efficiency is assessed
based on accident rates in combination with severity
rates, which are expected to be reduced towards zero
over time.
Promotion of worker health
SKF is committed to promoting employee health and
well-being beyond occupational safety, by offering variety
of health-promoting activities. Employees have access to
locally defined health promotion programs, which include
regular health screenings and initiatives around HIV/AIDS
prevention, substance abuse, obesity, healthy living, and
stress management. Where feasible, SKF facilities provide
additional resources to support physical health, such
as on-site or subsidized exercise facilities, healthy food
options, and professional health guidance. These efforts
align with SKF’s Employee Wellbeing Policy, which takes
a holistic approach to supporting both physical and
mental health.
Managers play a key role in fostering a healthy work
environment by recognizing the risks and opportunities
related to employee well-being. Their actions directly
influence the psychological health and resilience of SKF’s
workforce. Employee well-being is deeply embedded in
SKF’s culture, reflecting SKFs core values of care.
SKF’s well-being initiatives focus on three primary
areas: psychological health and safety, work-life balance,
and healthy lifestyle choices. Confidentiality is strictly
maintained in compliance with data privacy regulations.
To continuously assess and improve well-being, SKF
in corporates health-related questions into its quarterly
employee survey, The SKF Team Pulse. The anonymous
survey allows employees to rate SKF’s performance in
well-being areas on a scale of 0 to 10, with 10 being the
most positive. Managers are encouraged to review survey
results regularly with their teams, using the data to identify
trends and implement targeted well-being improvements.
For more information on the SKF Team Pulse see page 125.
Diversity, equity and inclusion
Diversity, equity, and inclusion (DEI), along with non-
discrimination and equal opportunity, are key elements of
SKF’s People Agenda. The SKF Code of Conduct mandates
that all employees shall be treated equally, fairly and with
respect, regardless of race, colour, ethnicity, gender, sex,
sexual orientation, age, civil or social status, national
origin or nationality, disability or diverse abilities, medical
conditions (including pregnancy), genetic information,
caste, religion, union membership, political affiliation or
any other unique or ordinary trait.
Own workforce cont.
In 2024, several ongoing DEI initiatives have been
expanded and new ones introduced. SKF has intensified
its focus across multiple touchpoints to stay appealing
and competitive for both current and potential employees.
These efforts encompass learning and development,
competency evaluations, and the use of more inclusive
language in job postings, to attract top talents from
various backgrounds.
A new Diversity & Inclusion Global Ambition plan has
been rolled out in 2024, stretching until 2030, offering a
comprehensive framework tailored to each business area
and region’s specific needs. This strategy integrates DEI
initiatives and KPIs into SKF’s processes, impacting all
major interactions with the current and future workforce.
A comprehensive scorecard of KPIs has been developed
to measure and track progress on a quarterly basis.
Global
Gender ‘Balance’
Senior leaders
from 19% women to
> 35% by 2030
Global Gender ‘Balance’
Managers from 19% women to
> 30% by 2030
Global Gender ‘Balance’
SKF total employees from 22% women to > 30% by 2030
Global Diversity Pulse score: Never below 8.0
Global Inclusion Question Pulse score: Never below 8.0
Multi-dimensional experience, 80% of senior leaders
Diverse teams, departments across all of SKF – measure progress
(... experiences, age, generational span, gender, nationalities, perspectives ...)
More ambitious regionally set targets + local D&I activities = foundation for the global SKF ambition
SKF ANNUAL REPORT 2024 127
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SKF’s People KPIs are not limited to gender, but stretch
across a wider spectrum of diversity and inclusion indica-
tors, such as the SKF Diversity Pulse Score and Inclusion
Pulse score from the SKF Team Pulse survey. These are
now part of the comprehensive People Experience (PX)
Scorecard, among a variety of People KPIs spanning
across the globe and the business areas.
People Business Reviews are being held with the Busi-
ness Areas and Group Management twice a year, conducted
by PX. These review meetings are not limited to gender
balance KPI follow-ups, but equally include senior leaders’
mix of experience across different units and roles, existing
succession plans and diversity and inclusion initiatives
per region and Business Area. Workshops and training
material are available via the learning academy and internal
Sharepoint sites to build further awareness on unconscious
bias, psychological safety and the positive impact of
human - centric leadership.
The next phase of the SKF Global D&I Ambition is to
build diversity, equal opportunity and inclusion further into
the fabric of SKF’s DNA across all Business Areas, regions
and relevant processes. This plan incorporates many of
the successful local initiatives already in place, which are
tailored to regional needs, driven by SKF’s Purpose and
Values of Collaboration, Curiosity, Courage and Care,
such as:
• Expanding an SKF D&I community network around
the globe with regional ambassadors.
• Female networks.
• Partnership with Mitt Liv, The International Council
of Swedish Industry and Swedish Chamber of
Commerce D&I committee partnerships.
• DEI Council Americas.
• Employee Resource Groups, promoting inclusion of
e.g. neurodiversity, veterans, LGBTQ+, employees
with disabilities (or rather different abilities) and other
underrepresented affinity groups.
• Wellness rooms and daycare facilities in India and
Indonesia.
• Partnership with Universeum National Science Centre
Sweden, to promote women in Science Technology
Engineering Mathematics.
• Family days at SKF facilities around the world.
• Diversity Calendar celebrations such as World Mental
Health Day, Pride month, Veterans’ Day and International
Women’s Day among others.
• Inclusive promotion and recruitment processes.
• “Psychological Safety”, “Better Together”, Linkedin
DEI learnings.
Equal treatment and opportunities for all
SKF integrates equality into the people processes, such
as learning and development, succession planning and
recruitment. The recruitment principles are based on the
SKF Code of Conduct and facilitate skills-based recruit-
ment by utilizing an ability test. The test used is a scienti-
fically robust instrument, reviewed and certified by a third
party verification organ.
As part of the new Global D&I Ambition plan 2024–2030,
in 2024 SKF commissioned a thorough study through an
independent consulting firm of all its internal processes
and practices with the lens of “Equal Treatment and
Opportunities for All” to identify further improvement
areas for diversity, equity and inclusion. This assessment
consisted of existing SKF policies reviews, as well as
leadership, subject matter experts and employee focus
groups interviews regarding all touchpoints in the
employee process.
Through this in-depth analysis, which was finalized at
the end of 2024, a detailed action plan has been developed
that is being incorporated into the overall SKF Global D&I
Ambition. See the figure on page 127.
Targets related to managing material negative
impacts, advancing positive impacts, and managing
material risks and opportunities
Health and safety
SKF’s overall health and safety ambition, established in
2000, is to reach zero accidents. In addition, accident rate
and severity rate are monitored together with other cate-
gories of incidents described in the health and safety pyra-
mid on page 132. In this pyramid, near misses and unsafe
conditions and behaviours are presented and monitored
to ensure increasing proactivity in health and safety
management. Site, Business Area and Group performance
towards the zero accidents target is followed up on a
monthly basis using a monthly safety data report, and the
above-mentioned metrics and rates, as well as through
integration into quarterly performance reviews. A high-
level review of the performance and plans is conducted
with each Business Area at the half-year EHS reviews.
SKF’s accident rate has steadily decreased over the last
two decades. The accident rate is calculated as the num-
ber of recordable accidents per 200,000 worked hours per
year, which approximately corresponds to the number of
accidents per 100 full-time employees per year. In 2024,
the rate reached an all-time low of 0.59 (compared to 0.64
in the previous year), demonstrating that the ongoing
efforts in health and safety are driving continuous per-
formance improvements.
People Experience
Group People Experience has started to establish a
PX Scorecard that includes goals and KPIs for the most
relevant metrics, following the People Agenda and the
Strategic priorities. These KPIs are followed up with all
Business Areas and Regions on a at least quarterly basis.
Every Business Area has set own targets which could
differ from the global targets, depending on businesss-
climate, region or other factors. However, the global aver-
age for each KPI should be met as a minimum. See figure
on page 127.
SKF Global D&I Gender Targets 2030
While employment decisions are always based on the skills
and qualifications of the candidates, SKF is taking further
action to achieve a better gender balance across all levels
in the company, with measurable KPI’s and initiatives
throughout;
• Gender balance targets have been established across
SKF’s global workforce. The target is to reach a mini-
mum of 30% female workers by 2030 (compared to
22% in 2023).
• A gender balance target of a minimum of 30% female
managers by 2030 has been established for managerial
positions globally (compared to 19% in 2023).
Own workforce cont.
• The gender target for senior leaders has been raised to
a minimum of 35% female leaders by 2030 (compared
to 19% in 2023).
• Specific gender target KPIs have also been set by
Business Areas and regions.
• Elevate, a global virtual programme for SKF‘s women
leadership and career development was run for the 5th
consecutive year, with over 100 women participating
each year.
• SKF’s Global Leadership development programs and
the Global Graduate Program each have gender balance
targets for every graduating class
• SKF is participating in the UN Global Compact Target
Gender Equality Programme, a nine-month programme
(started in June 2024) to accelerate the journey in
reaching ambitious targets for womens’ representation,
equal pay and leadership in business.
SKF Team Pulse result Q4 2024
Drivers 2024
Manufacturing
benchmark
Diversity and Inclusion 8.1 8.1
Health and Well-being 8.0 7.8
Engagement 7.9 7.5
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Employees age groups and terminations
2024 Female Male Grand Total Under 30, % 30–50, % Over 50, %
Terminated
Female
Terminated
Male
Terminated
Total
Europe, Middle East and Africa 4,494 16,036 20,530 11.37 49.43 39.19 574 1,874 2,448
The Americas 1,870 6,200 8,070 15.54 58.29 26.17 588 1,663 2,251
China and Northeast Asia 1,782 4,366 6,148 14.85 76.61 8.54 179 544 723
India and Southeast Asia 684 3,311 3,995 21.99 57.74 20.27 165 407 572
Grand total 8,827 29,910 38,737 13.89 56.45 29.66 1,506 4,488 5,994
Employee hires and turnover
2024
New hires
Female
New hires
male
New hires
Total
New hires
under 30
New hires
30–50
New hires
over 50
New hires
under 30, %
New hires
30–50, %
New hires
over 50, %
Turnover
Female, %
Turnover
Male, %
Turnover
under 30, %
Turnover
30–50, %
Turnover
over 50, %
Turnover
Total, %
Europe, Middle East and Africa 374 801 1,175 668 417 90 16.6 10.3 2.2 12.24 10.96 26.6 7.4 11.9 11.2
The Americas 528 1,182 1,710 652 921 137 16.2 22.8 3.4 30.47 24.89 49.7 24.6 17.9 26.1
China and Northeast Asia 104 306 410 199 206 5 4.9 5.1 0.1 9.64 11.82 18.7 10.0 10.5 11.2
India and Southeast Asia 394 346 740 512 215 13 12.7 5.3 0.3 36.26 12.07 40.2 8.7 13.9 14.9
Grand total 1,400 2,635 4,035 2 031 1 759 245 50.3 43.6 6.1 16.86 14.13 32.3 11.9 13.1 14.7
Number of employees per region – headcount
2024
Europe, Middle East and Africa 20,530
The Americas 8,070
China and Northeast Asia 6,148
India and Southeast Asia 3,995
Total 38,743
Own workforce cont.
Characteristics of the undertaking’s employees
All SKF employees, as well as the majority of the non-
employee workforce, are maintained in a central master
data system at SKF. All data provided in this chapter will
be based on this repository. The numbers for 2024 will
be including also the employees from acquisitions being
made throughout the year.
For the breakdown of employee figures into gender we
are differentiating between male and female. This is due to
the current system setup. This however does not mean in
Number of employees by contract type
2024 Female Male
Number of employees 8,830 29,913
Number of permanent employees 8,244 28,880
Number of temporary employees 586 1,033
Number of full-time employees 8,328 29,533
Number of part-time employees 502 380
Number of employees by gender – headcount
2024
Male 29,913
Female 8,830
Total 38,743
Number of employees by contract type, by region
2024 Americas CNEA EMEA ISEA
Number of employees 8,070 6,148 20,530 3,995
Number of permanent employees 7,826 6,132 19,578 3,588
Number of temporary employees 244 16 952 407
Number of full-time employees 8,063 6,145 19,668 3,985
Number of part-time employees 7 3 862 10
any way that SKF is discriminating any individual due to
the gender. As stated in the SKF Code of Conduct, SKF
has “… zero-tolerance for discrimination. All employees
shall be treated equally, fairly, and with respect, regardless
of race, colour, ethnicity, gender, sex, sexual orientation,
age, civil or social status, national origin or nationality,
disability or diverse abilities, medical conditions (including
pregnancy), genetic information, caste, religion, union
membership, political affiliation, or any other unique or
ordinary trait.”
When it comes to the contract-type we are differen-
tiating between permanent and temporary contracts as
well as part-time and full-time, however not breaking down
into non-guaranteed hourly employees.
Please be aware that all numbers are based on Head-
count figures and the numbers are disclosed based on
the end of the reporting period.
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These are: Time and material, Service contracts, Fixed
price as well as Non-commercial resources. The data
is, just like the employee headcount, being collected in
the central employee master data system. However, this
system only covers non-employees with IT access, it does
not reflect the total population, especially in the “Time
and material” category. The estimate is that approximately
3,000 additional profiles should be included here.
Non-employee category Description Type of payment
Fixed price
resource
Fixed price for a well-defined assignment scope with
deliverables attached to clearly mapped milestones
and payments connected to the successful delivery
Pre-negotiated cost/price and
resource part of a project deliverable
Non-commercial
resource
None of the above categories, but still requiring
IT access and therefore needs to have a profile in
SKF master data application
According to contract
Service contract
resource
Providing a specific level of services for an
extended period. Clearly defined scope and
service level agreement
Terms can vary depending on service
(for example: outsourced IT services,
equipment maintenance and out-
sourced business functions such as
cleaning services)
Time and material
Resource
Paid based on the time and materials used to
deliver an assignment/project, with a clearly
defined start- and end-date
A pre-negotiated rate
(Consultant or contingent workforce)
Based on this categorization, this is the headcount as of 31 December 2024:
Fixed price resource 778
Non-commercial resource 584
Service contract resource 3,855
Time and material resource 2,645
Undefined 811
Grand total 8,673
Collective bargaining coverage and social dialogue
SKF has established collective bargaining agreements and
social dialogue structures in most countries where the
company operates, ensuring that employees have access
to formal representation and negotiation mechanisms.
Social dialogue refers to discussions, consultations, and
negotiations between employers and employees (or their
representatives) to promote fair working conditions,
Characteristics of non-employees
in the undertaking’s own workforce
SKF is, as most other companies in the manufacturing
industry, relying on external workforce in different domains
spanning from IT to Manufacturing and Logistics as well as
Finance and other parts of the organization. The type of
external workforce is usually divided into four categories
which are further described in the table below.
Own workforce cont.
wages, and rights in the workplace. The countries listed
here (considering those where SKF has a direct workforce
presence and more than 50 employees) have collective
bargaining agreements signed by local Unions and/or
WUC/EWC : Argentina, Austria, Belgium, Brazil, Bulgaria,
Canada, Chile, China, Czech Republic, Finland, France,
Germany, India, Indonesia, Italy, Japan, Republic of Korea,
Malaysia, Mexico, Netherlands, Poland, Singapore, Spain,
Sweden, Taiwan, Thailand, Ukraine, The United Kingdom
and The United States.
In a few countries, SKF has not yet established local
collective bargaining agreements due to complex labor
market conditions and external challenges. This includes
Australia, Colombia, Peru, and South Africa. However,
ensuring fair working conditions for all employees remains
a priority. Through SKF’s global framework, employees in
these countries are covered under corporate and regional
agreements that uphold the same high labor standards
worldwide. Furthermore, SKF is actively working to
strengthen local engagement with union councils and
social dialogue structures in these regions to enhance
employee representation and participation.
SKF is actively engaged in global labor representation
through the SKF World Union Council (WUC) and the Euro-
pean Work Council (EWC), which facilitate discussions on
labor conditions, policies, and agreements across regions.
While Colombia, Peru, and South Africa do not have direct
representation in these councils, group-level agreements
apply to all SKF employees worldwide.
SKF is a member of the International Council of Swedish
Industry (NIR), which supports Swedish companies in
global markets by promoting responsible business conduct
and sustainable labor practices. Through NIR, SKF partici-
pates in the Swedish Workforce Program, an initiative
aimed at strengthening collaboration between manage-
ment and employees, regardless of union presence, in
selected international markets where Swedish companies
operate.
Additionally, SKF works with Business Sweden, a joint
initiative between the Swedish government and industry
leaders, to promote responsible and sustainable labor
practices globally. These efforts help Swedish companies,
including SKF, navigate local labor conditions while ensur-
ing alignment with international labor standards.
For country with +50 employees %
Collective bargaining coverage
Employees European Economic Area 96
Employees non-European Economic Area 94
Social dialogue
Workplace representation
(European Economic Area only) 99
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Diversity metrics
Own workforce cont.
13.9%
29.7%
56.5%
Total employees per region by age groups
Total employees refers to the total number of employees in SKF as per end of 2024.
Age structure
<30: 15.5%
30–50: 58.3%
>50: 26.2%
15.5% 26.2%
58.3%
The Americas
Age structure
<30: 14.9%
30–50: 76.6%
>50: 8.5%
8.5%
14.9%
76.6%
China and
Northeast Asia
Age structure
<30: 11.4%
30–50: 49.4%
>50: 39.2%
11.4%
39.2%
49.4%
Europe, Middle
Eastand Africa
Age structure
<30: 22.0%
30–50: 57.7 %
>50: 20.3%
20.3%22.0%
57.7%
India and
Southeast Asia
Adequate wages
SKF pays adequate wages to all employees, and ensures
that wages and other benefits meet at least the adequate
wages benchmarks and are rendered in full compliance
with laws and collective agreements. Staff salaries are
set based on evaluation of performance and position, to
ensure internal equity and to pay people fairly. Salary
setting also follows legislation and/or union agreements
as locally applicable.
Training and skills development metrics
In an era of constant change, SKF has embraced a culture
of continuous learning to maintain a competitive edge.
Recognizing the risks associated with skill gaps, talent
attrition, and a weakened employer brand, SKF has prior-
itized initiatives that creates the right environment and
foster self-driven learning and development. This commit-
ment is critical in positioning SKF as a forward-thinking
employer offers personal and professional growth.
To track progress, SKF leverages a global Learning
Management System which monitors skills development
The Board
The Board refers to the SKF Board of Directors
which makes up the highest governance body for
the organization. The percentage refers to Board
members elected by the annual general meeting.
For more information, see page 155–156.
30%70%
30%70%
30%70%
202220232024
Board of
Directors
Women
Men
Women
Men
Age structure
<30: 0%
30–50: 20%
>50: 80%
20%
80%
Including CEO. Excluding Employee representatives.
Group Management
Group Management is the operational management
team of the SKF Group. For more information,
see page 158–159.
23%77%
2022
17%83%
23%77%
20232024
Group
Management
Age structure
<30: 0%
30–50: 30.8%
>50: 69.2%
30.8%
69.2%
Total employees
Total employees refers to the total number of
employees in SKF as per end of 2024.
2023
22%78%
2024
23%77%
2022
22%78%
Women
Men
Age structure
<30: 13.9%
30–50: 56.5%
>50: 29.7%
Top Management
Top Management refers to the around top 400
managers in the SKF Group. The actual number in
this population changes over time.
19%81%
16%84%
23%77%
202220232024
Higher
Management
Women
Men
Age structure
<30: 0%
30–50: 52.6%
>50: 47.4%
47.4%
52.6%
Managers
Managers refers to the employees
who have direct reports.
81%
19%
79%
21%
2023
82%
18%
20222024
Managers*
Women
Men
Age structure
<30: 1.8%
30–50: 29.5%
>50: 68.7%
68.7%
29.5%
1.8%
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aligned with strategic competencies. The goal is to
empower individuals to future-proof their development
and, concurrently, future-proof the organization’s ability to
deliver. SKF’s legacy of success is built upon the collective
competencies and capabilities of its employees. The per-
sonal dedication of its employees to their own competence
development is a critical factor in maintaining up-to-date
competencies.
In 2024, staff employees recorded an average of 14.2
formal learning hours in the SKF learning management
system, while workers recorded an average of 3.5 hours.
In addition to these metrics, SKF emphasizes the signifi-
cance of informal learning – gained through daily inter-
actions, knowledge sharing, and collaboration. The infor-
mal and social learning time is not included in the formal
learning hours neither is any external formal learning.
Recorded hours of formal learning in SKFs global
learning management system, average / employee
2024 2023
Staff
1)
Workers
2)
Staff
1)
Workers
2)
Tot 14.2 3.5 9 2
Women 14.4 4.3 N/A N/A
Men 14.1 3.4 N/A N/A
1) Staff = white collar
2) Workers = blue collar
In early 2024, SKF launched an extensive content library
from LinkedIn Learning, available to all staff and interested
workers, enriching opportunities for skill development and
enabling a flexible, on-demand learning experience. This
initiative supports our strategy to build critical competen-
cies in a resource efficient way. To further reinforce our
core values of Collaboration, Curiosity, Courage, and Care,
SKF introduced Learning Week for all employees with
access to an SKF email address — a quarterly event offer-
ing brief daily learning sessions, each concluding with
reflections or collaborative exercises in the end of the week.
SKF Team Pulse encompasses all employees globally. In
the field of growth and learning SKF are above benchmark.
According to SKF Team Pulse, the employees feel a sense
of professional growth and support within the organiza-
tion, recognizing pathways for career and skill develop-
ment, fostered by the encouragement and guidance they
receive from managers and mentors.
The Group People Experience function sets the strate-
gic direction for learning at SKF. Our global platform pro-
vides tailored training for various user groups, including
external partners, and serves as a compliance tracker,
reinforcing our commitment to regulatory standards and
the SKF Code of Conduct. During 2024 SKF has initiated
a pre-study on skills-based Talent Management to identify
and strengthen talent practices, aiming to boost competi-
tiveness and adaptability in a dynamic market landscape.
SKF Academies ensure that competence development
aligns with SKFs strategic business goals. Local initiatives
and teams ensure that learning content is tailored to
regional needs.
SKF Manufacturing Academy continued its focus on
digitalization, maintenance, automation and SKF Produc-
tion System. By combining digital learning with physical
training in learning centers within the factories, employees
engage with both hands-on equipment and digital courses
in their local language. This approach allows scalable,
standardized training, ensuring that all employees, regard-
less of location, have access to essential knowledge and
skills in its pursuit of innovative solutions.
SKF Technology Academy supports the SKFs technol-
ogy strategy by training and skill development in key future
technology areas to ensure long term success. The aim is
to empower employees to engage with emerging technolo-
gies, translating strategic goals into actionable expertise.
An example is the rollout of an AI program for all employees
which includes a “train the trainer” concept.
SKF is committed to fostering leadership at all levels.
To do so, the SKF Leadership Academy highlights two
initiatives during the year. The Self-Growth Leadership
initiative supports employees on their leadership journey
by focusing on self-awareness and personal development,
through guided sessions with trained accelerators. For
middle and senior leadership, the academy offers the
Boost leadership program, which focuses on accelerating
strategy, leadership development and building global
networks.
Clear expectations are a cornerstone of management at
SKF. Managers are collaborating with their teams to define
individual and collective goals, with focus on developing
yourself, others and the business linking them to the
Own workforce cont.
200
220
240
260
280
20222021 2020 2023 2024
Proactive incident reporting vs accidents
0
20,000
40,000
80,000
60,000
Proactive incident reporting
Serious recordable and recordable accidents
Serious recordable
accidents
Recordable
accidents
First aid
incidents
Near miss
incidents
Unsafe conditions
and behaviours
Serious recordable
accidents
Recordable
accidents
First aid
incidents
Near miss
incidents
Unsafe conditions
and behaviours
3
204
1,490
3,794
75,551
broader company strategy. Supported by a global plat-
form, this process enables a dynamic and updated dia-
logue on progress and priorities throughout the year.
An annual performance review meeting, integral to our
talent management and salary review process, helps to
define an overall performance rating.
In 2024, this platform supported the performance
process for more then 13,500 employees. Following the
global performance review process, which is a prerequi-
site for the salary review process, comparing the number
of completed performance reviews against the total num-
ber of employees and those eligible for salary review. This
transparent metric underlines SKFs commitment to the
continuous professional development of its workforce.
Performance reviews
Female Male Total
Performance reviews com-
pleted (total employees)
8,830
(43.5%)
29,913
(32.7%)
38,743
(35.2%)
Performance reviews
completed (eligible
employees)
3,444
(97.10%)
9,027
(96.6%)
12,471
(96.8%)
Health and safety metrics
SKF gives top priority to health and safety. The obvious
reason to work systematically with health and safety is to
prevent accidents and avoid negative health effects and
to create a more sustainable company. Proactive work is
the main feature of EHS management and means that
work is done today to prevent something from happening
tomorrow or in the future.
All health and safety incidents are addressed and
managed locally where the incident occurred, or was
identified, with support from other parts of the organiza-
tion if needed.
Health and safety data is consolidated in the Group’s
main reporting and consolidation tool.
During 2023 and 2024, there has been additional focus
on pro-active health and safety management driving
identification of near misses, unsafe conditions and
behaviours. This proactive approach helps to ensure
proper risk mitigation and prevention of future accidents.
In the last few years, with enlarged focus during 2024,
an incident management software application has been
developed. The application makes it possible to capture
and investigate incidents in an effective way and to man-
age incidents in a proactive way to avoid causing harm in
the future. After full deployment of the application, all inci-
dents around SKF will be captured, verified, investigated,
and closed in this system. Roll-out to a few sites started in
September 2024 and by the end of the year 40% of SKF’s
operations had started using the application.
Employees covered by an occupational health and
safety management system
77%, or around 30,000 employees are covered by the certi-
fied health and safety management system. The system
focuses on the manufacturing sites, workshops, logistics
and technical centres. In addition, 85% of the agency
workers under SKF’s management control (around 3,800
people) are also covered by the health and safety manage-
ment system. No specific type of workers or staff are
excluded.
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Remuneration metrics
(pay gap and total remuneration)
The Gender Pay Gap
Eliminating the unadjusted gender pay gap is an important
area of work for SKF. Differences in remuneration as shown
by the gender pay have been identified being mainly due
to a higher proportion of men in higher level positions and
are a sign of lack of equal access to opportunities, such as
career advancement and recruitment to senior positions,
for women.
In 2024, People Experience colleagues globally were
trained to perform equal pay analysis which the SKF
Equal Pay Policy requires. Managers were given access to
e-learning on salary setting which included training on pay
equity, gender pay gaps and pay transparency. The People
Experience function held action planning sessions to
identify actions to decrease gender pay gaps. The people
experience scorecard includes a new target for the reduc-
tion of gender pay gaps.
SKF has also signed up for the UN Target Gender
Equality program, running nine months, starting June 2024.
The gender pay gap for 2024 is 19.1%. The gender pay
gap is based on all employees’ total remuneration per
contracted hour paid out during 2024 and is not directly
comparable to the gender pay gaps reported in base pay
Own workforce cont.
of staff employees in previous years. The data excludes
employees from acquisitions made during Q4 2024.
The gender pay gap in base pay for staff employees in
the previous two reporting periods was 16% (2023) and
17% (2022).
The global unadjusted gender pay gap is an indicator of
gender representation in SKF’s global workforce, measuring
the difference in average pay between men and women
worldwide. This metric compares the average pay by gender
across all roles collectively, regardless of level or job type.
SKF’s gender pay gap reflects the extent to which women
are underrepresented in senior and higher-paid roles while
being overrepresented in junior and lower-paid positions.
It is important to distinguish the gender pay gap from
equal pay. SKF is committed to ensuring that employees
are paid equally for the same work or work of equal value.
As part of the annual salary review cycle, SKF conducts
equal pay analyses and takes action to address any
identified discrepancies.
The annual total remuneration ratio – CEO to median
employee pay ratio
The annual total remuneration ratio of the highest paid
individual to the median annual total remuneration for
all employees is 75:1.
The CEO to median employee remuneration ratio
is sensitive to exchange rate fluctuations which can
influence year-on-year comparisons.
Incidents, complaints and severe human rights
impacts
Incidents of discrimination and corrective actions taken
During 2024, 75 reports related to discrimination and
harass ment have been received through the SKF Ethics
and Compliance Reporting Line. These cases are normally
assigned to local investigators (mainly People Experience
country leads) and actions are taken on a local level.
SKF has had a process in place since 2021 so that
concerns about harassment and discrimination reported
locally (e.g. via email or in person to People Experience)
are also reported and documented centrally.
Operations and suppliers in which the freedom of
association and collective bargaining may be at risk
All employees are covered by collective agreement or the
SKF Framework agreement. The overall approach from
the state towards union membership and the level of
independence of trade unions in certain countries where
SKF has operations, creates challenges in this respect.
SKF works pragmatically with the WUC and the appointed
union representatives to try and address these challenges.
Please refer to page 130 for a description of the SKF WUC’s
work related to collective bargaining agreements. Informa-
tion on which countries SKF has operations in is available
on skf.com/locations.
Operations and suppliers at significant risk for
incidents of child labour
The risk for child labour in SKF’s operations is very low but
the issue is nonetheless included in SKF’s internal audits.
The risk for child labour at SKF suppliers is higher and
therefore the supplier audits have a high focus on this.
However, due to the nature of suppliers and the long stand-
ing relationship with them, the cases are extremely rare.
During 2024, SKF found no cases of child labour at its own
operations and no cases at SKF’s suppliers.
Operations and suppliers at significant risk for
incidents of forced or compulsory labour
The issue of forced, bonded and compulsory labour is
included in the SKF Code of Conduct and internal and
supplier audits. During 2024, SKF found no cases of
forced or compulsory labour at its own operations and
no cases at SKF’s supplier.
SKF applies regional risk characterization from tools
such as Maplecroft to help identify countries with these
potential risks.
Health and safety incident statistics
2024 2023
1)
2022
Work related fatalities 0 3 0
Serious recordable accidents 3 3 2
Recordable accidents 204 223 249
First aid incidents 1,490 1,631 1,799
Near miss incidents 3,794 4,268 3,601
Unsafe conditions and behaviours 75,551 58,761 34,830
Worked hours (x 200,000) 348 358 371
Accident rate 0.59 0.64 0.68
1) 2023 figures include three fatalities and five recordable accidents resulting from the Russian missile attack on the Lutsk factory in Ukraine.
Newly acquired sites and companies are given a time
period before being included in the scope. All certified
sites are subject to internal audit every one to three years.
The data has been collected from the SKF financial report-
ing system using headcount data for sites and units
included in the Group’s ISO 45001:2018 certification. SKF
engages a third-party certification body to audit for com-
pliance to this standard at Group and site level. In addition
to these external audits, a number of SKF employees are
qualified as Group internal auditors and these individuals
also audit sites to assure compliance with the standards,
the EHS policy and related Group instructions and require-
ments. Read more on the certification on skf.com/45001.
Work-related health and safety incidents
Serious recordable accidents and recordable accidents
are reported within three working days while other incident
types can be reported monthly.
SKF reports accidents for employees and non- employees
where SKF has management control together as these
types of workers are treated equally when it comes to
health and safety management, including hazard elimi-
nation, risk management and corrective and preventive
actions when incidents have occurred. For non- employees,
where SKF does not have management control, the number
of incidents are recorded separately.
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Material impacts, risks and opportunities and their
interaction with strategy and business model
SKF’s supply chain consists of tens of thousands of sup-
pliers globally. Producing and transporting products or
services benefits local economies and provides economic
opportunity for workers in the value chain. While most
governments where our suppliers operate have established
legal infrastructure on human rights, companies also have
a responsibility to respect human rights. This means
addressing the adverse impacts of our global operations
and value chain, which could otherwise have negative
impact on SKF in terms of supply interruption and
reputation.
In 2023 SKF conducted an analysis to identify human
rights impacts through a Human Rights Impact Assess-
ment, which included workshops to evaluate and deter-
mine the salience of these impacts. The primary risks are
mainly associated with the supply chain. The outcome of
the assessment highlights salient risks related to working
conditions, discrimination, freedom of association and
collective bargaining. While these risks are predominantly
linked to the supply chain, they are also relevant to SKF’s
Workers in the value chain
Material impacts, risks and opportunities
IRO and value chain Description
Working conditions
Positive impacts
Upstream
Improving working conditions
together with suppliers
Negative impacts
Upstream
Unsafe working conditions
for supply chain workers
Equal treatment and opportunities for all
Positive impacts
Upstream
Responsible Sourcing
Programme improving
equal treatment
Negative impacts
Upstream
Harassment and
discrimination
Other work-related rights
Negative impact
Upstream
Violations of human rights
own operations. Additionally, SKF is closely monitoring
other human rights issues including child labor and young
workers as well as forced or bonded labor. The Impact
Assessment is planned to be updated in 2025 to ensure
continuous improvement, further strengthening due
diligence efforts.
SKF’s entity in Germany has also established the
necessary procedures and responsibilities for compliance
to the German Supply Chain Due Diligence Act (LkSG),
which includes human rights due diligence efforts in the
upstream value chain. Since most risks are associated
with the supply chain, SKF conducts due diligence through
its Responsible Sourcing Program.
SKF commits to sustaining a safe work environment,
personal development, health and well-being of all
employees at SKF, as well as people in the supply chain.
Management and oversight
Workers in the value chain is a material topic for SKF and
is included under the governance of the Sustainability
& Ethics commitee on the SKF Board.
SKF’s Responsible Sourcing program addresses risks for
social and environmental negative impacts in the supply
chain, and works to ensure effective deployment of the
SKF Code of Conduct for suppliers and sub-contractors.
Policies, processes, and procedures are built and imple-
mented under the program, which is overseen by the
Responsible Sourcing Committee and managed by Group
Sustainability. SKF has auditors around the world dedi-
cated to implementing the Responsible Sourcing program
and executing audits on the SKF Code of Conduct for sup-
pliers and sub-contractors adherence. Workers’ perspec-
tives are captured through worker interviews and a series
of audit questions on for example human rights and health
and safety. Supplier assessment and supplier audits are
managed by SKF Regional Responsible Sourcing auditors
in collaboration with the relevant purchasing organization.
When necessary or if requested, some audits are out-
sourced to a third-party company. In 2024, this was done
in China and North East Asia as a response to a request.
Non- compliance case management activities have led
to changes in purchasing practices, including updates
to policies, strategies and business models.
Auditors in five countries provide ongoing support, guid-
ance and training to regional purchasing teams. This helps
them align purchasing practices with program expecta-
tions and understand the importance of these practices
and their impact on workers and suppliers worldwide.
Purchasing teams focus on communicating expectations
to suppliers and engaging with them to take remediation
action if necessary. The remediation process follows legiti-
mate procedures. When adverse impacts are identified
through supplier assessments and audits, suppliers must
submit corrective action reports to SKF. Upon review and
within the timeline provided by the suppliers, on-site vali-
dation is arranged to ensure corrections comply with all
applicable laws and respect internationally recognized
human rights, wherever they operate. Suppliers who fail to
address critical deviations over time risk having their con-
tracts with SKF terminated.
SKF’s grievance mechanism, the SKF Ethics and Com-
pliance Reporting Line, allows workers in the value chain
to raise concerns directly to SKF. Significant deviations
from audits as well as reported concerns through the
whistle- blowing channel deemed critical are escalated
to SKF Group’s Responsible Sourcing Committee. At the
same time, SKF Group Compliance is informed.
In SKF, regions and countries are assigned risk levels
based on publicly available resources on risks, such as
Verisk Maplecroft, regarding human rights, environment
and corruption. The high-risk region list is approved by
the Responsible Sourcing Committee, and is continuously
updated. Currently, 40 countries in Asia, 18 countries in
America, 44 countries in Africa, 1 country in Oceania and
5 countries in Europe are defined as high-risk by SKF.
As part of this approach, current trends in the domestic
and international labour markets are monitored to identify
growing risk areas in the supply chain and update the SKF
Code of Conduct for suppliers and sub-contractors as well
as audit practices, based on any new trends.
Suppliers in all countries and regions are typically sub-
ject to quality audits where weight on Code of Conduct
questions is lighter, while suppliers in countries and regions
that fall into higher levels of risk are subject to regular code
of conduct audits. Value chain workers categories covered
by audit activities under the responsible sourcing program
include:
• Workers from upstream product suppliers. Steel and
steel components, such as forgings, rings and rolling
elements represent by far the most significant direct
material input to SKF. Direct material suppliers making
up 90% of SKF’s spend are automatically subject to
audits if they are in high-risk regions. These can be
suppliers in tier one, tier two and beyond. Suppliers
for components, such as plastics and polymers, sheet
metal parts and ceramics and finished products are
also constantly monitored for adverse impacts on work-
ers. Suppliers of indirect materials including grinding
wheels, abrasives, grease and packaging are also in
scope.
• Supplier workforce at SKF locations. Staff and
service providers from suppliers working at SKF sites
are included in the scope of the supplier audit. This
includes personnel from service suppliers who handle
cleaning, catering, security and other services at SKF
locations. Additionally, staff involved in inspection
and sorting activities, primarily at sites manufacturing
products for the automotive sector, are also covered by
the audit.
• Young workers, migrant workers and women are rela-
tively more vulnerable to negative impacts. To respond
to the changing external operating environment, SKF
has significantly expanded the narratives in the SKF
Code of Conduct for suppliers and sub-contractors to
address issues of child labour, forced labour, abuse and
harassment, and added requirements on recruitment
practices and grievance system.
• Workers from logistics, distributors and SKF associ-
ated companies. Considering SKF contracted logistics
flows, SKF covers about 80% of outbound and 70% of
inbound transportation. The work related to human
rights for people at SKF’s distributors currently focuses
on adhering to export control regulations and ensuring
they adhere to the SKF Code of Conduct for Distributors.
SKF recognizes that potential adverse human rights
impact on workers in logistics, distributors and SKF
associated companies and joint ventures, are currently
not in the SKF Code of Conduct compliance monitoring
scope. The Responsible Sourcing Committee is
informed and will decide on how to move forward in
2025. For more information on SKF associated compa-
nies see page 61.
SKF has a net-zero objective for greenhouse gas emissions
from its own operations by 2030 and for the full upstream
value chain by 2050. Given that steel accounts for 95% of
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Workers in the value chain cont.
the weight of SKF’s products, SKF has pledged to source
at 100% net zero steel by 2050. This commitment will
influence green production practices in SKF’s steel supply
chain, where the risks and opportunities for workers in the
steel industry are considered higher.
Over the 18 years of implementing the responsible
sourcing program, supplier improvement has been one of
the greatest values. SKF is not only enhancing its supply
chain but also setting positive examples in society. The
Group sees direct positive developments based on their
demands. For example, during a supplier audit in India,
document reviews revealed a failure to pay equal wages to
women and men. The supplier was required to make reme-
diation and subsequently began paying women equally.
Policies related to value chain workers
SKF is committed to respecting internationally recognized
human rights. Respect of the UN Guiding Principles on
Business and Human Rights, ILO Declaration on Funda-
mental principles and Rights at Work and OECD Guidelines
for Multinational Enterprises is included both in SKF pur-
chasing contracts and the SKF Code of Conduct for suppli-
ers and sub-contractors. Suppliers are expected to respect
human rights and safeguard the well-being of workers
within their own business operations, and also to cascade
the requirements to their own supply chains accordingly.
The SKF Responsible Sourcing program sets expecta-
tions on suppliers aligned with the SKF Code of Conduct
for suppliers and sub-contractors, monitors supplier per-
formance against those expectations and works to con-
tinuously improve the supply chains. SKF’s expectations
on suppliers are set out in the SKF Sustainability standard
for suppliers and SKF Code of Conduct for suppliers and
sub-contractors, which apply to all types of suppliers and
sub-contractors. Expectations on distributors are estab-
lished in the SKF Code of Conduct for Distributors and the
SKF Code of Conduct for Agents and other intermediaries.
These policies cover all value chain workers, and address
fundamental issues such as child labour, working condi-
tions, forced labour, harassment and discrimination in the
workplace.
SKF’s purchasing teams choose which suppliers to work
with and are key to achieving SKF’s responsible sourcing
objectives. Their actions are guided by above mentioned
policies. Purchasing practices are continuously reviewed
to ensure alignment with the SKF Code of Conduct for
suppliers and sub-contractors and to avoid potential
conflicts with SKF policies.
SKF communicates policies to all business relation-
ships in the value chain in various ways, including at
supplier conferences, via the supplier web-portal, during
risk-based supplier Code of Conduct audits, supplier
training on the Code of Conduct and as a normal part
of the supplier development process.
Processes for engaging with value chain workers
about impacts
Supplier screening
All potential suppliers are initially screened using a set of
minimum criteria related to the SKF Code of Conduct for
suppliers and sub-contractors and quality demand. These
must be met to be considered as an SKF supplier. Risk
aspects on human rights and labour rights, environment
and governance are included, as well as specific risks on
supplier type and product or service. Suppliers may be
required to submit documented evidence to support that
they meet the minimum criteria. Assessment of the docu-
ments is done by SKF auditors. Screening is the initial step
to identify potential sustainability risks in the supply chain
and might be followed by supplier audits.
Risk management
This includes evaluation of suppliers with a risk assess-
ment tool covering direct material suppliers in high-risk
regions. In addition, when risks to people, the environment
or business ethics are flagged during supplier audits, or
SKF staff visiting suppliers, such as during a quality
review, the suppliers are escalated to be audited. Auditing
any type of supplier is done using SKF’s own risk tool and
audits, of which some are unannounced, and are always
done on suppliers’ locations by SKFs own internal respon-
sible sourcing auditors or third-party auditors.
Supplier audits
Suppliers must maintain on-site documentation that
demonstrates compliance with requirements of the SKF
Code of Conduct for suppliers and sub-contractors. They
must also allow SKF auditors full access to production
facilities, worker records, including worker recruitment
records, labour contracts, wage records and time sheets,
production records and worker interviews. The Code of
Conduct audit procedure is based on a checklist with
62 specific questions focusing on a wide range of aspects
such as human rights, labour rights, environment, health
and safety.
This checklist was revised during 2024 to be fully in line
with the new the SKF Code of Conduct for suppliers and
sub-contractos. For example, questions related to impacts
on vulnerable groups of workers, including women workers,
workers with disabilities and migrant workers was added.
Questions about Diversity, Equity and Inclusion (DEI) were
also included to raise supplier awareness. Audit scores
are assigned to all audited suppliers based on their com-
pliance and risk levels. The score values will be adjusted
in accordance with the updated checklist, but currently
consist of the following classifications:
• Fully approved (score range 0–80): Highest level of
compliance.
• Business approved (score range 81–199): General
compliance with minimal deviations to be addressed.
• Conditionally approved (score range 200–800): More
critical deviations that shall be remediated.
• Not approved (score range over 800): significant
deviations that may lead to supplier business exit
with SKF.
The audit checklist is designed to assess compliance
in the following areas:
• Child labour
• Forced labour
• Health and safety
• Labour union
• Discrimination/Disciplinary
• Compensation
• Working hours
• Environment management
• Code of Conduct
Deviation remediation
Suppliers are expected to take necessary corrective
actions to promptly remediate any deviations found during
audits, following a defined timeline, including timely
preparation and submission of a Corrective Action Report
(CAR). The auditor evaluates the CAR activities to ensure
that corrective plans are actionable and within reasonable
timelines. Follow-up audits for CAR verification and re-
audits of suppliers are conducted with a frequency
depending on their performance in prior audits. Suppliers
that fail to address critical deviations over time risk having
their contracts with SKF terminated.
Processes to remediate negative impacts and chan-
nels for value chain workers to raise concerns
Concerns and remediation
SKF recognizes the importance of having effective griev-
ance mechanisms in place for all workers in the supply
chain. The SKF Ethics and Compliance Reporting Line is
open to all suppliers and supply chain workers to raise
concerns directly to SKF. Group Ethics and Compliance
manages all reports made through the reporting line and
other channels. Read more on page 126.
SKF continues to explore opportunities to increase
awareness and accessibility of reporting options. During
2024, information was distributed through supplier audits
on accessing and engaging with SKF’s Ethics and Compli-
ance Reporting Line to major suppliers. Specific questions
about reporting line awareness were also added in the
Code of Conduct audit checklist, and the reporting line will
be promoted on the SKF supplier web-portal in 2025.
At year-end of 2024, 0 concerns were received from value
chain workers.
SKF has the Group Whistleblowing policy in place to
safeguard the identity of reporters and other individuals
mentioned in the report. The policy strictly prohibits any
form of retaliation against those who report concerns in
good faith. Once a concern is reported, it can only be
accessed by Group Ethics and Compliance.
If a violation is identified for value chain workers, SKF
will collaborate with business partners to address and
remediate the negative impacts. When necessary, SKF
may also partner with recognized external resources to
support capacity building and remediation on human
rights issues, ensuring that the solutions are effective.
Taking action on material impacts on value chain
workers, and approaches to managing material risks
and pursuing material opportunities related to value
chain workers, and effectiveness of those actions
Managing non-compliance and risk
By policy, suppliers are required to remediate any identi-
fied deviations with the SKF Code of Conduct for suppliers
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Workers in the value chain cont.
and sub-contractors, even if the audit result is Fully
approved or Business approved. The follow-up and re-
auditing requirements allows monitoring whether identi-
fied deviations remain or have been corrected.
Suppliers are expected to make continuous improve-
ment. Approximately 64% of audits conducted in 2020
–2022 resulted in suppliers receiving the score Condition-
ally approved. In 2023 and 2024, the rate dropped to 37.7%
and 31.1% respectively. This improvement is primarily
attributed to increased engagement and leadership inter-
vention from the purchasing team, which has actively
collaborated with suppliers to ensure compliance with
SKF’s Code of Conduct. Notably, the audit population has
remained relatively stable over the years – 104, 123, 117,
and 138 in 2020, 2021, 2022 and 2023, respectively – indi-
cating that the improvement is not due to change in the
supplier base but rather a direct result of enhanced com-
pliance measures and follow-up actions.
The improvements are realized through joint efforts.
SKF auditors work with purchasing teams to engage the
supplier to communicate the results and expectations
for remediation and may escalate to regional purchasing
management when needed.
Where serious issues are not remediated over time or
unacceptable deviations are identified through audits, this
will result in termination of a supplier’s contract with SKF.
In 2024, unacceptable deviations were found at one sup-
plier in India. This case was escalated to the Responsible
Sourcing committee, who decided to assign specific sup-
port to help the supplier improve. However, the contract
with the supplier was terminated.
Child labour and forced labour
In 2022 SKF significantly expanded the narratives in the
SKF Code of Conduct for suppliers and sub-contractors
to address child labour and forced labour. Requirements
related to child labour and forced labour were further
clarified by prohibiting the use of child labour in any form,
as well as all types of forced labour, including all forms of
slavery, prison labour, human trafficking, restriction on
freedom of movement, any other excessive means, or other
forms of intimidation. For more details, see SKF Code of
Conduct for suppliers and sub-contractors.
If child labour is discovered in the supply chain, SKF’s
child labour remediation process will be followed to pro-
tect child workers from further harm.
Training and communication
SKF conducts regular training programs with suppliers
related to the SKF Code of Conduct for suppliers and
sub-contractors. From 2020 to 2023, a total of 389 sup-
pliers participated in classroom training sessions at SKF.
In 2024, three training sessions for 200 suppliers were con-
ducted in different countries – China, India, and Americas,
focusing on the Code of Conduct and audit process to
enhance suppliers’ understanding of SKF’s expectations
on social and environmental performance and assessment.
Occupational health and safety are also central element
in courses held by SKF for customers on mounting and dis-
mounting SKF’s products. Training feedback was collected
after each session where suppliers were asked to provide
the three most important takeaways from the training. The
data for 2024 shows that employment practices, machine
safety and chemical handling ranked highest.
Internally, training of buyers regarding the Responsible
Sourcing program is conducted on a regular basis. To
strengthen compliance and expand the coverage of SKF’s
Code of Conduct audits for its suppliers, a new auditor has
been trained in Brazil. In 2024, training of buyers took
place in regional purchasing offices in China, where eleven
buyers participated. SKF’s purchasing teams choose
which suppliers to work with and play an important role in
the process of supplier improvement, and their decisions
can impact workers worldwide. The outcome from the
trainings shows a significant drop in the number of sup-
pliers receiving the score Conditionally approved, and a
steady increase in the number of new suppliers receiving
Business approved or Fully approved audit results over
the years.
Partnerships and stakeholder collaborations
SKF collaborates with a range of stakeholder groups,
including workers in the value chain, to avoid or mitigate
human rights risks. SKF Group Management meets annu-
ally with the SKF World Union Council according to the
Global Framework Agreement. SKF also maintains
dialogues with peers and Non Government Organizations
via networks such as the UN Global Compact, Transparency
International, Rail sponsible, Roundtable on Sustainable
Palm Oil and ResponsibleSteel Initiative (RSI). RSI is a
multi-stakeholder initiative which has defined a standard to
be applied in the steel value chain which seeks to assess
how companies address salient human rights, as well as
environmental risks in the full steel value chain, from scrap
or raw material to finished steel. SKF promotes the use of
this standard in the relevant parts of its supply chain.
Responsible sourcing of raw materials from conflict
affected and high-risk areas
SKF supports the cessation of violence and human rights
violations associated with the mining of specific minerals
from regions classified as conflict regions, for example the
eastern portion of the Democratic Republic of the Congo
and surrounding countries. Suppliers are required to adopt
a policy for responsible sourcing of the 3TG’s (Tin, Tantalum,
Tungsten and Gold) plus Cobalt and Mica. If SKF discovers
the use of minerals produced in facilities that are consid-
ered to be non-conflict free in any mate rials, parts or com-
ponents, appropriate actions and due diligence will be
performed to transition to products that are conflict free.
SKF is a member of the Responsible Minerals Initiative.
Sustainability indexes
The participation in various globally recognized sustain-
ability evaluation platforms helps SKF to benchmark
and refine its process and approach for risk mitigation
and remediation for workers in the value chain through
effective solutions.
Addressing systemic risks to workers’ well-being,
and supplier engagement
Systemic risks such as forced labour, unsafe working
conditions, and gender inequity require collective action
by collaborating and engaging suppliers and other stake-
holders to bring positive and lasting protection of workers’
well-being. This work at SKF is in the early stages, and
will be scaled up in the coming years.
Health and Safety related to Workers in the Value Chain
SKF is committed to promoting health and safety not
only for its own employees but also for workers throughout
the value chain. This commitment is demonstrated by
requiring suppliers and subcontractors to adhere to the
principles outlined in the SKF Group EHS Policy.
As part of the SKF Code of Conduct for suppliers and
subcontractors, the Group conducts on-site audits cover-
ing a wide range of sustainability topics, including health
and safety. For more details, please refer to page 135.
In 2024, two tragic events involving workers in the value
chain were reported. In May 2024, a truck driver passed
away at the Changshan site in China. Authorities concluded
that the death was due to natural causes; it is mentioned
here because it occurred at an SKF site. In July 2024,
an accident at the Lutsk site in Ukraine resulted in the
death of a contracted electrician. The incident has been
thoroughly investigated and addressed by the authorities
and all involved parties.
Targets related to managing material negative
impacts, advancing positive impacts, and managing
material risks and opportunities
Supplier improvement target
SKF collects data and reports on the Group’s impact, mak-
ing sure constant improvement is made towards targets.
Since early 2024, SKF Group Supply Chain has set a target
for the reduction of Conditionally approved suppliers in
the audited supplier pool from the baseline 2020 to 2023,
when there were 167 active Conditionally approved sup-
pliers in total. The target was to reduce the number of
Conditionally Approved suppliers by 16% (27 suppliers) by
transitioning them to Business Approved or Fully Approved
status by the end of 2024. As a result, the number of sup-
pliers who moved from Conditionally Approved to Business
Approved or Fully Approved surpassed the initial target,
achieving a 25% reduction instead of the projected 16%.
The progress of supplier improvement is tracked and moni-
tored by Group Supply Chain and Group Sustainability
throughout the year.
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Business conduct policies and corporate culture
The SKF Code of Conduct represents the DNA of SKF and
describes the principles of SKF’s corporate culture, thus
outlining SKF’s fundamental responsibilities and business
conduct expectations. The SKF Code of Conduct is
embodying SKF’s purpose and serves as a compass for
ethical business conduct, promoting a culture of integrity
and trust and helping SKF’s employees to stay true to
SKF’s core values: Collaboration, Curiosity, Courage and
Care. The SKF Code of Conduct sets not only SKF’s expec-
tations in relation to legal compliance, but also outlines the
skills, attitude and mindset expected of SKF employees in
terms of how to behave and interact with SKF’s business
partners and each other.
Senior Management sets the tone from the top and
ensures operational ownership of compliance to the SKF
Code of Conduct. There are several subordinate policies
and instructions related to the SKF Code of Conduct which
further defines the details of the commitments in the Code.
The SKF Code of Conduct and its subordinate policies and
instructions applies to all SKF’s units and employees world-
wide. It is accessible online both internally and externally.
For managing third parties, the Group has a SKF Code of
Conduct for suppliers and subcontractors, as well as one
for distributors, agents and intermediaries, publicly available
on skf.com.
A new and improved SKF Code of Conduct
launched 2024
In 2024, SKF launched an updated SKF Code of Conduct
to align with its new purpose, values and an evolving
regulatory and technological landscapes. While SKF’s core
commitments remain unchanged, SKF recognized the
need to refresh the SKF Code of Conduct to align with both
external and internal developments, ensuring its continued
relevance and effectiveness.
As part of the process to revise the SKF Code of Conduct,
SKF engaged in an inclusive dialogue with employees rep-
resenting different functions of the Group through surveys
and interviews to identify their needs and expectations,
conducted extensive research, and benchmarked against
external standards. Representatives of the World Union
Council were part of the steering committee for the SKF
Code of Conduct update project and represented the
employee stakeholder group.
The revised SKF Code of Conduct includes significant
updates in content, structure, language, and tone. The
content was expanded to address the emerging issues
from legal requirements and key stakeholders in many
areas of the organization, providing clearer guidance.
The new Code is organized around Governance, Social,
and Environmental (GSE) criteria, enhancing the ESG
approach by recognizing that robust governance is essen-
tial to mitigate and prevent non-compliance in social and
environmental areas. This underlines SKF’s commitment
to a comprehensive sustainability agenda across the
entire value chain.
The updated version is approved by SKF’s Board
of Directors, Group Management and trade union
representatives.
Key contents in the SKF Code of Conduct
In the SKF Code of Conduct, the company recognizes
the strong responsibility towards people and business
partners, the society and communities SKF operates in,
the environment and the climate.
The SKF Code of Conduct outlines SKF’s overarching
commitments and responsibilities in the areas of Govern-
ance, Social and Environment.
The governance section of the SKF Code of Conduct
covers governance, ethics and compliance related topics,
namely fair business and competition, anti-corruption and
ethical behavior, international trade compliance, secure
use of company information, assets and resources and
innovation and responsible use of technologies.
The social section of the SKF Code of Conduct covers
people, social topics and human rights related topics,
namely care for people and respect for human rights,
diversity, equity and inclusion, health and safety and
privacy, integrity and security.
The environmental section of the SKF Code of Conduct
covers environment, climate and resource related topics,
namely environmental sustainability and integrity, circu-
larity and environment and use of resources.
Building on the SKF Code of Conduct, the Group main-
tains efficient governance to ensure adherence to applicable
rules and legislations in all the above-mentioned areas.
To further strengthen this governance, SKF plans to review
the Group Policies and the overall policy governance struc-
ture starting in 2025.
Additional policies in relation to business conduct
matters
The following policies are detailing the overarching
commitments related to business conduct matters in
the SKF Code of Conduct:
• Group Anti-Corruption policy, including zero tolerance
for corrupt activity including inappropriate gifts or
hospitality, bribery, facilitation payments and conflict
of interest as well as SKF’s policy to not give political
donations.
• Group Anti-trust policy, including zero tolerance for
engagement in activities detailed in the policy which
may constitute violations of applicable antitrust laws
and regulations.
Governance
Business conduct
Material impacts, risks and opportunities
IRO and value chain Description
Corporate Culture
Positive impacts
Own operations
Fostering a strong corporate
culture for a better tomorrow
Negative impacts
Own operations
Breaches against the SKF Code
of Conduct
Protection of whistle-blowers
Positive impacts
Full value chain
Protection of whistle-blowers
Corruption and bribery
Risks
Own operations
Corruption and bribery leading
to fines and/or reputational
damage
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• Group Insider policy, including information on require-
ments and obligations related to the prohibition of
insider trading.
• Group Export Control policy, requiring full compliance
with applicable export control laws and regulations
when exporting products, associated technical data
and technical services or when involving parties or
destinations covered by these regulations.
• Group Policy on Data Privacy, describing the minimum
requirements on how SKF shall collect, process and
protect personal data.
• Group Whistle-blowing policy, including information
on SKF’s procedures for raising concerns including
the whistleblowing channel as well as SKF’s policy of
non-retaliation.
These policies are all part of SKF’s compliance programme
and supplemented by more detailed Group instructions
where appropriate. Both group policies and instructions
are accessible online internally.
Third party standards and initiatives
In the Group’s business conduct policies, SKF commits to
the following internationally recognized principles, guide-
lines and initiatives which promote sustainable and ethical
business practices:
• The United Nations Global Compact and the United
Nations Guiding Principles on Business and Human
Rights.
• The International Labour Organization’s core
conventions.
• OECD’s Guidelines for Multinational Companies
on Responsible Business Conduct.
Implementation, training and awareness
SKF has implemented a Group-wide compliance program
to prevent, detect and correct non-compliance with legis-
lation and policies as well as ensure a corporate culture
based on ethical business conduct and good business
practices. This program adheres to international guidelines
from the EU, the US and the UK authorities (Department
of Justice, UK Bribery Act, and EU ICP) and includes the
elements of management commitment, risk assessment,
training and awareness, policies, procedures and whistle-
blowing, investigations and audits.
SKF adopts a decentralized operating model, where
accountability and commitment to compliance including
the SKF Code of Conduct and SKF’s corporate culture,
rest at the Business Areas. The Group-wide compliance
program, together with common processes and tools gov-
erned by the respective corporate functions provides the
respective Business Areas with the framework and ensures
compliance, risk management and synergies across the
Group. Adherence to local laws is the responsibility of the
respective legal entities. SKF’s major sites have inhouse
lawyers that monitor and support the companies to comply
with local requirements beyond the requirements in the
Group’s compliance program.
In light of the decentralised operating model, the
Business Area Presidents are responsible for the effective
implementation of the SKF Code of Conduct and the
Ethics & Compliance programme in their respective busi-
ness areas. The Chief Compliance Officer follows up on
the Business Areas’ implementation of the same with the
Business Area presidents. In addition, the Chief Compli-
ance Officer chairs the SKF Compliance Leadership Team
consisting of management representatives from all Busi-
ness Areas. The team shall ensure that priorities and
activities are aligned across the Business Areas, as well
as drive risk assessment, participate in investigations
and ensure an operational ownership of compliance in
the business operations.
To ensure employee awareness and effective communi-
cation of Group policies and measures, SKF conducts
periodic global awareness campaigns, such as the Global
Compliance week, and have all policies readily accessible
online. In addition, there is a Group-wide program of online
training courses for general awareness on compliance
and business ethics that are mandatory for all employees
having an SKF email address. The training courses cover
a wide range of topics, providing general awareness of the
policies on good business conduct, such as Antitrust in
relation to competitors 94%, Corruption at SKF 96%, How
to avoid antitrust risks in the sales channel 99%, Ethical
leadership 85% and Reporting ethical concerns 96%.
The numbers represents the percentage of the total num-
ber of the employees in scope who have completed the
training as per January 2025. Every employee with an SKF
email address is assigned an onboarding package of train-
ings when starting at SKF. To ensure continuous awareness
and coverage of any changes in requirements or expecta-
tions, all trainings are refreshed with a frequency of one
to three years depending on the subject of the training.
In addition, all employees with an SKF email address are
required to commit to the SKF Code of Conduct on an
annual basis. The trainings are also available on-demand
online for employees with access to the internal learning
portal.
Identification, reporting and investigation of concerns
SKF has several mechanisms for identifying concerns
about behaviour contradicting the SKF Code of Conduct
and underlying policies, such as management reviews,
internal controls, internal audits and Code of Conduct
audits (Responsible Sourcing programme).
Where SKF employees experience or notice behaviours
that are not in line with SKF’s Code of Conduct they are
requested to report it to their manager, local People Experi-
ence function or to other senior managers. Employees can
also raise concerns or seek advice via the SKF Ethics and
Compliance Reporting Line, a whistle-blowing line which is
set up subject to the legal requirements in the EU Whistle-
blowing Directive. The reporting line consists of an external
system hosted by a third party. Reports can be made
anony mously, unless this is prohibited by local legislation.
The SKF Ethics and Compliance Reporting Line is also
available to external parties, such as suppliers and distri-
butors, through skf.com. SKF employees and others can
report concerns in their own language via a designated
web portal or by calling a local telephone number (tele-
phone service is available only in Brazil and Mexico).
SKF is committed to investigating business conduct
incidents, including incidents of corruption and bribery,
promptly, independently and objectively. All concerns that
are reported to the SKF Ethics & Compliance Reporting
Line, via other channels, or otherwise identified by the
central functions through other mechanisms are reviewed
and assessed by Group Compliance, for assignment to an
appropriate investigator. Concerns deemed as critical are
communicated on a case-by-case basis to the General
Counsel and SVP Legal & Compliance, to the Board of
Director’s Sustainability & Ethics Committee and/or to
the Audit Committee. In addition, the Chief Compliance
Officer directly reports material compliance issues, risks,
findings and root causes, as well as remediation plans
where appropriate, to the Board of Directors’ Sustainability
and Ethics Committee, and the Audit Committee on a
continuous basis.
The number of concerns reported and investigated is
animportant KPI of the effectiveness of SKF’s compliance
program. The goal is to increase awareness about and
compliance with the SKF Code of Conduct, for example
via additional e-learnings, to gradually decrease the
number of serious concerns reported and investigated.
Internal control issues, training completion rates and the
number of reported and substantiated ethical concerns
give SKF indications on the need for improving the com-
pliance program.
Business conduct cont.
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SKF’s compliance program actions to prevent or miti-
gate risks are focused on the main risks identified in the
Group’s yearly compliance risk assessment. During 2024
SKF engaged approximately 400 managers from all Busi-
ness Areas, regions and corporate functions in a self-
assessment of key compliance risks. The number of units
participating is a KPI for the quality of the risk assessment.
The conclusions of the risk assessment are the basis for
mitigation plans per Business Area and for the Group.
SKF has dedicated Legal & Compliance officers in all
Business Areas. Together with the Chief Ethics & Compli-
ance Officer, the Business Areas develop a compliance
plan based on risks and incidents. This is approved by
the Sustainability & Ethics Committee on an annual basis.
Positive examples of the compliance activities, such as
employee and business partner engagement, are shared
with the Group’s Compliance Core Team.
Prevention and detection of corruption and bribery
SKF addresses anti-corruption and anti-bribery as part of
the Group’s compliance program as described on page
138. The SKF Code of Conduct outlines the overall prohibi-
tion of corrupt practices, including bribery, and is supple-
mented by the Group compliance program on anti-
corruption which includes different elements to support
the prevention and detection of corruption and bribery,
such as policies, instructions and guidelines as well as
trainings. Prohibition of corruption and bribery is also
included in the SKF Code of Conduct for suppliers and
sub-contractors, the SKF Code of Conduct for Distributors
and the SKF Code of Conduct for Agents and other Inter-
mediaries.
Business conduct cont.
The Group Anti-Corruption Policy, described on
page 137, is supplemented by instructions to provide
more detailed requirements related to the overarching
prohibition on corrupt practices. These are:
• Group Instruction on Anti-Corruption
• Group Instructions on the Use of Gifts and Other Favors
• Group Instructions on the use of Agents and other
Intermediaries
• Group Instructions on Charitable Activities
• Group Instructions for Sponsorship
The Group also provides guidelines related to conflict of
interest as well as a due diligence checklist to be used
when appointing and using distributors and agents.
The policies, instructions and guidelines are all readily
accessible online internally for all employees, and the SKF
Code of Conducts are readily accessible online both inter-
nally and externally. The Code of Conducts for third parties
are provided to the third party or otherwise referenced as
part of the onboarding and thereafter when required. When
a supplier is subject to SKF’s Code of Conduct audit as
described on page 134, compliance with the SKF Code of
Conduct for suppliers and sub-contractors including sec-
tions related to prohibition of corruption and bribery is
audited.
To support general awareness about anti-corruption
and anti-bribery in the Group, SKF provides group-wide
e-learnings, such as “Corruption at SKF” and “Reporting
ethical concerns” as described on page 138. In addition,
all staff employees are assigned a conflict of interest train-
ing for general awareness purposes every year, that also
includes a step where the employee shall confirm that any
conflicts of interests will be disclosed as per SKF’s policy.
As described page 137, the Business Areas presidents
are responsible for implementing the Anti-Corruption com-
pliance program in their respective business area, thus
also responsible for providing further trainings to address
Business Area specific risks as well as to conduct due
diligence when required.
Allegations and incidents of corruption and bribery are
addressed as described page 137.
SKF is continuously working to strengthen its efforts to
fight corruption. In 2025, the Group intends to review the
anti-corruption compliance, including the potential need
to update and/or expand the trainings provided by the
Group, as well as to strengthen the third-party due dili-
gence process by updating the minimum requirements
and process for third party due diligence.
Operations assessed for risks related to corruption
SKF’s compliance risk assessment for 2024 indicates that
the risk of corruption is in general low, while slightly higher
in regions of high risk of corruption. The identified main
corruption risk is conflict of interest, especially in high-risk
regions. In addition, SKF assesses that it is more at risk for
corruption where distributors and agents are used to rep-
resent SKF when interacting with governments or state-
owned entities in countries with a high corruption risk.
Together with Group Compliance, each business area con-
solidates the results and sets an action plan in accordance
with the results. At SKF’s manufacturing units, risk based
ethics and compliance reviews are carried out, in conjunc-
tion with environmental, health and safety audits. The pur-
pose is to assist units in their work to identify and address
specific ethics and compliance risks, including corruption.
During 2024, 15 such reviews have been carried out.
Incidents of corruption or bribery
During 2024, SKF confirmed 15 incidents of corruption
or bribery, whereof 5 of these led to employees being
dismissed and 5 employees being disciplined. SKF had
3 confirmed incidents when contracts with business part-
ners were terminated or not renewed due to violations
related to corruption.
Local units have, based on root cause for the breaches
in procedures and standards, taken appropriate measures,
such as strengthened internal controls and updated
procedures.
SKF was neither convicted nor liable to pay any fines
for violation of anti-corruption or anti-bribery laws.
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Additional information
Water
SKF operations are not considered to be water intensive,
however, water is relevant at specific locations.
Performance is monitored for sites located in areas
of actual and potential water stress.
Interactions with water as a shared resource and
management of water discharge-related impacts
Water is used at SKF’s sites for processes and civil pur-
poses (toilets, showers, cooking facilities, etc.). Focus on
efficient water use is applied in various ways. For example,
in new factory building projects the latest technologies
have been put in place to achieve minimal impact on local
resources. In addition, practices like closed loop systems
for industrial water used and rainwater harvesting are com-
mon in many SKF facilities.
Water withdrawal is metered at site level for ”water from
municipal supply” (the most common source) and ”water
from other sources”. The first is the aqueducts supply
and the second includes supply by wells or other surface
sources (such as rivers and creeks) practiced according to
local regulations. There are no cases of sourcing from the
sea, or local water production. Water is discharged in sur-
face water or sewage systems after treatment, with quality
levels according to local regulations and in this way, water
related impacts are addressed.
Numerous lifecycle assessments (according to ISO
14044:2006) have been conducted both on product and
process levels, and water impacts have been identified.
The main findings from these studies are that SKF’s direct
water use is relatively insignificant compared to upstream
use in energy generation, steel production, etc. However,
SKF recognizes the increased importance of water effi-
ciency and other measures at sites located in areas of
water scarcity. SKF uses the World Resources Institute’s
tools to identify those sites in areas of water stress or
projected water stress. These sites are then required to
define improvement plans to drive reduced water intensity
through various means (see table). Efforts to improve water
efficiency have shown a positive trend at most of the sites
within scope. At the same time, it is acknowledged that
this is a learning process, and there are still areas with
room for improvement. SKF remains committed to enhanc-
ing its water conservation strategies to achieve even better
results. In other locations the nature of SKF’s processes,
where most systems using water are closed loop, means
that SKF typically does not represent a major water user
in the local industrial context.
Due to low water intensity of SKF’s direct operations
and the measures in place to follow applicable wastewater
treatment requirements, the chances of SKF water usage
impacting local community water availability or quality are
very low.
As part of the Group’s overall environmental approach,
SKF works with upstream users of water, such as steel and
energy suppliers, to reduce water use. For example, by
switching to renewable electricity sources, a dramatic
reduction in water needed per/kWh can be achieved com-
pared to thermal power sources. The SKF requirements for
suppliers to adopt the ISO 14001 standard will also help
increase focus on water by the direct material suppliers.
Water efficiency performance for sites
in water stressed areas
Site
KPI 2024
vs. 2023, %
Ahmedabad –39
Bangalore: DGBB –41
Bangalore: Lincoln +38
Bari +55
Cajamar and Jordanésia –28
Chakan
1)
+71
Dalian +13
Haridwar –8
Jakarta +1
Jinan –22
La Silla –17
Monterrey: Solution Factory
1)
+7
Mysore –27
Nairobi
1,2)
—
Nankou –12
Puebla –5
Pune –31
Shanghai ATC –27
The KPI for manufacturing sites is water intensity calculated as
water withdrawal / production volume. Non-manufacturing sites,
marked;
1) KPI for water intensity calculated as water withdrawal/average
number of full time employees.
2) Included in scope during 2023. Data to calculate the KPI is not
available.
Water withdrawal by source
As the clear majority of SKF’s factories are in industrial
zones, water is supplied by municipalities. Other sources
have not been considered significant. Therefore, SKF
monitors total water withdrawal at sites and not per with-
drawal by source. As the reporting is based on actual
measurements from water suppliers or at SKF sites, no
specific assumptions are referred to.
Water withdrawal
1,000 cubic metres 2024 2023
2)
2022
2)
Water from
municipal supply 1,527 1,668 1,884
Water from
other sources
1)
869 1,018 1,307
Water withdrawal total 2,396 2,686 3,191
1) Other sources is mostly wells from which water is extracted.
2) Past data are restated for divested units and data amendment.
Water discharge
Water discharge follows regional regulations. The flow
goes to local sewage systems or to surface water flow in
compliance with mentioned regulations for the quality of
discharged water (suspension, temperature, etc.). Metered
discharge flows are thus not reported.
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SKF has an objective to eliminate emissions from the use
of volatile organic compounds (VOC) in washing processes
for bearings and bearing components by 2025. These
washing processes are the main source of VOC emissions
from the Group’s operations.
In 2024, the Group achieved a significant reduction in
VOC emissions. As the deadline for meeting the objective
SKF does not currently have any targets or KPIs related to
biodiversity on a Group level. SKF is working to improve
its understanding of the impact and dependencies of bio-
diversity as well as associated risks and opportunities
through the full value chain. An assessment conducted in
2023 shows that SKF has potential impacts on the direct
drivers of biodiversity loss specifically in terms of climate
change, land use change, and pollution. To mitigate the
impacts on these drivers of biodiversity loss, SKF sees
strong synergies with meeting its decarbonization targets,
increasing its circular use of products and resources,
and reducing its risks of pollution through strong environ-
mental management.
The assessment shows that SKF’s dependency on steel
and its related environmental impacts from both produc-
tion and mining is critical for the Group to address also
from a biodiversity perspective. Reducing use of virgin
resources, re-using materials and products, and increasing
the use of recycled materials are key for SKF to meet its
net-zero goals, as well as to reduce its impact on bio-
diversity, pollution, and land use.
For SKF’s targets, KPIs, and activities related to climate
change, please see page 102.
For SKF’s targets, KPIs, and activities related to
resource use and circular economy, please see page 120.
Going forward, SKF will continue to improve its under-
standing of its impact on local flora and fauna in relation to
the company’s sites across the globe. SKF will also further
address how it integrates biodiversity-related impact, risks
and opportunities in its environmental management system
for sites near or in proximity to protected areas and Key
Biodiversity Areas.
approaches, each Business Area has intensified efforts
to address the remaining VOC emissions, ensuring timely
elimination. The Group will continue to support the
development of action plans for sites with the highest
emissions.
Pollution of air Biodiversity
Group objective: Eliminate emissions of volatile organic compounds
from washing of bearings and bearing components by 2025
Tonnes 2024 2023
1)
2022
1)
VOC (volatile organic compounds) total use 615 637 755
VOC (volatile organic compounds) emitted to the atmosphere
(washing of bearings and components in bearings manufacturing) 98 122 135
1) Past data are restated for divested units and data amendment.
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Policies Description Link to material topics
SKF Code of Conduct The policy that all other policies and instructions shall adhere to. All
SKF Group Anti corruption policy Zero tolerance for corrupt activity including inappropriate gifts or hospitality, bribery, facilitation payments
and conflict of interest as well as SKF’s policy to not give political donations.
Governance
Group Antitrust policy Zero tolerance for engagement in activities detailed in the policy and which may constitute violations
of applicable antitrust laws and regulations.
Governance
SKF Group Insider policy Requirements and obligations related to the prohibition of insider trading. Governance
SKF Group Policy on Export Control Full compliance with applicable export control laws and regulations when exporting products, associated
technical data and technical services or when involving parties or destinations covered by these regulations.
Governance
SKF Group Policy on Data Privacy Minimum requirements on how SKF shall collect, process and protect personal data. Governance
SKF Group Whistleblowing policy Procedures for raising concerns including the whistleblowing channel as well as SKF’s policy
of non-retaliation.
Governance, Own workforce
Group Environmental, Energy,
Health and Safety Policy
This policy enables a culture where EHS awareness, involvement, and accountability is integrated into
SKF’s business activities and decision-making processes. It provides guidance to proactively assess health
and safety risks, as well as environmental and energy impacts, aiming to eliminate hazards, reduce risks,
and minimize negative impacts.
Own workforce, Workers in the
value chain, Climate change,
Resource use and Circular
Economy
SKF Employee Wellbeing policy Requirements for promoting and protecting employee wellbeing. Own workforce
SKF Code of Conduct for
SKF Distributors
Expectations on SKF’s full value chain to act in an economically, socially and ethically responsible manner Workers in the value chain
SKF Code of Conduct for suppliers
and sub-contractors
Expectation on suppliers to protect human rights and safeguard the well-being of workers within their
own business operations, and also to cascade the requirements to their own supply chains acccordingly.
Addresses Resource Use and Circular Economy in the Environmental impact part.
Workers in the value chain,
Resource Use and Circular
Economy
SKF Group Equal Pay Policy Responsibility to treat all employees equally, fairly and with respect regardless of race, gender, age, national
origin or nationality, disability, caste, religion, sexual orientation, union membership or political affiliation.
Furthermore, SKF shall provide non-discriminatory working conditions and promote diversity.
Own workforce,
Workers in the value chain
Fossil fuel phase out policy Aims to accelerating the decarbonization of SKF’s operations and reaching the Group’s 2030
decarbonization goal.
Climate change
Shadow Carbon Pricing Policy Aims at internalizing the environmental cost of steel and steel components within our supply chain
by implementing a Shadow Carbon Price.
Climate change
Airfreight Avoidance Policy Aims at reducing greenhouse gas emissions impact of logistics and related costs for transportation. Climate change
SKF Group Business Travel Policy Aims at limiting the environmental impact from business travels. Climate change
SKF Sustainable Buildings Policy Requirements for the design and construction of major new facilities which are to be owned
or leased by SKF.
Climate change
SKF Policy for hazardous substances
in products
Aims to protect the environment and the health of people from harmful substances. Resource use
SKF Conflict mineral policy This policy describes SKF’s supports for efforts to end the violence and human rights violations involved
in the mining of so called conflict minerals.
Workers in the value chain
Policies
A Group Policy is authorized by the CEO and owned by
the relevant member of Group management. A Group
Instruction is authorized by the relevant member of
Group management, and (in many cases) provides
details to a related Group Policy. Group Policies and
Group Instructions are applicable to all employees
and units in the SKF Group, with the exception of the
SKF Code of Conduct for distributors, suppliers and
sub- contractors.
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TCFD
TCFD is the Task Force on Climate-related Financial Dis-
closures initiated by the Financial Stability Board. The aim
with the initiative is to develop a set of recommendations
for voluntary and consistent climate-related financial risk
disclosures. SKF reports according to the TCFD recom-
mendations since 2020.
SKF is also a respondent to the CDP Climate Change
survey and achieved an A– score for its 2024 submission.
The Group’s submission is publicly available on the CDP
website. CDP has aligned their survey with the TCFD
and the SKF response provides a further, more detailed
resource for stakeholders wishing to gain a deeper under-
standing of SKF’s climate risks and opportunities and
how the company is addressing these.
Governance Strategy Risk management Metrics and targets
The board’s oversight of climate-related
risks and opportunities.
See pages 27–31, 83–85, 153
Identified climate-related risks and
opportunities over the short, medium,
and long term.
See pages 89–94, 102–106
Processes for identifying and assessing
climate-related risks.
See pages 102–106
Metrics used to assess climate-related
risks and opportunities in line with
strategy and risk management process.
See pages 85–89
Management’s role in assessing and
managing climate-related risks and
opportunities.
See pages 83–85, 102–106 , 169
Impact of climate-related risks and
opportunities on the organization’s busi-
nesses, strategy, and financial planning.
See pages 89–94, 102–106
Processes for managing climate-related
risks.
See pages 102–106
Scope 1, Scope 2, and, if appropriate,
Scope 3 greenhouse gas emissions, and
the related risks.
See pages 102–106
Resilience of the organization’s strategy,
taking into consideration different
climate-related scenarios, including
a 2°C or lower scenario.
See pages 102–106
How processes for identifying, assessing,
and managing climate-related risks are
integrated into the organization’s overall
risk management.
See page 102–106
Targets used to manage climate-related
risks and opportunities and performance
against targets.
See pages 102–106
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Omission
GRI standard/Other source Disclosure Location Requirement(s) omitted Reason Explanation
GENERAL DISCLOSURES
GRI 2: General Disclosures 2021 2-1 Organizational details 4–5, 86–87
2-2 Entities included in the organization’s
sustainability reporting
83
2-3 Reporting period, frequency and contact
point
83
2-4 Restatements of information 83
2-5 External assurance 83, 149
2-6 Activities, value chain and other
business relationships
12–18, 23–24,
86–87
2-7 Employees 124–133 SKF reports data on employees by gender, age group, regions, and contract type.
However, non-guaranteed hours are not currently reported. SKF is preparing for
upcoming legal requirements in this area.
2-8 Workers who are not employees 130
2-9 Governance structure and composition 83–85, 150–160
2-10 Nomination and selection of
the highest governance body
150–160
2-11 Chair of the highest governance body 150–160
2-12 Role of the highest governance body in
overseeing the management of impacts
83–85
2-13 Delegation of responsibility for
managing impacts
83–85
2-14 Role of the highest governance body
in sustainability reporting
83–85
2-15 Conflicts of interest 61
2-16 Communication of critical concerns 126, 138–139,
142
2-17 Collective knowledge of the
highest governance body
83–85
2-18 Evaluation of the performance of
the highest governance body
150–160
2-19 Remuneration policies 61–64
2-20 Process to determine remuneration 61–64
Statement of use AB SKF has reported in accordance with the GRI Standards for the period 2024-01-01–2024-12-31
GRI 1 used GRI 1: Foundation 2021
Applicable GRI Sector Standard(s) No applicable GRI sector standards exists
GRI content index
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Omission
GRI standard/Other source Disclosure Location Requirement(s) omitted Reason Explanation
GENERAL DISCLOSURES CONT.
2-21 Annual total compensation ratio Information unavailable
/incomplete
The median annual total compensation for all employees and the median
percentage increase in total compensation for all employees have not been
collected yet. Base salary for blue collar workers, local short-term variable pay,
long-term variable pay and other remuneration and benefits cannot be obtained
to calculate total compensation, as this data is not stored in the global HR
system. This applies to all locations and legal entities.
The remuneration and change of remuneration for the President compared
to the remuneration and change of the average remuneration of employees in
AB SKF is reported in the Remuneration Report.
2-22 Statement on sustainable
development strategy
12–18, 86–87
2-23 Policy commitments 83–84, 114–115,
142
2-24 Embedding policy commitments 83–84, 114–115,
142
2-25 Processes to remediate negative impacts 89–95, 103–106,
108–116, 122–123,
126–129, 137–139,
142
2-26 Mechanisms for seeking advice and
raising concerns
126, 138–139,
142
2-27 Compliance with laws and regulations 137–139
2-28 Membership associations 85
2-29 Approach to stakeholder engagement 87–88
2-30 Collective bargaining agreements 130
MATERIAL TOPICS
GRI 3: Material Topics 2021 3-1 Process to determine material topics 95
3-2 List of material topics 89–94
Anti-corruption and competition law
GRI 3: Material Topics 2021 3-3 Management approach 83–85, 142
GRI 205: Anti-corruption 2016 205-1 Operations assessed for risks
related to corruption
139
205-3 Confirmed incidents of corruption
and actions taken
139
GRI 206: Anti-competitive
Behavior 2016
206-1 Legal actions for anti-competitive behavior,
anti-trust, and monopoly practices
139
GRI content index cont.
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Omission
GRI standard/Other source Disclosure Location Requirement(s) omitted Reason Explanation
MATERIAL TOPICS CONT.
Enabling cleantech growth
GRI 3: Material Topics 2021 3-3 Management approach
SKF Specific topic Revenue from sales to cleantech areas 103
Energy use and efficiency, climate change and greenhouse gas emissions
GRI 3: Material Topics 2021 3-3 Management approach 83–85, 102
GRI 302: Energy 2016 302-1 Energy consumption within
the organization
117
302-3 Energy intensity 118
302-4 Reduction of energy consumption 108
GRI 305: Emissions 2016 305-1 Direct (Scope 1) GHG emissions 104, 118
305-2 Energy indirect (Scope 2) GHG emissions 104, 118
305-3 Other indirect (Scope 3) GHG emissions 118, 119 SKF has substantially increased the scope of scope 3 reporting in 2022 to include
a significant amount to the emissions related to its direct material suppliers
(steel and forging suppliers), however this does not cover the entire potentially
applicable Scope 3 emissions. SKF intends to continue to increase the scope of
reported Scope 3 emissions in the coming years.
305-4 GHG emissions intensity 118
Material waste and environmental compliance
GRI 3: Material Topics 2021 3-3 Management approach 120–123
GRI 301: Materials 2016 301-1 Materials used by weight or volume 123
GRI 303: Water and
Effluents 2018
303-1 Interactions with water as a shared
resource
140
303-2 Management of water discharge-related
impacts
140
303-3 Water withdrawal 140
303-4 Water discharge 140 Water discharge follows regional regulations. The flow is going to local sewage
systems or to surface water flow in compliance to mentioned regulations for the
quality of discharged water (suspension, temperature, etc.). Metered discharge
flows are thus not reported.
GRI 306: Waste 2020 306-2 Management of significant
waste-related impacts
123
306-3 Waste generated 123
306-4 Waste diverted from disposal 123
306-5 Waste directed to disposal 123 SKF reports only grinding swarf separately as its main hazardous waste.
Resource outflows 122–123 Resource outflow was a new material topic 2023. SKF aims to develop KPIs on
this topic going forward.
GRI content index cont.
SKF ANNUAL REPORT 2024 146
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Omission
GRI standard/Other source Disclosure Location Requirement(s) omitted Reason Explanation
MATERIAL TOPICS CONT.
Employment
GRI 3: Material Topics 2021 3-3 Management approach 83–85, 124–126
GRI 401: Employment 2016 401-1 New employee hires and
employee turnover
129
Labor/management relations
GRI 3: Material Topics 2021 3-3 Management approach 83–85, 124–126
GRI 402: Labour/Management
Relations 2016
402-1 Minimum notice periods regarding
operational changes
130
Occupational health and safety
GRI 3: Material Topics 2021 3-3 Management approach 83–85, 124–126
GRI 403: Occupational Health
and Safety 2018
403-1 Occupational health and safety
management system
126
403-2 Hazard identification, risk assessment,
and incident investigation
126–127
403-3 Occupational health services 127
403-4 Worker participation, consultation,
and communication on occupational
health and safety
127
403-5 Worker training on occupational
health and safety
127
403-6 Promotion of worker health 127–128
403-7 Prevention and mitigation of occupa-
tional health and safety impacts directly
linked by business relationships
137
403-8 Workers covered by an occupational
health and safety management system
132
403-9 Work-related injuries 132
Training and education
GRI 3: Material Topics 2021 3-3 Management approach 83–85, 124–126
GRI 404: Training and
Education 2016
404-2 Programs for upgrading employee skills
and transition assistance programs
131–132
404-3 Percentage of employees receiving
regular performance and career
development reviews
132
GRI content index cont.
SKF ANNUAL REPORT 2024 147
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Omission
GRI standard/Other source Disclosure Location Requirement(s) omitted Reason Explanation
MATERIAL TOPICS CONT.
Diversity and equal opportunity
GRI 3: Material Topics 2021 3-3 Management approach 83–85, 124–126
GRI 405: Diversity and
Equal Opportunity 2016
405-1 Diversity of governance bodies
and employees
131
405-2 Ratio of basic salary and remuneration
of women to men
133
Human rights and non-discrimination
GRI 3: Material Topics 2021 3-3 Management approach 83–85,
124–126, 134
GRI 406: Non-discrimination 2016 406-1 Incidents of discrimination and corrective
actions taken
133
GRI 407: Freedom of Association
and Collective Bargaining 2016
407-1 Operations and suppliers in which
the right to freedom of association and
collective bargaining may be at risk
133
GRI 408: Child Labour 2016 408-1 Operations and suppliers at significant
risk for incidents of child labour
133
GRI 409: Forced or Compulsory
Labour 2016
409-1 Operations and suppliers at significant
risk for incidents of forced or compulsory
labour
133
412-1 Operations that have been subject
to human rights reviews or impact
assessments
126, 133
Supplier assessments
GRI 3: Material Topics 2021 3-3 Management approach 83–85, 91, 94
120, 137
GRI 308: Supplier Environmental
Assessment 2016
308-1 New suppliers that were screened using
environmental criteria
Percentage cannot be disclosed. The total number of new suppliers is not known.
308-2 Negative environmental impacts in
the supply chain and actions taken
91, 108–110
GRI 414: Supplier Social
Assessment 2016
414-1 New suppliers that were screened
using social criteria
52 suppliers have been audited, total number of suppliers assessed in other ways
cannot be disclosed.
414-2 Negative social impacts in the supply
chain and actions taken
135
Socioeconomic compliance
GRI 3: Material Topics 2021 3-3 Management approach 83–85
GRI 2-27: Compliance with laws
and regulations
2-27 Non-compliance with laws and regulations
in the social and economic area
139
GRI content index cont.
SKF ANNUAL REPORT 2024 148
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Auditor’s Limited Assurance Report on the
Sustainability Report and statement regarding
the Statutory Sustainability Report
To AB SKF (publ.),
corporate identity number 556007-3495
Introduction
We have been engaged by the Board of Directors of AB SKF
to undertake a limited assurance engagement of the AB SKF
Sustainability Report for the year 2024. The Company has
defined the scope of the Sustainability Report on page 2
in connection to the table of content in Annual Report and
the Statutory Sustainability Report on page 83.
Responsibilities of the Board of Directors and the
Executive Management
The Board of Directors and the Executive Management are
responsible for the preparation of the Sustainability Report
including the Statutory Sustainability Report in accordance
with the applicable criteria and the Annual Accounts Act,
according to the previous version applied before 1 July 2024,
respectively. The criteria are defined on page 83 in the
Sustainability Report, and are part of the Sustainability
Reporting Guidelines published by GRI (Global Reporting
Initiative), which are applicable to the Sustainability Report,
as well as the accounting and calculation principles that
the Company has developed. This responsibility also in -
cludes the internal control relevant to the preparation of
a Sustainability Report that is free from material misstate-
ments, whether due to fraud or error.
Responsibilities of the auditor
Our responsibility is to express a conclusion on the
Sustainability Report based on the limited assurance
procedures we have performed and to express an opinion
regarding the Statutory Sustainability Report. Our engage-
ment is limited to historical information presented and
does therefore not cover future-oriented information.
We conducted our limited assurance engagement in
accordance with ISAE 3000 (revised) Assurance Engage-
ments Other than Audits or Reviews of Historical Financial
Information. A limited assurance engagement consists
of making inquiries, primarily of persons responsible for
the preparation of the Sustainability Report, and applying
analytical and other limited assurance procedures. Our
examination regarding the Statutory Sustainability Report
has been conducted in accordance with FAR’s accounting
standard RevR 12 The auditor’s opinion regarding the Statu-
tory Sustainability Report. A limited assurance engage-
ment and an examination according to RevR 12 is different
and substantially less in scope than an audit conducted
in accordance with International Standards on Auditing
and generally accepted auditing standards in Sweden.
The firm applies International Standard on Quality
Management 1, which requires the firm to design, imple-
ment and operate a system of quality management in -
cluding policies or procedures regarding compliance
with ethical requirements, professional standards and
applicable legal and regulatory requirements. We are
in dependent of AB SKF in accordance with professional
ethics for accountants in Sweden and have otherwise
fulfilled our ethical responsibilities in accordance with
these requirements.
The limited assurance procedures performed and the
examination according to RevR 12 do not enable us to obtain
assurance that we would become aware of all significant
matters that might be identified in an audit. The conclusion
Gothenburg, March 7, 2025
Deloitte AB
Lennart Nordqvist
Expert Member
of FAR
Hans Warén
Authorized Public
Accountant
based on a limited assurance engagement and an exami-
nation according to RevR 12 does not provide the same
level of assurance as a conclusion based on an audit.
Our procedures are based on the criteria defined by
the Board of Directors and the Executive Management
as described above. We consider these criteria suitable
for the preparation of the Sustainability Report.
We believe that the evidence we have obtained is
sufficient and appropriate to provide a basis for our
conclusion below.
Conclusion
Based on the limited assurance procedures we have
performed, nothing has come to our attention that
causes win all material respects, in accordance with the
criteria defined by the Board of Directors and Executive
Management.
A Statutory Sustainability Report has been prepared.
SKF ANNUAL REPORT 2024 149
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corporate
governance
report
Fighting friction
SKF supports the hydrogen journey from produc-
tion to end usage. From efficient production
methods to storage and transport solutions, we
are committed to pioneering this development to
support you in achieving reliability and efficiency
every step of the way.
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Introduction
SKF applies the principles of sound corporate gov-
ernance as an instrument for increased competitive-
ness and to promote confidence in SKF among all
stakeholders. Among other things, this means that
the company maintains an efficient organizational
structure with clear areas of responsibility and clear
rules for delegation and decision making together
with an accountability framework, that the financial
and sustainability reporting is transparent and that
processes governing such reporting is paved by a
robust risk management and assurance framework
and that the company in all respects maintains good
corporate citizen ship.
SKF is purposefully working to ensure sustaina-
bility, ethics and compliance to achieve a positive
development over the short, medium and long term.
More information is found on pages 83–85 in the
Sustainability Report for the Group in the Annual
Report 2024.
The corporate governance principles applied
by SKF are based on Swedish law, in particular
the Swedish Companies Act and the Swedish Annual
Accounts Act, and the regulatory system of NASDAQ
Stockholm AB (Stockholm Stock Exchange) as well
as the Swedish Code of Corporate Governance (the
“Code”) issued by the Swedish Corporate Govern-
ance Board and the AB SKF Articles of Association.
Information under the Annual Accounts Act Chap-
ter 6, § 6, sections 3–4, are found on pages 29–31 of
the Administration Report for the Group in the Annual
Report 2024.
Swedish Code of Corporate Governance
The Code was originally introduced on 1 July 2005 by
the Swedish Corporate Governance Board. The Code
has been revised several times since the introduction
and the applicable Code is available at the website
of the Swedish Corporate Governance Board,
www.corporategovernanceboard.se.
It is considered good stock exchange practice for
Swedish companies whose shares are traded on
a regulated market to apply the Code. SKF applies
the Code and this Corporate Governance Report has
been prepared in accordance with the Code as well
as the Swedish Annual Accounts Act. Furthermore,
SKF has provided information on the company’s web-
site in line with the Code requirements. The Annual
General Meeting in 2024 was also held in accordance
with the Code rules. The auditor of the company has
read and performed a statutory examination of the
Corporate Governance Report.
General information about how the company
is managed
The shareholders’ meeting is the company’s highest
decision-making body. An Annual General Meeting
of shareholders shall be held annually and within six
months after the end of the financial year. At the
Annual General Meeting the shareholders may exer-
cise their voting rights to part take in decision making
of the company for example in relation to the compo-
sition of the Board of Directors, the adoption of prin-
ciples of remuneration for Group Management and
the election of external auditors. SKF has issued A
and B shares. An A share entitles the shareholder to
one vote and a B share to one-tenth of a vote. In all
other aspects, SKF’s class A and B shares have the
same rights.
The Board of Directors has a responsibility for the
company’s organisation and for the oversight of the
management of the company’s affairs and is, together
with the President and CEO and Group Manage ment
defining and continuously monitoring SKF’s purpose,
strategy, values and drivers. The Board of Directors
also continuously evaluates economic, environmental,
social and governance aspects of the SKF Group’s
performance.
The Chair of the Board of Directors shall direct
the work of the Board and monitor that the Board
fulfils its obligations. The Board of Directors annually
adopts written rules of procedure for its internal
work and written instructions. For more details on
the rules of procedures and the written instructions,
Corporate Center Business Areas
Shareholders through
shareholders’ meeting
Board of Directors
President and CEO
Group Management
Internal audit
Audit Committee
External auditors
Remuneration Committee
Nomination Committee
1
22.1
Sustainability and
Ethics Committee
2.2
2.3
3
4
5
see below under the heading “Activities of the Board
of Directors”.
The President of the company, who is also the
Chief Executive Officer, is appointed by the Board of
Directors and handles the day-to-day management
of the company’s business in accordance with the
guidelines and instructions from the Board. The
approval of the Board of Directors is, for example,
required in relation to investments and acquisitions
above certain amounts, as well as for the appoint-
ment of certain senior managers. The President and
CEO is supported by a Group Management team, see
pages 158–159 in the Annual Report 2024.
SKF is structured in two reporting segments, the
Industrial and Automotive businesses. The Auto-
motive business is a global organization while the
Industrial business is organized in four industrial
regions: The Americas (Americas), Europe, Middle
East and Africa (EMEA), India and Southeast Asia
(ISEA) and China and Northeast Asia (CNEA), and
also includes five independent global business
units, collectively referred to as Independent and
Emerging businesses. All of the above mentioned
business areas are respectively accountable for their
own operational and financial performance. Further,
there is a lean corporate center consisting of six Group
staff functions: Group Operations, Group Technology
Development, Group Commercial Excellence Bearings,
Group Finance, Group Legal & Compliance and Group
People Experience & Communication. The manage-
ment of SKF’s operations is based on a decentralised
operating model for the business areas achieving
decision making close to the customer and the goal
of serving customers with increased speed and
responsiveness, however within a set of account ability
frameworks ensuring compliance, risk management
and synergies across the SKF Group. The corporate
center governs these defined frameworks being
fundamental requirements for the management of
the SKF Group. Within these frameworks, defined
processes, policies and instructions are in place to
manage risk, strategically important matters, and
ensure compliance. Furthermore, certain transactions/
arrangements of high value or strategic importance
are referred to the relevant decision- making bodies
and ultimately the President and CEO and/or the
Board of Directors.
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1
Nomination Committee
At the Annual General Meeting of AB SKF it was
resolved that the company shall have a Nomination
Committee formed by four members appointed by
each one of the four largest shareholders with regard
to the number of votes held as well as the Chair of
the Board of Directors. When constituting the Nomi-
nation Committee, the shareholdings per the last
banking day in August each year would determine
which shareholders are the largest with regard to the
number of votes held. The names of the four mem-
bers were to be published as soon as they had been
elected, however, not later than six months before the
next Annual General Meeting. The Nomination Com-
mittee shall remain in office until a new Nomination
Committee has been appointed.
In a press release on 11 September 2024, it was
announced that a Nomination Committee consisting
of the following members, together with the Chair of
the Board of Directors, had been appointed in prepa-
ration of the Annual General Meeting 2025:
• Marcus Wallenberg, FAM
• Philip Ahlgren, Cevian Capital
• Anders Algotsson, AFA Försäkring
• Anders Jonsson, Skandia
The Nomination Committee is to furnish proposals
in the following matters to be presented to, and
resolved by, the Annual General Meeting in 2025:
• proposal for Chair of the Annual General Meeting
• proposal for Board of Directors
• proposal for Chair of the Board of Directors
• proposal for remuneration to the Board of Directors
• proposal for auditor
• proposal for remuneration to the auditor
• to the extent deemed necessary, proposal for new
instructions for the Nomination Committee.
The proposals of the Nomination Committee were
published in a press release dated 22 January 2025
and in connection with the notice to the Annual
General Meeting 2025.
Board members elected
by the Annual General Meeting
Independence
in relation to the
company/senior
management
Independence
in relation to the
major shareholders
1)
of the company
Executive
director
Female
Board members
Hans Stråberg (Chair)
Håkan Buskhe (Vice Chair)
Hock Goh
Geert Follens
Susanna Schneeberger
Rickard Gustafson
Beth Ferreira
Therese Friberg
Richard Nilsson
Niko Pakalén
Total 9/10 (90%) 8/10 (80%) 1/10 (10%) 3/10 (30%)
1) Major shareholders are, according to the Code, defined as those controlling ten per cent or more of the shares or votes in the company.
2
The Board of Directors
Composition and remuneration of the Board
The Board of Directors shall, in addition to specially
appointed members and deputies, according to the
Articles of Association of SKF, comprise a minimum
of five and a maximum of twelve Board members,
with a maximum of five deputies. The Board mem-
bers are elected each year at the Annual General
Meeting for the period up to the end of the next
Annual General Meeting.
The Nomination Committee proposes decisions
to the Annual General Meeting regarding electoral
and remuneration issues, including proposals for the
composition and remuneration of the Board of Direc-
tors. As reflected in the Nomination Committee’s
statement regarding the composition of the proposed
Board of Directors and the proposed remuneration
presented to the Annual General Meeting 2024, the
Nomination Committee has applied the provisions
in the Code as diversity policy. The objectives of the
diversity policy is for the Board of Directors to have
a composition appropriate to the company’s opera-
tions, phase of development and other relevant
circumstances; that the Board members elected by
the shareholders’ meeting collectively are to exhibit
diversity in terms of for example gender, nationality,
age and industrial experience and breadth of qualifi-
cations, experience and background; and that the
company is to strive for gender balance on the Board.
In front of the Annual General Meeting 2024 the
Board members in office were all proposed to be
re-elected as they, according to the Nomination
Committee, are assessed to possess expertise in key
areas for SKF such as financial management, digital
transformation, sustainability and technological inno-
vation. The Annual General Meeting 2024 resolved
to appoint Board members in accordance with the
Nomination Committee’s proposal.
Ten Board members, including the Chair, were
elected at AB SKF’s Annual General Meeting held in
the spring of 2024. In addition, the SKF labor unions
have appointed two Board members and two deputy
Board members. No Board member, except for the
President and CEO, is included in the management
of the company.
Information on the composition and remuneration
of the Board members decided upon by the Annual
General Meeting 2024 can be found in the Annual
Report 2024, Consolidated Financial Statements,
Note 23.
Independence requirements
The Nomination Committee has a responsibility
to take independence into consideration in its
proposal for Board of Directors. The Board of
Directors has been considered to comply with the
requirements of the Code regarding independence.
The table below shows the Board members’ in -
dependence according to the requirements of
the Code in relation to the company and major
shareholders
1)
.
Activities of the Board of Directors
The Board of Directors held ten meetings in 2024.
The Board members were present at the Board meet-
ings as described in the table on the next page.
The Board of Directors adopts written rules of procedure
annually for its internal work. These rules prescribe i.a.:
• the number of Board meetings and when they are
to be held,
• the items normally included in the Board agenda,
and
• the presentation to the Board of reports from the
external auditors.
The Board of Directors has also issued written
instructions on:
• when and how information required for the Board’s
assessment of the company’s and the Group’s
financial position shall be collected and reported
to the Board, and
• the allocation of the tasks between the Board and
the President and CEO.
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Issues dealt with by the Board of Directors in 2024
include i.a. strategy execution, market outlook and
the geopolitical situation, cash flow and investment
analysis, financial and sustainability reporting, capital
structure, acquisitions and divestments of com-
panies, the continued implementation of the decen-
tralized operating model, in cluding material organiza-
tional changes of the Group and management issues
including the decision to initiate a separation of the
automotive business with the intention to list the
company on Nasdaq Stockholm.
The Board of Directors continuously evaluates
economic, environmental, social and governance
aspects for the Group’s performance and reviews
specific issues such as accident rates, greenhouse
gas emissions and Code of Conduct adherence.
Each new Board member has to go through a gen-
eral introduction training about the SKF Group. The
Board of Directors visits on a regular basis different
SKF sites in order to enhance knowledge about the
SKF Group.
Board Committee work
Certain topics of strategic importance for the com-
pany have, through the Boards written rules of proce-
dure and Board Charters, been assigned to the Board
Committees to prepare and give recommendations
on to the wider Board of Directors before any deci-
sions are made, for example matters relating to remu-
neration to the President and CEO, principles of
remuneration for Group Management, sustainability
strategy and management of material sustainability
impacts, risks and opportunities, as well as financial
and sustainability reporting and ethics and compli-
ance.
The President and CEO is supported by the Group
Management team and subject matter experts in
preparation of materials and reports to the Board
in specific topics.
2.1
Remuneration Committee
The Board of Directors of AB SKF has in
accordance with the principles in the Code estab-
lished a Remuneration Committee consisting of
the Chair of the Board, Hans Stråberg as Chair,
Vice Chair of the Board Håkan Buskhe and the
board members Susanna Schneeberger and Niko
Pakalén.
The Remuneration Committee prepares matters
related to the principles of remuneration for Group
Management and employment conditions for the
President and CEO as well as supporting the succes-
sion planning for Group Management. The principles
of remuneration for Group Management shall be sub-
mitted to the Board of Directors, which shall submit
a proposal for such remuneration principles to the
Annual General Meeting for approval at least every
fourth year. The employment conditions for the Presi-
dent shall be approved by the Board of Directors.
Presence during Board and Committee meetings
Name of the board member
Presence Board meetings/
Total number of meetings
1)
Presence Audit
Committee meetings/
Total number of meetings
1)
Presence Remuneration
Committee meetings/
Total number of meetings
1)
Presence Sustainability and
Ethics Committee meetings/
Total number of meetings
1)
Hans Stråberg (Chair) 10/10 7/7 (Chair) 5/5 —
Håkan Buskhe (Vice Chair) 10/10 7/7 5/5 (Chair) 3/3
Hock Goh 10/10 — — 3/3
Geert Follens 10/10 7/7 — 3/3
Susanna Schneeberger 10/10 — 5/5 —
Rickard Gustafson 10/10 — — —
Beth Ferreira 10/10 — — 2/2
Therese Friberg 10/10 7/7 — —
Richard Nilsson 10/10 (Chair) 7/7 — —
Niko Pakalén 10/10 — 5/5 3/3
Jonny Hilbert (employee representative) 10/10 — — —
Zarko Djurovic (employee representative) 9/10 — — —
Total presence by board members in percentage 99.2% 100% 100% 100%
Thomas Eliasson (deputy employee representative) 10/10 — — —
Steve Norrman (deputy employee representative) 6/10 — — —
1) Total number of meetings is dispalyed for each board member, based on the number of board meetings held during the time they were each elected during the year.
The Remuneration Committee continuously moni-
tors and evaluates the SKF Group’s remuneration
package for Group Management. No later than three
weeks prior to the Annual General Meeting the Board
of Directors submits on the company’s web site, in
accordance with the Swedish Companies Act and
the principles in the Code, a remunera tion report
attached hereto on pages 168–174.
The Remuneration Committee held five meetings
in 2024. The members of the committee were present
at the meetings as shown in the table below.
2.2
Sustainability and Ethics Committee
The Board of Directors of AB SKF has estab-
lished a Sustainability and Ethics Committee. The
Sustainability and Ethics Committee consists of the
Vice Chair of the Board, Håkan Buskhe, as Chair and
the board members Hock Goh, Geert Follens, Beth
Ferreira and Niko Pakalén. The Sustainability and
Ethics Com mittee oversees SKF’s strategy related to
sustain ability and ethics. The work also includes to
review, monitor and keep informed on the strategic
objectives, initiatives, and the implementation
thereof for a sustain able development, mitigation
and action on impacts, risks and opportunities of
SKF and monitoring of progress against externally
communicated sustainability targets related to
among other things climate, environment and safety.
Based on SKF Care, the committee also handles
items relating to SKF’s values, employee organization
including talent acquisition, development, retention
and planning, business and work ethics, compliance,
community care, environment, health and safety.
The Sustainability and Ethics Committee held three
meetings in 2024. More on SKFs Sustainability
and Ethics Committee’s role in SKF’s sustainability
governance is found in the Sustainability Report
on page 84. The members of the committee
were present at the meetings as shown in the
table below.
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2.3
Audit Committee
The Board of Directors of AB SKF has in
accordance with the principles of the Swedish Com-
panies Act and the Code appointed an Audit Commit-
tee. The Audit Committee consists of the board mem-
ber Richard Nilsson, as Chair, the Chair of the Board,
Hans Stråberg, the Vice Chair of the Board, Håkan
Buskhe, and the Board members Geert Follens and
Therese Friberg.
The Audit Committee oversees and ensures the
quality and reliability of the accounting and financial
and sustainability reporting processes and reports,
monitors the effectiveness of the Group’s internal
control over financial and sustainability reporting,
audit and risk management processes and the ade-
quacy of the Group’s controls for compliance with
laws and regulations. The Audit Committee also
reviews and monitors the work of external auditors
as well as makes prepa rations in relation to the nomi-
nation of external auditors.
The Audit Committee held seven meetings in 2024.
The members of the committee were present at the
meetings as shown in the table on the previous page.
Assessment
The members of the Board of Directors assess the
representation of relevant competences amongst
the members of the Board as well as the quality of
the work of the Board through the completion of
a question naire and following interviews. The result
is then discussed at a Board meeting. The Nomina-
tion Committee has been provided with the result
of the assessment.
3
President and Chief Executive Officer
The Board of Directors has delegated the
day-to-day management of AB SKF (publ) and the
SKF Group’s operations to the President and CEO,
including an authorization to make decisions and
govern issues that are not exclusively under the
authority of the Board. It is the President and CEO’s
responsibility to implement and ensure that the SKF
strategy, purpose, long term financial targets and
operational objectives determined by the Board of
Directors are carried out and that effective govern-
ance and control is maintained. The President and
CEO is also responsible for preparing materials to
the Board of Directors in front of the Board meetings
and keeping the Board informed on SKF’s financial
position, development, risks and opportunities. The
President and CEO’s role, areas of responsibility and
authorizations are described in more detail in the
CEO instruction each year adopted by the Board of
Directors. More information on SKF’s President and
CEO is found on page 158 in the Annual Report.
4
The auditor of the company
The task of the auditor is to audit, on behalf of
the shareholders, the Annual Report including SKF’s
financial and sustainability reporting and reporting
processes and also to audit the Board of Directors’
and the President and CEO’s management of the
company.
The SKF Articles of Association states that the
auditor shall be elected for a period of four years. AB
SKF’s Annual General Meeting 2021, elected Deloitte
AB (Deloitte) as auditor for the time up to the closing
of the Annual General Meeting in 2025. Hans Warén
is the auditor in charge.
Hans Warén has many years of experience as
auditor in a number of other listed companies, and
is currently the lead auditor for Industri värden,
Mölnlycke Healthcare, and Atrium Ljungberg.
The auditor shall according to a resolution of the
Annual General Meeting be remunerated in accord-
ance with approved invoice. SKF has a procedure
in place whereby all matters that are intended to be
handled by the elected auditors are evaluated in
relation to the independence requirements and are
approved or, as the case may be, rejected, by the
Audit Committee. Deloitte applies a similar procedure
and issues annually, in addition thereto, a written
statement to the Audit Committee stating that the
audit firm is independent in relation to SKF.
Deloitte has during 2024 been involved in matters
besides the audit assignment. These matters have
primarily concerned tax and sustainability services.
The total fees for Deloitte’s services besides auditing
in 2024 amount to MSEK 3.
Financial and sustainability reporting
The Board of Directors is responsible for document-
ing how the quality of the financial and sustainability
reporting is secured and how the company communi-
cates with its auditor.
The Audit Committee assists the Board of Directors
by preparatory work to secure the quality of the com-
pany’s financial and sustainability reporting. This is,
for example, achieved through the Audit Committee’s
review of the financial and sustainability information
and the company’s internal financial controls.
The Board of Directors had two meetings with
the auditors in 2024 and has been provided with
the audit and its result. Within the scope of its work,
which includes reviewing the extent of the external
audit and evaluating the performance of the external
auditors, the Audit Committee met with the auditors
in connection with six Audit Committee meetings.
In addition to that, the auditors gave both the Audit
Committee and the Board of Directors information in
writing regarding matters including the planning and
implementation of the audit and an assessment of
the risk position of the company.
154SKF ANNUAL REPORT 2024
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The Board of Directors
Hans Stråberg
Chair, Board member since 2018
Born 1957
Education
Master of Science in Engineering from Chalmers
University of Technology, Gothen burg.
Job experience
President and CEO of Electrolux AB 2002–2010.
Several leading positions within the Electrolux
Group in Sweden and USA since 1983. Former
EU Co-Chair TABD, Trans- Atlantic Business
Dialogue.
Other assignments
Chair of Atlas Copco AB, Roxtec AB, and
Anocca AB. Board member of Investor AB
and Member of the Royal Swedish Academy
of Engineering Sciences.
Shareholding
(own and/or held by related parties
1)
)
73,000 SKF B
Håkan Buskhe
Vice Chair, Board member since 2020
Born 1963
Education
Master of Science, Licentiate of Engineering,
Chalmers University of Technology, Gothen-
burg.
Job experience
CEO of FAM AB, owned by Wallenberg
Investments AB. Previous senior positions
include CEO of Saab AB, 2010–2019, and
CEO of E.ON Nordic AB, 2008–2010.
Other assignments
Chair of IPCO AB, Vice Chair of Stora Enso Oyj,
board member of FAM AB, Kopparfors Skogar
AB, The Grand Group, Navigare Ventures AB,
Qarlbo Energy AB, Swedish Defense University
and Industrikraft AB.
Shareholding
(own and/or held by related parties
1)
)
5,000 SKF B
Hock Goh
Board member since 2014
Born 1955
Education
Bachelor’s Degree (honours) in Mechanical
Engineering from Monash University, Australia,
completed the Advanced Management Program
at INSEAD.
Job experience
Operating Partner of Baird Capital Partners
Asia, 2005–2012. Several senior management
positions in Schlumberger Limited, 1995–2005,
President of Network and Infra structure Solu-
tions division in London, President Asia and
Vice President and General Manager China.
Shareholding
(own and/or held by related parties
1)
)
0 SKF B
Geert Follens
Board member since 2019
Born 1959
Education
Master of Science in Electromechanical
Engineering and a post-graduate degree in
Business Economics from the university of
Leuven, Belgium.
Job experience
Senior Executive Vice President and Business
Area President Vacuum Technique at Atlas
Copco AB. Several leading positions within the
Atlas Copco Group in Sweden, Belgium and the
U.K. since 1995, including General Manager of
Atlas Copco Compressor Technique customer
center, President of the Portable Energy division
and President of the Industrial Air division.
Other assignments
Board member of AB Electrolux.
Shareholding
(own and/or held by related parties
1)
)
1,500 SKF B
Susanna Schneeberger
Board member since 2020
Born 1973
Education
Master of European Affairs (MBA) and Master
of Science in International Business, Lund
University.
Job experience
Senior advisor and several leading positions
including Chief Digital Officer and executive
board member of the KION Group, 2018–2020,
CEO of Demag Cranes & Components, 2015–
2018, and various senior positions in the Trelle-
borg Group 2007–2014.
Other assignments
Chair of Yunex GmbH. Board member
of Modulaire Group and Sandvik AB.
Shareholding
(own and/or held by related parties
1)
)
1,000 SKF B
1) SKF has chosen to apply the following definition of “related parties” when calculating the shareholdings:
close relatives and legal entities set up for the benefit of the board member or his/hers close relatives.
Other assignments and shareholdings shows assignments and shareholdings per 31 December 2024.
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Rickard Gustafson
President and Chief Executive Officer
Board member since 2021
Born 1964
Education
Master of Science from the Institute of
Tech nology at Linköping University.
Job experience
Previous senior positions include President
and CEO of the SAS Group 2011–2021, CEO
of the insurance company Codan/Trygg-Hansa
and several positions within General Electric.
Other assignments
Board member of Telia Company and
Confederation of Swedish Enterprise.
Shareholding
(own and/or held by related parties
1)
)
22,500 SKF B
Beth Ferreira
Board member since 2023
Born 1973
Education
Bachelor of Science in International Studies,
Emory University, Atlanta.
Job experience
Chief Executive Officer, Life Technology
and formerly Divisional Managing Director at
IMI plc 2020–present. Previous senior positions
include multiple Group President roles at
Illinois Tool Works (ITW) 2014–2020, multiple
President roles in Belden 2008–2014, and
various marketing and commercial roles in
Ingersoll Rand 1997–2008.
Shareholding
(own and/or held by related parties
1)
)
2,500 SKF B
Therese Friberg
Board member since 2023
Born 1975
Education
Bachelor’s Degree in Business Administration,
Stockholm University.
Job experience
Group CFO and Executive Vice President of
Electrolux. Several leading positions within the
Electrolux Group since 1999, including CFO,
Major Appliances EMEA, Head of Group
Business Control and Sector Controller
Home Care & SDA.
Shareholding
(own and/or held by related parties
1)
)
0 SKF B
Richard Nilsson
Board member since 2023
Born 1970
Education
Bachelor of Science in Business Administration
and Economics, Lund University.
Job experience
Investment Director at FAM AB. Employed by
FAM since 2008. Previous positions include
equity research analyst at SEB Enskilda,
2000–2008, Alfred Berg 1995–2000 and
Handelsbanken 1994–1995.
Other assignments
Board member of Stora Enso Oyj, IPCO Holding
AB and group companies, GROPYUS AG, Cinder
Invest AB and TBox Sweden AB.
Shareholding
(own and/or held by related parties
1)
)
12,000 SKF B
Niko Pakalén
Board member since 2023
Born 1986
Education
Master of Science in Economy and Business
Administration, Helsinki School of Economics
(today Aalto University).
Job experience
Partner at Cevian Capital since 2017. Several
manage ment positions within Cevian Capital
2011–2016 and associate at Danske Bank
Corporate Finance 2009–2011.
Other assignments
Chair of Human Practice Foundation Sweden.
Member of the Board of Metso Corporation.
Shareholding
(own and/or held by related parties
1)
)
0 SKF B
1) SKF has chosen to apply the following definition of “related parties” when calculating the shareholdings:
close relatives and legal entities set up for the benefit of the board member or his/hers close relatives.
156SKF ANNUAL REPORT 2024
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THE SHARE
SUSTAINABILITY
REPORT
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Jonny Hilbert
Board member since 2015
Born 1981
Education and
job experience
Employed in the SKF Group
since 2005.
Other assignments
Chair of Unionen,
SKF, Gothenburg.
Shareholding
(own and/or held by
related parties
1)
)
0 SKF B
Zarko Djurovic
Board member since 2015
Born 1977
Education and
job experience
Employed in the SKF Group
since 2006.
Other assignments
Chair of Metalworker’s Union,
SKF, Gothenburg.
Shareholding
(own and/or held by
related parties
1)
)
0 SKF B
Thomas Eliasson
Deputy Board member
since 2021
Born 1965
Education and
job experience
Employed in the SKF Group
since 1984.
Other assignments
Chief Safety Representative
and Board member of Unionen
at SKF in Gothenburg.
Shareholding
(own and/or held by
related parties
1)
)
0 SKF B
Steve Norrman
Deputy Board member
since 2021
Born 1965
Education and
job experience
Employed in the SKF Group
since 1994.
Other assignments
Vice Chair and Safety Officer
of Metalworker’s Union,
SKF, Gothenburg.
Shareholding
(own and/or held by
related parties
1)
)
0 SKF B
Employee representatives
1) SKF has chosen to apply the following definition of “related parties” when calculating the shareholdings:
close relatives and legal entities set up for the benefit of the board member or his/hers close relatives.
157SKF ANNUAL REPORT 2024
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Group Management
Rickard Gustafson
President and CEO
Employed since 2021
Born 1964
Education
Master of Science from the
Institute of Technology at
Linköping University.
Job experience
President and CEO of the SAS
Group, CEO of the insurance
company Codan/Trygg-Hansa
and several positions within
General Electric.
Other assignments
Board member of Telia Company
and The Con federation of
Swedish Enterprise.
Shareholding
22,500 SKF B
Manish Bhatnagar
President, Industrial Region
Americas
Employed since 2018
Born 1969
Education
Master of Business Administra-
tion from Indian Institute of
Management Calcutta, and B.E.
in Electronics Engineering from
Birla Institute of Technology
& Science, Pilani, India.
Job experience
President, Industrial Region India
and Southeast Asia and senior
roles at General Electric and
Danaher.
Other assignments
Board member of SKF India Ltd.
Shareholding
4,852 SKF B
David Johansson
President, Industrial Region
Europe Middle East and Africa
Employed since 2005
Born 1980
Education
Master of Science; Industrial
Marketing, Electrical Engineering
at Chalmers University of
Tech nology, Gothenburg.
Job experience
President Automotive, Director,
Global Railway and China Mobility
business, Director, China Auto-
motive, Aerospace and Railway
business and several other
positions within SKF.
Shareholding
4,262 SKF B
Henry Wang
President, Industrial Region
China and Northeast Asia
Employed since 2022
and 1997–2019
Born 1968
Education
Master of Business Administra-
tion from the University of
Calgary and a Bachelor of
Engineering from Shanghai
Jiaotong University.
Job experience
President of Alstom’s operations
in China, CEO of KUKA in China,
Head of SKF Industrial Sales in
China as well as several other
positions within SKF.
Shareholding
0 SKF B
Mukund Vasudevan
President, Industrial Region India
and Southeast Asia
Employed since April 2024
Born 1969
Education
Master of Business from Univer-
sity of Chicago, Booth School of
Business; Bachelor of Technology
from Indian Institute of Tech-
nology, Mumbai.
Job experience
Managing Director Moglix
(eCommerce startup), Managing
Director Ecolab-South Asia,
Vice President Pentair-India,
Engagement Manager McKinsey
& Company.
Shareholding
0 SKF B
Kerstin Enochsson
President, Automotive
Employed since 2023
Born 1975
Education
Master’s Degree in Law from Freie
Universität, Berlin and MBA from
ESCP-EAP European School of
Management, Paris.
Job experience
Head of Procurement and Supply
Chain, Vice President Corporate
Strategy & Project Office, both at
Volvo Car Group. Global Director
Parts at Volvo Construction
Equipment and several other
senior positions.
Other assignments
Board member of SSAB.
Shareholding
0 SKF B
Thomas Fröst
President, Independent
and Emerging Business
Employed since 1988
Born 1962
Education
Master of Science in Industrial
Economics from Chalmers
University of Technology,
Gothenburg.
Job experience
President, Industrial Technolo-
gies, Director Industrial Units,
Head of Industrial Marketing,
and several other positions
within SKF.
Shareholding
9,892 SKF B
Other assignments and shareholdings shows assignments and shareholdings per 31 December 2024.
158SKF ANNUAL REPORT 2024
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PRESIDENT’S
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THE SHARE
SUSTAINABILITY
REPORT
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GOVERNANCE
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STATEMENTS
BACK TO
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Joakim Landholm
Senior Vice President, Group
Operations and Chief
Sustainability Officer
Employed since 2022
Born 1969
Education
Master of Science from
Stockholm School
of Economics.
Job experience
CEO Hector Rail, Chief Commer-
cial Officer SAS and senior
positions at Codan/Trygg-Hansa
and GE Capital.
Other assignments
Board member of Sdiptech AB.
Shareholding
4,090 SKF B
Annika Ölme
Chief Technology Officer
and Senior Vice President,
Technology Development
Employed since 2022
and 2002–2017
Born 1973
Education
Master of Science in Electrical
Engineering from Chalmers
University of Technology and
a Master of Business Administra-
tion from Waikato University.
Job experience
CTO and Head of Engineering at
SAAB Radar Solutions, Managing
Director of Arcam, a subsidiary
of General Electric and various
positions within SKF.
Shareholding
45 SKF B
Hans Landin
Senior Vice President, Group
Commercial Excellence Bearings
Employed since 2023
Born 1972
Education
Master of Science in Mechanical
Engineering at Chalmers Univer-
sity of Technology, Gothenburg.
Job experience
Group Vice President and Officer
and several other senior posi-
tions at the Timken Company.
Other assignments
Board member of Beijer Alma AB.
Shareholding
600 SKF B
Niclas Rosenlew
Chief Financial Officer
and Senior Vice President,
Group Finance
Employed since 2019
Born 1972
Education
Master of Science in Finance,
Hanken, Swedish School of
Economics.
Job experience
Senior positions within
Basware, Microsoft, Nokia
and Deutsche Bank.
Shareholding
18,297 SKF B
Mathias Lyon
General Counsel and Senior
Vice President, Group Legal
and Compliance
Employed since 2012
Born 1975
Education
Master of Laws, Faculty of
Law at Lund University.
Job experience
SKF Deputy General Counsel
and several other positions at
Volvo, AstraZeneca, Mannheimer
Swartling and Rosengrens.
Shareholding
8,205 SKF B
Ann-Sofie Zaks
Senior Vice President, Group
People Experience and
Communication
Employed since 2001
Born 1976
Education
Bachelor’s Degree, Innovation
Program with special focus on
Behavioural Science from
University college of Mälardalen.
Job experience
People Experience Director
Bearing Operations, Program
manager, Group People Trans-
formation initiative and several
other positions within SKF.
Other assignments
Board member of International
Council of Swedish Industry
(NIR).
Shareholding
12,004 SKF B
Changes in Group
Management in 2024
In February, John Schmidt,
President, Industrial
Region Americas, stepped
down from his role in
Group Management.
In July, SKF announced
that Niclas Rosenlew, Chief
Financial Officer and
Senior Vice President, had
decided to leave the com-
pany and step down from
his role in Group Manage-
ment in December 2024.
Changes in Group
Management in 2025
In September, SKF
announced the appoint-
ment of Susanne Larsson
as new Chief Financial
Officer and Senior Vice
President. Susanne joined
SKF in February 2025.
Read about her previous
experience at skf.com
159SKF ANNUAL REPORT 2024
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5
Internal control and risk management
regarding financial reporting
SKF uses the established framework developed by
the Committee of Spon soring Organizations of the
Treadway Commission (COSO) as a foundation. SKF
has implemented these requirements as a Group
standard, SKF Internal Control Standard (SICS) for all
Group Companies. Through its policies, instructions
and organizational structure, SKF has documented
the division of responsibility throughout the SKF
organization. This is reflected in the fact that policies
and instructions, where applicable, are developed
on the basis of internationally accepted standards
and/or best practice. Policies and instructions are
reassessed by the responsible central function based
on the need to adapt these to changes in require-
ments and legislation.
SKF is a process-oriented company and includes
integrated risk assessment with the business pro-
cesses such as business planning. In the area of
control activities, SKF has documented all the
critical finance processes and controls for the parent
company and subsidiary companies. The documen-
tation standards require that relevant controls in the
business processes are described and performed.
When deficiencies in individual controls are identi-
fied, action plans are created to remediate control
gaps. A selection of defined control activities are
tested annually. SKF has a risk approach to controls,
control testing and actions to remediate control gaps.
During 2024 self-assessments and control test activ-
ities have been performed in finance processes
cross the regions including also smaller entities that
are not covered by external auditors.
SKF has information and communication systems
and procedures in place in order to ensure the com-
pleteness and correctness of the financial reporting.
Accounting and reporting instructions are updated
when necessary. These instructions are available to
all relevant employees together with training material.
Changes to accounting and reporting instructions are
communicated regularly. Detailed financial process
and control documentation are stored centrally and/
or locally. This enables access to individual control
documentation and analysis of results from the test-
ing of SKF’s financial internal control system.
SKF has an internal control function, with the main
responsibility to support the business to implement
and maintain good internal control as well as to
perform control testing to evaluate adherence with
the framework and identify control weaknesses.
The internal audit department conducts high level
risk-based process audits within prioritized areas.
The internal audit and internal control functions
report to the Global Finance Sustainability & Opera-
tions Director who regularly submits reports to the
Audit Committee of the Board of Directors. The Board
of Directors receives regular financial reports and the
Group’s financial position and development are
dis cussed at every Board meeting. The Audit Com-
mittee of the Board of Directors reviews all interim
and annual financial and sustainability reports
before they are released to the public.
Gothenburg, 7 March 2025
The Board of Directors
© 2013 Internal Control- Integrated Frame-
work Committee of Sponsoring Organizations
of the Treadway Commission (COSO).
All rights reserved. Used with permission.
Operations
Control Environment
Risk Assessment
Control Activities
Information & Communications
Monitoring activities
Entity Level
Division
Operating Unit
Function
Reporting
Compliance
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Auditor’s report on the
Corporate Governance Statement
To the general meeting of the shareholders in AB SKF
(publ), corporate identity number 556007-3495
Engagement and responsibility
It is the Board of Directors who is responsible for the
corporate governance statement for the financial
year 2024-01-01–2024-12-31 on pages 150–160 and
that it has been prepared in accordance with the
Annual Accounts Act.
The scope of the audit
Our examination has been conducted in accordance
with FAR’s standard RevU 16 The auditor’s examina-
tion of the corporate governance statement. This
means that our examination of the corporate govern-
ance statement is different and substantially less in
scope than an audit conducted in accordance with
International Standards on Auditing and generally
accepted auditing standards in Sweden. We believe
that the examination has provided us with sufficient
basis for our opinions.
Opinions
A corporate governance statement has been pre-
pared. Disclosures in accordance with chapter 6 sec-
tion 6 the second paragraph points 2–6 the Annual
Accounts Act and chapter 7 section 31 the second
paragraph the same law are consistent with the
annual accounts and the consolidated accounts and
are in accordance with the Annual Accounts Act.
Gothenburg, 7 March, 2025
Deloitte AB
Hans Warén
Authorised Public Accountant
161SKF ANNUAL REPORT 2024
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Seven-year review
MSEK unless otherwise stated 2024 2023 2022 2021 2020 2019 2018
Income statements
Net sales 98,722 103,881 96,993 81,732 74,852 86,013 85,713
Operating income/expenses
incl. associated comp. –88,383 –92,797 –88,401 –70,974 –67,783 –76,618 –74,664
Operating profit 10,339 11,084 8,532 10,758 7,069 9,395 11,049
Financial income and expense, net –1,250 –1,903 –1,239 –695 –769 –926 –861
Profit before taxes 9,089 9,181 7,293 10,063 6,300 8,469 10,188
Taxes –2,202 –2,404 –2,438 –2,484 –1,826 –2,677 –2,603
Net profit 6,887 6,777 4,855 7,579 4,474 5,792 7,585
Balance sheets
Intangible assets 17,245 17,007 18,193 16,942 16,242 18,397 17,722
Deferred tax assets 3,369 3,107 3,173 3,839 4,800 4,437 3,563
Property, plant and equipment 30,470 26,820 24,897 20,723 18,161 18,420 16,688
Right of use assets 3,564 2,961 3,084 2,661 2,517 2,991 —
Non-current financial and other assets 2,971 2,091 1,781 1,674 1,939 2,019 1,964
Inventories 26,182 23,194 26,052 20,997 15,733 18,051 17,826
Trade receivables 16,600 16,811 16,905 13,972 12,286 14,006 13,842
Other current assets 19,012 19,912 16,838 18,820 18,879 15,787 15,568
Total assets 119,413 111,903 110,923 99,628 90,557 94,108 87,173
Equity 61,969 54,956 54,043 45,365 35,712 37,366 35,452
Provisions for post-employment benefits 8,502 8,797 8,748 11,781 15,170 15,366 12,894
Deferred tax provisions 1,905 1,220 1,365 1,040 792 960 1,118
Other provisions 2,582 2,584 2,305 2,517 3,482 2,474 2,541
Financial liabilities 20,760 21,954 22,135 19,336 18,349 19,017 17,157
Trade payables 12,553 11,236 11,594 9,881 8,459 8,266 7,831
Other liabilities 11,142 11,156 10,733 9,709 8,593 10,659 10,180
Total equity and liabilities 119,413 111,903 110,923 99,628 90,557 94,108 87,173
MSEK unless otherwise stated 2024 2023 2022 2021 2020 2019 2018
Key figures
1)
Operating margin, % 10.5 10.7 8.8 13.2 9.4 10.9 12.9
EBITA 10,971 11,741 9,173 11,340 7,681 10,008 11,541
EBITDA 14,771 15,381 12,316 14,064 10,470 12,892 13,522
Return on capital employed, % 12.1 13.3 10.6 14.8 9.8 13.2 17.6
Return on equity, % 11.7 12.0 9.5 18.8 12.1 15.7 22.8
Net working capital, % of sales 30.6 27.7 32.4 30.7 26.1 27.7 27.8
Net debt/equity, % 26.6 29.5 35.2 38.3 51.7 59.3 49.1
Net debt/EBITDA 1.1 1.1 1.5 1.2 1.8 1.7 1.3
Turnover of total assets, times 0.85 0.90 0.90 0.85 0.79 0.90 1.00
Gearing, % 30.9 35.2 35.6 40.5 48.0 47.1 45.0
Equity/assets, % 51.9 49.1 48.7 45.5 39.4 39.7 40.7
Net cash flow after investments before financing 5,190 7,916 295 2,100 5,259 4,953 8,326
Investments and employees
Additions to property,
plant and equipment 5,078 5,749 5,030 3,822 3,332 3,461 2,647
Research and development
expenses 3,326 3,303 3,177 2,751 2,515 2,691 2,591
Patents – number of first filings 261 245 240 241 200 201 202
Average number of employees 37,731 39,672 40,773 40,861 38,385 41,559 42,565
Number of employees registered
at 31 December 38,743 40,396 42,641 42,602 40,963 43,360 44,428
1) See page 164 for definitions.
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Three-year review
MSEK unless otherwise stated 2024 2023
1)
2022
1)
Industrial
Net sales 69,475 73,393 69,354
Operating profit 9,285 9,735 7,838
Operating margin, % 13.4 13.3 11.3
Assets and liabilities, net 54,662 50,420 50,387
Registered number of employees 32,465 34,017 35,965
Automotive
Net sales 29,247 30,488 27,579
Operating profit 1,054 1,349 694
Operating margin, % 3.6 4.4 2.5
Assets and liabilities, net 16,151 14,611 15,255
Registered number of employees 3,879 4,089 4,049
1) Previously published figures have been restated to conform to the current Group structure.
For more information refer to Note 2 in the consolidated financial statements.
SEK per share unless otherwise stated | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 |
Earnings per share | 14.22 | 14.04 | 9.81 | 16.10 | 9.44 | 12.20 | 16.0 |
Dividend per A and B share | 1) | ||||||
Total dividends, MSEK | 2) | ||||||
| Purchase price of B shares | |||||||
at year-end on NASDAQ Stockholm | 207.6 | 201.3 | 159.2 | 214.5 | 213.4 | 189.4 | 134.5 |
Equity per share | 131 | 116 | 114 | 96 | 75 | 78 | 74 |
Yield (B), % | 3.7 2) | 3.7 | 4.4 | 3.3 | 3.0 | 1.6 | 4.5 |
| P/E ratio, B | |||||||
(share price/earnings per share) | 14.6 | 14.3 | 16.2 | 13.3 | 22.6 | 15.5 | 8.4 |
Cash flow from operations, per share | 23.7 | 30.3 | 12.4 | 11.5 | 18.2 | 20.7 | 18.3 |
| Cash flow after investments | |||||||
and before financing, per share | 11.4 | 17.4 | 0.7 | 4.6 | 11.6 | 10.9 | 18.3 |
| 1) See page 164 for definitions. | |||||||
| 2) According to the Board’s proposal for the year 2024. |
Distribution of shareholding
Shareholding Number of shareholders % Number of shares %
1–1,000 69,375 88.85 14,423,531 3.17
1,001–10,000 7,885 10.10 21,116,638 4.64
10,001– 822 1.05 365,384,064 80.25
Anonymous ownership — — 54,426,835 11.95
78,082 100 455,351,068 100
Source: Modular Finance as of 31 December 2024.
Per-share data
1)
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SKF has applied the guidelines issued by ESMA (European
Securities and Markets Authority) on APMs (Alter native
Performance Measures). These key figures are not defined
or specified in IFRS but provides complementary informa-
tion to investors and other stakeholders on the com pany’s
performance. These measures are used internally by man-
agement, as a complement to IFRS measures, as basis for
business decisions. The alter native performance measures,
defined by SKF Group, may not be comparable to similar
measures presented by other groups.
Adjusted operating profit
Operating profit excluding items affecting comparability.
Adjusted operating margin
Operating profit margin excluding items affecting
comparability.
Adjusted return on capital employed
(Adjusted ROCE)
Return on capital employed (ROCE) excluding items
affecting comparability.
Average number of employees
Total number of working hours of registered em ployees,
divided by the normal total working time for the period.
Basic earnings per share in SEK
(as defined by IFRS)
Net profit less non-controlling interests divided
by the ordinary number of shares.
Capital employed
Twelve months rolling average of total assets less
the average of non-interest bearing liabilities.
Currency impact on operating profit
The effects of both translation and trans action flows
based on current assumptions and exchange rates
compared to the corresponding period last year.
Debt
Loans plus provisions for post- employment
benefits, net.
Dividends pay-out ratio
Dividends paid in relation to net income for the year
the dividend relates to.
EBITA
(Earnings before interest, taxes and amortization)
Operating profit before amortizations.
EBITDA
(Earnings before interest, taxes, depreciation
and amortization)
Operating profit before depreciations, amortizations,
and impairments.
Equity/assets ratio
Equity as a percentage of total assets.
Equity per share
Equity excluding non-controlling interests divided
by the ordinary number of shares.
Gearing
Debt as a percentage of the sum of debt and equity.
Gross margin
Gross income as a percentage of net sales.
Definitions
Items affecting comparability
Significant income/expenses that affects comparability
between accounting periods. This includes, but is not
limited to, restructuring costs, impairments and write-offs,
currency exchange rate effects caused by devaluations
and gains and losses on divestments of businesses.
Net debt
Debt less short-term financial assets excluding
derivatives.
Net debt/Adjusted EBITDA
Net debt, in relation to twelve months rolling EBITDA.
excluding items affecting comparability.
Net debt/EBITDA
Net debt, in relation to twelve months rolling EBITDA.
Net debt/equity
Net debt, as a percentage of equity.
Net working capital as % of annual sales (NWC)
Trade receivables plus inventory minus trade payables
as a percentage of twelve months rolling net sales.
Operating margin
Operating profit, as a percentage of net sales.
Organic growth
Sales excluding effects of currency and acquired
and divested businesses.
Revenue growth
Sales excluding effects of currency and divested
businesses.
P/E ratio
Share price at year end dividend by basic earnings
per share.
Registered number of employees
Total number of employees included in SKF’s payroll
at the end of the period.
Return on capital employed (ROCE)
Operating profit/loss plus interest income, as a percentage
of twelve months rolling average of total assets less the
average of non-interest bearing liabilities.
Return on equity (ROE)
Profit/loss after taxes as a percentage of twelve months
rolling average of equity.
Turnover of total assets
Net sales in relation to twelve-month rolling
average of total assets.
Total value added (TVA)
TVA is the operating profit, less the pre-tax cost of capital.
The pre-tax cost of capital is based on a weighted cost
of capital with a risk premium of 6% above the risk-free
interest rate.
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Alternative performance measures
MSEK unless otherwise stated 2024 2023
EBITA and EBITDA
Net profit 6,887 6,777
Taxes 2,202 2,404
Financial income and expense, net 1,250 1,903
Operating profit 10,339 11,084
Amortizations of intangible assets 632 657
EBITA 10,971 11,741
Depreciation and impairments of intangible and tangible assets 3,800 3,640
EBITDA 14,771 15,381
Adjusted EBITA and Adjusted EBITDA
Net profit 6,887 6,777
Taxes 2,202 2,404
Financial income and expense, net 1,250 1,903
Items affecting comparability 1,844 1,893
Adjusted Operating profit 12,183 12,977
Amortizations of intangible assets 632 657
Adjusted EBITA 12,815 13,634
Depreciation 3,455 3,490
Adjusted EBITDA 16,270 17,124
Adjusted operating profit
Operating profit 10,339 11,084
Items affecting comparability
1)
1,844 1,893
Adjusted operating profit 12,183 12,977
Net working capital (NWC) of 12-months rolling sales
Total net sales 98,722 103,881
Inventories 26,182 23,194
Trade receivables 16,600 16,811
Trade payables –12,553 –11,236
Net working capital 30,229 28,768
NWC of 12-months rolling sales, % 30.6 27.7
1) For more information, see page 34.
MSEK unless otherwise stated 2024 2023
Return on Equity (ROE) (rolling 12-months average)
Net profit 6,887 6,777
Equity (rolling 12-months average) 58,852 56,511
ROE (rolling 12-months average), % 11.7 12.0
Capital employed (rolling 12-months average)
Total assets 116,558 115,434
Provisions 4,158 3,658
Other non-current liabilities 90 58
Trade payables 11,777 11,877
Other current liabilities 11,612 11,953
Non-interest bearing liabilities 27,636 27,546
Capital employed (rolling 12-months average) 88,922 87,888
Return on capital employed (ROCE) (rolling 12-months average)
Operating profit 10,339 11,084
Interest income – external 436 562
Operating profit plus interest income 10,775 11,645
Capital employed (rolling 12-months average) 88,922 87,888
ROCE (rolling 12-months average), % 12.1 13.3
Adjusted return on capital employed (ROCE) (rolling 12-months average)
Adjusted operating profit 12,183 12,977
Interest income – external 436 562
Adjusted operating profit plus interest income 12,619 13,539
Capital employed (rolling 12-months average) 88,922 87,888
Adjusted ROCE (rolling 12-months average), % 14.2 15.4
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MSEK unless otherwise stated 2024 2023
Debt and Net debt
Long term loans – total 12,594 15,325
Current financial liabilities 5,361 4,060
Short term derivative liabilities –627 –260
Post-employment benefits – other 810 780
Post-employment benefits – pension 7,692 8,017
Defined benefit assets –773 –219
Long term lease liabilities 2,714 2,207
Debt 27,771 29,910
Current financial assets –11,361 –14,053
Short term derivative assets 62 334
Net debt 16,472 16,191
Gearing
Shareholder's equity 61,969 54,956
Debt 27,771 29,910
Gearing, % 30.9 35.2
Equity/assets ratio
Shareholder's equity 61,969 54,956
Total assets 119,413 111,903
Equity/assets ratio, % 51.9 49.1
Net debt/equity
Shareholder's equity 61,969 54,956
Net debt 16,472 16,191
Net debt/equity, % 26.6 29.5
Net debt/equity, excl post-employment benefits
Shareholder's equity 61,969 54,956
Net debt, excluding post-employment benefits 8,743 7,613
Net debt/equity, excl post-employment benefits, % 14.1 13.9
Net debt/Adjusted EBITDA
Net debt 16,472 16,191
Adjusted EBITDA 16,270 17,124
Net debt/Adjusted EBITDA 1.0 0.9
Net debt/EBITDA
Net debt 16,472 16,191
EBITDA 14,771 15,381
Net debt/EBITDA 1.1 1.1
Alternative performance measures, cont.
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General information
Annual General Meeting
The Annual General Meeting will be held at Radisson
Blu Scandinavia Hotel, Södra Hamn gatan 59, Gothen-
burg, Sweden, at 14.00 on Tuesday, 1 April 2025.
The Board of Directors has decided that the share-
holders shall be able to exercise their voting rights
by postal voting in accordance with the company’s
articles of association.
Payment of dividend
The Board of Directors proposes a dividend of
SEK 7.75 per share for 2024. Thursday, 3 April 2025
is proposed as the record date. Subject to resolu-
tion by the Annual General Meeting, it is expected
that Euroclear will distribute the dividend on
Tuesday, 8 April 2025.
Financial information and reporting
Publishing dates for financial reports in 2025:
Annual Report 2024 7 March
Q1 report 25 April
Q2 report 18 July
Q3 report 29 October
Q4 report 30 January 2026
The reports are available in Swedish and English
on investors.skf.com. A subscription service for
press releases and interim reports, sent via
e-mail or SMS, is available on the website.
Contact information
Sophie Arnius
Head of Investor Relations
investors.skf.com
Carl Bjernstam
Head of Media Relations
SKF Group Headquarters
SE-415 50 Gothenburg, Sweden
Telephone: +46 31 337 10 00
www.skf.com
Company registration no 556007-3495
Cautionary statement
This report contains forward-looking statements that
are based on the current expectations of the manage-
ment of SKF. Although management believes that the
expectations reflected in such forward-looking state-
ments are reasonable, no assurance can be given
that such expectations will prove to have been correct.
Accordingly, results could differ materially from those
implied in the forward-looking statements as a result
of, among other factors, changes in economic, market
and competitive conditions, changes in the regulatory
environment and other government actions, fluctua-
tions in exchange rates and other factors mentioned
in the Administration Report in this Annual Report.
AB SKF is obliged to make this Annual Report public
pursuant to the Securities Markets Act. The report was
submitted for publication through the agency of the
contact persons set out above, on 7 March 2025 at
13.00 CET.
® SKF, ALEMITE, DST, GBC, KAYDON, Lincoln, PEER, and
RecondOil are registered trademarks of AB SKF (publ).
© SKF GROUP 2025. All rights reserved. Please note that
this publication may not be copied or distributed, in whole
or in part, unless prior written permission is granted.
Every care has been taken to ensure the accuracy of the
information contained in this publication, but no liability
can be accepted by SKF for any loss or damage whether
direct, indirect or consequential arising out of the use of
the information contained herein.
PUB GCR/R1 20015 EN · March 2025
SKF Annual Report 2024 was published on
7 March 2025.
Produced by AB SKF and Solberg Kommunikation.
Photo credits: SKF Group, Robin Aron, STARK, John
Hagby and Magnus Fond. Certain images used under
license from Shutterstock.com.
More information about the Annual General
Meeting including preconditions for participation
and instructions for postal voting can be found
in the notice and is available at www.skf.com.
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remuneration
report
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This report describes how the principles of remuner-
ation for Group Management, adopted by the Annual
General Meeting 2020 and revised in 2022, have
been implemented in 2024. The report has been pre-
pared in accordance with the Swedish Companies
Act and the remuneration rules issued by the Stock
Market Self-Regulation Committee.
SKF’s view upon remuneration
Remuneration is an important component of SKF’s
total employee offering. The objective of the remu-
neration principles is to ensure that the SKF Group
can attract and retain the best people to contribute
to the SKF Group’s mission, long-term interests and
business strategy. Remuneration for Group Manage-
ment, including the President and CEO, shall be
based on market competitive conditions while align-
ing with the best interests of shareholders.
Closely linked to long term ambitions,
targets and strategy
SKF’s strategy is centred around two key concepts:
Intelligent and clean. Intelligent reflects, among other
things, the commitment to providing connected and
customized solutions for customers while utilizing
technology to improve operational efficiency. Clean
emphasize SKF's role in driving a more sustainable
industry and conducting business transparently and
responsibly.
To capture profitable growth, SKF is focusing
on several strategic priorities:
• Strengthening the position in high-growth seg-
ments where SKF already holds a strong foothold.
• Review the portfolio in order to concentrate
on the most profitable segments, customers,
and products.
• Develop solutions for emerging industries
that leverage new technologies.
• Refocus the service business to deliver
more value.
Central to the strategy is also the continued work
towards net-zero greenhouse gas emissions in the
entire value chain by 2050, with significant reduc-
tions in scope 1 and 2 already by 2030.
SKF’s variable salary programmes effectively
support the strategic objectives by aligning incen-
tives with key areas of focus. Both the one-year and
multi- year variable programmes are pre determined,
measurable and structured to balance growth,
profitability, operational efficiency and the reduction
of greenhouse gas emissions, thereby driving both
financial performance and sustainability.
Read more about the performance measures on
pages 19
–20.
Transparency and comparability
When it comes to salaries and compensation, SKF
is commited to be transparent and open about the
principles and actual outcomes. This also includes
performance measures and criteria for variable
compensation components.
Stakeholder dialogue is important to SKF, and this
report takes into account, views, opinions and feed-
back from shareholders.
Key highlights 2024
For information about key highlights 2024, please
see the President´s letter on pages 7–9 in the SKF
Annual Report 2024.
Remuneration to the Group Management, including
the President and CEO, is governed by a set of prin-
ciples of remuneration adopted by the shareholders
at the Annual General Meeting. The principles of
remuneration shall be adopted by the shareholders
at least every fourth year. The principles currently
in force were first adopted in 2020 and revised in
2022. The principles are found on the Group’s web-
page, www.skf.com and are further described in
note 23 on pages 61–64 in the Group's Annual
Report for 2024 (the “Annual Report 2024”) which
also contain information on remuneration payments
expensed during the year as required by Chapter 5,
Sections 40–44 of the Annual Accounts Act
(1995:1554).
SKF
’s Board of Directors has established a Remu-
neration Committee responsible for the preparation
of matters relating to remuneration to the Group
Management. The Remuneration Committee has
no executive directors i.e. no-one from the Group
Management is part of the Remuneration Commit-
tee. Information on the work of the Remuneration
Committee in 2024 is set out in the Corporate Gov-
ernance report, which is available on pages 150–160
in the Annual Report 2024. Remuneration of the
Board of Directors is not covered by the remunera-
tion report. Such remuneration is resolved annually
by the Annual General Meeting and disclosed in
note 23 on page 61–64 in the Annual Report 2024.
Each year, the Remuneration Committee evalu-
ates the overall remuneration package to Group
Management and proposes to the Board of Direc-
tors, who resolve on the level, components and
design of Group Management remuneration and
incentive programmes for the forthcoming year in
accordance with the principles of remuneration.
This includes components such as fixed salary and
the short term variable salary programme. In addi-
tion to remuneration covered by the principles of
remuneration, the Annual General Meeting of the
Group has resolved to implement a performance
share programme for senior managers and key
employees. More information is found on pages
170 and 173.
As communicated in September 2024, the Board
of Directors has decided to initiate a separation of
the Group’s Automotive business with the objective
of a separate listing on Nasdaq Stockholm.
To incentivize sustained dedication, focus and com-
mitment from Group Management to achive the
ambitious goals to timely, efficiently and success-
fully create two robust and high-performing busi-
nesses and while simultanously driving business
results and growth, the Board of Directors has
decided to introduce a separate incentive pro-
gramme. Implementing a transformative project as
described above while at the same time managing
ongoing business performance is deemed by the
Board of Directors to constitute a special cause to
motivate a deviation from the principles of remuner-
ation and introduce an additional remuneration
component to align with SKF’s long-term interests.
Further information on this incentive programme is
available on page 174.
Beyond the deviation described above, the princi-
ples of remuneration have been fully implemented
and no derogations from the procedure for imple-
mentation of the principles have been made. The
auditor’s report regarding the Group’s compliance
with the principles is available on www.skf.com.
No remuneration has been reclaimed.
This remuneration report has been prepared in
compliance with Chapter 8, Sections 53 a and
53 b of the Swedish Companies Act (2005:551)
and the Rules on Remuneration to directors and
Incentive programs issued by the the Stock Market
Self-Regulation Committee.
Remuneration governance
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Remuneration structure
In accordance with the principles adopted by the
Annual General Meeting 2020 and revised in 2022,
the total remuneration package for Group Manage-
ment members, including the President and CEO,
shall consist of fixed salary, variable salary, pension
Components Description in brief
Fixed salary The fixed salary of a Group Management members shall be at a market competitive level and
determined based on competence, responsibility, experience and performance.
SKF Group uses an internationally well-recognized evaluation system to evaluate the scope
and responsibilities of the position. Market benchmarks shall be conducted on a yearly basis.
The performance of Group Management members shall be continuously monitored during the
year and shall be used as a basis for annual reviews of fixed salaries.
One-year
variable salary
The variable salary of Group Management members shall be determined according to a performance-
based programme. The satisfaction of criteria for awarding variable salary shall be measured over
a period of one year. The maximum variable salary is set between 50% to 70% of the accumulated
annual fixed salary of Group Management members.
Purpose of the programme
The purpose of the programme is to motivate and compensate value-creating achievements to
support operational, financial and sustainability targets, thereby promoting the SKF Group’s business
strategy, sustainability and long-term interests. The performance-based programme shall have pre-
determined and measurable criteria which can be both financial and non- financial.
Description and purpose of the performance criteria
SKF’s variable salary programme aligns well with the strategy by directly incentivizing key perfor-
mance areas that support long-term ambitions. Below is an explanation of how each performance
criterion corresponds to the strategy:
1. Adjusted operating margin: This metric encourages profitability and is aligned to SKF´s focus
on optimizing value creation and achieving profitable growth. Rewarding improvements in
operating margin supports enhancements in efficiency and cost management, and also
supports the review of the portfolio to focus on more profitable segments, customers,
and products.
2. Net working capital: Managing net working capital effectively ensures liquidity and operational
efficiency, which is crucial for the ability to make investments and sustain growth.
3. Organic growth: By incentivizing organic growth, SKF encourage innovation and market expan-
sion. This aligns with the strategy to focus on customer value creation, high-growth segments
and new technologies, driving sustainable and profitable growth.
4. Reduction of greenhouse gas emissions: This component directly supports SKF’s commitment
to sustainability and achieving net-zero greenhouse gas (GHG) emissions in the entire value
chain by 2050, with significant reductions in scope 1 and 2 already by 2030. By linking variable
salary to emission reductions, SKF ensures that activities aimed at reducing GHG emissions
are integrated into everyday business operations, reinforcing the strategy of enabling a more
sustainable industry.
Components Description in brief
Multi-year
variable
remuneration
The multi-year variable for Group Management consists of shares received under SKF’s
Performance Share Programme.
Purpose of the programmes
The purpose is to motivate senior managers beyond their regular cash-based compensation
and to align their interests with those of the Group's shareholders.
Description and purpose of the performance criteria
The programmes have pre-determined and measurable performance criteria that are distinctively
linked to the business strategy and thereby to the SKF Group’s long-term value creation, including
its sustainability.
1. Total Value Added (TVA): This metric is a simplified economic value-added measure supporting
SKF´s focus on greater operating profit, capital efficiency and profitable growth.
2. CDP Climate Change score: This component measures and incentivizes SKF’s performance
relating to climate change and environmental impact and reinforces the strategy of enabling
a more sustainable industry. From PSP 2023 and onwards this criterion replaces the previous
CO2 emission reduction target used in PSP 2022 programme.
Other benefits The SKF Group may provide other benefits to Group Management members in accordance with
local practice. Premiums and other costs relating to such benefits shall depend on and follow local
conditions and local practice but shall represent, as a general rule, a limited value and may amount
to not more than 10% of the accumulated annual fixed salary of the members of Group Management.
Other benefits can be, for instance, a company car or health and medical insurance.
Pension The SKF Group shall strive to establish pension plans based on defined contribution models, which
means that a premium is paid amounting to a certain percentage of the employee’s annual salary.
The commitment in these cases is limited to the payment of an agreed premium to an insurance
company offering pension insurance. In addition to the basic pension, Group Management member
shall normally be covered by a supplementary defined contribution pension plan. By offering this
supplementary defined contribution plan, it is ensured that Group Management members are enti-
tled to earn pension benefits based on the fixed annual salary above the level of the basic pension.
The normal retirement age for Group Management members shall be 65 years.
Severance pay In the event of termination of employment at the request of the company, the Group Management
member shall receive a severance payment based on their years of service, up to a maximum of
two years’ fixed salary.
benefits, conditions for notice of termination and
severance pay, and other benefits. The components
shall create a well-balanced remuneration reflecting
individual performance and responsibility as well as
the SKF Group’s overall performance.
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Change of remuneration for the President and CEO and company performance over the last reported financial years (kSEK)
1)
2024 2024 vs. 2023 2023 vs. 2022 2022 vs. 2021 2021 vs. 2020
Remuneration 30,201 –5,789 (–16%) +11,223 (+45%)
2)
+868 (+3.6%) +2,506 (+11.7%)
Adjusted operating profit
3)
12,183,000 –794,000 (–6%) +2,773,000 (+27%) –635,000 (–5.9%) + 1,645,000(+17.9%)
Cash flow
4)
10,792,000 –2,991,000 (–22%) +8,142,000 (+144%) +393,000 (+7.5%) –3,017,000 (–36.5%)
Change in average remuneration on a full-time
equivalent basis of employees in AB SKF 1,087 –50 (–4%) +86 (+8%) +3 (+0.3%) +18 (+1.7%)
1) 2020 was the first reference year and, therefore, no year over year changes for the previously reported financial years (RFY) will be presented. Coming years will be added so that the annual change over the last
five years will be visible.
2) The development of the President and CEO remuneration between 2022 to 2023 relates to a 2% increase on the fixed salary, an 18% increase related to improved results in the one-year variable salary
programme and a 25% increase related to the multi-year variable salary programme (SKF Performance Share Program 2021). The SKF PSP 2021 was the first multi-year incentive program in which the President
andCEO participated in and was allotted shares.
3) Operating profit excluding items affecting comparability.
4) Net cash flow from operating activities.
Total remuneration in 2024 (kSEK)
Fixed remuneration Variable remuneration
Year
Fixed salary (includ-
ing vacation pay)
Other
benefits
Pension
expense
One-year
variable salary
Multi-year
variable salary
Extraordinary
items Total
Proportion of fixed
and variable
remuneration, %
Rickard Gustafson,
President and CEO
2024 15,712 266 6,013 4,582 3,628
1)
— 30,201 73/27
2023 14,970 222 5,573 8,928 6,297 — 35,990 58/42
1) The multi-year variable consists of the PSP 2022 programme that vested on 7 February 2025. The share price at vesting was 221.40.
Total remuneration of the President and CEO 2024
The table below sets out the total remuneration earned to SKF's President and CEO.
variable
Proportion of fixed and variable renumeration
Variable renumeration, 27%
Fixed renumeration, 73%
2024 2023
Pension expense
Multi-year variable salary
One-year variable salary
Fixed salary
0
40 MSEK
32
24
16
8
Total remuneration CEO
Comment on the development for 2024
The table above shows the CEO and average
employee remuneration, along with the Group’s
financial performance development from 2020 to
2024. As can be seen, compared to the average
employee remuneration, there is a higher variance
in the CEO’s remuneration, as it is more influenced
by variable components that depend on SKF’s
financial performance.
In 2024, the SKF financial performance is strong,
though slightly softer compared to the previous year.
This is reflected in the lower CEO remuneration for
2024 compared to last year.
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One-year variable remuneration
The Board of Directors, each year, after preparation
in the Remuneration Committee, resolve on the per-
formance criteria for the one-year variable remunera-
tion programme. The performance criteria for the
President and CEO’s variable remuneration have been
selected to deliver the SKF Group's strategy and to
encourage behaviour which is in the long-term
Performance criteria
1)
Relative weighting of
the performance criteria Actual result 2024
Performance
achievement 2024 Actual award 2024, KSEK
Rickard Gustafson,
President and CEO
Adjusted operating margin 50% 12.3% 32.5%
Net working capital 30% 31.2% 0%
Organic growth 10% –5.4% 0%
Reduction greenhouse gas
emission 10%
>33,290 CO
2
e metric
tonnes reduction
2)
10%
100% 42.5% 4,582
One-year variable performance 2024 and remuneration of the President and CEO
Performance criteria
1)
Relative weighting of
the performance criteria
Rickard Gustafson,
President and CEO
Adjusted operating margin 40%
Net working capital 20%
Organic growth 30%
Reduction greenhouse gas
emission 10%
100%
1) The criteria for adjusted operating margin, net working capital and organic growth can result in an outcome
between 0% and 120%. The payout is linear between minimum and target and target and maximum.
The Greenhouse gas emission reduction criterion can only result in either a 0% payout if the target is
not achieved or a 100% payout if the target is achieved or exceeded. However, the total outcome for the
one-year variable remuneration is capped and cannot generate more than a 100% payout.
2) See more details on achieved CO
2
reduction in the Sustainability Report.
Performance criteria and weighting for the 2025 one-year variable
remuneration programme
interest of the SKF Group. In the selection of per-
formance criteria, the strategic objectives, sustaina-
bility, short-term and long-term business priorities
for 2024 have been taken into account.
The first table describes how the performance
criteria for the one-year variable remuneration were
applied during the year.
For the 2025 programme, the Board have resolved
on the same performance criteria as for the 2024
programme with a slight change in the relative
weighting of the performance criteria (compared to
the 2024 programme). See second table for the 2025
performance criteria.
172SKF ANNUAL REPORT 2024
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STRATEGY AND
VALUE CREATION
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SUSTAINABILITY
REPORT
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REMUNERATION
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Performance Share Programme expired in 2024
The SKF Performance Share Programme 2022 expired at the end of 2024.
Programme Performance period Vesting Performance criteria Conditions
Relative weighting
performance criteria
Possible
outcome
Maximum share awards
granted to CEO
Actual
result
Performance
achievement
Number of
shares alloted
PSP 2022
1 Jan 2022–
31 Dec 2024
February
2025
TVA Average of the Annual TVA over the performance
period compared to the actual TVA of 2021
90 % 0%–100% 32,850 6,070 MSEK 34.89%
Reduction of
Co
2
emission
1)
Average annual Co
2
reduction equal to or above
41,100 metric tonnes
10 % 0% or 100%
(binary)
3,650 >41,100 metric
tonnes
2)
10%
100% 36,500 44.89% 16,385
Ongoing Performance Share Programme
Programme Performance period Performance criteria Conditions
Relative weighting
performance criteria
Possible
outcome
Maximum share awards
granted to CEO
PSP 2023
1 Jan 2023–
31 Dec 2025
Total Value Added (TVA) Over the performance period, the TVA performance target range is set annually against the baseline of the
actual TVA achieved in the previous year. The overall performance achievement for the TVA performance
measure of the programme is the average of achievements of the annual TVA targets.
80 % 0%-100%
CDP Climate Change score
1)
Weighted average of the annual performance achievement for the performance period. An average score
of A (CDP score) gives an outcome of 100%. An average score of below B (CDP score), gives a 0% outcome.
20 % 0%–100%
100% 54,904
3)
Programme Performance period Performance criteria Conditions
Relative weighting
performance criteria
Possible
outcome
Maximum share awards
granted to CEO
PSP 2024
1 Jan 2024–
31 Dec 2026
Total Value Added (TVA) Over the performance period, the TVA performance target range is set annually against the baseline of the
actual TVA achieved in the previous year. The overall performance achievement for the TVA performance
measure of the programme is the average of achievements of the annual TVA targets.
80 % 0%-100%
CDP Climate Change score Weighted average of the annual performance achievement for the performance period. An average score
of A (CDP score) gives an outcome of 100%. An average score of below B (CDP score), gives a 0% outcome.
20 % 0%–100%
100% 54,386
4)
1) From the SKF Performance Share Programme 2023 and programmes thereafter a performance criterion related to the CDP Climate Change score has been included in the programme and replaces the previous sustainability criterion (CO
2
emission) used in the 2022 programme.
2) See more details on CO
2
emissions reductions in the Sustainability report
3) Shares corresponding to a value of 75% of the fixed salary.
4) Shares corresponding to a value of 75% of the fixed salary.
PSP, performance periods
20232022
PSP 2022
PSP 2024
PSP 2023
2024
2025
2026
Multi-year variable remuneration
(Performance Share Programme)
Since 2008 the Annual General Meeting has resolved
each year upon a multi-year variable renumeration
programme, the SKF Performance Share Programme
(PSP) for senior managers and key employees. The
performance criteria used to assess the outcome for
each of the currently running programmes are
distinctively linked to the business strategy and,
thereby, to the SKF Group’s long-term value creation,
including its sustainability.
For further information on all currently running
Performance Share Programmes, please see below.
173SKF ANNUAL REPORT 2024
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Creation of two robust and
high-performing businesses
To incentivize sustained dedication, focus, and
commitment from Group Management to reach the
ambitious goals, the Board of Directors has decided
to implement a separate incentive program for Group
Management. The goals include timely, efficient,
and successful creation of two robust and high-
performing businesses while driving business
results and growth. This follows the announcement
in September 2024 of the decision by the Board of
Directors to initiate a separation of the Automotive
business with the objective of a separate listing on
Nasdaq Stockholm.
By investing in this programme, SKF creates a
powerful motivator to, as far as possible, ensure
successful execution of the separation and listing
initiatives as well as the highest level of engagement
from Group Management in reaching the ambitious
goals and identified critical objectives key to the
Group's long-term success.
The incentive programme offers the opportunity
to be awarded a cash contribution in the form of
a multiple of the monthly fixed salary. The perfor-
mance period runs from 17 September 2024 until a
successful listing on Nasdaq Stockholm of the Auto-
motive business. Listing on Nasdaq Stockholm is
subject to the approval of the shareholders at a
general meeting. Payout will be made, following
a decision by the Board of Directors, in the months
following the potential listing on Nasdaq Stockholm.
The level of achievement and hence the level of
payout under the programme is measured against
certain pre- determined performance criteria. Pro-
vided that the performance criteria are fully met,
the President and CEO may be awarded a cash
contribution equal to twelve months of fixed salary.
The per formance criteria are: Timeline, the objective
of following the listing timeline including the
Auto motive business being successfully listed on
Nasdaq Stockholm, Target Delivery, an assessment
based on the achievement of key deliverables in
the project, and Cost Reduction, targets to identify
and mitigate stranded costs and dis-synergies.
The three performance criteria are weighted as
follows: Timeline 50%, Target delivery 25% and
Cost reduction 25%.
A precondition for payout under the programme
is that the participants´ employment has not been
terminated. The awarded cash payment is not in -
cluded in pensionable salary. The Board of Directors
may modify or terminate the programme.
Before determing the final payout, the Board of
Directors will assess whether the payout is reasonable
considering the Group's financial results and posi-
tion, the stock market conditions and other relevant
factors. If deemed necessary, the Board may reduce
the cash contributions to a lower amount considered
appropriate.
174SKF ANNUAL REPORT 2024
THIS
IS SKF
PRESIDENT’S
LETTER
STRATEGY AND
VALUE CREATION
THE BEARING
MARKET
RISKS AND
THE SHARE
SUSTAINABILITY
REPORT
CORPORATE
GOVERNANCE
REMUNERATION
REPORT
GROUP
DATA
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STATEMENTS
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AB SKF
SE-415 50 Gothenburg, Sweden
Telephone +46 31 337 10 00
www.skf.com