2025
Annual and
Sustainability Report
This is SKF ............................................................................................................ 3
President’s letter
............................................................................................... 4
SKF Group post Automotive separation
.................................. 12
Automotive
.............................................................................................................. 13
RISKS AND THE SHARE
....................................................................... 14
Risk management
............................................................................................. 15
The SKF share
...................................................................................................... 17
Contents
SUSTAINABILITY STATEMENTS ............................................... 31
General disclosure
.......................................................................................... 32
Environment
........................................................................................................... 41
Social
............................................................................................................................. 69
Governance
............................................................................................................. 86
Appendix
.................................................................................................................... 92
Auditors limited assurance report of AB SKF (publ)’s
statutory sustainability statement
................................................ 96
What has happened to
the front-end section?
We have streamlined the front-end section
of our 2025 annual report. Instead of a broad
introduction and company description, we
now present an extended CEO’s letter covering
our financial development, strategy and value
creation. For more information about SKF and
our business, please visit our website.
www.skf.com/group/investors
FINANCIAL STATEMENTS, PARENT COMPANY .... 135
Parent Company, AB SKF
......................................................................... 135
Parent Company income statements
......................................... 135
Parent Company statements of
comprehensive income
.............................................................................. 135
Parent Company balance sheets
..................................................... 136
Parent Company statements of cash flow
............................. 137
Parent Company statements of changes in equity
...... 137
Notes to the financial statements
of the Parent Company
............................................................................... 138
Proposed distribution of surplus
..................................................... 144
Auditor’s Report
................................................................................................. 145
OTHER INFORMATION
........................................................................... 147
Capital structure, financing, credit rating
and dividend policy
........................................................................................ 148
Nomination of Board members and
notice of Annual General Meeting
.................................................. 148
The Board of Directors’ proposal for
a resolution on guidelines for remuneration
to senior executives
....................................................................................... 149
Seven-year review
........................................................................................... 151
Three-year review
............................................................................................ 152
Alternative performance measures
.............................................. 152
Definitions
................................................................................................................ 154
General information
....................................................................................... 155
REMUNERATION REPORT
................................................................. 156
CORPORATE GOVERNANCE REPORT
................................ 19
The Board of Directors
................................................................................ 24
Group Management
........................................................................................ 27
Auditor’s Report on the
Corporate Governance Statement
................................................. 30
3
14
19 98
31
FINANCIAL STATEMENTS ................................................................. 98
Consolidated income statements
.................................................. 99
Consolidated statements
of comprehensive income
....................................................................... 99
Consolidated balance sheets
.............................................................. 101
Consolidated statements of cash flow
...................................... 103
Consolidated statements of changes in equity
............... 106
Notes to the consolidated financial statements
............ 107
SKF Group’s formal Annual Report is presented on
pages 14–29, 31–95, 98–144 and 148–150. It has been
audited by SKF’s external auditors. See the Auditor’s
Report on pages 145–146.
The Administration Report is presented on pages 14–18,
31–95 and 148–150.
PRESIDENT’S
LETTER
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
OTHER
INFORMATION
REMUNERATION
REPORT
FINANCIAL
STATEMENTS
More
progress
Less
friCtion
SKF is a trusted and leading global industrial
brand with a presence in around 130 countries.
We operate across four regions, to serve
customers with speed and responsiveness.
SKF operates through Industrial and Automotive,
with Industrial being the largest. In 2026, we plan
to separate Automotive and create two sharper,
independent businesses, enabling each to focus
on its markets and growth opportunities while
unlocking additional shareholder value.
Net sales by geographic area
– total
China and
Northeast Asia, 19%
India and
Southeast Asia, 11%
The Americas, 29%
Europe, Middle East
and Africa, 41%
Share of
Group net sales
What we do
Where we operate
How we are organized
With hands-on experience in over 20 industries,
we provide a comprehensive portfolio and
knowledge built on our core technology platforms:
bearings, seals, lubri cation systems, intelligent
solutions (such as condition monitoring) and
services. By integrating these platforms, we
deliver cus tomized solutions to meet each
customer’s unique needs.
Around 20% of all global energy is lost to
friction. At SKF, we fight friction to save
energy and resources, providing tailored
engineering solutions throughout our
customers’ product lifecycles. With over
a century of expertise and a trusted global
presence, we help industries improve
performance, efficiency and sustainability.
SKF operates across a wide range of industries,
with a strong focus on sectors where reliability
and efficiency are critical. Key industries
include aerospace, railway, automotive, high-
speed machinery and electrical drives, heavy
industries, agriculture, food and beverage.
Automotive, 28%
Industrial, 72%
>20
Automotive, 28%
Industrial, 72%
Share of
Group net sales
Read more about the
separation on pages 12–13
3SKF ANNUAL REPORT 2025
PRESIDENT’S
LETTER
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
OTHER
INFORMATION
REMUNERATION
REPORT
FINANCIAL
STATEMENTS
“We Continue
to unLoCk
Long-terM
vaLue”
SKF ANNUAL REPORT 2025 4
PRESIDENT’S
LETTER
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
OTHER
INFORMATION
REMUNERATION
REPORT
FINANCIAL
STATEMENTS
Creating two even sharper
businesses
For more than a century, SKF has built its repu-
tation as a global leader in bearing technology
and solutions, grounded in deep engineering
expertise, a trusted brand, and strong customer
relations. In 2025, we continued to strengthen
these foundations, enabling sharper customer
focus and enhanced long-term value creation.
Despite challenging market conditions and
continued geopolitical uncertainty, I am pleased
to conclude that we delivered resilient results.
We also continued to execute on our strategy,
including the ongoing separation of our Auto-
motive business, and we are now creating two
independent and, even stronger fit-for-purpose
businesses. By transforming SKF into a more
focused organization, we are positioning our-
selves well for accelerated, profitable growth.
Challenging market conditions
For the full year, organic sales declined by –0.4%
compared with 2024, reflecting challenging
market conditions, not least in the Automotive
business in Europe and the Americas. Our Indus-
trial business grew 1.2%, while organic sales in
our Automotive business declined –4.3%. Overall,
market conditions in 2025 remained unchanged
from the previous year, with generally weak
demand across many industries.
Looking at our main geographical regions,
demand in Europe remained challenging
throughout the year, resulting in an organic
sales decline. However, our businesses within
the newly established Specialized Industrial
Solutions, such as aerospace, performed well.
In China, organic growth was positive, mainly
driven by a somewhat improved business senti-
ment and timing effects in the wind business.
Demand related to electrical vehicles continued
to perform well. The Americas and India reported
relatively flat organic sales for the full year. In the
Americas, an active commercial agenda, includ-
ing tariff-related price increases, largely offset
weaker demand. In India, the main contributing
industries were railway, food value chain and
commercial vehicles.
Resilient and improved margins
It is encouraging that we once again delivered
resilient profitability in this weak demand
environ ment, particularly given the significant
currency headwinds faced during the year. The
adjusted operating margin of 12.7% improved
compared to last year. The adjusted operating
margin in our Industrial business was strong
and increased to 16.1%, while the Automotive
business performed relatively well, considering
the challenging market conditions, with a
margin of 4.1%.
Market performance
Long-term targets
1)
PRESIDENT’S LETTER
The global bearing market, valued at
approximately BSEK 500, is a critical
segment of the machinery industry.
Geographically, Asia-Pacific is the largest
and fastest growing region.
The market is led by SKF, along with
other major international players like
Schaeffler, Timken, NSK, NTN and JTEKT.
These top six manufacturers account for
more than half of the global rolling bearing
market. Given the market’s consolidation,
global brand recognition and high-quality
standards are key differentiators.
The global bearing market is experiencing
steady long-term growth driven by mega-
trends, which require more advanced
technical expertise, products and solu-
tions. In 2025, the market is estimated to
have grown somewhat, driven by growth
in the industrial bearing market, primarily
in China. The automotive market was
relatively flat compared to last year,
with growth in China.
Read more on www.skf.com/group/investors
Net sales and revenue growth
2)
Adjusted operating profit
and adjusted operating margin
1) Targets to be achieved over a business cycle.
2) Sales excluding effects of currency and divested businesses.
5
0
–5
10
% 15
60,000
30,000
0
90,000
120,000 MSEK
24232221 25
Net sales, MSEK
Revenue growth, %
Target 5%
10
5
0
15
% 20
8,000
4,000
0
12,000
16,000 MSEK
24232221 25
Adjusted operating profit, MSEK
Adjusted operating margin 12 months rolling, %
Target 14%
Target 14%
5SKF ANNUAL REPORT 2025
PRESIDENT’S
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OTHER
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Our focus on commercial excellence yielded
strong results. I would like to highlight our pricing
actions, where we have established stronger
capabilities to capture the full customer value
that our offerings bring. Price adjustments have
also been an important lever in mitigating the
impact of U.S.-imposed tariff costs. Another area
to highlight is portfolio management where our
focus on industries with the most attractive
profitable growth profile for SKF has contributed
to our earnings.
Our corporate culture embeds a mindset of
continuous improvement, ensuring resilience
and competitiveness, well beyond manufactur-
ing. As an example, we successfully redesigned
existing products using new technologies to
improve efficiency, which resulted in less usage
of different materials. This mindset contributed
to this year’s solid cost control. The World Class
Manufacturing programme, focusing on automa-
tion and regionalization of our manu facturing
footprint, was completed on time and delivered
the targeted business benefit of BSEK 5 in 2025
compared to 2019.
To further enhance competitiveness after
the separation of the Automotive business, we
initiated a rightsizing of our Industrial business
in 2025, primarily impacting staff positions in
Europe. Estimated savings of approximately
BSEK 2 are expected to more than offset the
negative synergies related to the Automotive
separation.
The costs related to the rightsizing program as
well as separating the Automotive business, for
example related to IT, manufac turing, and setting
up new legal entities, explain the sub stantial
increase in items affecting com para bility com-
pared to last year. However, we firmly believe
that two separated and focused businesses will
further enhance customer relevance and long-
term value creation in both businesses.
Strong financial position
I’m pleased to say that we have a strong capital
structure and balance sheet which has enabled us
to repay loans. This has resulted in a decreased
net debt
2)
/equity to 10.2% in 2025. It is also satis-
fying to conclude that our liquidity remains strong.
We have had a stable adjusted ROCE of around
14% in 2025. To improve, we continue to focus on
having more efficient working capital manage-
ment through a more digitalized and regionalized
value chain.
The five-year average for our dividend pay-out
ratio is 59% which is above our target. The Board
has proposed to the Annual General Meeting
a dividend of SEK 7.75 per share.
Leading the way in sustainability
Sustainability is an integral part of our strategy
and a priority for long-term profitable growth.
We aim to dramatically cut emissions by 2030
and achieve net-zero greenhouse gas emissions
in our supply chain by 2050. Both targets have
been approved by the Science Based Targets
Initiative. We also continue to support the UN
Global Compact initiative, its principles and
the Global Goals for 2030.
Net debt
2)
/equity
Dividend pay-out ratio Decarbonized operations
4)
by 2030
Adjusted ROCE
200
100
0
300
400
23222119
BASE YEAR
24 25
500 thousand tonnes CO
2
e
1) Targets to be achieved over a business cycle.
2) Excluding pension liabilities.
3) According to the Board’s proposal for the year 2025.
4) Target 95% reduction in scope 1 and 2 emissions by 2030 vs. 2019.
Long-term targets
1)
cont.
20
10
0
30
40
50 %
24232221 25
Target <40%
40
20
0
60
80 %
232221 24 25
3)
Target 50%
10
5
0
15
20 %
24232221 25
Target 16%
Target –95%
by 2030
6SKF ANNUAL REPORT 2025
PRESIDENT’S
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Our target is to have decarbonized operations
by 2030. In 2025, we reached a 79% reduction
vs 2019 base year. This is well ahead of our 2030
goal trajectory which shows that our focus is pay-
ing off. I’m also very pleased that six additional
fac tories were declared decarbonized in 2025.
We have also made significant strides in increas-
ing our use of electricity from renewable sources
that reached 91% in 2025. In addition, we have
continued to improve our energy efficiency.
Throughout the year, we have persistently con-
tinued to work towards our mission to create safe
and healthy workplaces across all SKF opera-
tions. Our unwavering commitment to achieving
zero accidents is a cornerstone in our strategic
approach to employee wellbeing and operational
excellence. I am pleased to report an improve-
ment in 2025 compared to last year.
Equally, we have stood firm in fostering an
inclusive and respectful work environment to
ensure equal opportunities for all. These prin-
ciples are deeply embedded in our culture and
drive the way we work every day.
We are driving responsible sourcing by ensur-
ing that all suppliers and sub-contractors uphold
fair working conditions, prevent work-related
injuries, and respect human rights throughout
SKF’s upstream value chain.
In 2025, we also received an A rating from
CDP for Climate, including the highest rating for
supplier engagement, placing us in the top 3%
of all evaluated companies. This recognition
reflects our deep commitment to decarbonizing
our own operations but also the broader value
chain.
Our strategy for
value creation
Looking beyond our financial performance, what
makes me truly confident about SKF’s future is
how we create long-term value. For more than
a century, we have combined engineering excel-
lence with strong customer relationships and
a trusted global brand. This combination has
allowed us to adapt through many industrial
transformations, and it is the same philosophy
that guides us today.
Our strategy builds on these strengths, focus-
ing on creating significant customer value in
targeted markets to drive both sales growth
andmargin expansion. This is supported by
our leading innovation capabilities, as well as
our strengthened operational and commercial
ex cellence. With a clear strategic direction and
a robust balance sheet, we are paving the way
for sustain able, long-term value creation.
Focusing on
attractive markets
SKF serves more than 20 industries worldwide.
We are increasingly concentrating on those where
our knowledge and technology create the great-
est value, and where long-term mega trends point
to structural growth. By focusing our resources,
we can build strong positions and develop solu-
tions that meet specific customer needs.
Laying the foundation
for long-term value creation
Financial targets
Innovation
Accelerating technology
development for sustained
innovation leadership
Targeted markets
Increased focus and shifting
exposure to attractive markets
leveraging megatrends
The financial targets for
the SKF Group, including
the Automotive business,
are to be achieved over
a business cycle.
Commercial and
operational efficiency
Essential to succeed in
our targeted segments
14%
5%
Adjusted
operating
margin
Revenue growth,
excl. currency
effects and
divestment
In short, our strategy is designed to deliver our financial
targets, driving long-term profitable growth.
7SKF ANNUAL REPORT 2025
PRESIDENT’S
LETTER
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
OTHER
INFORMATION
REMUNERATION
REPORT
FINANCIAL
STATEMENTS
A clear example is aerospace, where, during
the year, we have sharpened our focus on core
offerings in aeroengine and aerostructure applica-
tions, while divesting non-core operations. This
allows us to strengthen our profitability, reinforce
our core applications and improve our ability
to grow in one of the world’s most demanding
industries.
Capturing the opportunities
of global mega trends
One of the reasons SKF remains relevant after
more than 100 years is because we are aligned
with the big shifts shaping industries and socie-
ties. Today, megatrends such as digitalization,
automation, decarbonization, electrification,
urbanization, as well as an emerging focus on
infrastructure and defence, are creating signifi-
cant opportunities for our business.
Electrification is transforming transportation
and many other industries. Our advanced hybrid
ceramic bearings are already helping train manu-
facturers reduce downtime and energy use,
lowering both costs and emissions. In electric
vehicles, our solutions address challenges such
as electrical insulation and durability at high
speeds, areas where SKF has a competitive edge
and scale. The global transition to a greener econ-
omy also plays to our strengths. Energy-efficient
systems for heating, cooling and renewable
power all require high-performance bearings.
Demand is growing for the raw materials that
enable renewable energy and battery production,
which further increases the need for durable,
efficient equipment. SKF solutions are at the
heart of these demanding operations.
Demographic changes and urbanization are
driving growth in infrastructure, logistics, trans-
portation and food supply chains. From support-
ing agricultural machinery to ensuring conveyor
systems run reliably in food and beverage plants,
SKF helps essential industries improve efficiency.
As manufacturing is being more automated and
data-driven, our intelligent solutions and super-
precision bearings are central in machine tools.
These provide the accuracy and speed modern
factories depend on. Here, our ability to combine
technology, application know-how and customer
partnerships makes SKF a natural choice.
Rising geopolitical tensions are making infra-
structure and defence a growing priority for many
countries. This is driving demand for reliable,
high- performance rotating solutions, from
defence platforms to heavy-duty machinery used
in modern ization projects. With deep engineering
expertise and a strong global presence, SKF is
well positioned to support this growing need and
strengthen the resilience of critical systems.
By understanding and facilitating these mega-
trends, we secure our relevance and position SKF
to deliver profitable growth in the markets shaping
the decades ahead.
Strengthening our aftermarket
and service offering
A key strength of SKF is our ability to support our
customers from the initial design through every
stage of their equipment’s lifecycle. By strength-
ening our aftermarket and service offerings,
these have become an increasingly important
contributor to our value creation.
Every machine eventually needs maintenance,
repair or optimization. That is where our global
network of approximately 17,000 distributors plays
a key role. Many of these partners have worked
with us for decades, providing unmatched local
Megatrends driving growth
By combining deep technical and application expertise, a trusted global brand and
strengthened operational and commercial excellence, SKF is well-positioned to
capture the opportunities created by the megatrends reshaping our industries.
Decarbonization and electrification
Reshaping demand toward energy-efficient
solutions for industries and mobility.
Infrastructure and defence
Increasing the need for durable,
high-performance, long-life solutions.
Urbanization
Driving growth in transportation and
food supply chains.
Digitalization and automation
Drives demand for connected, efficient
solutions that improve reliability.
8SKF ANNUAL REPORT 2025
PRESIDENT’S
LETTER
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THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
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OTHER
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REPORT
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STATEMENTS
access to SKF products. For a farmer needing
a replacement bearing, seals or other critical
parts during harvest season, or a factory manager
aiming to minimize downtime, this fast and reliable
availability of genuine SKF components and
expertise is essential.
But today, we are much more than a parts
supplier. Our service offering extends across pre-
dictive maintenance, reliability solutions, condi-
tion monitoring, and remanu facturing. A good
example is our long-term collaboration with LKAB
in northern Sweden, where we provide advanced
condition monitoring across critical equipment
such as mills, conveyors, pumps and fans. When
I visit customers like LKAB, I see first-hand how
our technologies and know-how make a real
difference, keeping critical industries running
more reliably and sustainably.
This type of service creates great value for
customers and strengthens our recurring revenue
base. It makes SKF less dependent on the eco-
nomic cycle and more closely integrated into our
customers’ daily operations. In short, the after-
market is both a stabilizing force and a growth
engine for SKF.
Innovation at the core
of our strategy
If there is one constant in SKF’s history, it is
innovation. From the very beginning, new ideas
and new technologies have been the engine of
our success. Today, we continue that tradition
by investing in innovation that drives our growth
and sets new standards for our industry.
Our strategic innovation spans three areas.
Firstly, we lead in research and technology, draw-
ing on deep expertise in material science, tribology
and digital tools. These capabilities take decades
to develop and are difficult to replicate, which
gives us a unique advantage. Secondly, we turn
that research into new products and solutions
that improve performance, extend life and reduce
costs for our customers. Thirdly, we have around
600 application engineers with deep industry
expertise, working directly with customers to
design equipment that is more reliable and
efficient.
Digitalization is accelerating this journey.
By integrating sensors, AI and connected tech-
nologies into our products, we enable predictive
maintenance and help customers to avoid costly
downtime. Digital twins allow them to simulate
the performance of our products before produc-
tion begins, reducing time-to-market and improv-
ing reliability.
Collaboration adds new dimensions to inno-
vation. We partner with universities and start-
ups, etc. to tap into expertise beyond our own.
This open approach enables us to explore adja-
cent fields, such as AI, as well as to fast-track
development and bring solutions to market faster.
Projects that deliver results
More than 90% of our R&D projects are now
focused on our key industries, the very industries
where megatrends such as electrification, urbani-
zation and digitalization are driving long-term
demand. Each of these projects targets margins
well above our 14% Group target, making innova-
tion not just about technology leadership but
a contributor for profitable growth.
Innovation in
the metals industry
The metals industry is tough, with high loads
and temperatures above 1,000°C. SKF works
closely with steel mills to reduce downtime and
improve relia bility. New bearing designs in com-
bination with advanced material and heat treat-
ment technologies extend lifespan and boost
performance in these harsh conditions. With
increased dynamic load ratings and robust-
ness, these solutions lower costs, increase
reliability and strengthen customer loyalty.
A strong R&D foundation
We take a full value chain
approach built on three core
pillars: Research & Technology,
Product & Solutions Develop-
ment and Application know-
how. These are powered by
Digitalization & AI to accel-
erate inno vation. In addition,
we leverage external innovation
and collaborative ecosystems
with partners to maximize
customer value.
Digitalization
& AI
External
innovation
Research &
Technology
Application
know-how
Product & Solutions
Development
Customer-centric
innovation
A
c
c
e
l
e
r
a
t
o
r
s
A
c
c
e
l
e
r
a
t
o
r
s
9SKF ANNUAL REPORT 2025
PRESIDENT’S
LETTER
RISKS AND
THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
OTHER
INFORMATION
REMUNERATION
REPORT
FINANCIAL
STATEMENTS
In 2025, our innovation efforts have turned
into practical solutions for customers in several
industries. We introduced a new range of cutting-
edge bearing solutions and intelligent service
models, designed for heavy industries, energy
and manufacturing applications. These solutions
reduce friction, save energy, cut CO₂ emissions
and extend asset lifecycles, helping our custom-
ers run their operations more reliably and sustain-
ably. In the railway industry, our new low friction
bearing solutions have demonstrated up to
14% lower energy consumption, giving opera-
tors tangible savings. In the food industry,
we launched a bearing unit that requires no
r elubrication, improving safety while also saving
water, energy and maintenance resources.
What excites me most is seeing these advance-
ments not as abstract ideas but real, field-tested
solutions that help customers succeed while
driving profitable growth for us.
Super-precision,
Made in Italy
In 2025, SKF opened its new centre of
excellence for Super-precision bearings
in Airasca, Italy, as the global hub for
high-performance bearings. By com bining
manufacturing, R&D, engineering and
business support in one automated,
digitally-connected site, SKF has in -
creased capacity by 30% and cut head-
count and throughput time by 30%
respectively. The result is faster innova-
tion, higher precision and more reliable
solutions for demanding industries.
Driving a more agile and
efficient SKF
Innovation alone is not enough. To maximize
the value we create, we must also operate with
greater speed and efficiency across the entire
value chain. This is why we are reshaping our
organization to be faster, simpler and closer to
our customers.
A more decentralized organization gives our
teams greater responsibility and allows us to
re spond faster to customer needs. Investments
in automation and regionalization mean we are
producing closer to our customers, reducing lead
times and improving service levels. For example,
in China, regionalization has already cut lead
times by 20% and reduced manufacturing cost.
Our new global Super -precision centre shows
how we combine advanced automation and digi-
tal tools to boost efficiency and deliver greater
customer value.
Strengthening execution and
streamlining operations
In parallel, we are enhancing our commercial
execution and operational performance to
support long-term growth.
We are simplifying our port folio and reducing
complexity. By focusing on core businesses,
we direct resources where they matter the most.
The divestment of our non-core aero space
business mentioned earlier is a good example
of this. We are also streamlining supply chains
and procurement, strengthening resilience while
lowering costs.
Another important area is pricing. Through
advanced analytics and digital tools, we are
building stronger capabilities to capture the
full value our products and services bring.
This helps us unlock the full potential of our
offering.
Becoming more agile and effective is about
giving our people the right tools and mandate
to serve customers better.
A strong foundation
for the future
Over the past few years, we have reshaped
SKF into a stronger and more focused company.
We have sharpened our portfolio, exited contracts
that did not meet our profitability requirements,
accelerated regionalization and automation of
our manufacturing footprint, and focused our
innovation efforts on the key industries where we
see the strongest structural growth. We have also
shifted from a centralized functional setup to a
regional model, bringing decisions closer to our
customers and giving the business shorter deci-
sion paths and clearer accountability.
These changes have been implemented during
a prolonged period of muted market demand, and
yet they have strengthened our competitiveness
and improved our underlying profitability. Impor-
tantly, they have made the company more resil-
ient and created a solid base for the next major
step in SKF’s evolution.
10SKF ANNUAL REPORT 2025
PRESIDENT’S
LETTER
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THE SHARE
SUSTAINABILITY
STATEMENTS
CORPORATE
GOVERNANCE
OTHER
INFORMATION
REMUNERATION
REPORT
FINANCIAL
STATEMENTS
1) Targets over a business cycle.
2) SKF Group post Automotive separation.
3) Defined as 1 p.p. growth over market over a business cycle,
excluding Automotive contract manufacturing.
4) Defined as adjusted operating profit/loss plus interest income,
as a percentage of 12 months rolling average of total assets less
the average of non-interest bearing liabilities.
“Above market over
a business cycle”
Organic growth
To be revealed at Automotive CMD
Adjusted ROCE
Adjusted operating margin
“High single digit”
SKF Group average
2020–2025
4%
Organic growth
3)
1.4%
Organic growth
20%
Adjusted ROCE
4)
14.0%
Adjusted ROCE
Adjusted operating marginAdjusted operating margin
>17%
12.3%
mid-term
>19%
long-term
A separation of Automotive will create two
more focused businesses with clearer
strategies. Moreover, by allowing each
business to follow its own market logic and
value drivers, the separation strengthens
long-term value creation. This is reflected
in the new long-term targets and indicative
objectives valid post separation for the
Industrial and Automotive businesses
respectively. In 2025, the Industrial and
Automotive segments reported sales of
BSEK 65.6 and BSEK 26.0, with adjusted
operating margins of 16.1% and 4.1%.
A separation that unlocks
long-term value
Long-term financial targets/objectives post separation
1)
Two focused businesses
We are now in the process of separating our Auto-
motive business to create two strong and inde-
pendent businesses–Automotive and Industrial.
Each has distinct business logic, with its own
customer dynamics, technology cycles and long-
term value drivers. Clear mandates and govern-
ance will allow each business to operate indepen-
dently, with tailored strategies, performance
measures and capital allocation priorities.
For Industrial, independence strengthens our
competitiveness which reinforces our position
as the global leader in industrial bearings. We can
concentrate our resources on attractive industries
such as industrial mobility, defence, high-speed
machinery, electrical, and heavy industries. A key
priority is to grow a large aftermarket and service
business, pro viding recurring revenue and closer
customer relation ships.
For Automotive, a standalone setup means
a leaner organization and a value chain designed
for automotive customers. This supports faster
decisions, closer collaboration with OEMs and
a sharper focus on electric vehicles, commercial
vehicles and the aftermarket, where we see
attractive opportunities for profitable growth.
The separation is a complex program that
affects structures, systems, governance and
product flows. We plan to list the Automotive
business at Nasdaq Stockholm during Q4 2026,
subject to the Board of Directors proposing
a listing and shareholders’ approval. There is no
doubt in my mind that it is the right step for SKF.
It will lead to clearer strategies, faster decision-
making and business models that better reflect
the realities of each market.
Industrial
2)
Automotive
Looking ahead, I am confident that the actions
we are taking today will secure long-term value
creation, strengthening SKF’s role in shaping the
industries of tomorrow and ensuring we remain
a trusted partner for the next century, as we have
been for the past one.
Rickard Gustafson
President and CEO
11SKF ANNUAL REPORT 2025
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SKF Group
post Automotive separation
Industrial enters the next phase from a strong
starting position as the global leader in industrial
bearings, supported by deep expertise across
many industries. A global manufacturing foot-
print, a world-class distribution network and a
large, recurring aftermarket, representing more
than half of revenues, provide stability and long-
term potential.
The business is well aligned with long-term
megatrends such as digitalization, auto mation,
decarbonization, stricter energy- efficiency
requirements and significant investments in
critical infrastructure. These dynamics support
steady demand for reliable rotating equipment,
and SKF is already growing fast in several attrac-
tive industries such as rail, defence and data
centres.
To capture these opportunities, Industrial will
focus on two segments: Bearing Solutions, repre-
senting around 75% of net sales, and Specialized
Industrial Solutions, representing around 25% of
net sales, including aerospace, lubrication life-
time solutions, sealing solutions and magnetic
mechatronic solutions. Industrial’s strategy, built
on three pillars and seven levers, combines tar-
geted growth, innovation leadership and a more
efficient, business- driven value chain.
Value creation will be driven by targeted expan-
sion in high-growth industries and geographies,
growing services and intelligent solutions,
improved performance in Specialized Industrial
Solutions and selective bolt-on acquisitions.
Innovation remains central, with close customer
collaboration to deliver smarter, more efficient
and lower- emission solutions. Operational
excellence, modernized supply chains and
regionalization will strengthen flexibility, effi-
ciency and resilience across the business. To
become an even more efficient company, we are
optimizing our footprint through regionalization
and automation, which will result in higher invest-
ments and one-off costs in next few years.
Industrial’s long-term ambitions are clear:
to grow ahead of the industrial bearing market,
improve margins and reduce working capital,
ultimately resulting in strong returns on capital.
With a simpler, more focused operating model
and exposure to markets with structural tail-
winds, Industrial is well positioned to deliver
sustain able growth and strengthen its techno-
logical leadership.
3 pillars and 7 levers for more progress
Reignite
growth
1 Leverage attractive
high-growth industries
and geographies
2 Scale recurring service
and intelligent solution
business
3 Accelerate Specialized
Industrial Solutions
4 Explore value accretive
bolt-on M&A
5 Differentiate through
customer-centric
innovation and AI
6 Finalize ongoing
regionalization and
footprint optimization
7 Optimize supply chain
for a pure Industrial
play
Business- driven
value chain
Innovation
leadership
Market and business dynamics
• Diversified market exposure, focus on
accessibility and speed
• Manufacturing in smaller batches, more
variants, agility and speed to market
• Diversified customer base with many local/
regional OEMs, end- users and distributors
• Dynamic and shorter sales cycle and
lower volumes
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Automotive
Automotive is preparing to operate as an
in dependent business with the focus and
agility required in a rapidly transforming indus-
try Electri fication, new driveline designs and
changing mobility patterns are reshaping
customer requirements, raising the bar on
innovation, speed, commercial execution
and collaboration with global OEMs.
The business rests on a solid foundation.
It has global manufacturing, R&D and engineer-
ing capabilities and a product portfolio aligned
with the shift toward electric and energy-
efficient vehicle platforms. Automotive also
benefits from a strong aftermarket position, which
provides recurring revenues. Over the past few
years, it has broadened its aftermarket offering
in Europe and has the ambition to do the same in
other geographical areas.
The strategy focuses on accelerating growth in
high-potential areas where SKF already today has
leading positions, such as electric vehicles and
commercial vehicles, along with the repetitive
and beneficial aftermarket business. This is sup-
ported by a lean, automotive-adapted value chain
that increases speed and efficiency. Innovation
will remain central, with dedicated teams working
alongside customers to develop next-generation
bearings that support emerging performance and
sustainability requirements.
As a standalone business, Automotive will oper-
ate as a leaner, faster and more focused organiza-
tion, able to make decisions closer to customers
and respond more quickly to market shifts. Its
long- term ambition is to grow faster than the over-
all automotive market and improve profitability,
as it unlocks the value potential of its tech nology,
customer relationships and global capabilities.
Five strategic levers
1 2 3 4 5
Continue to
win in leading
segments
Maintain and
strengthen
leadership in
innovation
Expand
addressable
market
A lean
company
setup
Entire value
chain is
Auto motive
adapted
Accelerate growth Faster and more efficient
Market and business dynamics
• Rapidly transforming industry,
driven by electrification
• Manufacturing in larger batches,
few variants, cost efficiency
• Customer base of a limited number
of global OEMs
• Longer sales cycle with long-term
contracts and high volumes
13SKF ANNUAL REPORT 2025
risks and
the share
14SKF ANNUAL REPORT 2025
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14SKF ANNUAL REPORT 2025
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.
SKF operates in many different industries and
geographical areas. As a result, the Group is
exposed to various types of risks.
SKF appreciates that there are risks associated
with the macro environment such as the geo -
political landscape, the state of global markets
and significant industry and technological shifts.
There are also business risks including supply
chain disruptions, information and cybersecurity
The result is shared yearly with Group Manage-
ment and the Audit and Sustainability 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 and
Sustainability
Committee
SKF strategy
development
and execution
Risk owners
Annual Report
The consolidated risk
assessment is shared with
the Audit and Sustain -
ability 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
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. To ensure effective, integrated risk
management, the business operations are
accountable for the identification, assessment
and mitigation of their respective risks, while
the Group functions facilitate the risk process,
and oversee its implementation. The Group Risk
Manager
1)
, who is part of the central group func-
tions and reports to the CFO and to the Audit and
Sustainability Committee, is overall re sponsible
for the ERM process and consolidates the risks
and the mitigating activities. The risks highlighted
on the next page are the main risks identified
during the 2025 Group ERM process. The main
areas of opportunity are described in the previous
section, on pages 5–13. For information about
financial risks including currency risks, interest
risks, liquidity risks and credit risks, see Note 26
on pages 132–134. For information about on -
going compliance related investigations, see
Note 19 on pages 124–125.
As with other risks, SKF applies an integrated
approach to the identification and manage ment
of risks related to sustainability. The sustain-
ability risks have been identified through the
double materiality assessment (DMA). More
information on the DMA on pages 37, 39 and 40.
1) Group Chief Accountant
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
15SKF ANNUAL REPORT 2025
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Risk Trend Mitigation
Geopolitical tensions
Global conflicts and political tensions may lead
to sanctions, tariffs, export controls, and trade
disruptions. These developments increase un -
certainty and pose risks to supply chains and
international trade flows.
Accelerate regionalization and build more flexible,
resilient supply chains. Continuously monitor threats
and relevant risks for SKF’s sales, operations and
supply chain.
Information and cyber security
Advanced information- and cyber security breaches
and threats driven by financial and political motives
and enabled by AI. Increasing compliance require-
ments related to cyber security such as NIST and
TISAX.
Training and awareness. Implementation of a global
ISMS based on ISO27001 and implementing required
technical and organizational measures. Improving
cyber defence and resilience of SKF’s sites, critical
digital solutions including supplier- and third-party
deliveries.
Market competitiveness
and pricing pressure
Intensifying price competition as economic
downturn continues to impact the global market
pose risks to market share, growth targets, and
operating margins.
Defend market pricing through improved sourcing
strategies and cost competitiveness across the
supply chain. Accelerate localization and cost
optimization initiatives. Strengthen commercial
capabilities, ensure differentiated and added
value products and solutions to protect margins.
Supply chain competitiveness
and effectiveness
Risk of disruption, cost impact or increasing lead
times due to supplier dependencies, complex
flows and tariffs. Market demand uncertainties
and limited forecasting capabilities may lead to
reduced cost competitiveness and inventory
management inefficiencies.
Continue to review commercial agreements, supplier
localization and footprint, expand dual sourcing, and
consolidate supply chain flows. Advance inventory
optimization and digitalization efforts, supported by
improved planning governance and cross-functional
collaboration.
Automotive separation
The Automotive separation and related organiza-
tional changes may lead to business disruption
and distraction.
Ensure open communication and a structured change
management approach. Secure balanced effort
between core business priorities and separation.
Risk Trend Mitigation
Speed of digitalization and AI adoption
Increasing opportunities for a connected value
chain, digital customer experience and opera-
tional efficiency puts increasing demands on
digitalization and AI implementation to maintain
competitiveness.
Drive standardization and modernization of digital
solutions, data and AI across the organization.
People and leadership
The success of companies increasingly depends
on their ability to attract, develop, and retain
critical competences and capabilities.
Strengthen leadership capabilities and talent pipe-
lines to secure critical competences and support
long-term business success. Additionally, diversity
and inclusion and a competitive reward structure
are emphasized to attract a broader recruitment
base and build a more dynamic workforce.
Legal compliance
Regulatory requirements and increased com-
plexity within trade compliance, export control
and international sanctions. Antitrust risks in
relation to distributors. Adherence to legal,
regulatory and customer requirements of
information and cyber security.
Ensure ownership and accountability of compliance
in the business operations. Continuous monitoring,
training and awareness in key risk areas. Perform
yearly compliance risk assessment and third-party
risk due diligence.
Speed of innovation
Missing the introduction of disruptive and rapidly
evolving technologies, leading to missed opportu-
nities or delayed market response.
Closely monitor technology trends and regularly
review investment plans to stay aligned with market
shifts. Strengthen innovation capabilities through
customer insights, sustainability integration, and
targeted training. Reinforce stakeholder engagement
and promote external collaboration to accelerate
development and scaling.
Macro-economic uncertainty
Unstable macroeconomic conditions–including
inflation, currency devaluation, interest rate vola-
tility, and prolonged weak demand. Sudden market
shifts further increase uncertainty in financial
business planning and operations.
Implement flexible cost structures and pricing strate-
gies to manage financial exposure. Reduce reliance
on imports in vulnerable markets and regularly review
business performance in economically unstable
regions.
Main risks
16SKF ANNUAL REPORT 2025
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The SKF share
SKF’s A and B shares are listed on Nasdaq Stock-
holm in Sweden, included in the Large Cap seg-
ment, and part of several indices.
In 2025, the share price increased by 19.0% for
the SKF A share and 18.4% for the SKF B share.
The total number of SKF shares traded on Nasdaq
Stockholm was 330,331,914. SKF’s B shares are
also traded on other markets outside Nasdaq
Stockholm. The total number of shares traded
on these marketplaces combined in 2025 was
859,709,180. (Source: Modular Finance AB). SKF’s
American Depositary Receipts (ADRs) are traded
on the OTC market.
As per 31 December 2025, the Company’s
share capital amounted to SEK 1,138,377,670
and the total number of shares amounted to
28,930,824 shares of Series A and 426,420,244
shares of Series B. The number of votes in the
Company amounted to 71,572,848. Rights associ-
ated with the different share types are further
elaborated in the Corporate Governance Report
on pages 19–29.
Share conversion
Owners of A shares have an option to convert
these to B shares. In 2025, 53,175 shares were
converted. As of 31 December 2025, 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 to be paid for 2025. For more information,
see page 155. The total return from investing in
the SKF A share over the past three years was
72.4% and for the SKF B share 71.9%. (Source:
Modular Finance AB).
0
75
150
225
202520232023
0
25
50
75
B share
Nasdaq Stockholm (OMXSPI)
(normalized against the B share )
Number of B shares traded at
Nasdaq Stockholm, million
A share
(normalized against the B share )
Million 100
300 SEK
Share development 2023–2025
Distribution of shareholding
Shareholding Number of shareholders % Number of shares %
1–1,000 80,898 89.82 16,055,423 3.53
1,001–10,000 8,328 9.25 21,891,565 4.81
10,001– 843 0.94 387,050,717 85.00
Anonymous ownership n/a n/a 30,353 6.67
Source: Modular Finance as of 31 December 2025.
Ownership structure
As per 31 December 2025, SKF had 90,069 share-
holders. Around 33.3% of the share capital was
owned by foreign investors, around 48.3% by
Swedish companies, institutions and mutual
funds and around 9.2% by private Swedish inves-
tors (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 2025 the company owned none
of its own shares.
Information to shareholders
Financial reports and further information about
the share can be found at skf.com/group/inves-
tors. A list of analysts covering SKF and the
opportunity to subscribe to information from
SKF is also available on the website.
Sustainability indexes
Based on the 2025 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 Gold
(in the top 3% of companies in its sector) via the
EcoVadis supplier sustainability evaluation plat-
form which is used by many of the Group’s global
customers to understand supplier sustainability
performance.
17SKF ANNUAL REPORT 2025
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The ten largest shareholders sorted by voting rights
Number
of shares
Share
capital, %
Voting
rights, %
FAM AB 69,227,539 15.20 29.23
Cevian Capital 37,049,148 8.14 5.18
AFA Försäkring 4,137,038 0.91 4.01
Livförsäkringsbolaget Skandia 4,381,077 0.96 2.61
BlackRock 15,563,878 3.42 2.17
Vanguard 15,024,328 3.30 2.10
SEB Funds 14,596,906 3.21 2.04
SEB-Stiftelsen 1,450,000 0.32 1.77
Alecta Tjänstepension 11,295,048 2.48 1.58
Nordea Funds 10,205,024 2.24 1.43
Source: Modular Finance AB as of 31 December 2025.
Geographic ownership 2025
Others, 1.9%
Unknown country, 6.7%
Europe excl Sweden, 15.8%
USA, 16.4%
Sweden, 59.2%
0
20
40
60
Jan
2023
Jan
2024
Jan
2025
Dec
2025
80 %
Total return 2023−2025
Return SKF B
Total return SKF B (including dividends)
Data per share 1) | ||
SEK per share unless otherwise stated | 2025 | 2024 |
Earnings per share | 8.62 | 14.22 |
Dividend per A and B share | 2) | |
Total dividends, MSEK | 2) | |
Purchase price of B shares at year-end on Nasdaq Stockholm | 245.8 | 207.6 |
Equity per share | 118 | 131 |
Yield (B), % | 3.2 2) | 3.7 |
P/E ratio, B (share price/earnings per share) | 28.5 | 14.6 |
Cash flow from operations, per share | 18.43 | 23.7 |
Cash flow after investments before financing, per share | 15.14 | 11.4 |
| 1) See page 154 for definitions. | ||
| 2) According to the Board’s proposal for the year 2025. |
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 conse-
quence of a public take over bid for the shares in AB SKF.
Source: Modular Finance AB as of 31 December 2025.
18SKF ANNUAL REPORT 2025
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corporate
governance
report
19SKF ANNUAL REPORT 2025
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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 organisational
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 32–34 in the
Sustainability Report for the Group in the Annual
Report 2025.
The principles of corporate governance applied
by SKF are based on Swedish law, primarily the
Swedish Companies Act and the Swedish Annual
Accounts Act. SKF also complies with Nasdaq
Stockholm’s regulations as well as the Swedish
Code of Corporate Governance (the “Code”)
issued by the Swedish Corporate Governance
Board. In addition, the provisions of AB SKF’s
Articles of Association are applied.
Information under the Annual Accounts Act
Chapter 6, § 6, sections 3–4, are found on pages
17–18 of the Administration Report for the Group
in the Annual Report 2025.
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 intro-
duction and the applicable Code is available on the
Swedish Corporate Governance Board’s website,
www.corporategovernanceboard.se.
It is considered good stock exchange practice for
Swedish companies, whose shares are admitted to
trading on a Swedish regulated market, to apply the
Code. SKF applies the Code, and this corporate gov-
ernance Report has been prepared in accordance
with its principles as well as the Swedish Annual
Accounts Act. Furthermore, SKF has provided infor-
mation on the company’s website in line with the
Code’s requirements. The 2025 Annual General
Meeting was also conducted in accordance with the
Code’s provisions. The auditor of the company has
reviewed and performed a statutory examination of
this Corporate Governance Report.
General information about how the company
is managed
The shareholders’ meeting is SKF’s highest deci-
sion-making body. Annual General Meeting of share-
holders shall be held annually and within six months
after the end of the financial year. At the General
Meeting the shareholders may exercise their voting
rights to part take in decision making of the company.
SKF has two classes of shares: A and B shares. At the
General Meeting, each class A share entitles the
holder to one vote, and each class B share entitles
the holder 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 is responsible for the com-
pany’s organisation and for the oversight of the man-
agement 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 Direc-
tors annually adopts written rules of procedure and
instructions for its internal work. For more details on
the rules of procedures and the written instructions,
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 27–28 in the Annual Report 2025.
SKF is structured in two reporting segments, the
Industrial and Automotive businesses. The Auto-
motive business is a global organisation while the
Industrial business is organized in four industrial
regions: (1) the Americas & Australia, (2) Europe &
Africa, (3) India, Southeast Asia & the Middle East,
and (4) China & Northeast Asia. The Industrial busi-
ness also includes four independent global business
units, collectively referred to as Specialized Industrial
Solutions. All of the above mentioned business areas
are respectively accountable for their own operational
and financial performance. Further, there are five
corporate functions: Commercial & Operations
Development, Group Technology Development, Group
Finance & Sustainability, Group Legal & Compliance
and Group People Experience & Communication. The
last three are defined as the Lean Corporate Centre
where research and strategy are part. 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
functions govern 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 matters 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.
Corporate Functions Business Areas
Shareholders through
shareholders’ meeting
Board of Directors
President and CEO
Group Management
Risk and Assurance
Audit and
Sustainability Committee
External Auditors
People Committee
Nomination Committee
Automotive Board
Work Committee
1
2.1
2.3
4
2.2
5
2
3
20SKF ANNUAL REPORT 2025
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1
Nomination Committee
The Annual General Meeting of AB SKF has
resolved that the company shall have a Nomination
Committee formed by one representative for 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 shall determine
which shareholders are the largest with regard to
the number of votes held. The names of the four
members shall be published as soon as they have
been elected, however, not later than six months
before the next Annual General Meeting. The Nomi-
nation Committee shall remain in office until a new
Nomination Committee has been appointed.
In a press release on 9 September 2025, 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 2026:
• Marcus Wallenberg, appointed by FAM
• Henning Elmberger, appointed by Cevian Capital
• Anders Algotsson, appointed by AFA Försäkring
• Anders Jonsson, appointed by Skandia
The Nomination Committee is to furnish proposals
in the following matters to be presented to, and
resolved by, the Annual General Meeting 2026:
• 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 Nomination Committee’s proposal regarding the
Board of Directors was published in a press release
dated 30 January 2026. The Nomination Committee’s
remaining proposals will be published in connection
with the notice to the Annual General Meeting 2026.
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)
Mats Rahmström (Vice Chair)
Hock Goh
Geert Follens
Susanna Schneeberger
Rickard Gustafson
Beth Ferreira
Therese Friberg
Richard Nilsson
Niko Pakalén
Total 10/11 (91%) 8/11 (73%) 1/11 (9%) 3/11 (27%)
1) Major shareholders are, according to the Code, defined as those controlling 10% 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,
without deputies. The Board members 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 2025, 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 and breadth of qualifications, experience
and background, and that the company is to strive
for gender balance on the Board. All Board members
in office were proposed to be re-elected by the
Annual General Meeting 2025, as they, according
to the Nomination Committee, were assessed to
r epresent a broad range of expertise and the neces-
sary diversity, as well as to possess solid experience
from the segments and markets where SKF operates,
along with digitalisation and sustainability matters.
To further strengthen the Board, the Nomination
Committee also proposed Mats Rahmström as a
new Board Member, based on his experience in
areas such as international industrial operations,
sustainability issues, separation processes, and
spin-offs. The Annual General Meeting 2025 re -
solved to appoint Board members in accordance
with the Nomination Committee’s proposal.
Eleven Board members, including the Chair, were
elected at AB SKF’s Annual General Meeting held in
the spring of 2025. In addition, the SKF labour 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 2025 can be found in the Annual
Report 2025, 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 seven meetings in 2025.
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.
21SKF ANNUAL REPORT 2025
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GOVERNANCE
OTHER
INFORMATION
REMUNERATION
REPORT
FINANCIAL
STATEMENTS
Issues dealt with by the Board of Directors in 2025
include i.a. strategy execution, market outlook, 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 decentralised
operating model, in cluding material organisational
changes of the Group and management issues includ-
ing the separation and listing preparation of the Auto-
motive business.
The Board of Directors continuously evaluates
economic, environmental, social, and governance
aspects of the Group’s activities and reviews specific
issues such as 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, and
the Board of Directors regularly visits different SKF
sites in order to enhance its knowledge about the
SKF Group.
Board Committee work
Certain topics of strategic importance for the com-
pany have, through the Board’s written rules of pro-
cedure and Board Charters, been assigned to the
Board Committees to prepare and give recommen-
dations on to the wider Board of Directors before
any decisions are made, for example matters relating
to remuneration to the President and CEO, principles
of remuneration for Group Management, sustain-
ability strategy and management of material sus-
tainability impacts, risks and opportunities, as well
as financial and sustainability reporting and ethics
and compliance.
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
People Committee
The Board of Directors of AB SKF has in
accordance with the principles of the Code estab-
lished a People 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 People Committee oversees people-related
topics of the SKF Group, such as talent management,
succession planning, and employee well-being, and
also serves as a remuneration committee preparing
the Board’s decisions on guidelines for remuneration,
compensation, and other terms of employment for
the CEO and Group Management, and monitors and
evaluates programmes for variable remuneration and
the company’s application of the guidelines for remu-
neration established by the Annual General Meeting.
Presence during Board and Committee meetings
Name of the Board member
Presence Board meetings/
Total number of meetings
1)
Presence Audit
and Sustainability
Committee meetings/
Total number of meetings
1)
Presence People
Committee meetings/
Total number of meetings
1)
Presence Automotive Board
Work Committee meetings/
Total number of meetings
1)
Hans Stråberg (Chair) 7/7 6/6 (Chair) 3/3 —
Håkan Buskhe (Vice Chair) 7/7 6/6 3/3 (Chair) 2/2
Mats Rahmström (Vice Chair) 5/5 — — —
Hock Goh 7/7 — — 2/2
Geert Follens 7/7 6/6 — —
Susanna Schneeberger 7/7 — 3/3 —
Rickard Gustafson 7/7 6/6 3/3 2/2
Beth Ferreira 7/7 — — —
Therese Friberg 7/7 — — 2/2
Richard Nilsson 7/7 (Chair) 6/6 — —
Niko Pakalén 7/7 5/6 3/3 —
Jonny Hilbert (employee representative) 5/7 — — —
Zarko Djurovic (employee representative) 6/7 — — —
Total presence by Board members, % 96.7% 97.2% 100% 100%
Thomas Eliasson (deputy employee representative) 2/7 — — —
Steve Norrman (deputy employee representative) 1/7 — — —
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 principles of remuneration shall be sub mitted to
the Board of Directors, which shall submit a proposal
for such remuneration principles to the Annual Gen-
eral Meeting for approval at least every fourth year.
The employment conditions for the President shall be
approved by the Board of Directors.
The People Committee continuously monitors 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 156–162.
The People Committee held three meetings in
2025. The members of the committee were present
at the meetings as shown in the table below.
2.2
Audit and Sustainability Committee
The Board of Directors of AB SKF has in accord-
ance with the principles of the Swedish Companies Act
and the Code appointed an Audit and Sustainability
Committee. The Audit and Sustainability Committee
consists of the Board member 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 Niko Pakalén.
The Audit and Sustainability Committee oversees
the financial and sustainability reporting as well as
the financial audit and the sustainability reporting
review processes of the SKF Group, oversees the
adecuacy of the Group’s controls for compliance with
laws and regulations, and reviews the Group’s sustain-
ability position and information security posture.
22SKF ANNUAL REPORT 2025
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FINANCIAL
STATEMENTS
The Audit and Sustainability Committee held six
meetings in 2025. The members of the committee
were present at the meetings as shown in the table
on the previous page.
2.3
Automotive Board Work Committee
As part of the preparations for the planned
separation and separate listing of SKF’s Automotive
business, the Board of Directors of AB SKF appointed
a special Automotive Board Work Committee. The
Automotive Board Work Committee consists of the
Vice Chair of the Board Håkan Buskhe as Chair, and
Board members Hock Goh and Therese Friberg.
The Automotive Board Work Committee is, on
behalf of AB SKF, leading the creation of a new board
for the Automotive business, including establishing
the board work structure, governance documents,
and the establishment of its committees, all in pre-
paration of the intended listing of the Automotive
business on Nasdaq Stockholm in accordance with
previous communications.
During 2025, the Automotive Board Work Commit-
tee has convened two times. The committee mem-
bers have attended the meetings as shown in the
table on the previous page.
Assessment
The members of the Board of Directors annually
assess the representation of relevant compe-
tences amongst the members of the Board as well
as the quality of the work of the Board through
self-evaluation and following interviews. The
results are prepared in a board evaluation report
and then presented and discussed at a Board
meeting. The Nomination 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 and the SKF
Group’s operations to the President and CEO, includ-
ing 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 imple-
ment 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 governance and control is
maintained.
The President and CEO is also responsible for pre-
paring 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 27 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.
SKF’s Articles of Association states that the auditor
shall be elected each year. AB SKF’s Annual General
Meeting 2025, elected Deloitte AB (Deloitte) as auditor
for the time up to the closing of the Annual General
Meeting in 2026. 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 and Sustainability Committee. Deloitte applies
a similar procedure and issues annually, in addition
thereto, a written statement to the Audit and Sus-
tainability Committee stating that the audit firm is
independent in relation to SKF.
Deloitte has during 2025 been involved in matters
besides the audit assignment. These matters have
primarily concerned tax and sustainability services
and Automotive IPO readiness matters. The total fees
for Deloitte’s services besides auditing in 2025
amount to MSEK 6.
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 and Sustainability Committee assists the
Board of Directors by preparatory work to secure the
quality of the company’s financial and sustainability
reporting. This is, for example, achieved through the
Audit and Sustainability Committee’s review of the
financial and sustainability information and SKF’s
internal financial controls.
The Board of Directors had one meeting with
the auditors in 2025 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 and Sustainability Committee met
with the auditors in connection with six Audit and
Sustanability Committee meetings. In addition to
that, the auditors gave both the Audit and Sustaina-
bility Committee and the Board of Directors infor-
mation in writing regarding matters including the
planning and implementation of the audit and an
assessment of the risk position of the company.
23SKF ANNUAL REPORT 2025
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GOVERNANCE
OTHER
INFORMATION
REMUNERATION
REPORT
FINANCIAL
STATEMENTS
The Board of Directors
Hans Stråberg
Chair
Board member since 2018
Born 1957
Education
Master of Science in Engineering,
Chalmers University of Technology,
Gothen burg, Sweden.
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 Trans- Atlantic Business
Dialogue.
Other assignments
Chair of Atlas Copco AB, Roxtec AB, and
Anocca AB. Board member of Investor
AB. Member of the Royal Swedish
Academy of Engineering Sciences.
Shareholding
1)
73,000 SKF B shares and
4,786 synthetic SKF B shares.
Håkan Buskhe
Vice Chair
Board member since 2020
Born 1963
Education
Master of Science, Licentiate of
Engineering, Chalmers University
of Technology, Gothenburg, Sweden.
Job experience
CEO of FAM AB, owned by Wallenberg
Investments AB. CEO of Saab AB
2010–2019. CEO of E.ON Nordic AB
2008–2010.
Other assignments
Chair of IPCO AB and SKF Automotive.
Vice Chair of Stora Enso Oyj. Board
member of FAM AB, The Grand Group,
Navigare Ventures AB, Swedish Defense
University, Industrikraft AB, FAM invest
AB and Verkan AB.
Shareholding
1)
5,000 SKF B shares and
2,397 synthetic SKF B shares.
Mats Rahmström
Vice Chair
Board member since 2025
Born 1965
Education
Master of Business Administration,
Henley Management College,
Henley-on-Thames, United Kingdom.
Marketing and Economics, IHM Business
School, Stockholm, Sweden.
Job experience
Several senior positions at Atlas Copco,
including Chief Executive Officer 2017–
2024, Senior Executive Vice President
Industrial Technique 2008–2017, Presi-
dent General Industry 2006–2008 and
several General Manager positions
1998–2006.
Other assignments
Chair of Piab Group. Board member of
Investor AB, ABB Ltd, R12 Distribution
AB, Qvantum Industries AB and
Rahmström Invest.
Shareholding
1)
24,500 SKF B shares and
2,397 synthetic SKF B shares.
Hock Goh
Board member since 2014
Born 1955
Education
Bachelor’s Degree (honours) in
Mechanical Engineering, Monash
University, Melbourne, Australia.
Advanced Management Program at
INSEAD, Fontainebleau, France.
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 Solutions
division in London, President Asia and
Vice President and General Manager
China.
Other assignments
Board member of SKF Automotive.
Shareholding
1)
1,000 SKF B shares and
1,566 synthetic SKF B shares.
Geert Follens
Board member since 2019
Born 1959
Education
Master of Science in Electromechanical
Engineering and a post-graduate
degree in Business Economics,
University of Leuven, Leuven, Belgium.
Job experience
Retired 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.
Member of the Board of Trustees for
the Cooperative Health Community.
Shareholding
1)
1,500 SKF B shares and
1,566 synthetic SKF B shares.
Susanna Schneeberger
Board member since 2020
Born 1973
Education
Master of European Affairs (MBA)
and Master of Science in International
Business, Lund University, Lund,
Sweden.
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.
Various senior positions in the Trelleborg
Group 2007–2014.
Other assignments
Chair of Yunex GmbH. Board member
of Modulaire Group and Sandvik AB.
Shareholding
1)
1,000 SKF B shares and
1,566 synthetic SKF B shares.
1) The information regarding shareholding relates to own shareholding and/or shareholding held by related parties. 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 refer to the conditions as of 31 December 2025.
24SKF ANNUAL REPORT 2025
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OTHER
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FINANCIAL
STATEMENTS
Rickard Gustafson
President and Chief Executive Officer
Employed since 2021
Board member since 2021
Born 1964
Education
Master of Science, Institute of
Tech nology at Linköping University,
Linköping, Sweden.
Job experience
President and CEO of the SAS Group
2011–2021. CEO of Codan/Trygg Hansa.
Several positions within General
Electric.
Other assignments
Board member of Telia Company and
Confederation of Swedish Enterprise.
Shareholding
1)
30,037 SKF B shares
Beth Ferreira
Board member since 2023
Born 1973
Education
Bachelor of Arts in International Studies,
Emory University, Atlanta, USA.
Job experience
President, Diversified Industrials at
DuPont de Nemours from 2025. CEO Life
Technology and Divisional Managing
Director Precision Engineering at IMI plc
2020–2025. Senior President roles
leading global industrial businesses at
Illinois Tool Works 2014–2020 and
Belden 2008–2014. Commercial leader-
ship at Ingersoll Rand 1997–2008.
Shareholding
1)
2,500 SKF B shares and
1,566 synthetic SKF B shares
Therese Friberg
Board member since 2023
Born 1975
Education
Bachelor’s Degree in Business
Administration, Stockholm University,
Stockholm, Sweden.
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.
Other assignments
Board member of SKF Automotive.
Shareholding
1)
1,566 synthetic SKF B shares
Richard Nilsson
Board member since 2023
Born 1970
Education
Bachelor of Science in Business
Administration and Economics,
Lund University, Lund, Sweden.
Job experience
Investment Director at FAM AB.
Employed by FAM since 2008. 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
1)
15,000 SKF B shares and
1,566 synthetic SKF B shares
Niko Pakalén
Board member since 2023
Born 1986
Education
Master of Science in Economy and
Business Administration, Helsinki
School of Economics (today Aalto
University), Helsinki, Finland.
Job experience
Partner at Cevian Capital since 2017.
Several manage ment positions within
Cevian Capital 2011–2016. Associate
at Danske Bank Corporate Finance
2009–2011.
Other assignments
Chair of Human Practice Foundation
Sweden. Member of the Board of Metso
Corporation.
Shareholding
1)
1,566 synthetic SKF B shares
1) The information regarding shareholding relates to own shareholding and/or shareholding held by related parties. 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.
25SKF ANNUAL REPORT 2025
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OTHER
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REMUNERATION
REPORT
FINANCIAL
STATEMENTS
Jonny Hilbert
Employed since 2005
Board member since 2015
Born 1981
Education and job experience
Employed in the SKF Group
since 2005.
Other assignments
Chair of Unionen, SKF,
Gothenburg, Sweden.
Shareholding
1)
—
Zarko Djurovic
Employed since 2006
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, Sweden.
Shareholding
1)
—
Thomas Eliasson
Employed since 1984
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, Sweden.
Shareholding
1)
—
Steve Norrman
Employed since 1994
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, Sweden.
Shareholding
1)
—
Employee representatives
1) The information regarding shareholding relates to own shareholding and/or shareholding held by related parties. 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.
26SKF ANNUAL REPORT 2025
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STATEMENTS
Group Management
Rickard Gustafson
President and Chief Executive Officer
Employed since 2021
Born 1964
Education
Master of Science, Institute of
Technology at Linköping University,
Linköping, Sweden.
Job experience
President and CEO of the SAS Group
2011–2021. CEO of Codan/Trygg-Hansa.
Several positions within General Electric.
Other assignments
Board member of Telia Company
and Con federation of Swedish
Enterprise.
Shareholding
30,037 SKF B shares
Manish Bhatnagar
President Industrial Region Americas
& Australia
Employed since 2018
Born 1969
Education
Master of Business Administration,
Indian Institute of Management Calcutta,
Kolkata, India. B.E. in Electronics
Engineering, Birla Institute of Tech-
nology & Science, Pilani, India.
Job experience
President Industrial Region India and
Southeast Asia at SKF. Senior roles at
General Electric and Danaher.
Shareholding
7,459 SKF B shares
David Johansson
President Industrial Region Europe
& Africa
Employed since 2005
Born 1980
Education
Master of Science, Industrial Marketing,
Electrical Engineering, Chalmers
University of Tech nology, Gothenburg,
Sweden.
Job experience
President Automotive, Director Global
Railway and China Mobility business,
Director China Automotive, Aerospace
and Railway business and several other
positions at SKF.
Shareholding
6,946 SKF B shares
Henry Wang
President Industrial Region China
& Northeast Asia
Employed since 2022 and 1997–2019
Born 1968
Education
Master of Business Administration,
University of Calgary, Calgary, Canada.
Bachelor of Engineering, Shanghai Jiao
Tong University, Shanghai, China.
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 at SKF.
Shareholding
—
Mukund Vasudevan
President Industrial Region India,
Southeast Asia & Middle East
Employed since 2024
Born 1969
Education
Master of Business Administration,
University of Chicago, Booth School
of Business, Chicago, USA. Bachelor
of Technology, Indian Institute of
Tech nology, Mumbai, India.
Job experience
Managing Director of Moglix. Managing
Director of Ecolab-South Asia.
Vice President of Pentair-India.
Engagement Manager at McKinsey
& Company.
Shareholding
—
Kerstin Enochsson
President Automotive
Employed since 2023
Born 1975
Education
Master’s Degree in Law, Freie Universität,
Berlin, Germany. Master of Business
Administration, ESCP-EAP European
School of Management, Paris, France.
Job experience
Head of Procurement and Supply Chain
and Vice President Corporate Strategy
& Project Office at Volvo Car Group.
Global Director Parts and several other
senior positions at Volvo Construction
Equipment.
Other assignments
Board member of SSAB.
Shareholding
—
Other assignments and shareholdings refer to the conditions as of 31 December 2025.
.
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Joakim Landholm
Senior Vice President Commercial
& Operations Development
Employed since 2022
Born 1969
Education
Master of Science, Stockholm School
of Economics, Stockholm, Sweden.
Job experience
CEO of Hector Rail. Chief Commercial
Officer at SAS. Various senior positions
at Codan/Trygg-Hansa and GE Capital.
Other assignments
Board member of Sdiptech AB.
Shareholding
6,774 SKF B shares
Annika Ölme
Chief Technology Officer and Senior
Vice President Group Technology
Development
Employed since 2022 and 2002–2017
Born 1973
Education
Master of Science in Electrical
Engineering, Chalmers University of
Technology, Gothenburg, Sweden.
Master of Business Administration,
Waikato University, Hamilton,
N ew Zealand.
Job experience
CTO and Head of Engineering at
SAAB Radar Solutions, Managing
Director of Arcam, a subsidiary
of General Electric, and various
positions at SKF.
Other assignments
Chair of the Board of Jacob Wallenberg
Foundation. Board member of Grundfos
Holding.
Shareholding
45 SKF B shares
Hans Landin
President Specialized Industrial
Solutions
Employed since 2023
Born 1972
Education
Master of Science, Mechanical
Engineering, Chalmers University
of Technology, Gothenburg, Sweden.
Job experience
Group Vice President and Officer
and several other senior positions
at The Timken Company.
Other assignments
Board member of Beijer Alma AB.
Shareholding
600 SKF B shares
Susanne Larsson
Chief Financial & Sustainability Officer
and Senior Vice President Group Finance
& Sustainability
Employed since 2025 and 1991–2015
Born 1968
Education
Master of Science in Business
and Economics, University of Karlstad,
Karlstad, Sweden.
Job experience
Group CFO & EVP IT, Digital Enablement,
Global Business Services, Indirect
procure ment at Mölnlycke Healthcare.
Group CFO, including strategy office,
IT and Legal at Gunnebo Securities.
Various senior leadership positions in
finance and strategic change manage-
ment at SKF.
Other assignments
Board member of Ambu A/S and member
of the Corporate Advisory Board,
University of Gothenburg.
Shareholding
5,300 SKF B shares
Mathias Lyon
General Counsel and Senior Vice
President Group Legal & Compliance
Employed since 2012
Born 1975
Education
Master of Laws, Faculty of
Law, Lund University, Lund, Sweden.
Job experience
SKF Deputy General Counsel
and several other positions at Volvo,
AstraZeneca, Mannheimer Swartling
and Rosengrens.
Shareholding
10,889 SKF B shares
Ann-Sofie Zaks
Senior Vice President Group People
Experience & Communication
Employed since 2001
Born 1976
Education
Bachelor’s Degree, Innovation Program
with special focus on Behavioural
Science, University college of
Mälar dalen, Västerås, Sweden.
Job experience
HR Director & People Transformation
Leader, HR Business Partner & Compe-
tence Development, and several other
positions at SKF.
Other assignments
Board member of International Council
of Swedish Industry (NIR).
Shareholding
14,688 SKF B shares
Changes in Group Management in 2025
Thomas Fröst, President Independent and Emerging Businesses,
stepped down from his role in Group Management on 24 September.
28SKF ANNUAL REPORT 2025
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5
Risk and Assurance
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 organisational structure, SKF has documented
the division of responsibility throughout the SKF
organisation. 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 documentation standards require that relevant
controls in the business processes are described
and performed. When deficiencies in individual
controls are identified, 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 2025 self-assess-
ments and control test activ ities have been per-
formed 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 prioritised areas.
The internal audit and internal control functions
report to the Group Chief Accountant who regularly
submits reports to the Audit and Sustainability Com-
mittee of the Board of Directors. The Board of Direc-
tors receives regular financial reports and the Group’s
financial position and development are dis cussed at
every Board meeting. The Audit and Sustainability
Committee of the Board of Directors reviews all
interim and annual financial and sustainability
reports before they are released to the public.
Gothenburg, 2 March 2026
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 2025-01-01–2025-12-31 on pages 19–29, and
that is has been prepared in accordance with the
Annual Accounts Act.
The scope of the audit
Our examination has been conducted in accord-
ance with FAR’s standard RevU 16 The auditor’s
examination of the corporate governance statement.
This means that our examination of the corporate
governance statement is different and substantially
less in scope than an audit conducted in accord-
ance 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, 6 March, 2026
Deloitte AB
Hans Warén
Authorised Public Accountant
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sustainability
statements
GENERAL DISCLOSURES
Basis for preparation
................................................................................ 32
Governance
......................................................................................................... 32
Strategy
.............................................................................................................. 34
Impacts, risks and opportunities
............................................... 39
ENVIRONMENTAL
EU Taxonomy disclosures
................................................................... 41
Climate change
............................................................................................... 45
Resource use and circular economy
..................................... 63
SOCIAL
Own workforce
................................................................................................. 69
Workers in the value chain
................................................................. 81
GOVERNANCE
Business conduct
........................................................................................ 86
APPENDIX
Statement on due diligence
............................................................. 92
Disclosure requirements
..................................................................... 93
Content index
.................................................................................................... 95
31SKF ANNUAL REPORT 2025
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General disclosures
GovernanceBasis for preparation
BP-1
General basis for preparation
of the sustainability statements
SKF has prepared this sustainability statement on a con-
solidated basis and in accordance with European
Sustainability Reporting Standards (ESRS). The scope of
consolidation is the same as for the financial statements
of the company. The sustainability statement covers the
value chain of SKF Group visualized under SBM-1, includ-
ing SKF’s own operations and the main parts of the com-
pany’s upstream and downstream value chain with respect
to impacts, risks and opportunities. All data and informa-
tion reported in the sections for Environmental, Social and
Governance topics have been assessed as material in
SKF’s Double Materiality Assessment (DMA). The outcome
from SKF’s DMA can be found under SBM-3. No relevant
information has been excluded from the sustainability
statement due to reasons related to classified or sensitive
data and intellectual property matters.
This report has been subject to limited assurance by
SKF’s auditors in accordance with the RevR19. For more
information see Auditor’s Limited Assurance Report on the
Sustainability Report and the Statement regarding the
Statutory Sustainability Report.
GOV-1
The role of the administrative,
management and supervisory bodies
Sustainability governance model
[GOV-1_22, G1 GOV-1_5a]
The administrative, management and supervisory bodies
in SKF consist of the Board of Directors and the CEO.
The Board of Directors is responsible for the Group’s
organization and for the oversight of the management of
the Group’s affairs and is, together with the President and
CEO and Group Management, defining and continuously
monitoring SKF’s purpose, strategy, values and drivers.
The Board of Directors also continuously evaluates eco-
nomic, environmental, social, and governance aspects of
the SKF Group’s performance.
The SKF Board of Directors has established an Audit
and Sustainability Committee to ensure an increased
focus on sustainability topics, including oversight of
impacts, risks and opportunities. The responsibilities of
the Audit and Sustainability Committee are reflected in
the Audit and Sustainability Committee Charter. These
responsibilities primarily include to oversee the financial
and sustainability reporting and the financial audit and
sustainability reporting review processes of the Group, to
oversee the adequacy of the Group’s controls for compli-
ance with laws and regulations, and to review the Group’s
sustainability position and information security posture.
The Audit and Sustainability Committee held six meetings
in 2025. The Board of Directors has also established a
People Committee to oversee people related topics such
as talent management, succession planning and employee
wellbeing. The People Committee prepares the Board’s
decisions on guidelines for remuneration, actual remunera-
tion and other terms of employment for senior executives,
BP-2
Disclosures in relation to specific circumstances
SKF has adopted the time horizons in accordance
with ESRS:
• Short-term is up to one year.
• Medium-term is one to five years.
• Long-term is more than five years.
Indirect data related to SKF’s value chain, for example
scope 3 emissions, has a higher degree of uncertainty
than data from own operations. Methodology, estimations
and outcome uncertainty are covered in the accounting
principles for metrics in relevant sections of the
sustain ability statements.
There have been changes in the reporting for the diver-
sity metrics for own workforce and scope 3 emissions
category 1 and scope 3 emissions category 4. For more
information, see sections S1 and E1.
This sustainability statement does not contain informa-
tion arising from other legislations or generally accepted
sustainability reporting standards and frameworks and
the following information is incorporated by reference:
• GOV-3 Approval and updates of incentive schemes
– financial statement Note 23.
• SBM-1 Turnover – financial statement Note 2.
• SBM-1 Employees per geographical region
– financial statement Note 25.
as well as monitoring and evaluating programmes for
variable remuneration and the application of the guide-
lines for remuneration.
The President of the Group, who is also the Chief
Executive Officer, is appointed by the Board of Directors
and handles the day-to-day management of the Group’s
business in accordance with the guidelines and instruc-
tions from the Board of Directors. The President and
CEOis supported by a Group Management team. 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 gov-
ernance 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. This includes information to the
Board of Directors about new developments, requirements
and regulations within the sustainability and ethics area
as well as how SKF is working for a sustainable develop-
ment based on the SKF Code of Conduct and SKF Care,
which are described under SBM-3. The President and
CEO’s role, areas of responsibility and authorizations are
described in more detail in the CEO instruction adopted
on a yearly basis by the Board of Directors.
SKF has a Sustainability Steering Group consisting
of the CEO, Chief Financial & Sustainability Officer, Chief
Technology Officer, Senior Vice President People Experi-
ence & Communication, General Counsel and the Director
Group Sustainability. The Sustainability Steering Group
oversees emerging sustainability actions, targets, events,
and expectations to promote a proactive and leading
approach in sustainability.
SKF ANNUAL REPORT 2025 32
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Governance, cont.
GOV-2
Information provided to, and sustainability matters
addressed by the undertaking’s administrative,
management and supervisory bodies
Material impacts, risks, and opportunities were defined
through the DMA which are further described under
SBM-3 and IRO-1. The Audit and Sustainability Committee
of the Board receive annual updates on the material
sustainability impacts, risks, and opportunities as input
to the strategy work and the Group’s ambition to create
long-term value for stakeholders and the planet. Sustain-
ability risks are included in the Enterprise Risk Manage-
ment(ERM) process.
Based on material impacts, risks, and opportunities,
as well as other strategic input, the Group has during 2025
continued to run the strategic programme for Climate
Transformation. The Group has also continued its strong
focus on the commitment to zero accidents and other initi-
atives related to its employees and the social impact, such
as diversity, equity and inclusion, and equal and fair com-
pensation including living wages. Furthermore, the Group
has continued to run the compliance programme, 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 function heads are
actively involved in the programme steering. Status up -
dates are shared with the programme steering as well as
the Board of Directors’ Audit and Sustainability Committee.
For more information on how material impacts, risks, and
opportunities interact with strategy and business models,
see SBM-1 and SBM-3. The following topics were
addressed with the Audit and Sustainability Committee
and the People Committee of the Board during 2025:
• Climate transformation, including actions to reach
decarbonized operations by 2030, climate adaptation
and SKF’s participation at COP30.
• Aspects of circular economy, such as product design,
use of secondary raw material, waste, and remanu-
facturing.
• Corporate culture, corruption and bribery, sanctions
compliance, whistleblowing, awareness and trust of the
whistleblowing process, third party risk management,
updated internal governance model, and company
policies.
SKF’s sustainability work is operationally led by the
Chief Sustainability Officer who reports directly to the CEO
and is part of SKF’s Group Management team. The Director
Group Sustainability has the task to assure that all relevant
aspects of sustainability are addressed and integrated into
operations and activities throughout the SKF Group as
established by adopted policies, strategies and targets
related to SKF’s overall sustainability performance. These
in turn drive and support the integration of sustainability
into business practices, processes, operations, and staff
functions. In addition, group functions and committees
drive development in their respective areas.
Sustainability performance is the responsibility of the
line organization and should 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 each respective Business Area,
their business units or by country organizations. Informa-
tion about controls and procedures applied to the man-
agement of impacts, risks, and opportunities is provided
under GOV-5.
Composition and expertise of the board
[GOV-1_21; 23, G1 GOV-1_5b]
SKF’s Board of Directors has a broad range of geographical
experience, reflecting SKF’s global footprint. Several board
members have experience of industrial leadership in sec-
tors, such as energy, manufacturing, forestry, and aviation,
that have a high focus on climate, circularity, social topics,
and business conduct. The board has access to ESG
expert functions and is frequently updated on sustainabil-
ity topics, including material impacts, risks and opportuni-
ties, via forums like the Audit and Sustainability Commit-
tee. For further details on topics addressed with the Audit
and Sustainability Committee during 2025, see GOV-2.
SKF has 13 permanent board members, out of which
one is an executive member and two are employee repre-
sentatives. The board’s gender diversity ratio is 23%
women, and 58% of non-executive board members are
independent. The ratio includes employee representatives
of the Board, and therefore differs from the Corporate
Governance report.
• Diversity, equity and inclusion, equal and fair compen-
sation, including living wages and pay transparency,
skills-driven people practices, and employee wellbeing.
• Responsible business and commercialization of
sustain ability.
GOV-3
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 programmes. The incentive
schemes align the interests of the participants, and share-
holders, thereby strengthening SKF’s ability to attract and
retain top talent and contribute to the business strategy,
long-term interests, and sustainability, including climate.
Information on approval and updates of incentive schemes
can be found under note 23 in the financial statements.
The long-term incentive scheme, also called the SKF
performance share programme, which covers senior
managers and key employees in the Group, including
Group Management and the CEO, 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 per-
formance measure is weighted 20%. The CDP Climate
Change score is a well-recognized and easily comparable
metric of success in climate work, providing a transparent
and objective measure of SKF’s progress 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, deter-
mined by an external party, is dynamic, with the bar being
raised annually to mirror increasing stakeholder expec-
tations, which requires continuous improvements for
successful performance achievement.
SKF employees, including employee representatives
in the board, may be eligible for the short-term variable
salary programme, which offers a bonus based on salary.
Local conditions determine which employees are eligible
for the programme. The bonus has a climate-related com-
ponent constituting 10% of the total amount, which is
linked to the performance against SKF´s decarbonization
target 2030. Full payout of this 10% is given if the target
is met or exceeded. Zero payout of this 10% is given if the
target is not met.
Board members, other than the CEO and employee
representatives, do not have incentives schemes related
to sustainability.
GOV-4
Statement on due diligence
Data points are outlined in Appendix “Statement on due
diligence” of SKF’s management report.
GOV-5
Risk management and internal
controls over sustainability reporting
In response to the increasing regulatory demand for trans-
parency and accountability in sustainability reporting,
SKF is working proactively to enhance the quality and
reliability of data through establishing a robust system
of internal controls. Recognizing the importance of this
objective, SKF has commenced this journey, laying the
groundwork for an internal control framework that is based
on the established system developed by the Committee
of Sponsoring Organizations (COSO) for Internal Control
over Sustain ability Reporting (ICSR). ICSR are based on
the same principles as the SKF Internal Control Standard
(SICS).
Control environment [GOV-5_36a]
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,
directives and procedures, as well as instructions and
routines. Roles and responsibilities for topics have been
defined to ensure accountability and effective oversight
SKF ANNUAL REPORT 2025 33
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Governance, cont.
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 2025, SKF strengthened its sustainability reporting
framework by developing process maps and internal con-
trols covering the majority of material disclosure require-
ments. A comprehensive internal control framework was
established, including defined roles and responsibilities
and governance documents. To put the control framework
into practice, a structured implementation strategy and
approach was developed, and a pilot was executed to
test the implementation approach and validate the
design of the control framework, providing a foundation
for consistent and reliable reporting going forward.
Information and communication [GOV-5_36e]
SKF has executed a comprehensive Sustainability report-
ing programme to emphasize the organization’s commit-
ment to sustainability reporting and compliance. Regular
updates are provided to the Board of Directors’ Audit and
Sustainability Committee to keep them informed about the
progress and activities within the Sustainability reporting
programme and other sustainability reporting matters.
Monitoring [GOV-5_36a]
SKF aims to be a sustainability leader in the industry
and has set ambitious sustainability targets along with
associated strategies. To support these strategies, SKF
has established key performance indicators (KPIs) to moni-
tor progress. Responsibility for the quality of information
has been distributed to the individuals responsible for
sustainability topics. Going forward, SKF will utilize the
newly implemented digital tool and process for ICSR to
continuously monitor and enhance the internal control
system related to sustainability reporting.
of sustainability topics, ensuring that the work within these
areas is carried out efficiently. Governing documents, in-
cluding internal policies, directives, guidelines, and manuals,
are under further development to guide consistent and
ethical reporting practices and provide employees with
clear guidance on SKF’s operations. 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 [GOV-5_36b-c]
SKF utilizes the DMA to identify material topics for which
process maps and robust internal controls are being
developed and improved, ensuring that SKF can meet
the increasing regulatory and stakeholder requirements.
For more information on how the DMA is conducted, see
IRO-1 Description of the process to identify and assess
material impacts, risks, and opportunities. 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 completeness.
Internal controls are developed on site-level, tailored to
address 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 [GOV-5_36d]
SKF’s control activities include policies, directives,
guidelines, procedures, 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.
SBM-1
Strategy, business model and value chain
SKF is a leading global industrial brand with more than
37,000 employees across four key geographical regions:
North and South America; Europe, Middle East and Africa;
India and Southeast Asia; and China and Northeast Asia.
The average number of employees per geographical region
is presented in note 25 in the financial statements. In more
than 20 industries, SKF provides a comprehensive port-
folio and knowledge built on the company’s core tech-
nology platforms: bearings, seals, lubrication systems,
intelligent solutions (for example condition monitoring)
as well as services. By integrating these platforms SKF
delivers customized solutions to meet customer needs.
SKF operates within the areas Industrial and Auto-
motive. The Industrial business supplies customers
globally with products and services, both directly and
indirectly through a network of more than 7,000 distribu-
tors and generates 72% of SKF sales. The Automotive
business supplies bearings, seals and related products,
both directly and indirectly through a network of more
than 10,000 distributors and generates 28% of SKF sales.
For more information on turnover and financial results,
see note 2 in the financial statements. SKF’s strategy is
centred around two key concepts: intelligent and clean.
Intelligent reflects the commitment to provide connected
and customized solutions for customers while utilizing
technology to improve operational efficiency. Clean empha-
sizes SKF’s role in driving a more sustainable industry and
conducting its business transparently and responsibly.
Value chain [SBM-1_42]
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 respon-
sibility and seeks to drive improvements both upstream
and downstream in the value chain.
Upstream [SBM-1_40; 42]
The main upstream environmental impact comes from the
extraction and processing of raw materials and production
of metal components with the associated energy use
andGHG 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.
Based on conducted life cycle assessments, SKF has
concluded that raw materials have significant environ-
mental impacts. To decrease this impact, SKF has con-
ducted a Circularity programme, and the work continues
through the appointment of a Group Circularity Manager
within Group Sustainability, and through initiatives and
activities driven in Business Areas and group functions.
These efforts support improved value chain circularity,
refined operational practices, optimized material utiliza-
tion, reduced waste, and foster sustainable resource
cycles. Social impacts and risks in the upstream value
chain, including human rights risks highlighted through
the whistleblowing programme, are systematically
addressed via SKF´s Responsible Sourcing programme.
The programme covers all SKF’s suppliers, but uses a
risk-based approach focusing on tier one and sometimes
tier two or three suppliers. SKF also has a grievance mech-
anism 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.
Strategy
SKF ANNUAL REPORT 2025 34
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Strategy, cont.
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 more than 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
Conduct are performed and a whistleblowing process is
available at local and global levels, to ensure respect of
human rights 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.
Own operations [SBM-1_40; 42]
SKF has direct operational control of its own operations
and therefore has the means and responsibility to directly
drive improvements in environmental and social perf or-
mance. Safety always comes first, and SKF is convinced
that all work-related accidents can be prevented. The
Group has a global management system with a focus on
risk elimination and promotion of safe behaviours across
all operations. The Group’s commitment to Zero Accidents,
supported by proactive near miss reporting, aims to avoid
all workplace accidents and foster a culture of continuous
improvements in relation to health and safety.
By increasing energy efficiency within its operations
and the share of renewable energy utilized, SKF can
reduce its environmental impact. A roadmap has been
Downstream [SBM-1_40; 42]
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 that are hazardous
to people and to 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
control regulations and ensuring that SKF’s distributors
adhere to the SKF Code of Conduct.
In the product development phase, there is an
increasing 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 manufac-
turing 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 innovations.
The Group aims to support the growth of these
technologies and industries, which in turn will help to
reduce environmental impact on a large scale. SKF is also
growing its circular solutions such as bearing remanufac-
turing, a system for re-using oil (RecondOil) and Laser
Metal Deposition (LMD). Bearing remanufacturing avoids
the need for replacement with a new bearing and therefore
reduces material consumption and greenhouse gas emis-
sions from bearing production. In addition to emissions
associated with raw materials and energy use being
avoided, it also provides the customers lower costs and
in many cases, better availability compared to replacing
them with new products. SKF RecondOil is a service that
provides a solution for the complete recovery and reuse of
industrial oil. It uses Double Separation Technology (DST)
to remove contaminants from the oil, allowing it to be used
repeatedly. This reduces the environmental impact of
industrial oil use and can save on maintenance costs.
Upstream and downstream logistics [SBM-1_40; 42]
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.
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
SKF’s value chain
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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
innovative 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 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
businesses 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,
contribute to the climate transition, and future-proof its
operations 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 page 20. 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
communities 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 represent 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
trainings provide feedback to SKF on suppliers’ performance related to quality and sustain-
ability 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 decarbonizing the supply chain and upholding strong
due diligence practices.
Collaborations for developing low-carbon products and
materials and updated supplier sustainability standards.
SBM-2
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 is conducted with con-
sideration 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 activities is collected from cus-
tomers, investors and analysts, employees, union organiza-
tions, and representatives from civil society. It’s collected
via interviews, surveys, conferences, meetings, and data
analysis. The work to engage with the stakeholder groups
is conducted by the respective functions within the Group.
The insights are used to inform both the due diligence pro-
cesses and the DMA. SKF further ensures that the views of
stakeholders are communicated to the Board of Directors
and to the Audit and Sustainability Committee.
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Strategy, cont.
SBM-3
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 2025, SKF updated the DMA covering
impact materiality as well as financial materiality, and the
methodology used is described under IRO-1. The outcome
of the assessment is aggregated on ESRS topic level and
presented in the graph “Results of the Double Materiality
Assessment”. As the graph illustrates Climate change,
Resource Use & Circularity, 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, accom-
panied by the associated GHG emissions. SKF has identi-
fied both transitional and physical climate risks to be
material for the Group. SKF’s efforts related to circularity
and decarbonization are aimed at mitigating negative
impacts, while also contributing to positive impacts
beyond mitigating activities. Here, SKF has material
opportunities when increasing energy efficiency for its
customers and providing 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.
Notably, impacts related to human rights were also
deemed material due to their potential severity (if they
occurred) taking precedence over the likelihood of their
occurrence, which is low. This approach reflects SKF’s
commitment to upholding fundamental rights irrespective
of probability.
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. Risk assessments performed are
described in G1-1, G1-3 and S2-4. To reduce any potential
negative impacts and risks, SKF is continuously imple-
menting mitigating activities such as being a responsible
business partner to both suppliers and customers, where
SKF can contribute with positive impacts and capture
opportunities. Furthermore, the material impacts, risks,
and opportunities have a clear link to the Group’s strategic
sustain ability efforts, targets, and ambitions of caring for
people and ensure health and safety for own workforce (S1)
and workers in the value chain (S2), achieving net-zero
emissions by 2050 for climate change (E1), and doing busi-
ness responsibly for business conduct (G1) as well as the
pursuit of circularity (E5).
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.
In this report, only topics reaching the thresholds of the
materiality analysis are presented in full. The detailed
description of the IROs in relation to SKF are described
under each topic. The Material Impacts, Risks and Oppor-
tunities tables on the next pages provide a high-level
description of the IROs that were deemed material.
Impact materiality
Immaterial Material
Financial materiality
Immaterial Material
Pollution
Water and marine resources
Biodiversity and ecosystems
Affected communities
Consumers and end-users
Workers in the value chain Climate change
Resource Use and Circularity
Own workforce
Business conduct
Low
High
High
Results of Double Materiality Assessment
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Strategy, cont.
Material Impacts, Risks and Opportunities
Description of IRO Type of IRO Value chain Time horizon
E1 – Climate change mitigation
1 Innovating and providing products and solutions for the climate transition Actual
Positive
Impact
Short-term
2 Greenhouse gas emissions from own operations and value chain
(scope 1, 2, 3)
Actual
Negative
Impact
Short-term
3 Winning business by providing products and services that enable
climate transition and contribute to climate change mitigation
Opportunity
Long-term
4 Risk of financial loss and strategic setback from policy uncertainty
undermining investments in decarbonization and sustainable innovation
Risk
Long-term
5 Cost of decarbonization (full value chain) Risk
Long-term
6 Rising costs from stricter climate regulations and stakeholder pressure
for use of low-carbon materials
Risk
Long-term
E1 – Climate change adaptation
7 Physical climate risks (chronic and acute) Risk
Mid-term
E1 – Energy
8 Reducing friction and increasing energy efficiency Actual
Positive
Impact
Short-term
9 Use of fossil energy Actual
Negative
Impact
Short-term
10 Winning business by providing energy efficient solutions Opportunity
Short-term
11 Energy price fluctuations Risk
Short-term
E5 – Resource inflows
12 Increasing demand for products and business models with improved
circular performance
Actual
Positive
Impact
Mid-term
13 Reliance on virgin raw materials sourced for production Actual
Negative
Impact
Short-term
Material Impacts, Risks and Opportunities
Description of IRO Type of IRO Value chain Time horizon
E5 – Resource outflows, cont.
14 Designing, developing and providing products and solutions for circularity Actual
Positive
Impact
Long-term
15 Limited closed-loop material flows Actual
Negative
Impact
Short-term
16 Winning business in a circular economy Opportunity
Short-term
E5 – Waste
17 Waste generated in own operations Actual
Negative
Impact
Short-term
S1 – Working conditions
18 Work-related stress for own employees Actual
Negative
Impact
Short-term
19 Work-related injuries and ill-health of own workforce Actual
Negative
Impact
Short-term
S1 – Equal treatment and opportunities for all
20 Enabling a diverse and inclusive workplace Actual
Positive
Impact
Short-term
21 Training and skills development Actual
Positive
Impact
Short-term
22 Potential discrimination and non-equal treatment of own workforce Potential
Negative
Impact
Mid-term
23 Possible gender pay gaps and lack of pay equity Actual/
Potential
Negative
impact
1)
Short-term
24 Diversity and inclusion increasing innovation and business performance Opportunity
Mid-term
Upstream
Own operations
Downstream 1) Gender pay gap: Actual Negative impact. Pay equity: Potential Negative impact.
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Strategy, cont. Impacts, risks and opportunities
Material Impacts, Risks and Opportunities
Description of IRO Type of IRO Value chain Time horizon
S1 – Other work-related rights
25 Potential human rights violations of own workforce Potential
Negative
Impact
Short-term
S2 – Working conditions & Equal treatment and opportunities for all
26 Improving working conditions together with suppliers Actual
Positive
Impact
Long-term
27 Work-related injuries and ill-health of workers in the value chain Potential
Negative
Impact
Short-term
28 Potential sub-standard working conditions for workers in the value chain Potential
Negative
Impact
Short-term
S2 – Other work-related rights
29 Possible human rights violations in upstream and downstream value chain Potential
Negative
Impact
Mid-term
G1 – Corporate culture
30 Fostering a strong corporate culture for a better tomorrow Actual
Positive
Impact
Short-term
31 Breaches against the SKF Code of Conduct Potential
Negative
Impact
Short-term
G1 – Protection of whistleblowers
32 Protection of whistleblowers Actual
Positive
Impact
Short-term
33 Lack of adequate protection of whistleblowers Potential
Negative
Impact
Short-term
G1 – Corruption and bribery
34 Potential corruption and bribery leading to fines and/or
reputational damage including loss of business
Risk
Short-term
B. Identify SKF’s actual and potential
impacts, risks, and opportunities
For this step, SKF used the ESRS 1 AR16 topic list as
a foundation for identifying impacts, risks, and oppor-
tunities across the different sustainability matters that
are relevant to the Group’s own operations and in its
value chain. The gross list of IROs was compiled through
a structured and multi-source approach. Initial identifi-
cation was conducted by using a combination of scientific
literature, open-source sustainability risk assessment
platforms, such as CSR Risk Check, WWF Risk Filter, WRI
Aqueduct tool, MSCI ESG, Sustainalytics, as well as industry
benchmarks and peer comparisons. This ensured broad
coverage and relevance across SKF’s operational and
sectoral contexts.
Following this, the preliminary list of IROs underwent
a comprehensive internal review process involving key
stakeholders across environmental, social, and gover-
nance domains. In a stepwise process, Business Areas
and Business Units first evaluated the applicability of the
pre-identified IROs to their specific operational contexts
and contributed additional IROs that had not been cap-
tured by the core team. Further, topic owners and subject
matter experts validated the relevance of IROs at the Group
level and provided further input to ensure completeness
and alignment with strategic and sustainability priorities.
This bottom-up approach led to the identification of 115
IROs, documented in a comprehensive list.
When identifying risks and opportunities, it was evalu-
ated whether the identified impacts on people and the
environment were linked to any risks or opportunities for
the Group. This was done by assessing different scenarios
and possible financial effects when engaging with stake-
holder groups. The assessment showed that the identified
opportunities are usually associated with positive impacts,
whereas the actual or potential negative impacts and
dependencies tend to give rise to risks. Although the
majority of identified sustainability risks are not directly
connected to SKF’s own negative impact on the planet
and society, these are the general sustainability risks that
are relevant to its industry and context. SKF recognizes
those risks and takes a proactive approach towards
working to address them.
IRO-1
Description of the process to identify and assess
material impacts, risks and opportunities
Double materiality assessment [IRO-1_53h]
The 2025 assessment builds upon the foundation
established in SKF’s 2024 DMA process. SKF continues
to apply the principle of double materiality, evaluating
both impact materiality, meaning how SKF affects society
and the environment, and financial materiality, meaning
how sustainability topics influence SKF’s financial per-
formance. This dual perspective enables the Group to
identify the most relevant sustainability matters, allocate
resources effectively, and shape strategic decisions.
In 2025, the DMA process was further strengthened through
enhanced documentation and calibration measures, aimed
at improving completeness, comparability, and faithful
representation of impacts, risks, and opportunities (IROs)
across all topical ESRS standards.
Methodologies and assumptions [IRO-1_53a-g]
SKF’s DMA follows the European Sustainability Reporting
Standards (ESRS) 1 requirements. The 2025 process
included the following steps:
A. Understanding SKF’s business context
In this initial step, SKF conducted a comprehensive
analysis of historical materiality assessments, strategic
business plans, financial statements, and its overarching
strategy. In line with the due diligence process, a detailed
mapping of the value chain was performed, encompassing
not only SKF’s own operations but also the geographic
locations of key suppliers and customers. This enabled
the identification of stakeholder groups most likely to be
affected and helped focus the assessment on areas where
impacts, risks, and opportunities were deemed most likely
to arise. To further contextualize SKF’s exposure and in -
fluence, a task force reviewed the legal and regulatory
landscape, sector-specific benchmarks, media coverage,
global sustainability risk assessment platforms, and
scientific literature. This analysis considered both SKF’s
dependencies, such as access to natural, human, and
social resources at appropriate quality and cost, and its
potential impacts on those resources.
Upstream
Own operations
Downstream
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Impacts, risks and opportunities, cont.
C. Assessment of impacts, risks and
opportunities and defining thresholds
All identified IROs were assessed using the criteria in line
with ESRS 1 and EFRAG’s IG 1- Implementation guidance
on materiality assessment. The following criteria were
applied:
• 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
on a 0 to 5 scale.
• 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 on a 0 to 5
scale.
• 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 on a 0 to 5 scale.
• Likelihood: Impacts, risks, and opportunities have been
identified as actual or potential. The likelihood for
potential impacts ranges from unlikely to high on a 0
to 0.9 scale and actual impacts have a likelihood of 1.
• Financial risks or opportunities: Considers how a
sustain ability topic affects, among other things, current
and future price/cost, availability, supply and demand
for resources, 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 exchanges with, among other things, financial
institutions, suppliers, contractors, customers, and
society at large.
Each identified actual or potential impact was assessed
based on severity and likelihood. The criteria considered
for severity of an actual negative impact were scale, scope,
and irremediable character. For actual positive impacts,
the criteria were 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. In its DMA, SKF defines short-term as within
a year, medium-term as between one and five years and
long-term as beyond five years. The time horizons pre-
sented represent the earliest expected time that each IRO
may occur. 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, sig-
nificant, or crucial. SKF’s threshold for impact materiality
is from important and up, meaning that the impact is
considered material if it is important, significant, or cru-
cial. Although the thresholds utilized during the assess-
ment remained consistent with those established for the
FY24 DMA, the descriptions of assessment criteria related
to scale, scope, and irremediability were enhanced to
provide clearer guidance for the assessment process,
incorporating SKF-specific perspectives and context.
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 impact on the Group’s financial
results. Sustainability risks are included in the ERM process
and opportunities are assessed and managed by a pro-
gramme for commercialization of sustainability, involving
Group Sustainability, Business Area and Business Unit
representatives.
The DMA core team carried out the assessment,
drawing on input from SKF’s subject matter experts and
topic owners, as well as Business Area and Business Unit
sustain ability teams. In instances where certain IROs,
particularly those related to Pollution, Water, and Bio-
diversity, were situated near the materiality threshold,
additional targeted sessions were convened. These
sessions facilitated deeper deliberation and consensus-
building among relevant stakeholders, ensuring that
the final conclusions were both robust and reflective of
SKF’s operational and sustainability context.
sustainability remains a strategic priority, embedded in
SKF’s governance and decision-making processes, and
aligned with the Group’s ambition to create long-term
value for stakeholders and the planet.
The summarized results for SKF’s DMA can be found
under SBM-3. For more information on stakeholder views
and interests please read SBM-2.
IRO-2
Disclosure requirements in ESRS covered by
the undertaking’s sustainability statement
Upon finalizing the double materiality assessment, SKF
has aligned the identified material information relevant to
impacts, risk and opportunities (IROs) with the disclosure
requirements and data points outlined in Appendix
“Disclosure requirements”.
D. Summary and validation of material ESRS sub-topics
SKF’s DMA follows a three-step approval process. The
results of the impact and financial materiality are first pre-
sented to the Sustainability Board consisting of the Head
of Sustainability Reporting, Director Group Sustainability,
Manager Quality Operations (also responsible for Group
EHS), ESG Compliance and Human Rights Officer, and
Business Area and Business Unit Sustainability Directors.
The Sustainability Board has the mandate to review the
DMA result in detail and pre-approve it, before it goes
further in the approval process. Further, the DMA is re -
viewed and approved by SKF’s Sustainability Steering
Group, as presented under GOV-1. On the final step, SKF’s
Board of Directors is being informed of the DMA results.
While not directly involved in the operational approval, the
Board plays a pivotal role in steering the company’s long-
term sustainability direction. Their oversight ensures that
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
Process to identify and assess material impacts,
risks and opportunities
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Summary
SKF is eligible for six economic activities under the EU
Taxonomy covering manufacturing of components for the
automotive and railway industry, magnetic bearings, con-
dition monitoring hardware and services and ownership,
and leasing of company cars and buildings.
In January 2026, delegated regulation (EU) 2026/73 was
published. Based on the materiality threshold included in
this regulation, manufacturing of magnetic bearings and
leasing of company cars are considered non-material for
SKF’s taxonomy reporting. This impacts comparability to
previous years reporting.
SKF has assessed EU Taxonomy alignment for the
material economic activities in scope.
The EU Taxonomy is part of EU’s Green Deal and is a key
enabler for delivering the EU’s environmental goals by
2050. It’s a classification system that defines environ-
mentally sustainable economic activities.
SKF is performing activities that are in scope of the
EU taxonomy reporting and has assessed their align-
ment with the definitions of sustainable activities.
The environmental areas covered in the assessment are
Climate change mitigation, Climate change adaptation,
Sustainable use of water and marine resources, Transi-
tion to a circular economy, Pollution prevention and
P rotection of bio diversity and ecosystems.
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.
The assessment of 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
Monitoring services significantly contribute to Circular
Economy by assisting customers in monitoring the perfor-
mance of the rotating shaft, thereby enabling measures
to extend the lifespan of components. However, additional
actions are needed to verify design aspects and waste
management for the hardware.
The assessment of the second requirement shows that
it is not possible for SKF to claim alignment for all eligible
SKF products, since the DNSH requirements are not met
in full. No CapEx plan has been established, but improve-
ment activities have been identified.
The assessment of the third requirement shows that
SKF fulfils minimum safeguards criteria related to human
rights (including workers’ rights), bribery/corruption,
taxation, and fair competition.
The summarized result of these assessments is that
SKF can claim alignment for condition monitoring services,
excluding the hardware that are subject to additional
requirements which are not fully met.
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
substantial contribution to Climate change mitigation.
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
directive which requires all new large constructions
(including 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 directive 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 con-
dition monitoring solutions aim to detect and diagnose
potential issues or abnormalities before they lead to
equipment failure, downtime, or safety hazards, which
in turn significantly contribute to Circular economy.
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.
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 Non-
material
Non-
material
Non-
material
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 Non-
material
CCM 7.7 Acquisition and
ownership of buildings
Leased and acquired buildings Eligible
Environment
EU taxonomy
E
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EU taxonomy
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 its com-
mitment to sustainable and responsible business conduct.
DNSH Climate change adaptation
SKF has assessed that manufacturing sites and real estate
facilities partially fulfil the Do No Significant Harm (DNSH)
Climate change adaptation criteria. There is a loss preven-
tion process in place to address existing physical climate
risks. SKF also has a project to address future risks and
potential need for adaptation plans. To identify future
potential physical climate risks, SKF is using software
designed for assessing risks across various scenarios
projected up to the year 2100. In addition, regional busi-
ness representatives are performing extended analyses
for strategic locations. Physical climate risks are also in-
cluded in the investment process for new buildings.
DNSH Water and marine resources
SKF has assessed that its 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. Perfor-
mance 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 scarcity assessments, identifying 18 sites in
water-stressed areas. These sites are required to imple-
ment plans to minimize water usage. SKF’s EHS manage-
ment system includes a procedure on wastewater and
storm water discharge to avoid discharging 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 ensure that
SKF’s manufacturing sites don’t hamper marine waters.
SKF also works with upstream water users, such as steel
and energy suppliers, to reduce water use, for example by
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 label for Waste of Electrical
and Electronic Equipment. However, additional actions
to verify design aspects and waste management for the
hardware need to be conducted for SKF to fully meet the
technical screening 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 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 interna-
tional standards and guidelines including 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 Principles 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.
The human rights impact assessment is planned to be
updated 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 in section G1-3. SKF’s business activi-
ties are carried out in accordance with applicable compe-
tition laws, and training on this topic is mandatory for all
employees. Regarding taxation, SKF applies all relevant
requiring suppliers to adopt the ISO 14001 standard and
supplier code of conduct. Given the low water intensity of
SKF’s operations and the adherence to wastewater treat-
ment standards, the Group’s impact on local community
water availability and quality is low.
DNSH Biodiversity
SKF’s operations are not considered to have significant
risk of impacting biodiversity. Manufacturing facilities
are situated in industrial areas, which are typically
characterized by low levels of biodiversity and all SKF’s
manufacturing sites are certified according to ISO 14001
Environmental Management System. The EHS Manage-
ment system includes processes for identifying environ-
mental risks and opportunities, however, biodiversity is
not specifically addressed. Based on this, SKF’s current
assessment is partial fulfilment of the EU Taxonomy
DNSH criteria for biodiversity.
DNSH Circular economy
Assessments in 2025 indicate that SKF has several prac-
tices in place supporting the transition to a circular econ-
omy. In manufacturing, this includes applying the waste
hierarchy and maintaining waste reduction targets. In
product development, sustainability design aspects are
defined to address durability, recyclability, and material
selection, with recycling guidance provided to customers.
SKF ensures traceability of substances of concern up
to the point of product delivery, providing information such
as REACH and RoHS certificates. In addition, SKF main-
tains a hazardous substances policy covering traceability
throughout the value chain. Remanufacturing services are
available for selected products.
Overall, SKF’s current assessment is partial fulfilment
of the EU Taxonomy DNSH criteria for circular economy
(CCM 3.18/3.19). Further actions are described in E5.
DNSH Pollution
SKF follows all applicable legal requirements for restricted
and declarable substances in products and regularly
engages with suppliers on the presence of Substances
of Very High Concern (SVHC), substances of concern
and other regulated substances. Data is systematically
managed within a compliance database and operations
are ISO 9001 and 14001 certified, ensuring validated
supporting processes. SKF also has a Restricted Sub-
stances List (RSL), to help assess alternatives as new
restricted substances are added through legal require-
ments. When technically feasible, SKF takes efforts to
eliminate SVHCs and seek alternative non-hazardous
substances but has not yet eliminated SVHCs entirely
in the value chain. Hence, SKF has partial fulfilment of
the pollution criteria for products produced.
Accounting principles
Total turnover corresponds to net sales in the consolidated
income statement. Eligible turnover for 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) cover 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 Notes 10, 11 and 12 to the consolidated financial state-
ment. Capital expenditure resulting from business mergers
and acquisitions is also included and is part of the re -
ported 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
turnover 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
possibility to separate services and hardware in the sales
data. Revenue streams that include both services and
hardware have been excluded for cases where a separa-
tion has not been possible.
SKF ANNUAL REPORT 2025 42
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STATEMENTS
ENVIRONMENT
EU taxonomy
Financial year 2025
ΚΡΙ (1) Total (2)
Proportion
of Taxonomy
eligible
a ctivities (3)
Taxonomy
aligned
activities (4)
Proportion of
Taxonomy
aligned
activities (5)
Breakdown by environmental objectives of Taxonomy aligned activities
Proportion
of enabling
activities (12)
Proportion of
transitional
activities (13)
Not assessed
activities
considered
non-material
(14)
Taxonomy
aligned activities
in previous
financial year
(N-1) (15)
Proportion of
Taxonomy
aligned activities
in previous
financial year
(N-1) (16)
Climate Change
Mitigation (6)
Climate Change
Adaptation (7)
Water (8)
Circular
Economy (9)
Pollution (10)
Biodiversity (11)
MSEK % MSEK % % % % % % % % % % Currency %
Turnover 91,583 36% 180 0% 0% 36% 1% 212 0%
CapEx 4,421 39% 14 0% 0% 39% 1% 14 0%
OpEx 5,073 28% 3 0% 0% 28% 3% 9 0%
Reported KPI (Turnover) Turnover
Financial year 2025
Economic
Activities (1) Code (2)
Taxonomy
eligible KPI
(Proportion
of Taxonomy
eligible
Turnover) (3)
Taxonomy
aligned KPI
(monetary value
of Turnover) (4)
Taxonomy
aligned KPI
(Proportion
of Taxonomy
aligned
Turnover) (5)
Environmental objective of Taxonomy aligned activities
Enabling activity
(12)
Transitional
activity (13)
Proportion
of Taxonomy
aligned in
Taxonomy
eligible (14)
Climate Change
Mitigation (6)
Climate Change
Adaptation (7)
Water (8)
Circular
Economy (9)
Pollution (10)
Biodiversity (11)
% MSEK % % % % % % %
(E where
applicable)
(T where
applicable) %
Manufacture of automotive and
mobility components
CCM 3.18 28%
Manufacture of rail rolling stock
constituents
CCM 3.19 5%
Provision of IT/OT data-driven
solutions
CE 4.1 2% 180 0% 0% E 8%
Sum of alignment per objective 0%
Total KPI (Turnover) 36% 180 0% 0% 36% 1%
SKF ANNUAL REPORT 2025 43
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EU taxonomy
Reported KPI (CapEx) CapEx
Financial year 2025
Economic
Activities (1) Code (2)
Taxonomy
eligible KPI
(Proportion of
Taxonomy
eligible CapEx)
(3)
Taxonomy
aligned KPI
(monetary value
of CapEx) (4)
Taxonomy
aligned KPI
(Proportion of
Taxonomy
aligned CapEx)
(5)
Environmental objective of Taxonomy aligned activities
Enabling activity
(12)
Transitional
activity (13)
Proportion
of Taxonomy
aligned in
Taxonomy
eligible (14)
Climate Change
Mitigation (6)
Climate Change
Adaptation (7)
Water (8)
Circular
Economy (9)
Pollution (10)
Biodiversity (11)
% MSEK % % % % % % %
(E where
applicable)
(T where
applicable) %
Manufacture of automotive and
mobility components
CCM 3.18 31%
Manufacture of rail rolling stock
constituents
CCM 3.19 5%
Provision of IT/OT data-driven
solutions
CE 4.1 3% 14 0% 0% E 11%
Acquisition and ownership of
buildings
CCM 7.7 0%
Sum of alignment per objective 0%
Total KPI (CapEx) 39% 14 0% 0% 39% 1%
Reported KPI (OpEx) OpEx
Financial year 2025
Economic
Activities (1) Code (2)
Taxonomy
eligible KPI
(Proportion of
Taxonomy
eligible OpEx) (3)
Taxonomy
aligned KPI
(monetary value
of OpEx) (4)
Taxonomy
aligned KPI
(Proportion of
Taxonomy
aligned OpEx)
(5)
Environmental objective of Taxonomy aligned activities
Enabling activity
(12)
Transitional
activity (13)
Proportion
of Taxonomy
aligned in
Taxonomy
eligible (14)
Climate Change
Mitigation (6)
Climate Change
Adaptation (7)
Water (8)
Circular
Economy (9)
Pollution (10)
Biodiversity (11)
% MSEK % % % % % % %
(E where
applicable)
(T where
applicable) %
Manufacture of automotive and
mobility components
CCM 3.18 19%
Manufacture of rail rolling stock
constituents
CCM 3.19 5%
Provision of IT/OT data-driven
solutions
CE 4.1 4% 3 0% 0% E 0%
Sum of alignment per objective 0%
Total KPI (OpEx) 28% 0% 0% 28% 0%
SKF ANNUAL REPORT 2025 44
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Climate change is a strategic priority for SKF,
embedded in SKF’s commitment to reducing
environmental impact across the value chain.
Guided by science-based targets, SKF focuses on
reducing greenhouse gas emissions, prioritizing
energy efficiency and the transition to renewable
energy sources. By integrating climate consider-
ations into products, processes, and partner-
ships, SKF aims to create long-term value for
itself and its customers. These efforts reflect
SKF’s commitment to sustainability and its role
in enabling a low-carbon future.
Description of IRO Type of IRO Value chain Time horizon
E1 – Climate change mitigation
1 Innovating and providing products and solutions for the climate transition
SKF has a portfolio of products and services that mitigate the customer’s
negative impacts. However, SKF’s most significant positive impact lies in its
ability to innovate and provide products that enable the transition to a
low-carbon economy. Specifically, SKF provides solutions that enable the
growth of cleantech industry, electrification, and renewable energy as well
as increase the demand for circular products which have significantly lower
lifecycle emissions.
Actual
Positive
Impact
Short-term
2 Greenhouse gas emissions from own operations and value chain
(scope 1,2 and 3)
SKF’s operations and value chain generate greenhouse gas emissions.
Actual
Negative
Impact
Short-term
3 Winning business by providing products and services that enable
climate transition and contribute to climate change mitigation
With a strong focus on innovative, energy efficient and low-carbon products
and services, SKF has the opportunity to be a preferred business partner
to its customers. Supplying customers with less climate change inducing
products is a significant financial opportunity for SKF. By providing innova-
tive 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.
Opportunity
Long-term
4 Risk of financial loss and strategic setback from policy uncertainty
under mining investments in decarbonization and sustainable innovation
SKF’s investments in emissions-reduction initiatives and technologies (e.g.,
renewable energy adoption, green R&D, sustainable supply chains) face
financial and operational risks if government policies fail to align with their
decarbonization strategies. These investments often assume future regula-
tory frameworks will reward early adopters through mechanisms like carbon
pricing, subsidies, or market advan tages. However, abrupt policy shift, such
as weakened climate targets, delayed regulation, or reduced incentives
could render these investments obsolete.
Risk
Long-term
Description of IRO Type of IRO Value chain Time horizon
E1 – Climate change mitigation, cont.
5 Cost of decarbonization
Costs associated with climate change mitigation such as investments
required to reduce emissions across all scopes 1, 2, and 3 (full value chain).
Risk
Long-term
6 Rising costs from stricter climate regulations and stakeholder pressure
for use of low-carbon materials
SKF faces increasing financial and operational pressures due to stricter
climate regulations - such as carbon pricing and import taxes on emissions
embedded in certain goods (CBAM) - as well as rising stakeholder expecta-
tions for the use of low-emission materials. Together, these regulatory and
market-driven demands may significantly increase costs, require changes
in sourcing and production processes, and impact competitiveness if not
proactively managed.
Risk
Long-term
E1 – Climate change adaptation
7 Physical climate risks (chronic and acute)
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. Extreme climate-related events are
already becoming increasingly common and pose potential financial risks
for SKF. In particular, heat stress, heavy precipitation as well as flooding are
types of physical risks that according to location-specific analyses may
cause disruptions in SKF’s production processes.
Risk
Mid-term
E1 – Energy
8 Reducing friction and increasing energy efficiency
SKF’s products aim to reduce friction, which leads to increased energy
efficiency for customers, reducing otherwise emitted GHG.
Actual
Positive
Impact
Short-term
9 Use of fossil energy
SKF still has a dependency on fossil energy in its own operations and its
upstream and downstream value chain.
Actual
Negative
Impact
Short-term
10 Winning business by providing energy efficient solutions
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.
Opportunity
Short-term
11 Energy price fluctuations
Energy price fluctuations pose a material financial risk for SKF. For instance,
geopolitics can cause energy crisis which may affect the energy costs of
SKF’s own operations and upstream supply chain, especially for energy-
intensive materials like steel.
Risk
Short-term
E1 Climate change
E
Upstream
Own operations
Downstream
SKF ANNUAL REPORT 2025 45
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E1 Climate change, cont.
its customers. With a strategic focus on cleantech indus-
tries at all stages of industrialization, SKF is developing
products, solutions, and services that enable these tech-
nologies to develop, making them competitive and sup-
porting the need for rapid growth in the coming years. SKF
can also contribute significantly to its customers’ energy
and carbon savings in all industries by optimizing the
design of its products (e.g., making them lighter, more effi-
cient, longer lasting and repairable), as well as improving
the performance of the customers’ products by optimizing
system designs through advanced modelling and simula-
tion. For example, SKF’s service offering, including condi-
tion 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 emissions. With a combination
of these approaches, SKF has the potential to make a
STRATEGY
E1-1
Transition plan for climate change mitigation
[E1-1_14; 15; 16 a-g]
SKF bases its climate position and strategy on science and
is committed to the Paris Agreement’s 1.5 °C goal. Since the
early 2000s, SKF has reported and reduced greenhouse gas
(GHG) emissions, consistently decoupling revenue growth
from scope 1 and 2 emissions. SKF’s climate targets (both
near- and long-term) are approved by the Science Based
Target initiative (SBTi) and are aligned with the most ambi-
tious aim of the Paris Agreement to reduce the destructive
impacts of climate change. This means net-zero global
emissions by 2050, at the latest, to limit global warming
to 1.5 °C (the IEA Net Zero Scenario).
SKF’s largest contribution to the transformation into a
net-zero future lies in what can be achieved with, and for,
E
profound contribution to the transition to a net-zero world
and, at the same time, drive innovation and growth for
SKF and its customers.
Simultaneously, SKF addresses carbon emissions of
its own operations and activities, as well as those in its
extended value chain. By addressing them, SKF sets a
positive example for customers, suppliers and other stake-
holders, and creates long-term competitive advantages by
reducing costs and risks. The Group has been reporting
and reducing carbon emissions from its own operations
since the early 2000’s and has 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. In 2023, SKF’s near and long-term
emissions reduction targets were approved by the SBTi,
which implies that SKF’s targets are based on the latest
climate science and require rapid, significant emissions
reductions consistent with pathways that limit global
warming to 1.5 °C with little to no overshoot. By meeting
these targets, SKF is contributing to global efforts to avoid
the severe impacts of climate change, as outlined by the
IPCC and required under Article 2.1(a) of the Paris Agree-
ment (read more about SKF’s climate targets in E1-4).
The relative CO
2
e impacts according to the GHG
protocol definition for 2019 are summarized in the graph
showing of the estimated GHG emissions (tonnes), with
base year 2019.
SKF has defined several strategic levers and related
actions and objectives which, when applied in combina-
tion, aim to reach the Group’s climate targets. The levers
are primarily focused on the most significant impact
categories (as illustrated in the table for Decarbonization
levers), specifically scope 1 and 2, and scope 3, cate gories
1, 3, 4 and 11, but also include scope 3, category 6. They
are further explained and quantified in the E1-3 section
‘levers and actions’.
Estimated GHG emissions (tonnes), base year 2019
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
4,000,000
5,000,000
3,000,000
2,000,000
1,000,000
Decarbonization levers
Scope 1 Scope 2
Scope 3,
Category 3
Scope 3,
Category 1
Scope 3,
Category 11
Scope 3,
Category 4
Scope 3,
Category 6
Direct emissions
generated at SKF
facilities e.g. burning
fossil fuels, release
of other GHG’s.
Indirect emissions
from electricity and
district heating use in
SKF operations.
Fuel and energy
related activities.
Purchased goods
and services.
Use of sold
products.
Transportation
and distribution.
Business
Travel.
• Increased energy efficiency for
manufacturing, heating, ventilation
and air conditioning.
• Improved supplier
material & energy
efficiency.
• Increased use
of secondary
material.
• Use of innovative
technologies.
• Regionalization
(factories closer
to suppliers and
customers).
• Airfreight
avoidance.
• Fuel switching
and EV solutions.
• Optimization
(e.g. fill rates).
• Promotion
of virtual
meetings.
• Promotion of
lower carbon
transport
modes.
• Phase out of fossil
fuel use via electrifi-
cation or use of
alternative fuels.
• Decarbonization
of local district
heating systems.
• Increased use of renewable electricity.
• Advocating for increased renewables.
• Developing and supplying products and solutions that enable
renewable generation.
Strategic levers Description
SKF ANNUAL REPORT 2025 46
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E1 Climate change, cont.
OpEx can be found in the EU Taxonomy disclosures.
SKF currently has no plans (CapEx or OpEx) for aligning
its eligible economic activities (revenues, CapEx, OpEx)
with the criteria established in Commission Delegated
Regulation 2021/2139. SKF is included in the Paris-aligned
benchmarks.
Alignment of the transition plan with business strategy
[E1-1_16h]
The strategy behind SKF’s Climate Transition plan is
integrated with the overall business strategy and finan-
cial planning of the Group. Short-term climate risks are
addressed in annual plans, while medium- and long-term
risks shape strategic direction. Investments and resources
for decarbonization are embedded in Business Area and
Business Unit plans and supported by green finance
mechanisms. Scenario analysis and cross-functional
governance ensure the plan evolves with changing risks
and opportunities (read more in E1-3). 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 and Business Units, regions and various
Group functions. The plan has been reviewed and approved
by Group Management and the Board of Directors, and
regular updates are provided via the various governance
forums described in the section General disclosures in the
governance section.
Progress in implementing the transition plan [E1-1_16j]
SKF has been working on key aspects of the current transi-
tion plan since the early 2000s. For example, the Group
has been measuring and acting on carbon emissions from
its own production activities for more than 20 years and
has reduced CO
2
e impact in real terms while achieving
sustained economic growth. Since the launch of SKF’s
Net Zero ambitions in 2021, good progress has been made.
The Group is on track to deliver its 2030 goals for scope
1 and 2.
Investments to support the transition plan
The execution of the 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:
1. SKF internal allocation of climate specific investment
frames:
• Decarbonization investment frame (MSEK 3,000)
2. Targeted financing of investments focused on
sustainability:
• Green Finance (bond issuance and utilization)
(MEUR 700)
• EIB credit facility (MEUR 430)
Read about how these mechanisms are implemented
in E1-3.
Locked-in greenhouse gas emissions
SKF assesses potential locked-in GHG emissions from its
assets and products, identifying raw material production
(steel) as a key upstream risk due to its carbon intensity.
However, strategic sourcing roadmaps, including the shift
to less carbon-intensive steel production (e.g., increased
scrap content using EAF furnaces), and the use of shadow
carbon pricing, aim to mitigate this. Within its operations,
SKF’s fossil fuel phase-out directive prohibits new fossil
fuel-based investments and mandates phasing out exist-
ing assets by 2030, effectively mitigating operational
locked-in emissions. Without these mitigation plans, these
locked-in emissions from steel production and on-site
fossil fuel use would jeopardize the achievement of SKF’s
GHG reduction targets and may expose it to transition
risks, including increased carbon pricing and shifting
customer demand for low-carbon products.
SKF has a number of economic activities that fall under
the Taxonomy Regulation. For instance, SKF’s products
and services for fully electric vehicles and electric railways
make significant contributions to climate change mitiga-
tion. The KPIs for SKF’s taxonomy-aligned CapEx and
E
Progress is evaluated based on actual performance
and strategic actions that support future deployment.
While some areas, like scope 1 and 2 reductions, are
well- established, others – such as measuring scope 3,
category 1 emissions – are more recent. Despite varying
maturity levels, the overall implementation trajectory is
positive. As of 2025, the status of focused targets – those
SKF can directly influence – is summarized below:
Scope 1 and 2 (SKF operations)
SKF continued to implement strategic decarbonization
measures in 2025, aligned with its long-term commitment
to reduce scope 1 and 2 emissions. Site-level and Business
Area and Business Unit roadmaps were refined and moni-
tored through governance forums, including EHS and Net-
Zero reviews.
Scope 3, category 1 (purchased goods and services)
In 2025, SKF advanced its strategy to reduce scope 3,
category 1 emissions from purchased goods and services.
Roadmaps were developed by Business Areas and
Business Units to support the 2030 target of a 32% reduc-
tion in scope 3, category 1 emissions compared to 2019,
leveraging strategic levers outlined in section E1-3. These
roadmaps are now being followed up every six months in
the EHS and NetZero reviews.
SKF continues to engage suppliers and refine procure-
ment practices to drive emissions reductions across its
value chain.
Scope 3, category 4 (logistics)
In 2025, SKF advanced its logistics decarbonization
strategy through regionalization and transport optimiza-
tion. The Group continued to implement its footprint and
regionalization strategy, designed to reduce long-distance
transport by aligning production sites more closely with
regional customers and suppliers.
Work continued on the global rollout of an airfreight
avoidance directive. This directive aims to minimize
the use of air transport due to its disproportionately high
emissions. It applies to all inbound and outbound logistics.
Planned airfreight must be evaluated for alternatives, and
unplanned airfreight is restricted to urgent cases only. All
such cases are logged and analysed to prevent recurrence.
In 2025, SKF implemented a third-party system to cal-
culate logistics emissions using a bottom-up approach
(read more in E1-6, Accounting principles, scope 3, cate-
gory 4). This approach aims to significantly improve the
quality and accuracy of emissions data and enables more
granular and detailed follow-up on improvement actions,
supporting targeted decarbonization initiatives across
SKF’s logistics network.
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E1 Climate change, cont.
(1–5 years) and long term (5 + years). In general, SKF
performs resilience analysis for climate topics by using
externally published scenarios. By leveraging globally
recognized external scenarios, SKF ensures its analysis
is credible and aligned with international standards.
The range of climate scenarios used to inform the identi-
fication and assessment of both physical and transition
risks is described in detail under the “Scenario analysis”
in E1 IRO-1_21.
Cross-functional teams make use of the scenarios to
identify and quantify SKF-specific risks, which are then
addressed within the relevant strategies, organizations
and processes. The set-up of the cross-functional teams
depends on the topic, but may, for example, include Sales
and Marketing, Business Development, Manufacturing
Operations, Group Loss Prevention & Risk, Group Pur-
chasing, Group Legal & Compliance, Group Real Estate
Scope and approach of the resilience analysis
[E1 SBM-3_19]
SKF performs resilience analysis on its own operations,
strategy, business model and value chain in various ways.
This includes resilience analysis relating to risks coming
from activities for climate change mitigation conducted on
the full value chain, including the upstream supply chain,
SKF’s direct operations and its customers downstream.
Resilience analysis for physical climate risks and adap-
tation 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
ESRS 2 SBM-3
Material impacts, risks and opportunities and their
interaction with strategy and business model
E
SKF has identified the following material climate-related risks in its 2025 double materiality assessment.
[E1 SBM-3_18]
Description of the risk Type of the risk Time horizon
Energy price fluctuations Transitional Short-term
Cost of decarbonization Transitional Long-term
Rising costs from stricter climate regulations and stakeholder pressure
for use of low-carbon materials
Transitional Long-term
Risk of financial loss and strategic setback from policy uncertainty
undermining investments in decarbonization and sustainable innovation
Transitional Long-term
Physical climate risks such as heat stress, heavy precipitation and
flooding may cause disruptions in SKF’s production processes,
according to location-specific analyses
Physical Mid-term
and Facility Management and Group Sustainability. This
ensures climate resilience is anchored into the core of
SKF’s business strategy and operations. Involving diverse
functions fosters ownership across the organization and
integrates climate considerations into everyday decision-
making. This not only strengthens risk management and
strategic planning but also supports long-term value crea-
tion by safeguarding assets, supply chains, and customer
relationships.
Results of the resilience analysis
[E1 SBM-3_19c; E1 IRO-1_20 b-c]
Short-term climate risks and opportunities are integrated
into yearly operational business planning and follow-up.
Medium-term and long-term climate risks and opportuni-
ties are integrated into strategic business planning. The
Group’s climate targets typically cover a longer time hori-
zon, for example, the target to decarbonize SKF’s opera-
tions by 2030 and achieve net-zero GHG emissions by
2050. This is to ensure that long-term climate-related
risks and opportunities are proactively identified. In some
cases, individual strategic initiatives are conducted to
investigate specific risks, opportunities and impacts,
and find ways to address these in existing strategies and
business models. Naturally, the future orientation of resil-
ience analysis means that it’s 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 incen-
tives 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 technological 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 continued 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. SKF is also inherently resilient to these
and other types of uncertainties due to its highly diversi-
fied and globalized customer base.
IMPACTS, RISKS AND OPPORTUNITIES
MANAGEMENT
ESRS 2 IRO-1
Description of the process to identify
and assess material climate-related impacts,
risks and opportunities
The gross list of climate-related impacts, risks and
opportunities (IROs) has been compiled via the double
materiality assessment (DMA) conducted in 2025. The
DMA was based on the input from already existing SKF
processes to identify and address the IROs pertaining to
climate change mitigation, adaptation and energy use.
To ensure a comprehensive perspective, the identification
of IROs incorporated the views and interests of key SKF
stakeholders to capture diverse expectations and priorities.
The input gathered via different channels of inter action
helped validate the relevance of identified IROs, ensuring
alignment with both business objectives and societal
needs. The list of material climate related IROs is presented
in the beginning of the E1 Climate Change section.
Impacts [E1 IRO-1_20a]
SKF’s negative climate impact primarily arises from the
GHG emissions generated in its own operations and
throughout its upstream and downstream value chain.
To identify and assess these impacts, SKF systematically
screens its activities and strategic plans to pinpoint actual
and potential future sources of GHG emissions, as well as
other climate-related drivers. This screening is embedded
within the company’s DMA, which integrates inputs from
existing internal processes, supplier data, and stakeholder
engagement. The assessment covers emissions arising
from raw material extraction, manufacturing, logistics, and
product use-phase, and is supported by life cycle assess-
ments (LCAs), supplier data collection frameworks, and
scenario analyses. SKF has a long history of reporting on
its GHG emissions (see table E1-6 for details) and has set
net-zero targets (see E1-4 for details) to address them.
The relative scale of these impacts is also illustrated in
the graph in E1-1 summarizing estimated GHG emissions
(tonnes), with base year 2019.
SKF ANNUAL REPORT 2025 48
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E1 Climate change, cont.
the Enterprise Risk Management (ERM) process to inform
strategic planning and resilience measures.
Transition scenarios include the IEA Net Zero Emissions
by 2050 (NZE, equivalent to IPCC SSP1-1.9), which repre-
sents an ambitious pathway aiming to limit global warming
to 1.5°C through rapid policy shifts, carbon pricing, and
widespread electrification. This enables SKF to assess
the implications of a low-carbon global economy, such
as rising costs for energy and raw materials, while also
identifying market growth potential in cleantech sectors
– such as electric vehicles, renewable energy, and hydro-
gen technologies – to provide supporting information on
R&D priorities and customer engagement strategies.
In addition, SKF has developed a bespoke transition
scenario with external consultants, assuming a 2.0–2.4°C
warming pathway. This scenario is broadly aligned with
IPCC SSP2-4.5 (“middle of the road”) and the IEA’s Stated
Policies Scenario (STEPS), reflecting current policy trends
and moderate global climate ambition. This intermediate
scenario provides further insight into the transition risks
SKF’s potential for positive climate impact lies primarily
in its ability to innovate and provide products and solutions
that help enable the transition to a low-carbon economy.
For example, SKF provides products and solutions that
help enable cleantech industries such as transport and
industrial electrification, and renewable energy generation
and storage. SKF also has a number of solutions that enable
increased circularity – reducing the needfor raw material
extraction and processing and the related emissions.
The company also provides products and solutions which
significantly increase material and energy efficiency
– leading to reduced emissions – to customers in multiple
industries globally.
Scope and approach of the scenario analysis
[E1 IRO-1_21; AR13]
SKF employs a multi-scenario approach to assess
climate-related risks and opportunities, aligning with
CDP and TCFD frameworks. The analysis spans short-,
medium-, and long-term horizons and integrates into
E
and opportunities that may arise if the world follows
e xisting policy trajectories.
For physical risk assessment, SKF uses the IPCC
SSP5-8.5 scenario, which models severe physical climate
impacts associated with high GHG emissions and a >4°C
warming pathway by 2100. These impacts include an
increased frequency and intensity of floods, storms, and
water stress. The assessment is further described in the
“Climate-related physical risks” section.
By integrating both transition and physical risk
scenarios, SKF can better manage climate-related risks,
capture emerging opportunities in the circular economy
and low-carbon products, and refine its R&D direction
and customer offerings in line with different levels of
global climate action.
Climate-related physical risks [E1 IRO-1_20b]
SKF has developed bottom-up and top-down approaches
towards the assessment of physical climate risks. The
bottom-up approach is long-standing and based on the
Group’s EHS management system and loss prevention
processes. Operating 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 fossil-fuelled development
shared socioeconomic pathway 5 (SSP5-8.5) scenario
published by the IPCC.
A cross-functional team has performed quantitative
and qualitative assessments of the potential risks and the
effectiveness of existing mitigation measures. In 2025,
each Region has appointed a person who interacts with
the overall cross-functional team on this topic.
Further development of both the bottom-up and top-
down processes is underway. One example of this is the
mapping of some 300 major global suppliers, who will be
requested to act on physical risks at their operations and
map the parts of their supply chain that is relevant for SKF,
for physical risks. The SSP5-8.5 scenario is being used to
apply the precautionary approach in defining mitigation
measures.
Climate related hazards [E1 IRO-1_AR10a]
Temperature related Wind Water Solid mass
Chronic
Changing temperature Changing wind patterns Changing precipitation patterns and types Costal erosion
Heat stress Precipitation or hydrological variability Soil degradation
Temperature variability Ocean acidification Soil erosion
Permafrost thawing Saline intrusion Solifluction
Sea level rise
Water stress
Acute
Heat wave
Cyclones, hurricanes, typhoons
Drought
Avalanche
Cold wave/frost
Storms
Heavy precipitation
Landslide
Wildfire
Tornado
Flood
Subsidence
Glacial lake outburst
The highlighted have been considered in the SKF assessment.
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E1 Climate change, cont.
E
Examples of climate-related transition events (based on TCFD classification) [E1 IRO-1_AR12]
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.
Legal and policy
Slower or reversal of changes in laws
and regulations related to climate
change mitigation.
Slower development of market for
cleantech and other solutions.
Diversified global customer base,
flexible and adaptive strategy.
NA NA
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
technologies.
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 communications.
SKF is using a tool from a third party which takes the
geocoordinates of SKF locations and those of critical
suppliers and provides input on the relevant physical risks
in terms of expected severity, frequency etc. During 2025,
all SKF’s production and warehousing facilities have been
evaluated using this tool, and relevant employees have
been trained in using the software as well as in interpreting
the reports from it. This evaluation confirmed that some
locations are in high-risk areas and these locations
resilience is under evaluation and will be addressed where
needed in the top-down approach to climate physical risk
management described previously.
Where applicable the output of these physical risk
reports is utilized to understand implications on aspects
such as potential future revenue growth, risk of supply
chain disruptions etc. On top of the data-driven approach
described above, a business importance layer is also
applied. This means that facilities deemed business
critical receive extra attention regarding their climate
risk resilience.
The tool considers all the main climate-related hazards
as defined in the EU delegated regulation (EU 2021/2139)
and provides location-based risk indications of the
hazards in the short-, medium- and long-term. The table
on climate hazards summarizes the hazards that have
been considered in the assessment.
Climate-related transition risks and opportunities
[E1 IRO-1_20c]
The identification and management of climate transition
risks and opportunities is an integral part of SKF’s overall
business strategy. The company systematically identifies
climate-related transition events over the short-, medium-,
and long-term, including topics such as increased pricing
of GHG emissions, evolving regulatory requirements
leading to incentives or penalties, technology shifts and
changing customer behaviours. Based on these inputs,
the company screens its assets, business activities and
current and future revenue streams for potential risks
and opportunities. SKF considers the likelihood, magni-
tude, and duration of transition events risks, particularly
those related to policy and legal changes, technological
advancements, market dynamics, and reputational factors.
Based on the scenario analysis, SKF has identified certain
assets and activities that are not aligned with a Net-zero
scenario and is taking steps to address these. For example,
by introducing its fossil fuel phase out directive the Group
is addressing assets that may present locked-in green-
house gas emissions within its operations. The Group is
also working to address any incompatibility with evolving
taxonomy regulations and related EU requirements (see
the EU Taxonomy section for further details).
A summary of identified transition risks and opportuni-
ties is provided in the table below, alongside the mitiga-
tion and capitalization measures.
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Name Background / objective Key content Scope / key stakeholders Accountability IRO number
Fossil fuel
phase out
Directive
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 directive must be reviewed with SKF’s Net-zero team and approved by
the Group Investment Committee.
• It’s 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 an 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 and Business Unit sustainability and supply chain managers.
• A specific investment frame – the ‘Decarbonization investment frame’ shall,
where applicable, be used to fund the necessary investments to achieve this.
Scope
SKF operations globally.
Stakeholders targeted
SKF managers involved in investment decisions.
Stakeholders involved in the development of directive
Internal technical specialists, senior
managers from operations.
Chief Financial/
Sustainability
Officer.
2, 9, 6
Shadow
Carbon Pricing
Directive
This directive aims towards internalizing
the environmental cost of steel and steel
com ponents 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.
Scope
Sourcing of bearing steel for SKF operations globally.
Stakeholders targeted
SKF managers involved in direct material sourcing.
Stakeholders involved in the development of directive
Internal technical specialists, senior managers from
purchasing.
Chief Financial/
Sustainability
Officer.
2, 6
Airfreight
Avoidance
Directive
This directive aims to minimize as much as
feasible the use of airfreight for both inbound
(SKF receiver of goods) and outbound
(SKF shipper of goods) transportation due
to carbon intensity of airfreight compared to
other alternatives.
The directive sets out the SKF approach towards
achieving this aim.
Planned airfreight (routine, regularly scheduled use of airfreight) should be kept to
a minimum. Supply chains should be based on road and ocean freight as standard.
Deviation from this must be aligned and approved by BA president. Customer delivery
lead times should not be based on airfreight delivery.
Unplanned airfreight (use of airfreight in response to urgent/emergency needs and
unforeseen circumstances) should only be considered in cases where it provides the
only viable solution to achieve timely customer deliveries or avoid major disruption to
SKF production schedules. In such cases, the quantity transported by air should be
kept to a minimum (splitting the order to include other transport modes if possible).
Scope
Inbound and outbound transports for SKF
operations globally.
Stakeholders targeted
SKF managers involved in selection of transport mode.
Stakeholders involved in the development of directive
Internal technical specialists, senior managers from
SKF logistics functions globally.
Chief Financial/
Sustainability
Officer.
2
E1 Climate change, cont.
E
E1-2
Policies related to climate change mitigation
and adaptation [E1-2_MDR-P_22-25a-d]
SKF has defined and implemented a number of policies,
directives, management systems, procedures and instruc-
tions intended to address climate change mitigation,
climate change adaptation and energy efficiency.
As part of SKF’s broader initiative to streamline and har-
monise its governance framework, Group Legal & Compli-
ance has led a comprehensive update of SKF’s policies
and directives. This includes the conversion of several
sustainability-related policies into directives, while main-
taining their original content, responsibility and scope.
This change is structural in nature and does not alter
the original content, assigned responsibilities, or scope
of the documents. The transition to directives is intended
to enhance clarity, consistency, and enforceability across
the organisation, aligning with SKF’s commitment to
transparent and robust governance. These are summarized
in the table below.
SKF ANNUAL REPORT 2025 51
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E1 Climate change, cont.
Name Background / objective Key content Scope / key stakeholders Accountability IRO number
SKF Group
Environmental,
Energy, Health
and Safety
Policy
SKF works systematically to understand and
address the sustainability impacts of its operations
and supply chain, and of its customers, so that
sustainability is truly embedded in the way
business is made.
Through the policy, SKF commits to proactively assessing health and environmental
and energy impacts and systematically define, document, and implement improve-
ment plans which aim to eliminate hazards, reduce risks, and avoid or reduce impacts.
Energy performance should be continually improved by applying or promoting tech-
nological and organizational measures along the full value chain.
SKF has an energy management system globally certified according to
ISO 50001:2018. The certificate covers the 44 most energy intensive operations
making up more than 80% of the Group’s total energy use and helps drive continual
improvement in energy performance by utilizing the plan-do-check-act cycle.
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
environ mental performance by utilizing the plan-do-check-act cycle.
Scope
SKF operations globally and upstream supply chain.
Stakeholders targeted
Managers and employees at SKF and in supply chain
with potential impact on EHS performance.
Stakeholders involved in the development of policy
Internal technical specialists, senior managers from
operations, 3rd party auditors (to confirm compliance
with ISO standards 14K,45K and 50K).
Senior Vice Presi-
dent Commercial
and Operations
Development &
Chief Financial/
Sustainability
Officer.
2, 7
Sustainable
Buildings
Directive
The directive sets out the sustainability require-
ments 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.
Scope
SKF operations globally.
Stakeholders targeted
Managers driving or implementing investments
in new buildings, major refurbishments etc.
Stakeholders involved in the development of directive
Internal technical specialists, senior managers from
operations.
Chief Financial/
Sustainability
Officer.
2
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.
Scope
Business travel by SKF employees.
Stakeholders targeted
Managers and employees who conduct business travel.
Stakeholders involved in the development of policy
Internal technical specialists.
Group Purchasing. 2
Group Energy
Sourcing
Committee
(GESC)
The GESC is a forum with the 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 drive the deployment of renewable energy
at SKF. The representatives from relevant SKF functions shall meet regularly
(at least quarterly).
The environmental aspects related to sourcing renewable energy, for electricity,
should be compliant with RE100 criteria.
Scope
Energy sourcing for operations globally.
Stakeholders targeted
Managers involved in energy procurement.
Stakeholders involved in the development of policy
Internal technical specialists, senior managers from
operations.
Senior Vice Presi-
dent Commercial
and Operations
Development.
2, 9
E
SKF ANNUAL REPORT 2025 52
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E1 Climate change, cont.
improvements are described. Significant progress has
been made during 2025 in increasing the granularity of
these action plans, which are now routinely followed up
at Business Area and Business Unit as well as Group level
to ensure timely execution of the planned actions and in -
vestments and secure the achievement of the 2030 targets.
In 2025, six additional factories across SKF’s global manu-
facturing footprint have achieved decarbonized status,
marking a significant step towards the target to reach
decarbonized operations by 2030. The newly decarbon-
ized sites include Nilai in Malaysia, Puebla in Mexico,
Haridwar and Pune in India, Massa in Italy, as well as
Ladson in USA. To qualify as decarbonized, the factories
must demonstrate a reduction in scope 1 and 2 emissions
corresponding to 95% compared to the 2019 baseline,
as well as present a clear plan to address any remaining
greenhouse gas emissions. They should also show con
-
tinuous improvement in energy performance. The six
factories join the previously recognized facilities in Steyr
in Austria, Tudela in Spain, and Gothenburg in Sweden.
These nine decarbonized factories represent almost
20% of SKF’s baseline manufacturing emissions.
E1-3
Actions and resources in relation to climate change
policies
Levers and actions – SKF own operations scope 1 and 2
[E1-3_MDR-A_26-29]
SKF’s target to decarbonize its operations requires, as
verified by SBTi, a 95% reduction in the scope 1 and 2
emissions 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 biofuels.
During 2025 there has been significant progress in
the further development and realization of the plans for
decarbonization. During 2024, each factory developed
a decarbonization 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 efficiency and fossil fuel phase out, these
plans are further defined in a group-wide database in
which the detailed actions, investments and expected
E
Energy efficiency
SKF has an energy management system globally certified
according to ISO 50001:2018. The certificate covers the
44 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, Business Unit or
Group energy baseline as described below.
The baseline is established using linear regression of
the previous two years’ monthly energy use in combina-
tion with the total value added (a measure of production
activity). Other drivers than value added are used for some
factories, following a statistical analysis, if value added
does not meet set requirements. This KPI reduces distor-
tions associated with more simplistic measurements of
energy performance such as production volume variations
and allows a focus on the real underlying energy perfor-
mance. In 2025, the performance against this target was
3.7% compared to the 5.0% target indicating an underlying
energy efficiency saving of 34 GWh. This includes all
types of energy except energy used for building heating
and cooling.
For energy used for building heating and cooling a sepa-
rate performance indicator has been established, which is
however not used as a formal performance indicator inte-
grated in energy management or management follow-up.
As energy for heating is a significant contributor to Group’s
scope 1 emissions, it is, apart from for energy efficiency
reasons, critical to reduce heating demand to reduce emis-
sions and enable electrification. The energy performance is
calculated by comparing actual energy use with a baseline
established using linear regression and heating degree
days calculated using local weather data from a weather
database. In 2025, the performance improvement was
1.9% indicating and underlying energy efficiency savings
of 3.2 GWh.
To drive development and planning of energy savings
activities, the Group-wide database with detailed actions
is used to show if factories, Business Area, Business Unit
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
roadmap requires the sites to plan for continually improv-
ing energy efficiency.
Factory, Business Area, Business Unit and Group per-
formance 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 perfor-
mance and plans is conducted by the Chief Sustainability
Officer together with each Business Area and Business
Unit President on a half-year basis.
Renewable energy
SKF has a centralized function to manage strategic energy
sourcing decisions for the Group, including the sourcing
of renewable energy, primarily electricity. Through this
function, 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 (PPA), virtual power purchase agreements,
bundled and un-bundled environmental attribute certifi-
cates (EACs) and long-term Renewable Energy Certificate
agreements (RECs). Although the most significant contri-
bution will come from the Group’s renewable electricity
sourcing approach, SKF is also expanding the use of
on-site solar PV (photo-voltaic) installations for the self-
generation of renewable electricity. Some SKF locations
make use of district heating to provide building heating.
Due to the very specific and local nature of the district
heating systems, the work to decarbonize district heating
supply is driven at site-level, with the anticipated results,
actions and investments included in the site-level decar-
bonization roadmap.
Fossil fuel phase out (scope 1 emissions)
SKF makes direct use of fossil fuels, to some extent, 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 well below 20,000 tonnes
by 2030 to achieve SKF’s scope 1 and 2 decarbonization
objective. The main strategic levers applied to achieve this
Scope 1 and 2 – Achieved and Expected GHG emission reductions
Increase in activity
Scope of reporting
Efficiency electricity
Reductions by 2025
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
SKF ANNUAL REPORT 2025 53
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Key activities and outcomes 2025 for SKF own operations
scope 1 and 2
Key activities and outcomes in 2025:
• Scope 1 and 2 emissions were reduced by 87,403
tonnes compared to 2024.
• The resulting reduction of 79% vs. the 2019 baseline
keeps SKF well ahead of the 2030 reduction trajectory.
Main contributors to this development:
• Energy efficiency improved by 3.7%, supported by
investments from the BSEK 3 Energy Efficiency and
Decarbonization frame (2023–2028).
• Use of renewable electricity increased to 91%, supported
by both increased sourcing and PPAs (including leased
assets for on-site generation). Notable contribution to
reduced emissions from electricity use was achieved by
increased renewable electricity sourcing in India, China,
Bulgaria and Malaysia, primarily by use of different
types of Environmental Attribute Certificates.
• The total emissions from direct fuel use and district
heating decreased by –3% supported by targeted
decarbonization actions.
• A total of 28 GWh of electricity was self-generated from
non-renewable fuel-based sources.
• Production activity decreased moderately compared
to 2024, but the change had limited impact on overall
energy demand.
Levers and actions – SKF suppliers scope 3 category 1
[E1-3_MDR-A_26-29]
SKF’s target 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% re -
duction in scope 3 emissions by 2050.
There are several strategic levers which SKF utilizes
to achieve these targets, focusing on improving material
efficiency, increasing circularity, increasing the use of
secondary materials, increasing the use of renewable
energy in the supply chain and the use of emerging and
new technologies to produce very low carbon embodied
materials. In 2025, SKF’s procurement strategy continued
to focus heavily on bearing steel and related components,
which constitute the most significant volume of materials
sourced, both in terms of weight and value. During this
period, SKF used approximately 490,000 tonnes of bearing
are a ban on any new investments in plants 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
non-fossil alternatives such as biomethane.
The Group Fossil fuel phase out directive 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 BSEK
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, including energy
efficiency investment, and the fossil fuel phase out in
particular.
During 2025, it was observed, following systematic
follow-up of approved investment requests making use
of the decarbonization investment frame, that progress
was not meeting expectations. The main action taken to
change this was to introduce the Investment Ready Con-
cept for Decarbonization. This means, SKF sites must have
a concrete, feasible and timely plan to meet site specific
emissions reduction targets by the end of 2025. If the
criteria are not met, all other new investments for the
site are halted until such a plan can be presented.
Further, SKF has a Sustainable Buildings directive
setting requirements for new, as well as leased buildings
in terms of decarbonization and the use of the USGBC’s
LEED 4.1 standard. As with energy efficiency, Group pro-
gress towards the fossil fuel phase out target is followed
up on a monthly basis and a high-level review of the perfor-
mance and plans is conducted by the Chief Sustain ability
Officer together with each Business Area and Business
Unit president on a half-year basis. To drive development
and planning of fossil fuel phaseout activities, the Group-
wide database with detailed actions are used to show if
factories, Business Areas and Business Units 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 in the graph on the
previous page “Scope 1 & 2 – Achieved & Expected
GHG emission reductions” [E1-3_29b].
E
steel and related components. In comparison, the Group
sourced around 5,848 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
components 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 measures 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 compo-
nents. A more detailed description of each of the strategic
levers is provided next.
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 emissions 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 and Business
Units include this aspect in the development of their
steel sourcing roadmaps. Currently around 51% of the
total volume of bearing 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 transformation towards very low embodied
carbon steel, it’s important to recognize that the limited
availability of scrap compared to the global demand means
that it’s 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 pro-
duction 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 works proactively with its suppliers and updated its
sustainability standard for suppliers in 2025. The standard
sets out in detail the Group’s expectations and require-
ments 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
SKF ANNUAL REPORT 2025 54
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E1 Climate change, cont.
guide procurement decisions toward lower- carbon
options and raise awareness of future carbon cost
exposure among suppliers and internal stakeholders.
• Further work was undertaken to increase the com-
pleteness of SKF’s reported scope 3, category 1 data.
Categories which had not previously been reported due
to lack of data from suppliers were estimated using a
spend-based methodology (read more in the Accounting
principles in E1-6).
• Scope 3, category 1 emissions from direct material
purchases totalled 2,354,700 tonnes, representing
a reduction of 73,800 tonnes compared to 2024.
Main contributors to this reduction:
• Emissions fell by 1% in 2025 versus 2024, largely due to
a 7% drop in production volume. The emissions reduc-
tion was smaller than the volume decrease because
emissions intensity rose as a result of mixed effects.
Levers and actions – Emissions from logistics
– scope 3, category 4 [E1-3_MDR-A_26-29]
The Group focuses on reducing transportation GHG
emissions in four main areas.
Decrease transportation need (regionalization)
SKF aims to accelerate inter-regional activities, thereby
lowering the need for global transports, and hence
s ignificantly reducing the associated CO
2
emissions.
0
Scope 3, category 1
Expected GHG emission reductions
Switch to scrap
H2 DRI
Inc. RE use
2030 target
Supplier efficiency
Baseline 2019
700,000
1,400,000
3,500,000
2,800,000
2,100,000
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 reporting 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. Addi-
tionally, selected suppliers of bearing steel shall achieve
specific certifications or targets by 2030, such as Respon-
sible 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 rele-
vant details to SKF when requested.
To enhance completeness and accuracy, SKF has
now incorporated spend-based emissions data for the
remaining of spend (read the details in E1-6 Accounting
principles, scope 3, category 1). As a result, reported
scope 3, category 1 emissions have approximately doubled.
This restatement reflects an expansion in coverage rather
than a change in actual performance. SKF will continue
to prioritize engagement with suppliers where primary
data is available and influence is possible, while pro-
gressively transitioning high-impact suppliers identified
through the spend-based approach into its primary
data programme.
The expected contribution of these strategic levers toward
the achievement of the 2030 mid-term net-zero objective
is summarized in the graph Scope 3 Category 1 – Expected
GHG emission reductions [E1-3_29b].
Key activities and outcomes 2025 for SKF suppliers
scope 3, category 1
Key activities and outcomes in 2025:
• Mandatory shadow carbon pricing was introduced in
July 2024 and applied in 2025 for selected steel sourcing
categories. This internal pricing mechanism aims to
E
Airfregiht avoidance
SKF implemented a global airfreight avoidance policy
in 2024 with the objective of reducing airfreight and
pro moting less carbon intensive transportation modes
(e.g. ocean, railway). The Group also works closely with
customers and suppliers to shift from airfreight to sea
and rail transportation.
Decarbonizing transportation
In addition to the reduction of airfreight by shifting to
other less carbon intensive modes, 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
This includes improving fill rates, selecting lower-emission
transport modes, and enhancing route planning and vehicle
utilization. Initiatives such as the deployment of hydrogen-
powered trucks in China and electric vehicle logistics
routes in Europe have demonstrated the potential for sig-
nificant emissions reductions – up to 60% in some cases
– while also improving cost efficiency and operational
resilience. By working closely with logistics partners and
leveraging smarter transport choices, SKF is actively con-
tributing to the decarbonization of its supply chain and
supporting broader industry transformation.
The expected contribution of these strategic levers
toward the achievement of the 2030 mid-term net-zero
objective is summarized in graph Scope 3, category 4
– Expected GHG emissio reductions [E1-3_29b].
Key activities and outcomes 2025 for Emissions
from logistics – scope 3, category 4
Key actions and outcomes in 2025:
• In 2025, logistics emissions were 18% lower than the
2019 base year, driven primarily by a reduction in total
shipped weight and a more carbon efficient transport
mode mix, particularly a decrease in airfreight. These
improvements reflect SKF’s ongoing regionalization of
the upstream supply chain and increased localization
of production closer to end markets, which together
reduced reliance on long distance air and ocean
transport.
• Compared with 2024, however, 2025 emissions
increased by 1%, despite a slight reduction in shipped
weight. This year on year rise was caused by a higher
share of airfreight and express shipments, largely a
response to volatile market conditions and supply
disruptions that required faster transport solutions.
Levers and actions – Emissions from use of sold
products scope 3, category 11 [E1-3_MDR-A_26-29]
SKF reports downstream greenhouse gas emissions asso-
ciated with the use of certain directly powered systems,
in line with its SBTi-approved net-zero commitment.
These emissions fall under scope 3, category 11 and
relate specifically to electrical systems such as magnetic
bearings, electric motors, and lubrication systems sup-
plied to customers. While this category represents a rela-
tively small portion of SKF’s overall business, it’s signifi-
cant due to the direct energy consumption involved.
Importantly, many of these solutions contribute to
improved energy efficiency for customers, either directly
or through enabling energy efficient technologies. For
example, at a facility in China, chillers using SKF’s mag-
netic bearing technology were installed, enabling the shift
to more efficient technology resulting in more than 60,000
MWh of energy savings over their lifetime – equivalent to
over 35,000 tonnes of avoided CO₂e emissions based on
China’s current electricity mix. However, there is currently
no widely accepted framework within the GHG Protocol for
0
Airfrieght avoidance
Optimization
Fuel switching
and EV solutions
2030 target
Regionalization
Baseline 2019
30,000
60,000
150,000
120,000
90,000
Scope 3, category 4
Expected GHG emission reductions
SKF ANNUAL REPORT 2025 55
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E1 Climate change, cont.
stakeholders, it uses its voice and partnerships to promote
systemic change in energy markets – supporting the shift
to low-carbon power and helping reduce emissions across
the value chain.
Key activities and outcomes 2025 for upstream fuel
and energy related activities for scope 3, category 3
Key actions and outcomes in 2025:
• Following a significant increase in renewable electricity
sourced, the emissions in this category have been
reduced by 22,478 tonnes or 37% compared to 2024.
• Biofuels may have an adverse effect in this category,
while significantly contributing to the reduction of
scope 1 emissions. No significant such effects have
occurred in 2025 compared to 2024.
Levers and actions – Emissions from business travel
scope 3, category 6 [E1-3_MDR-A_26-29]
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 online
travel booking solutions, SKF encourages employees to
use more carbon efficient transport modes where it is
feasible to do so.
Investments to support the transition plan [E1-3_29c]
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:
reporting such avoided emissions, despite their clear con-
tribution to global decarbonization.
SKF estimates that the direct use-phase emissions from
these systems total approximately 1 million tonnes CO₂e
annually, based on global average electricity emission fac-
tors. While SKF continues to enhance the energy efficiency
of its products, the most impactful lever for reducing these
emissions lies in the customer’s choice to use low-carbon
or renewable electricity. Although this is beyond SKF’s direct
control, the company actively advocates for increased
availability of renewable energy through initiatives such
as RE100 and broader industry coalitions – supporting
the systemic transition needed to decarbonize power
generation globally.
Levers and actions – Upstream fuel and energy related
activites scope 3, category 3 [E1-3_MDR-A_26-29]
Scope 3, category 3 emissions refer to greenhouse gas
emissions generated upstream of energy use – specifically
from the extraction, processing, and transportation of fuels
used in power generation, as well as emissions from the
transmission and distribution of electricity. In 2025, these
activities accounted for approximately 38,000 tonnes of
CO₂e emissions across SKF’s operations.
SKF addresses these emissions through three strategic
levers. First, as part of its decarbonized operations pro-
gramme, the Group is reducing overall energy demand by
improving energy efficiency across its facilities. At the
same time, SKF is transitioning away from fossil fuels and
increasing its sourcing of renewable electricity, thereby
eliminating the upstream emissions associated with fossil
fuel extraction and processing – currently the largest con-
tributor to this category.
Second, SKF is developing and delivering solutions that
enable renewable electricity generation, such as compo-
nents for wind power systems. These technologies support
the broader energy transition and are associated with sig-
nificantly lower scope 3, category 3 emissions compared
to conventional fossil-based power systems.
Third, SKF actively participates in multi-stakeholder initi-
atives such as RE100, advocating for increased availability
and adoption of renewable electricity globally. While the
company cannot directly influence the energy choices of all
E
SKF internal allocation of climate specific investment frames:
• Decarbonization investment frame
Targeted financing of investments focused
on sustaina bility:
• 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 efficiently 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 intervention from SKF Group is required to
make sure that the investments 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 MSEK 3,000 will be needed to achieve our
2030 scope 1 reduction objective, including energy effi-
ciency ambitions. SKF then defined an investment frame
and process for the allocation and follow-up of its utiliza-
tion. During 2023 and 2024 a total of MSEK 429 of this
frame has been allocated, and during 2025 an additional
MSEK 224 was allocated. The remainder is planned to be
primarily allocated during 2026 to 2028.
Green Finance
SKF’s Green Bonds are significant financial instruments
that align with the company’s sustainability commitment
and climate targets. Two such bonds have been issued,
the first for MEUR 300 in November 2019 and the second
for MEUR 400 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 development related
to cleantech. These are reflected in the Notes 5 and 11 of
SKF’s financial statement. 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 MEUR 700.
These projects span across various regions and sectors.
By the end of 2024, all proceeds from both bonds were
allocated to 220 projects totaling MEUR 700, supporting
SKF’s climate transition strategy. With the allocation phase
complete and no changes for 2025, no separate Investor
Letter or Impact Report will be issued for 2025.
EIB credit facility
On the 22nd of November 2024, SKF secured a MEUR 430
credit facility from the European Investment Bank (EIB)
to support its R&D efforts focused on sustainable tech-
nologies which was unutilized by the end of 2025. 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 financing
supports the European Green Deal, the EU’s plan to
achieve net zero emissions by 2050.
Categories Currency
Total value
million
Allocation
2019–2024
Allocation
2025
Planned
allocation
2026–2028
Financial
mechanism
Decarbonization
investment frame
Electrification & related topics. SEK 3,000 429 224 1,500 SKF internal
allocation
Green Bond SKF World Class Manufacturing, Investments and acquisitions in production capacity, tech-
nology, testing and tooling for cleantech, Green buildings, Renewable energy, Improving pro-
cess /facility energy or resource efficiency, Cleantech R&D, Product and process related R&D
EUR 700 700 0 TBD Use of
proceeds
Green Finance
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E1 Climate change, cont.
E
METRICS AND TARGETS
E1-4
Targets related to climate change mitigation and
adaption
[E1-4_34a-f; AR 31; MDR-T]
SKF has defined GHG emissions reduction targets for all
material emissions-related impacts, and these have been
approved by the SBTi both in the near-term (2030) and
the long-term (2050). Targets are determined using the
1.5˚C-aligned pathway from the SBTi that is aligned with
the IEA Net Zero Emissions (NZE) scenario.
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. The targets
have been established in the context of a solid under-
standing of potential future changes in sales, production
volume and the impact of technological, operational and
market-related changes. For example, in determining 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, 10 and 12 are not considered
material and therefore only 2050 targets are defined for
the time being.
• While scope 3, categories 3 (fuel- and energy-related
activities not included in scope 1 or 2) and 7 (employee
commuting) are considered to have a material impact,
SKF has not yet established medium-term targets
(2030-2040) for these categories. For category 3,
although SKF’s efforts to promote renewable energy
contribute positively, the indirect nature of this impact
makes it difficult to quantify the results in a reliable
and consistent way. As such, setting meaningful
targets remains a challenge. In the case of category 7,
SKF currently lacks a robust methodology to measure
emissions from employee commuting across our global
operations. Work is ongoing to improve data quality and
develop appropriate metrics, which will inform future
target- setting.
Please read in more detail on how SKF tracks the overall
progress towards the adopted targets over time in E1-1.
Climate targets
Scope 1, 2 and 3
Full value chain
Scope 1 and 2
Own operations
Scope 3, Cat 1
Upstream
Scope 3, Cat 4
Upstream/Downstream
Scope 3, Cat 11
Downstream
Progress to the net-zero target
Milestones 2025 40% reduction of CO
2
e emissions from
manufacturing per tonne of bearings sold,
base year 2015
15% absolute reduction in emissions from
forgings and rings suppliers vs 2019
1)
2030 95% absolute reduction 32% absolute reduction from purchased
goods and services vs 2019
35% absolute reduction vs 2019 28% absolute reduction vs 2019
2035 Maintain 95% 43% absolute reduction in emissions
from direct material vs 2019
55% absolute reduction vs 2019
2040 Maintain 95% 60% absolute reduction in emissions
from direct material vs 2019
77% absolute reduction vs 2019
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.
Addressed material IRO(s) All, except physical climate risks 2, 5, 6, 9 2, 6 2 2, 3
Linked policy/directive All policies and directives (see E1-2) • Fossil Fuel Phase-out
• SKF Group Environmental,
Energy, Health and Safety
• Sustainable Buildings
• Shadow Carbon Pricing
• SKF Sustainability standard
for suppliers
• Airfreight Avoidance
Linked action(s) All decarbonization levers (see E1-3) Decarbonization levers scope 1 and 2 Decarbonization levers scope 3, Cat 1 Decarbonization levers scope 3, Cat 4
Baseline value and year 2019 (3,528,869 tCO
2
e market-based) 2019 (425,493 tCO
2
e) 2019 (3,299,300 tCO
2
e) 2019 (136,669 tCO
2
e) 2019 (1,012,016 tCO
2
e)
Reporting period result 4,933,834 tCO
2
e 90,254 tCO
2
e 2,743,246 tCO
2
e 111,465 tCO
2
e 1,803,859 tCO
2
e
1) Primary data
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E1 Climate change, cont.
E
Other sub-targets
In addition to these targets, SKF has established a number
of sub-targets to drive and follow-up on the strategic levers
such as energy efficiency and renewable electricity use.
These are summarized below in the table presenting
sub-targets.
• Scope 1 and 2 emissions per tonnes of sold bearings,
reduction by 40%, was achieved already in 2021, and by
2025 SKF has achieved 87%. This has been achieved
through a combination of increased renewable
electricity sourcing, energy efficiency, fossil phase-out,
and improved productivity.
• The objective for scope 3, category 1 emissions from
forgings and rings suppliers has been achieved in 2024,
and by 2025 SKF has reached 18.2% reduction.
Please refer to the policy matrix in E1-2 to understand how
the targets are interconnected with the respective policies.
Accounting principles E1-4
SKF defined absolute climate targets, measured in tCO2e,
for both near-term 2030 and long-term 2050, committing
to achieving Net Zero across the value chain by 2050.
The targets and underlying methodology are validated
by SBTi following a 1.5˚C cross-sectoral decarbonization
pathway. This pathway is based on the IEA Net Zero Emis-
sions by 2050 Scenario (NZE equivalent to IPCC SSP1-1.9)
and assumes progressive decarbonization of the power
sector, improved energy efficiency, and low-carbon tech-
nology deployment. The methodology follows SBTi criteria
and recommendations for setting scope 1, 2, and 3 targets.
The methodology to quantify GHG corporate inventory
follows the GHG protocol. Emission factors and data
sources include on-site measurement (e.g., energy use),
supplier surveys, and internal LCA studies. SKF selected
2019 as the base year for its SBTi-approved targets
because it reflects a typical year in terms of demand,
production output, and building heating and cooling
needs, and predates the operational disruptions caused
by the COVID-19 pandemic.
In line with SBTi’s target recalculation criteria, SKF
reviews and updates its emissions targets every five-year
period. Following the announcement of the automotive
business separation, SKF has initiated the internal process
of reviewing the impact of this separation on the emissions
inventory and climate targets. As a result of this review,
SKF will revalidate its existing climate targets. There were
no changes in the methodology made since its initial set-
ting. Any future updates will be disclosed.
Targets related to scope 1 and 2 GHG emissions
SKF has committed to reducing its scope 1 and 2 by 95% by
2030 compared to the 2019 base year. The targets cover
scope 1 and 2 emissions from all operation sites, aligned
with the GHG protocol reporting boundary. For scope 2
emissions, market-based emissions are taken as a refer-
ence; however, SKF reports both scope 2 location-based
and market-based emissions.
Key assumptions include continued access to renewable
energy, technological advancement (e.g., electrification,
biogas systems), and increased investments. Action plans
Sub-targets
Description Target Timeframe Purpose 2025 2024 2023 2022 2021
Manufacturing energy efficiency
improvement
5% Improvement Year-on-Year Drive focus on energy efficiency
at unit and BA level
3.7% 3.5% 4.7% 3.8% 1.7%
100% renewable electricity use 100% 2030 Drive the increase in renewable
electricity use in accordance with
RE 100 requirements
91% 72% 64% 54% 49%
Scope 1 and 2 reduction 95% Reduction 2030
(2019 base year)
Drive focus on fossil fuel phase out
related to energy used in SKF
operations
79% 59% 39% 26% 12%
Scope 1 and 2 reduction per
tonnes of sold bearings
40% Reduction 2025
(2015 base year)
Previous goal
(set before SBTi targets)
87% 76% 66% 60% 51%
Scope 3 category 1 reduction in
emissions from forgings and rings
suppliers
1)
15% Reduction 2025
(2019 base year)
Drive targeted reductions in
supplier emissions
18.2% 15.6% 6.2% +15.7% +36.3%
1) Primary data
are tailored to site-specific conditions and cost- benefit
analyses. The underlying methodology follows SBTi’s criteria
and recommendations for scope 1 and 2 target setting.
Due to the expanded scope of scope 1 emissions reporting
(see E1-6 Accounting principles, scope 1), the threshold
for significance in SKF’s SBTi application was exceeded.
This triggered the need to restate the current baseline and
target. The requirement is being addressed as part of the
new SBTi application for the automotive business separa-
tion and the corresponding resubmittal for the industrial
business.
Target related to scope 3 emissions
SKF has committed to reducing its scope 3 emissions by
31% by 2030 compared to the 2019 base year and reducing
scope 3 emissions by 90% by 2050 compared to the same
base year. The target related to scope 3 emissions cover
scope 3 categories, which contribute the most to the total
GHG inventory. The target focuses on the high-impact
areas from category 1 (purchased goods and services),
category 3 (scope 3 energy-related emissions), category 4
(upstream distribution and transportation), and category 11
(emissions from sold products). The GHG inventory
boundaries aligned with GHG protocol reporting
boundaries.
Key assumptions include the decarbonization of the
steel sector, increased access to sustainable materials,
logistic optimization, increased access to renewable fuel,
and decarbonization of the power sector. The underlying
methodology follows SBTi’s criteria and recommendations
for scope 3 target setting.
Target related to Net-zero emissions
SKF has committed to achieving Net-zero emissions by
2050 across its scope 1, 2, and 3 emissions by neutralising
the remaining 15% residual emissions through high-quality,
certified carbon removals.
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E1-5
Energy consumption and mix [E1-5_AR 34]
Energy consumption and mix (GWh) 2025 2024 % change
(1) Fuel consumption from coal and coal products 0.0 0.0
(2) Fuel consumption from crude oil and petroleum products 4.6 5.1 –10%
(3) Fuel consumption from natural gas 215.9 222.7 –3%
(4) Fuel consumption from other fossil sources 13.9 16.6 –16%
Of which fuel consumption from LPG 13.9 16.6 –16%
(5) Consumption of purchased or acquired electricity, heat steam and cooling
from fossil sources
105.4 278.2 –62%
Of which purchased electricity (fossil sources) 55.0 223.3 –75%
Of which purchased heat and cooling (fossil sources) 50.5 54.9 –8%
(6) Total fossil energy consumption 339.8 523.0 –35%
Share of fossil sources in total energy consumption 24% 35%
(7) Consumption from nuclear source 16.1 70.0 –77%
Of which purchased electricity (nuclear) 16.1 70.0 –77%
Total consumption from nuclear sources 16.1 70.0 –77%
Share of consumption of nuclear sources in total energy consumption 1% 5%
(8) Fuel consumption from renewable sources, including biomass 25.7 28.2 –9%
Of which fuel consumption from biomethane and biogas (renewable) 17.3 17.3 0%
Of which fuel consumption from biomass (renewable) 8.4 10.9 –23%
(9) Consumption of purchased or acquired electricity, heat steam and cooling
from renewable sources
1,045.1 838.3 25%
Of which purchased electricity (renewable) 998.8 790.8 26%
Of which purchased heat and cooling (renewable) 46.3 47.4 –2%
(10) Consumption of self-generated non-fuel renewable energy 15.8 35.3 –55%
Of which self-generated electricity (non-fuel renewable) 15.8 35.3 –55%
(11) Total renewable energy consumption 1,086.6 902.0 20%
Share of renewable sources in total energy consumption 75% 60%
Total energy consumption 1,442.5 1,494.0 –3%
Accounting principles E1-5 [MDR-M]
The total volumes of purchased electricity and natural gas
(including renewable sourcing) are primarily based on
invoices validated on group level. Gap-filling is done using
site reported volumes which may be from meters or locally
collected invoices. For other energy sources, activity data
is collected from the sites through the common reporting
system. Also, here the primary data source will be invoices
but the invoices are not sent for validation on group level.
Energy consumption from fossil, nuclear
and renewable sources
For electricity, renewable energy has been accounted for
only where supplier specific statements are available. This
means that when grid averages are used, SKF takes a con-
servative approach, and the renewable portion of such grid
E1 Climate change, cont.
E
mixes is accounted for as fossil sources. As SKF sources
its electric energy in line with RE100 criteria, nuclear
energy is only reported where the Group report grid mix
energy. On-site non-fuel renewable electricity is collected
from the sites as part of monthly energy reporting. Some
of the solar PV installed in SKF locations are leased assets,
thus reported as PPA.
For district heating, supplier specific data is used to
separate between fossil and renewable sources. If such
data is not possible to acquire, this energy is assumed to
be from fossil sources.
For remaining fuel-based energy use this is only re -
ported as renewable if separate documentation is avail -
able and possible to review. Grid-injected bio- methane
is also considered renewable, if it fulfils the internally set
requirements for such use.
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E1 Climate change, cont.
E
E1-6
Gross Scopes 1,2,3 and Total GHG emissions (Tonnes CO
2
e) [E1-6_AR 48]
Targets
Base year
2019 2025
% change
2025 vs 2024 2030 (2050)
Annual % target/
base year
Scope 1
Gross scope 1 64,620 51,199 –1.8%
8.6%
from ETS 8.2%
Scope 2
Gross location-based 518,500 338,562 –14%
Gross market-based 360,873 39,055 –69%
8.6%
Significant scope 3
GHG emissions
1. Purchased goods
and services
3,299,269 2,743,246 –1%
2.9%
2. Capital goods 16,500 19,105 –25%
3. Fuel- and energy-related
activities (not included
in scope 1 or 2)
97,527 37,894 –37.2%
4. Upstream transportation
and distribution
136,669 111,465 1.4%
3.2%
5. Waste generated
in operations
38,378 20,772 –41%
6. Business travel 12,954 12,565 8%
7. Employee commuting 56,132 46,292 –4.4%
8. Upstream leased assets NA NA NA
9. Downstream transportation
and distribution
21,867 17,834 1.4%
10. Processing of sold products 8,390 8,667 –2%
11. Use of sold products 1,012,016 1,803,859 48%
2.5%
12. End-of-life treatment of
sold products
21,713 21,881 –1.1%
13. Downstream leased assets NA NA NA
14. Franchises NA NA NA
15. Investments NA NA NA
Total GHG emissions
Total location-based 5,304,535 5,233,341
Total market-based 5,146,908 4,933,834
Sources of emissions
Tonnes CO
2
e 2025 2024 2023
Direct (scope 1)
LPG (incl. renewable) 3,040 3,638 4,197
Fuel oil (incl. renewable) 1,360 1,477 1,639
Natural gas (incl. renewable) 39,939 40,615 43,880
Biomass 97 117 NA
Methanol 2,222 1,764
1)
1,922
1)
Refrigerants 4,542 4,542
1)
4,542
1)
Supplied (scope 2), market-based
Electricity 31,484 117,817 195,978
District heating and cooling 7,571 7,688 8,046
Total CO
2
e emissions, market-based 90,254 177,657 260,203
1) Estimated following restatement of the baseline.
Biogenic emissions
Tonnes CO
2
e 2025 2024
Solid biomass 2,969 3,853
Biomethane 3,242 3,456
Scope 1 Total 6,211 7, 3 09
Scope 2 Total
1)
Scope 3 Total
1)
1) Data has not yet been possible to acquire.
Contractual instruments for purchase
of renewable energy
Type of instrument
Share of total purchased
electricity (renewable)
PPA on-site (a) 3.3%
PPA physical grid-connected (a) 5.3%
vPPA financial (virtual) (b) 15.9%
Project specific contract (b) 13.4%
Retail green electricity supply
contract (a)
54.2%
Unbundled EACs (b) 7.9%
a) Bundled; b) Unbundled
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E1 Climate change, cont.
E
Scope 2 – market based
Includes indirect emissions from purchased power, heat,
and steam, categorized into electricity and district heating.
For electricity, primary data is mostly used, meaning con-
tractual emission factors from electricity suppliers or sup-
pliers of instruments of renewable electricity are applied.
Where such data has not been possible to acquire, grid
mixes from IEA are used (where possible, residual mixes are
used). For district heating specific contractual emission
factors from local district heating suppliers are primarily
used, and in some cases where such data has not been
possible to obtain, emissions factors from DEFRA are used
based on statements on the fuels used.
Scope 2 – location-based
Includes indirect emissions from purchased power, heat,
and steam. Electricity 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 pro-
vided by the local district heat provider.
Scope 3, category 1
Primary data from suppliers is preferred, using GHG inten-
sity (kg CO
2
e/kg product) multiplied by weight supplied.
Secondary data is only used when primary is unavailable.
In 2025, SKF has broadened its reporting of scope 3,
category 1 GHG emissions to include data previously
excluded from purchased goods and services. Historically,
reporting focused on a limited set of major direct material
suppliers, using primary data based on supplier-specific
emission factors and purchased weight. This approach
provided meaningful insights into supplier performance
and enabled SKF to actively drive reductions.
To improve completeness and accuracy, SKF has now
incorporated spend-based emissions for the remaining of
spend. These calculations apply generic emission factors
from a recognized third-party database – the Comprehen-
sive Environmental Data Archive (CEDA), which is GHG
Protocol compliant – to spend categories where primary
data is unavailable. As a result, reported scope 3, category
1 emissions have approximately doubled. This increase
Accounting principles E1-6
There were no significant changes in the Group’s definition
of what constitutes the reporting undertaking and its
upstream and downstream value chain.
Gross Scopes 1,2,3 and Total GHG emissions are
reported according to the Greenhouse Gas (GHG) Protocol
Corporate Reporting Standard. SKF is prioritizing primary
data over secondary data and mass allocation is preferred
over economic allocation. GHG included are Carbon
dioxide, Methane, Nitrous oxide, Hydrofluorocarbons, Per-
fluorocarbons, Sulfur hexafluoride and Nitrogen trifluoride.
Table E1-6 summarizes SKF scope 1, scope 2, and relevant
scope 3 emissions. This forms the basis for the calculation
approach outlined below and described in more detail in
‘SKF Methodology for Corporate Carbon Footprint’.
Direct GHG emissions (scope 1)
Emission factors for fuel use are derived from DEFRA. For
verified uses of renewable fuels, corresponding DEFRA
emissions factors are used for direct emissions, covering
local fugitive emissions. This currently applies for Gothen-
burg (RED-Cert bio-methane), Non-energy scope 1 emis-
sions include methanol where an emission factor based
on specific characteristics in SKFs processes is used.
For refrigerants, different publicly available sources for
emission factors are used to cover the wide range of types.
Underlying refrigerant volume for emission calculation
are based on the amount needed for refills to cover leaks.
Some sites use 2024 data for 2025 reporting to achieve
alignment with local reporting requirements. The emis-
sions included in the scope of reporting increased by 15%
in 2025 due to the inclusion of methanol and refrigerants.
This expansion resulted in an additional 6,764 tonnes of
CO₂e in scope 1.
Biogenic emissions
Biogenic emissions are reported only in scope 1 as it has
not been deemed possible to acquire meaningful data
for the other scopes. The scope 1 biogenic emissions are
calculated using DEFRA emission factors based on the
fuels that are reported as renewable in E1-5.
The transport-emissions for scope 3 category 4 have
been adjusted to the 2019 base year by applying the
updated calculation methodology for transport-emissions.
Under this approach, the Company first determined the
average CO₂e per tonne shipped for each transport mode
using the data from the first half of 2025, and then recalcu-
lated the 2019 baseline by multiplying these mode-specific
emission factors by the corresponding weight of products
shipped by each mode in 2019.
The first step (using the approach described above), is
to ensure the reporting scope, such as routes and regions,
remains consistent with the previous calculation method.
During this step SKF relies on the standardized energy and
GHG emission calculation assumptions embedded within
the new calculation tool.
Scope 3, other categories
• Category 2: Emissions from manufacturing equipment
are calculated with emission factors based on repre-
sentative production machines for CapEx.
• Category 5: Emissions are calculated using waste
data at site level together with commercial emission
factors.
• Category 6: Primary data for air travel from agencies.
• Category 7: Average data method is used. Emissions
based on employee count, region, and commuting
patterns.
• Category 9: Emissions have been estimated using high-
level assumption due to the absence of detailed data.
Based on SKF logistics experience, approximately 20%
of outbound logistics is assumed to be customer pick-
ups, which falls under category 9. The CO
2
e emissions
are calculated by extrapolating the emissions
calculated under scope 3 category 4 by leveraging the
assumption of 20%. For further explanation on the
methodology refer to the accounting principles for
scope 3, category 4.
• Categories 10 and 12: Based on product weights and
assumptions on mounting and end-of-life treatment.
• Category 11: Estimated direct energy use multiplied by
global average electricity emission factor.
reflects expanded coverage rather than a change in actual
performance. SKF will continue to prioritize engagement
with suppliers where primary data is available and influ-
ence is possible, while progressively transitioning high-
impact suppliers identified through the spend-based
approach into its primary data program. The emissions for
the 2019 base year have been restated by adding spend-
based emissions calculated using historical spend data
from SKF’s internal systems.
Scope 3, category 3
For electric power where grid mix is used, generic scope 3
emission factors are applied. In the case of renewable
electricity, emissions from fuel and generation are
considered zero. Transmission and distribution (T&D)
emissions are also set to zero, but only for on-site gener-
ated non-fuel electricity and power purchase agreements
(PPAs). For all other purchased electricity, national average
emission factors are used for T&D.
For fuels, generic emission factors from DEFRA are
applied. When it comes to biofuels, supplier-specific
data is used where available; otherwise, DEFRA’s generic
emission factors are used.
Scope 3, category 4
During 2025 SKF introduced a new reporting method for
logistics emissions, that is based on the utilization of an
externally provided tool and aims to improve quality and
granularity of this metric. Emissions from transport and
distribution services purchased by SKF include inbound
logistics from tier 1 suppliers, outbound logistics for sold
products, and transportation between SKF facilities using
vehicles and infrastructure not owned or controlled by SKF.
Transportation activity data is collected monthly for all
major transport modes used by SKF. The modes are air,
ocean, rail, and road. The emission factors come from
scientifically validated datasets developed by independent
research institutes such as ifeu, INFRAS, and Fraunhofer
IML. These factors are based on detailed life-cycle
assessments of transport modes and energy sources, in -
corporating real-world data on fuel consumption, vehicle
technology, and infrastructure. They follow inter national
standards like ISO 14083, the GLEC Framework, and the
GHG Protocol, ensuring consistency and credibility.
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E1 Climate change, cont.
E
Internal carbon pricing schemes [E1-8_AR 66]
Types of internal carbon prices Scope
Carbon prices applied
(Euro/tCO2eq)
Volume at stake
(tCO2eq)
Share of overall
GHG emissions (%)
Energy-related CapEx Shadow Price Scope 1 and 2 154 69,700 1%
Direct Material Purchasing related
Shadow Price
Scope 3 C1 100 400,000 8%
SKF does not report scope 3, categories 8, 13, 14 and 15
because these categories are not relevant to the Group’s
business model; the activities covered by these categories
do not occur within SKF’s operations or value chain.
Energy and GHG intensity based on net sales
[E1-5_AR 37-38, E1-6_AR 54-55]
Energy and GHG intensity
per net sales 2025 2024 % change
Net sales (MSEK) 91,58391,583 98,722 –7%
Total energy con-
sumption (GWh)
1,443 1,494 –3%
GHG intensity,
market based (T/MSEK)
53.87 45.78 18%
GHG intensity,
location based (T/MSEK)
57.14 48.48 18%
Energy intensity
(MWh/MSEK)
15.75 15.13 4%
Accounting principles
All revenue-generating activities relate to the NACE Class
28.15 “the manufacture of bearings, gears, gearing and
driving elements” or related supporting activities. This is
designated as a high climate impact sector in Commission
Delegated Regulation (EU) 2022/1288. As the Group is not
active in other sectors, all its activities and revenue come
from activities in high climate impact sectors. The net
sales figure used is consistent with the net sales reported
in the Group’s consolidated income statements.
E1-7
GHG removals and GHG mitigation projects financed
through carbon credits
SKF does not make use of carbon credits and has not
developed any projects for GHG removals and storage.
E1-8
Internal carbon pricing
SKF applies a shadow carbon price as part of its internal
decision-making processes to support the transition to
lower-carbon materials and energy sources. This approach
is not yet reflected in standard cost accounting but is used
to influence procurement, investment, and strategic
planning decisions.
Application in Direct Material Purchasing
Scope 3, category 1 emissions from direct material
purchasing account for approximately 2.35 million tonnes
of CO₂e annually, representing 76% of SKF’s total cradle-
to- gate GHG emissions. A significant share – 70% is
attributable to the sourcing of steel and steel components.
To address these emissions, SKF has implemented
a shadow carbon pricing directive targeting upstream
material sourcing, particularly steel. The directive is
designed to:
• Raise awareness among purchasing, product line, and
commercial teams.
• Encourage consideration of lower-carbon alternatives.
• Prepare for future regulatory and market-driven
carbon costs.
The shadow carbon price is currently set at EUR 100 per
tonne of CO₂e, aligned with anticipated EU ETS prices and
the expected impact of the Carbon Border Adjustment
Mechanism (CBAM) and the phase-out of free allocations
under the EU ETS by the late 2020s.
This price is applied to sourcing decisions involving bar,
tube, and wire steel products, which together represent
24% of SKF’s upstream steel-related emissions.
The volume of emissions subject to shadow pricing in
this category is estimated at 400,000 tonnes of CO₂e
annually. The directive mandates that:
• A shadow carbon cost is calculated for all sourcing
decisions exceeding MSEK 10 annually.
• The carbon price is included in customer discussions
where feasible.
• Manual calculations are performed by designated
Business Area and Business Unit personnel.
Application in Energy-Related Investments
SKF also applies shadow carbon pricing in its capital
investment process where energy use is affected. In these
cases, the anticipated future cost of renewable energy is
included in the financial scenario. This covers Energy
Attribute Certificates (EACs) required to meet RE100-
aligned renewable electricity targets as well as expected
future additional cost of bio-methane for natural gas uses,
as this would be required unless electrifying current fossil
gas uses. This approach:
• Reflects expected increases in EAC prices and
renewable fuel premiums.
• Improves the payback profile of energy-saving and
GHG-reducing investments.
• Increases the likelihood of project approval.
All such projects are tracked in the FTJ Energy and Carbon
Savings Tracker, with oversight at the Business Area and
Business Unit level and sample reviews at Group level.
Detailed guidance is provided to ensure consistent appli-
cation of the shadow EAC price in financial modelling.
Governance and Review
The shadow carbon pricing directive is governed by SKF’s
sustainability and finance functions. The purchasing
team is responsible for calculating embodied carbon and
applying the shadow price in procurement decisions. The
Group Sustainability team reviews the price level annually,
with adjustments made based on evolving regulatory and
market signals.
Compliance with the shadow carbon pricing directive
has been required since 1 July 2024.
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E5 Resource use and circular economy
E
The shift from a linear to a circular economy is
essential for reducing environmental impact and
building resilience in a resource-constrained
world. For SKF, circularity is not only about mini-
mizing waste, but also about rethinking how
materials, products, and services flow through
our value chain. From sourcing raw materials to
product design, manufacturing, and end-of-life
strategies, SKF aims to maximize resource effi-
ciency and reduce reliance on virgin raw material.
Circularity is a strategic lever for SKF’s long-term
competitiveness and for our climate targets.
By expanding circular offerings, solutions and
services SKF creates shared value and acceler-
ate the market transition toward circular business
models.
Description of IRO Type of IRO Value chain Time horizon
E5 – Resource inflows
12 Increasing demand for products and business models with improved
circular performance
By offering more circular solutions like remanufactured bearings, RecondOil
and other services, SKF contributes to reducing the demand for virgin raw
materials, thereby having a positive environmental impact. Even though
these offerings with improved circular performance are still a smaller part of
the business, SKF considers them to be strategically important, accelerating
the circular transition in the market. In addition, SKF is collaborating with
suppliers and customers as well as engaging in cross-industry collaborations
such as ResponsibleSteel and SteelZero to promote the use of more environ-
mentally responsible materials, fostering sustainable resource cycles and
encouraging broader systemic change.
Actual
Positive
Impact
Mid-term
13 Reliance on virgin raw materials sourced for production
SKF’s sourcing of raw materials constitutes a significant negative environ-
mental impact from a lifecycle perspective. The extraction and processing
of these materials are associated with high energy use, emissions, and
resource depletion. Steel remains the dominant input, but materials used for
lubricants and seals also originate largely from non-renewable resources.
These materials will likely remain central to SKF’s business.
Actual
Negative
Impact
Short-term
Description of IRO Type of IRO Value chain Time horizon
E5 – Resource outflows
14 Designing, developing and providing products and solutions for circularity
SKF is developing products and services that have an important positive
impact on the transition of circularity and the planet. Further, during the
product development phase, SKF is focusing 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.
Actual
Positive
Impact
Long-term
15 Limited closed-loop material flows
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.
Actual
Negative
Impact
Short-term
16 Winning business in a circular economy
The accelerating shift toward circular economy practices presents a com-
mercial opportunity for SKF. As customer expectations evolve and circularity
becomes a growing factor in procurement decisions, SKF can position itself
as a first mover with circular offerings such as remanufactured bearings and
RecondOil. These solutions enable customers to meet their own
sustainability and climate targets, enhancing SKF’s value proposition.
In addition to creating new market opportunities, circular business models
help SKF reduce its dependence on virgin raw materials. This contributes to
minimizing exposure to risks associated with resource scarcity, volatile input
prices, and geopolitical supply chain disruptions, making the company more
resilient in the long-term. Tightening legislation and market dynamics, espe-
cially in the EU, further reinforce the relevance of circularity as a strategic
lever for competitiveness and growth.
Opportunity
Short-term
E5 – Waste
17 Waste generated in own operations
SKF generates both hazardous and non-hazardous waste in its own opera-
tions, which has a material negative environmental impact on the planet.
Some core materials are inherently difficult to recycle.
Actual
Negative
Impact
Short-term
Upstream
Own operations
Downstream
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E5 Resource use and circular economy, cont.
assess material impacts, risks and opportunities section.
For ESRS E5, all assets and activities were screened for
the identification of IROs related to resource inflows, out-
flows, and waste. This included stakeholder engagement
across SKF’s operations and value chain – upstream and
downstream – covering customers, employees, suppliers,
and civil society. Customers emphasized decarbonization
and energy efficiency, aligning with SKF’s sustainability
ambitions. Suppliers highlighted the need for transparent
sustainability practices, while civil society expressed
expectations for SKF to reduce environmental impacts
and support circular economy objectives.
IMPACTS, RISKS AND OPPORTUNITIES
E5 - ESRS 2 IRO 1
Description of the process to identify and assess
material resource use and circular economy-related
impacts, risks and opportunities
As part of its DMA, SKF has evaluated its entire value chain
– from raw material extraction to product end-of-life – to
identify actual and potential impacts, risks, and opportu-
nities. The detailed methodology of the DMA, including
applied tools, assumptions, and processes, is described
in IRO-1 Description of the process to identify and
E
Ongoing engagement also takes place with local
communities near SKF sites; to date, no significantly
affected communities have been identified in relation to
resource use. Further details on stakeholder dialogues
are described in SBM-2 Interests and views of stake-
holders’ section.
E5-1
Policies related to resource use and circular economy
SKF has established a set of policies that directly support
the identification and mitigation of material IROs under
ESRS E5, aligned with circular economy principles. All poli-
cies are approved by the respective SVP and the assigned
Governance Body, and owned by the respective Director,
with contributions from the relevant subject matter
experts, and apply across all SKF Business Areas and
Business Units. They are reviewed and updated by the
assigned SKF Group Governance Body on a scheduled
basis at least yearly to reflect emerging risks and opportu-
nities identified through SKF’s materiality assessment.
The most relevant policies for ESRS E5 are outlined
below. These policies guide the implementation of circular
strategies – such as recycling, waste management, and
resource efficiency, by promoting reduced reliance on
virgin materials, increased use of recycled content, and
a transition toward more sustainable and renewable
resource use.
Policies and directives related to resource use and circular economy
Name Background / objective Key content Scope/key stakeholders Accountability IRO number
SKF Code of Conduct
for Suppliers and
Sub-Contractors
SKF is committed to conduct business in an
economically, socially, and ethically responsible
manner throughout the full value chain.
SKF expects its suppliers and sub-contractors to
adhere to all applicable laws and regulations.
Clear expectations for suppliers to assess, manage, and report their environ-
mental impact, including material use, emissions, and waste. It encourages
improvements in product and process circularity, such as using recyclable
materials, designing for repair or disassembly, and avoiding restricted or
conflict materials. This supports compliance with legal requirements and
reinforces responsible sourcing throughout the value chain.
Scope
Upstream supply chain.
Stakeholders targeted
Applies to all suppliers and sub-contractors globally,
including their own supply chains.
Stakeholders involved in the development of policy
Group Sustainability, Group Legal & Compliance,
and local procurement teams.
SKF Business
Operations,
supported by
SKF Group Legal
& Compliance
responsible for
policy ownership,
governance and
oversight.
13, 15
Shadow Carbon
Pricing Policy
This policy aims towards internalizing the environ-
mental 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
together with other parameters to influence supplier selection for all major
direct material sourcing decisions related to steel bar, tube and wire. These
materials are included in the initial scope because of their high GHG emis-
sions impact and the relative ease of calculating a shadow carbon price.
The policy incentivizes sourcing of materials with lower embodied carbon
emissions, which often is accomplished through the use of steel produced
with high scrap content.
Scope
Sourcing of bearing steel for SKF operations globally.
Stakeholders targeted
SKF Managers involved in direct material sourcing.
Stakeholders involved in the development of policy
Internal technical specialists, senior managers from
purchasing.
Chief Financial/
Sustainability
Officer.
13, 15
SKF Group
Environmental, Energy,
Health and Safety
Policy
SKF is committed to leading in sustainability. This
policy sets out the proactive approach taken to
address environmental, energy, health and safety
aspects along the value chain.
The policy includes environmental protection by proactively addressing
climate change through both mitigation and adaptation strategies,
preventing pollution, minimizing the use of harmful substances, and pro-
moting sustainable resource utilization by reducing waste and increasing
circularity. 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
utilising the plan-do-check-act cycle.
Scope
SKF operations globally and upstream supply chain.
Stakeholders targeted
Managers and employees at SKF and in supply chain
with potential impact on EHS performance.
Stakeholders involved in the development of policy
Internal technical specialists, senior managers from
operations, 3rd party auditors (to confirm compliance
with ISO 14001:2015 standard).
Senior Vice
President Group
Commercial and
Operations
Development &
Chief Financial/
Sustainability
Officer.
15
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E5 Resource use and circular economy, cont.
E
E5-2
Actions and resources related to resource use
and circular economy
In 2024, SKF developed a circularity overview, which
illustrates how circularity spans the entire business
and connects resource inflows, resource outflows, and
waste. This overview supports the visualization and
communi cation of SKF’s company-wide transformation
and on going activities that contribute to more circular
practices, see graph on the right.
Circularity will continue to influence SKF’s approach
to materials, production, supply chains, and business
models. The previous Circularity Programme helped to
identify more than 100 initiatives across the company that
contribute to circular practices. With the programme now
concluded, SKF’s circularity work continues through Group
Sustainability and through initiatives that are integrated
into existing business area activities and operational
structures. The following sections present examples of key
ongoing initiatives. Resources are allocated as needed to
support effective implementation, and ongoing activities
involve SKF operations, suppliers, and customers through-
out the year. All activities are year-round efforts involving
SKF operation, suppliers and customers.
Green Steel Sourcing
SKF prioritizes the use of secondary raw materials where
feasible, with a strong focus on steel, which represents
the company’s largest material inflow. To reduce its reli-
ance on virgin iron ore and lower the carbon footprint of its
products, SKF is actively working to increase the share of
recycled and low-emission steel in its supply chain. This
includes strategic engagement with suppliers of Electric
Arc Furnace (EAF) based steel and ongoing assessments
of supplier capabilities and emissions profiles.
Circular solutions
/Business models
Remanufacturing
as a service
Extending Bearing and
Housing life through
professional refurbishment
RecondOil
Circular oil system enabling
oil reusage ”for life”
Predictive maintenance
Data-driven insights to plan
maintenance and maximize
bearing life
Laser Metal Deposition
Additive manufacturing
process for producing
and repairing bearing
components
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
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E5 Resource use and circular economy, cont.
strating high toughness and durability, corrosion resistance
and low wear. Product and manu facturing optimization is
ongoing, and large-scale industrialization is initiated.
Waste initiative
SKF is committed to minimizing waste generation and pro-
moting circularity across its value chain as part of the SKF
Group Environmental, Energy, Health and Safety Policy.
This includes upstream efforts such as the use of near-net
shape production technologies like cold rolling, which
reduce the amount of material that needs to be removed
in subsequent machining processes. Within SKF’s opera-
tions, optimized processes help avoid scrap and excessive
material use, contributing to more efficient resource utili-
zation. SKF also performs on-site recycling of lubrication
oil at selected facilities using its proprietary RecondOil
technology. Although this initiative is not yet reported
separately, it represents a strategic innovation in waste
reduction and resource recovery. Downstream, SKF
extends the life of its products and the systems in which
they operate through remanufacturing, thereby prevent-
ing waste and supporting a more circular approach.
Additionally, local objectives are established to drive per-
formance up the waste hierarchy, prioritizing prevention,
reuse, and recycling. The company is expanding its inter-
nal waste reporting framework to include more granular
waste fractions and increasing reporting intervals from
half-yearly to quarterly. Read more about SKF’s progress
in measuring and improving our waste performance in
E5-3 and E5-5.
METRICS AND TARGETS
E5-3
Targets related to resource use and circular economy
SKF has two Group-level targets aimed at promoting more
sustainable resource inflows and improved waste manage-
ment. These targets reflect SKF’s proactive approach
to sustainability and address key IROs under ESRS E5.
Stakeholders engaged in the target-setting process
primarily included internal subject matter experts that
considered internal conditions and external factors.
Bio-based Materials
SKF is exploring bio-based alternatives to reduce
dependency on fossil-based fluids. Current developments
include bio-based grinding emulsions as a process fluid,
which are undergoing extensive testing. These trials are
being expanded globally as part of SKF’s commitment to
sustainable manufacturing.
Remanufacturing
SKF promotes circularity by extending the lifespan of prod-
ucts across industries like the railway, metals and aero-
space industries. Remanufacturing extends the service life
of bearings, reduces environmental impact, increases
asset reliability, and cuts cost.
Additionally, 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. Remanufacturing directly addresses the risks of
resource scarcity and rising costs by extending product
lifecycles.
RecondOil
SKFs double separation technology (DST) enhances
the circularity of industrial oil by regenerating 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, reducing waste and carbon footprint across
various industries, while improving machine reliability
and efficiency.
Laser metal deposition (LMD)
SKF Infinium bearings, manufactured using additive manu-
facturing technique, enhances the circularity of bearings
by enabling severely damaged bearings to be renewed and
thereby repeatedly used in applications. In the re manufac-
turing process, severely damaged surfaces are exchanged
(about 15% of the weight) generating only maximum 25% of
CO
2
emission compared to new bearings. The SKF Infinium
bearings are verified inhouse and validated in field, demon-
E
SKF has not yet established formal targets for resource
outflows or circular product design. However, several inter-
nal initiatives are in progress, and SKF is actively working
to define measurable and reportable targets in these areas.
Further updates are expected to be communicated within
the next years. The current targets are presented below.
Buy and use 100% net zero steel by 2050, or earlier
Steel is by far SKF’s largest material inflow. The Group
has set the target to source and use 100% net-zero steel
by 2050, or earlier, compared to the 2019 baseline when
no net-zero steel was used due to the lack of technical
availability.
This target is aligned with the SteelZero initiative, a
global collaboration accelerating the transition to a net-
zero steel industry. By setting this target, SKF addresses
key material impacts linked to steel production. The long-
term transition to net-zero steel is expected to reduce the
Group’s overall environmental footprint while supporting
sustainable production methods. This commitment applies
globally across SKF’s supply chain to ensure future access
to net-zero steel in all operational regions. A critical part
of achieving this target is to maximize the use of scrap-
based steel (secondary raw material), typically produced
in Electric Arc Furnaces (EAF). Increasing the share of
scrap-based steel simultaneously lowers embedded
emissions and improves circularity by raising the percent-
age of secondary raw materials in SKF’s material inflows.
In 2025, an estimated 51% of SKF’s steel inflows were
manufactured with scrap; SKF will continue to increase
this share as a key milestone on the path to net-zero steel.
This approach complements broader circularity measures
such as remanufacturing and design for circularity, which
keep materials in use for longer and reduce demand for
virgin resources.
Recognizing systemic constraints – including finite
global scrap availability and the current scarcity of
net-zero primary steel – SKF combines increased scrap
use with supplier engagement on low- and near-zero-
emission primary routes. Participation in initiatives such
as SteelZero and ResponsibleSteel helps send a clear
demand signal and supports credible definitions and
verification pathways. SKF has set an interim milestone
for 2030, requiring selected bearing steel suppliers to meet
at least one of the following criteria:
• Steel produced at a site where the steelmaker has
adopted a science-based emissions reduction target; or
• Steel classified as “lower-emission”, in line with
Responsible Steel Decarbonisation Progress Level 2.
To support this transition, SKF applies its Sustainability
Standard for Suppliers and engages in targeted collabora-
tions to increase the availability of qualified recycled and
low-emission steel. This includes promoting Electric Arc
Furnace (EAF) routes utilizing a high proportion of second-
ary steel and powered by renewable electricity, which
significantly reduce carbon intensity compared to con-
ventional production methods.
Progress against the target and milestones will be
reviewed annually as part of SKF’s sustainability reporting
cycle.
A recycling rate above 80% for grinding swarf
Grinding swarf, a mixture of small metal particles, abrasives,
and emulsion, is a significant focus area for SKF due to its
classification as hazardous waste. If not properly managed,
grinding swarf can pose environmental risks; however, it
also presents a valuable opportunity to recover metal con-
tent for reuse in other applications. Recognizing both the
risks and the potential, SKF has set a Group-wide target
to achieve and maintain a recycling rate above 80% for all
sites that generate grinding swarf. Progress towards this
target is closely monitored through governance forums,
such as the half-year EHS reviews conducted with Business
Areas and Business Units.
Historically, SKF has met this target, but maintaining
it consistently across all regions has proven challenging.
Factors such as variations in local legislation, differences
in available treatment infrastructure, and fluctuations in
scrap market prices have impacted performance. In parallel,
the company is actively seeking and collaborating with
business partners who can utilize grinding swarf as input
material in their production processes, either directly or
indirectly.
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Because bearing steel constitutes the majority of metals
used at SKF, applying this percentage to the total metals
used in 2025 corresponds to approximately 212 thousand
tonnes of secondary recycled material.
Other technical, non-renewable inputs include rubber
(for example used in sealing solutions), oils and greases
(for lubrication systems and bearing performance), and
various metals such as aluminium and cast iron for
housings and structural parts. Rare earth materials are
used in specialized mechatronic systems and condition-
monitoring technologies. Water is used in manufacturing
for cooling, cleaning, and testing purposes.
The total weight of products and technical and bio-
logical materials used in 2025 amounts to 430,035 tonnes.
Biological materials represent only a negligible share of
this total and are therefore not reported separately. The
material breakdown below underscores the predominance
of metals in SKF’s operations and highlights the strategic
importance of increasing the share of green or net-zero
steel.
Accounting principles E5-4
Technical materials used
SKF’s resource inflow data for technical materials includes
steel, rubber, oils, and greases used in production pro-
cesses. Site-level data is collected quarterly across SKF’s
sites globally. Any variation greater than 10% from the pre-
vious reporting period must be explained and reviewed,
ensuring consistency. The reported volumes reflect actual
usage within production during the reporting year.
Secondary Reused or Recycled Components
The main recycled input at SKF is scrap-based steel, pri-
marily sourced through Electric Arc Furnace (EAF) produc-
tion. SKF assessed 87% of its bearing steel and related
components suppliers based on spend data. A limited
During 2025, SKF continued to invest in briquetting
technologies and strengthen strategic partnerships for
waste management, laying the groundwork for improved
recycling performance. These efforts are expected to
increase the overall recycling rate in the coming years.
Key challenges remain in certain regions, but targeted
solutions are being developed to overcome them. Inno-
vation, infrastructure development, and cross-sector
collaboration will be essential to reduce landfill de pend-
ency and meet long-term environmental goals. During
2025, the rate of recycled or reused grinding swarf in -
creased to 66% compared to 65% the previous year.
Looking ahead, SKF is evaluating a realistic and
meaningful target year for achieving consistent grinding
swarf recycling performance across all relevant sites.
This future target will be based on technical feasibility,
regional readiness, and partner capabilities, and will be
communicated once finalized. The ambition is to not only
maintain but improve the recycling rate beyond 80%,
ensuring that grinding swarf becomes a resource rather
than a liability in SKF’s environmental strategy.
E5-4
Resource inflows
SKF uses a wide range of materials in its operations,
including metals, plastics, rubber, hydraulic oil, grease,
and water. Steel represents by far the most significant
material input, primarily used for bearings and rolling
elements, making it a key focus for circularity and
de carbonization efforts.
To improve transparency and sustainability of material
inflows, SKF engages with suppliers to obtain data on
product composition, the type of electricity used and the
share of recycled content, prioritizing lower-emission alter-
natives. Steel, in particular, is a high-impact material due
to its carbon intensity and large volume in SKF’s opera-
tions. When produced via Electric Arc Furnaces (EAF),
scrap-based steel can significantly reduce greenhouse
gas emissions and dependency on virgin steel in com-
parison to traditional Blast Furnace/Basic Oxygen Furnace
(BF/BOF) methods.
In 2025, an estimated 51% of SKF’s bearing steel in -
flows originated from scrap-based sources, qualifying as
secondary recycled material, compared with 54% in 2024.
E
extrapolation was applied to estimate the recycled content
share across SKF’s global steel inflows. This percentage is
applied to the reported used metals quantity to calculate
the absolute weight of secondary materials, assuming the
procured bearing steel mix reflects the metals used.
E5-5
Resource outflows
Products and materials [E5-5_35-36]
SKF is advancing circularity by increasing the share of
products and materials designed for reuse, disassembly,
remanufacturing, refurbishment, and recycling, while pro-
moting circular business models. SKF’s global remanufac-
turing centres already repair and refurbish bearings that
meet technical criteria for reuse, extending product life
and reducing material demand.
Although a standardized methodology for measuring
repairability across the entire portfolio is not yet in place,
SKF has evaluated the remanufacturing potential of nearly
all roller bearing product families and selected ball bearing
types using the DIN SPEC 91472 classification. Although
not a direct measure of repairability, this assessment pro-
vides insight into the proportion of a product that can be
reused, serving as a proxy for circular potential. The results
indicate a high level of remanufacturing-based circularity
across most assessed product families. In 2025, SKF
remanufactured or refurbished over 6,000 tonnes of bear-
ings and continues to scale these efforts across multiple
industries, helping to reduce material use and extend
product lifecycles.
To further strengthen repairability in the long term, SKF
is embedding circular design principles into its product
development process. Building on existing environmental
guidelines, these principles emphasize designing products
for easier repair and component reuse, extending material
lifespan and supporting future circularity targets.
Resource inflows (key materials), tonnes 2025 2024 2023
% change to
previous year
Metal as raw material from external suppliers 414,893 410,182 475,268 1.15%
Rubber as raw material from external suppliers 5,848 4,829 4,956 21.10%
Oils 7,053 7,203 8,054 –2.08%
Greases 2,241 2,137 2,322 4.87%
Durability
The data point of expected durability is considered non-
material for SKF, as there is no meaningful or com parable
industry benchmark available. SKF’s products, particularly
bearings, are designed for highly specific customer
require ments and operating conditions, making their dura-
bility dependent on the machine or system in which they
are used.
Given the wide range of bearing types across industries
– from high-speed spindles to heavy-duty machinery – it
is neither practical nor meaningful to report a single average
durability value. Instead, durability is embedded in the
design process.
While a universal lifespan metric is not representative,
SKF applies well-established models to estimate bearing
performance under specific conditions – such as the
basic rating life (L10). These models consider factors like
load, speed, lubrication, contamination, and material
fatigue, helping optimize bearing selection and mainte-
nance planning.
Recyclability
SKF has estimated that around 96% of its products and
98% of its packaging are recyclable.
Accounting principles E5-5 (Products and materials)
Repairability
SKF used the DIN SPEC 91472 framework to assess the
remanufacturing potential of 11 bearing product catego-
ries, representing the vast majority of its product portfolio.
The DIN score ranges from 0 (virgin material only) to 1
(fully circular input). SKF adapted the approach to estimate
how much of a bearing can be reused in remanufacturing.
Nearly two-thirds of the product families scored above 0.8,
indicating a strong remanufacturing potential. This applies
to the larger bearings within these families, for which
remanufacturing is an economically viable option. The
assessment was conducted in 2024 and reviewed in 2025,
with no material updates required.
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Recyclable Content in Products
The recyclability of SKF products is calculated using a
simplified, material based approach. The method relies on
consolidated material inflow data and reflects the poten-
tial for materials to enter established recycling processes
at end of life. The assessment covers the four key material
categories included in the ESRS E5 Resource Inflows dis-
closure, and these material inflows are assumed to repre-
sent the composition of the products sold during the
reporting year. Metals are assigned a recyclability rate of
100%, reflecting widely available recycling routes. Rubber,
oils and greases are assigned a recyclability rate of 0%
because there are no established large scale recycling
practices for these materials in SKF’s applications. The
overall recyclability rate is determined by multiplying each
material category’s recyclability rate by the corresponding
material weight and dividing this sum by total material
inflows. The assessment is based on material properties
and recycling system capabilities, not on product level dis-
mantling feasibility, and the recyclability rates do not con-
sider the yield or any other losses in the recycling routes.
The resulting recyclability percentage represents an indic-
ative estimate and should be interpreted in light of these
methodological simplifications.
Recyclable Content in Packaging
Outbound packaging is designed to be recyclable and con-
sists mainly of cardboard and wood. A minor fraction, such
as plastic wrapping, may become non-recyclable due to
contamination. Since exact weights are not available, SKF
estimates that the non-recyclable content amounts to 2%
of the total. This adjustment is based on packaging speci-
fications, expert judgment, and EU packaging waste defi-
nitions to ensure recyclability is not overstated.
Waste [E5-5_37-39]
SKF generates a variety of waste streams across its global
operations, with the most significant volumes originating
from metalworking processes. These include both
hazardous and non-hazardous waste. Hazardous waste
primarily consists of grinding swarf and other machining
residues, while non-hazardous waste includes packaging
materials, scrap metals, and general industrial waste.
E
SKF confirms that no radioactive waste is generated in
its operations.
Waste management is conducted in collaboration with
external partners, including steel plants and specialized
waste management companies. These partners are
required to comply with the SKF Code of Conduct and all
applicable local regulations, ensuring responsible and
ethical handling of residual materials.
Disposal methods are categorized into prepared for
reuse, recycling, incineration (with and without energy
recovery), and landfill. Local objectives are established to
drive performance up the waste hierarchy, prioritizing pre-
vention, reuse, and recycling in line with circular economy
principles.
Grinding swarf, representing the largest portion of hazard-
ous waste, is a strategic focus area. It’s reported separately
to enhance transparency and track progress toward SKF’s
Group-level target to recycle 80% of grinding swarf.
Investments in briquetting technologies and strategic
partnerships are contributing to increased recycling rates.
While regional challenges persist, targeted solutions are
being implemented. Continued innovation, infrastructure
development, and collaboration are essential to reducing
landfill dependency.
SKF is enhancing its waste management strategy
through improved data accuracy and performance
tracking. Regular internal reviews identify opportunities
for waste reduction and validate reported data. To ensure
consistency and compliance SKF provides dedicated
training, environmental reporting handbooks, and guid-
ance documents for employees responsible for waste data
reporting. Ongoing efforts to reduce landfill fractions and
increase circular material use rates contribute to broader
environmental objectives and demonstrate SKF’s commit-
ment to responsible resource management.
Accounting principles E5-5 (Waste)
Waste data is collected and monitored at each site. Waste
volumes are measured based on official weight slips,
invoices, or confirmation statements from external waste
handlers and are reported quarterly. Any deviation of more
than 10% from the previous reporting period requires
justification and internal validation to ensure consistency.
Waste
Waste, tonnes 2025 2024 % change
Hazardous waste (other than grinding swarf)
Diverted from disposal:
Prepared for reuse 192 NA NA
Recycled 7,939 NA NA
Other recovery operations
1)
6,082 NA NA
Directed to disposal:
Incinerated without energy recovery 697 NA NA
Landfilled 5,366 NA NA
Grinding Swarf
Diverted from disposal:
Prepared for reuse 261 NA NA
Recycled 12,420 12,826 –3%
Other recovery operations
1)
2,344 619 279%
Directed to disposal:
Incinerated without energy recovery 1,391 3,198 –57%
Landfilled 2,728 3,190 –14%
Non-hazardous waste
Diverted from disposal:
Prepared for reuse 4,629 NA NA
Recycled (incl. Production Metal Scrap) 62,108 82,897 –25%
Other recovery operations
1)
4,979 7,604 –35%
Directed to disposal:
Incinerated without energy recovery 562 1,861 –70%
Landfilled 7,787 14,518 –46%
Total waste 119,485 126,713 -6%
Diverted from disposal, % 84 82
Directed to disposal, % 16 18
Total amount of non-recycled waste
2)
In absolute value 31,936 30,990 3%
In percentage, % 27 24
1) Incineration with energy recovery.
2) Includes the categories under directed to disposal and incineration with energy recovery.
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S
Social
SKF’s own workforce is at the heart of its success,
encompassing a wide range of roles and expertise
across global operations. SKF strives to foster
a safe, inclusive, and engaging environment that
encourages personal growth and professional
development for all. This dedication is supported
by policies, directives and practices designed to
promote equal opportunities, strengthen health
and safety, and nurture a culture of respect and
accountability.
Description of IRO Type of IRO Value chain Time horizon
S1 – Working conditions
18 Work-related stress for own employees
Work-related stress is a negative impact affecting employee well-being, as it
can generate anxiety, depression, and burnout. Contributing factors include
demanding workloads, tight deadlines, and inadequate support systems,
especially in high-risk environments. Stress potentially impacts individual
employees and could create a challenging work atmosphere, undermining
team dynamics and collaboration. Employees might experience decreased
job satisfaction and motivation, which can lead to decreased productivity
and engagement. Prolonged stress can result in increased absenteeism as
employees may need time off to recover.
Actual
Negative
Impact
Short-term
19 Work-related injuries and ill-health of own workforce
SKF recognizes that work-related injuries and ill-health occur in the work-
places even if the SKF Group Environmental, Energy, Health and Safety
Policy clearly states that the health and safety of employees, contractors,
agency workers and visitors is top priority. Safety always comes first and
SKF is convinced that all work-related injuries and ill-health can be pre-
vented by proactively assessing health and safety risks to eliminate hazards,
reduce risks and ultimately improve the work environment. SKF has a Group
EHS management system that supports this approach. Along with the Zero
Accidents commitment and proactive reporting of near misses and unsafe
conditions, it aims to prevent all workplace accidents.
Actual
Negative
Impact
Short-term
Description of IRO Type of IRO Value chain Time horizon
S1 – Equal treatment and opportunities for all
20 Enabling a diverse and inclusive workplace
SKF commits to providing equal opportunities irrespective 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 member-
ship, political affiliation, or any other unique or ordinary trait. 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 these
factors, SKF contributes with actual positive impacts beyond mitigating
negative impacts.
Actual
Positive
Impact
Short-term
21 Training and skills development
SKF is dedicated to providing employees with ongoing training opportuni-
ties that enhance their skill sets, enabling them to perform their roles more
effectively and adapt to the evolving demands of the industry. This invest-
ment not only boosts individual competence but also fosters a culture of
con tinuous improvement and innovation among the workforce. Moreover,
a strong focus on training and development leads to higher employee
engagement and job satisfaction, which positively impacts their overall
well-being and career progression, ultimately contributing to a more
ful filling work experience.
Actual
Positive
Impact
Short-term
22 Potential discrimination and non-equal treatment of own workforce
Large companies with many employees, such as SKF, face an inherent risk
of discrimination and unequal treatment, which may lead to stress, anxiety,
and other mental health issues among affected employees. This can negatively
impact their overall well-being and quality of life. The potential negative
impact is significant, given its severity on individual health. SKF operates
in several countries where there is a higher risk of discrimi nation. SKF’s pres-
ence in these regions raises concerns about the potential negative impact
on employees, highlighting the challenges associated with ensuring equitable
treatment in diverse environments.
Potential
Negative
Impact
Mid-term
S1 Own workforce
Upstream
Own operations
Downstream
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STRATEGY
ESRS 2 SBM-3
Material impacts, risks and opportunities and their
interaction with strategy and business model
SKF’s material impacts, risks, and opportunities (IROs)
related to its own workforce were identified through the
Group’s double materiality assessment (DMA ), as outlined
in ESRS 2 IRO-1. These IROs are presented in table SBM-3
and reflect both impact and financial materiality.
Strategic integration of workforce-related IROs
[S1 SBM-3_13a–b]
SKF’s ability to deliver on its strategic ambitions is closely
tied to how it manages impacts, risks, and opportunities
related to its own workforce. The SKF 2030 People Agenda
outlines key priorities – Culture & Leadership, Workforce
for the Future, and Employee Experience – that directly
respond to material IROs such as working conditions,
equal treatment, and well-being.
These priorities are embedded in how SKF builds and
retains a resilient, diverse, inclusive, skilled and high-
performing organization. They support the business model
by ensuring that SKF can attract, retain, and develop the
talent needed to drive innovation, operational excellence,
and customer value.
Operational context and feedback loop
[S1 SBM-3_13b;14b]
Workforce-related IROs arise from SKF’s operating
model, which spans manufacturing, engineering, R&D,
digital services, and global sourcing. These impacts
are present across all sites, business areas, business
units, and functions. They are managed through govern-
ance structures, policies (G1-1, S1-1), and actions (S1-4)
that ensure alignment with strategic targets. Insights from
employee engagement surveys, retention trends, and
grievance reports inform continuous improvements to
leadership development, onboarding, and inclusion initi-
atives. This feedback loop ensures that SKF’s strategy
remains responsive to workforce needs and sustainability
expectations, and supports the Group’s ability to deliver
on its strategic targets.
Material negative impacts [S1 SBM-3_14b;14d]
As part of the assessment of workforce-related IROs, SKF
has identified actual material negative impacts on its own
workforce, including work-related stress, occupational
injuries, and ill-health. These impacts are linked to the
inherent characteristics of industrial operations, such as
exposure to heavy machinery and physically strenuous
activities. In addition, SKF acknowledges the risk of poten-
tial discrimination and non-equal treatment. While these
impacts are not systemic across SKF’s operations, they
are considered material due to their potential severity and
relevance for SKF as a global manufacturing company.
All identified impacts have the potential to affect opera-
tional resilience, employee engagement, and long-term
sustainability. Therefore, SKF has implemented appropri-
ate policies, directives and actions to mitigate these risks
and potential negative impacts (see S1-1, S1-3, S1-4).
Material positive impacts [S1 SBM-3_14c]
While SKF actively manages and mitigates material nega-
tive impacts on its own workforce, the Group also recog-
nizes the significant positive contributions made by its
own workforce to long-term value creation and resilience.
S
Description of IRO Type of IRO Value chain Time horizon
S1 – Equal treatment and opportunities for all, cont.
23 Possible gender pay gaps and lack of pay equity
It’s not uncommon for manufacturing organizations to struggle with pay
gaps and lack of pay equity, stemming from longstanding industry practices
and workforce patterns as well as wider structural and cultural dynamics.
Typically, issues are caused by several key drivers interacting. Such drivers
include e.g., poor gender diversity and occupational segregation, under-
valued work in female-dominated roles, female under-representation in
senior and higher-paying leadership roles, insufficient flexible work arrange-
ments, which can lead to career interruptions for women who typically bear
greater care giving responsibilities, etc.
Potential pay gaps and lack of pay equity can negatively impact employee
engagement, productivity, and retention, which in turn may limit a company
like SKF’s capacity to develop talent, innovate, meet customer demands,
and grow the business.
Gender pay
gap: Actual
Negative
Impact
Pay equity:
Potential
Negative
Impact
Short-term
24 Diversity and inclusion increasing innovation and business performance
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 innovative
environment that contributes 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.
Opportunity
Mid-term
S1 – Other work-related rights
25 Potential human rights violations of own workforce
Other work-related rights include human rights such as zero tolerance against
child labour and forced labour. Some countries where SKF operates poses
a higher risks of potential child labour and forced labour. These risks are
particularly relevant to SKF’s operations as they can undermine the com-
pany’s commitment to ethical practices and human rights.
Potential
Negative
Impact
Short-term
S1 Own workforce, cont.
Upstream
Own operations
Downstream
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These positive impacts are embedded in how SKF’s
strategy and business model are designed and imple-
mented, fostering fair and safe working conditions, equal
treatment, and opportunities, as reflected in policies and
directives (S1-1) and actions (S1-4). These initiatives
directly address material IROs such as working conditions,
non-discrimination, and employee well-being. Positive
impacts, including training, inclusion, and well-being initia-
tives, contribute to workforce stability, engagement, and
performance. By fostering diverse teams and inclusive
leadership, SKF creates an environment that supports
innovation, collaboration, and operational excellence.
Elements such as purpose, culture, employee engage-
ment, leadership, competence, and ways of working are
foundational to sustaining positive impact and driving
continuous improvement. These impacts are tracked
through employee engagement surveys, diversity metrics,
health and wellbeing, transformation & change feedback,
and retention rates, which inform ongoing improvements
to SKF’s people strategy and support the Group’s long-
term resilience.
Material impacts arising from transition plans
[S1 SBM-3_14e]
While SKF does not currently anticipate material adverse
impacts from transition plans, potential effects such as job
redesign, reskilling, and redeployment are being monitored.
Stakeholder engagement and governance [S1 SBM-2]
SKF’s approach to managing workforce-related impacts,
risks, and opportunities is informed by structured input
from key internal stakeholders. Insights from People Expe-
rience (PX), workforce representatives, the Human Rights
Officer, DEI and Wellbeing Leads, Ethics & Compliance,
EHS and Quality Managers, and Business Areas and Busi-
ness Units contribute to identifying material topics and
shaping appropriate responses. This cross-functional
collaboration ensures that the perspectives of the own
workforce are reflected in SKF’s sustainability strategy and
operational decision-making, in line with ESRS 2 SBM-2.
Scope in relation to employees [S1 SBM-3_14]
The scope of affected individuals primarily includes per-
manent full-time and part-time employees across SKF’s
operations. In some cases, consultants engaged in SKF’s
operations are also considered within the scope of work-
force-related IROs, particularly where they are exposed to
similar working conditions or operational risks. However,
consultants are not included in the scope for IROs related
to remuneration, such as pay equity, as they are not
employed directly by SKF and are compensated by their
respective employers.
Vulnerable groups [S1 SBM-3_14a; 15; 16]
SKF does not currently categorize its own workforce into
specific vulnerable sub-groups. As a result, SKF is not able
to determine whether specific IROs disproportionately
affect these groups or are tailored to address their parti-
cular needs. The IROs identified through SKF’s DMA
apply broadly across the own workforce. However, SKF
acknowledges that certain individuals, such as migrant
workers, women, or employees with disabilities, may face
disproportionate risks. Although IROs are not tailored to
these groups, SKF’s management approach emphasizes
inclusivity, non-discrimination, and fair treatment, en sur ing
that policies, directives and actions are responsive to
diverse needs.
Human rights and forced labour risks [S1 SBM-3_14f-g]
No such risks have been identified within SKF’s own
operations during the assessment period. However,
SKF acknowledges that certain countries and regions
in its upstream supply chain may present elevated risks
due to weak labour protections or limited enforcement.
While the likelihood of incidents in SKF’s direct opera-
tions is considered low, the potential severity of human
rights violations, forced labour and child labour, renders
these issues material from an impact perspective.
SKF addresses these risks through its global Code of
Conduct, Supplier Code of Conduct, audits, and whistle-
blowing mechanisms with no-retaliation safeguards.
S1 Own workforce, cont.
S
IMPACTS, RISKS AND OPPORTUNITIES
MANAGEMENT
S1-1
Policies and directives related to own workforce
[S1-1_19-20a; 22; 23; 24a-d; MDR-P_65a-f]
SKF complies with all applicable local laws and regula-
tions where present. Beyond legal compliance, SKF sets
higher internal standards through a set of global policies
and directives (see table for policies and directives related
to own workforce on the next page) which address the
material IRO’s identified for SKF’s own workforce. In 2025,
SKF introduced a new Group People Policy that sets a clear
standard for workforce policies and practices.
The Group People Policy outlines SKF’s commitment to
employee well-being and responsible business conduct.
It is supported by several directives covering areas such
as working conditions, diversity and inclusion, learning
and development, and labour rights (see table for policies
and directives related to own workforce on the next page).
Together with the SKF Group Environmental, Energy,
Health and Safety Policy, these are governed by the
SKF Code of Conduct, which explicitly prohibits human
trafficking, forced labour, and child labour.
Measures to provide remedy for human rights impacts
[S1-1_20a-c;21, S1 SBM-2]
SKF’s commitment to respecting human rights is opera-
tionalized through its global policies and directives, as
outlined in the S1-1 policies and directives table. In addi-
tion, SKF’s practices, policies, and directives are guided
by key international frameworks, including the ILO Core
Conventions, the OECD Guidelines for multinational enter-
prises on responsible business conduct, the UN guiding
principles on business and human rights, the ICC business
charter for sustainable development, and the UN global
compact and its ten principles. Policies and directives
applies to all employees and consultants within SKF’s own
workforce. To ensure that human rights are upheld and that
remedy is available if impact would occur, SKF has imple-
mented the following mechanisms:
• Grievance and reporting channels: Employees and
stakeholders can report concerns through the Ethics
and Compliance Reporting Line (see S1-3).
• Corrective and remedial actions: When human rights
violations or misconduct are identified, SKF initiates
Corrective and remedial actions (CARs).
• Risk-based assessments: Human rights risks are
assessed through internal audits, supplier evaluations,
and incident reviews.
These measures complement the commitments described
in the S1-1 policies and directives table and in SKF’s Code
of Conduct (see G1-1).
Prevention of workplace accidents [S1-1_23]
Preventing health and safety risks in the workplace is
a core element of SKF’s commitment to achieving zero
accidents. This commitment is embedded in the Group’s
strategic approach to employee well-being and operational
safety. Further details are outlined in table S1-1 for policies
and directives which references the SKF Group Environ-
ment, Energy, Health and Safety Policy, setting expecta-
tions for safe working conditions across all SKF operations.
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S1 Own workforce, cont.
S
Policies and directives related to own workforce
Name Background/objective Key content Scope / key stakeholders Accountability IRO number
SKF Group
Environmental, Energy,
Health and Safety Policy
Addresses work-related injuries, ill-health
and related stress risks. Objective is to
ensure safe and healthy workplaces
across all SKF operations.
Focuses on occupational health, safety
and well-being: prevention of incidents
through proactive risk assessment and
EHS management.
Scope and stakeholders targeted
Applies to the entire SKF workforce – employees, contractors,
and visitors across global operations.
Stakeholders involved in the development of policy
Group Quality & EHS and Group Sustainability are key stake-
holders in the design of the Policy, with input given from Busi-
ness Areas, Business Units and EHS managers. The Group
Health & Safety Committee, where employee representatives
are present, also reviews and gives input before final approval
of the policy.
EHS managers are appointed in the regions, Business
Areas, Business Units and local management teams
across SKF. The operational management teams make
sure that appropriate attention, resources and invest-
ments are given to health and safety in their respective
units. The responsibility of the policy lies with SVP for
commercials and operations development and the
Chief Financial/Sustainability Officer. Accountability
of the policy lies with the President & CEO.
18, 19, 21
SKF Group DEI,
Employee Wellbeing,
Employee Feedback and
Flexible Work Directive
Addresses discrimination
1)
, unequal
treatment, work-related stress, and the
need for inclusive, healthy work environ-
ments.
Promotes an inclusive and respectful work
environment by preventing discrimination
and ensuring equal opportunities, while
also laying out principles to enhance
employees’ overall well-being and a
healthy work-life balance through flexible
work arrangements and regular employee
feedback.
Scope and stakeholders targeted
Applies to all SKF employees in its own workforce globally.
Stakeholders involved in the development of directive
SKF Group People Experience, DEI & Wellbeing, Culture,
Leadership & People Development leaders are key stakeholders
involved in the development of the directive.
Responsibility lies with the Senior Vice president for
Group People Experience, with implementation respon-
sibilities assigned to People Experience Managers, and
all employees. Accountability of the directive lies with
the President & CEO.
18, 20, 22,
23
SKF Group Total Reward
& Benefits Directive
Aims to ensure that the SKF Group
Total Reward Philosophy is consist-
ently applied across SKF Group for
all employees. It provides a unified
framework for designing, delivering,
and governing total reward practices
that support business objectives and
employee engagement. It also enables
local adaptation within a globally
coherent structure, ensuring compliance
with legal requirements and typical
reward practices in each market.
Additionally, the directive aims to foster
a culture of transparency and build
employee understanding of how their
pay is determined and how they can
influence it.
Provides a unified framework for designing,
delivering, and governing total reward
practices that support business objectives
and employee engagement. It promotes
fair, equitable and transparent total
rewards practices delivered in compli-
ance with applicable laws and regulations
in the countries where SKF operates.
The highest standard, set either by the
directive or applicable local laws and
regulations, shall be applied and prevail.
Scope and stakeholders targeted
Applies to all SKF employees in its own workforce globally.
Stakeholders involved in the development of directive
Group People Experience, Group Total Reward.
Responsibility lies with the Senior Vice president
for Group People Experience, with implementation
responsibilities assigned to local People Experience
organizations, leadership teams, and all managers
with direct reports. Accountability of the directive lies
with the President & CEO.
20, 22, 23
1) SKF’s non-discrimination commitments, as outlined in the SKF Group Code of Conduct, are aligned with ESRS S1-1 §24(b) and cover all protected grounds under EU regulation, as well as additional grounds defined in SKF’s
Code of Conduct (see G1-1), including race, colour, ethnicity, gender, sex, gender identity, sexual orientation, age, civil or social status, nationality, disability, medical conditions (including pregnancy), genetic information,
caste, religion, political affiliation, union membership and other unique or ordinary traits.
SKF ANNUAL REPORT 2025 72
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Name Background/objective Key content Scope / key stakeholders Accountability IRO number
SKF Group Global
freedom of Association
and Collective
Bargaining Directive
Aims to protect and promotes employees’
rights to freedom of association and
collective bargaining, in line with inter-
national labour standards.
Guarantees employees’ rights to freely join
or form trade unions and participate in
collective bargaining. Aims to prohibit dis-
crimination, intimidation, or retaliation
related to union activities. Aims to ensure
access to formal representation and con-
structive social dialogue between manage-
ment and employee representatives. The
directive promotes the integration of union
representatives into relevant workplace
committees, including SKF health and
safety committee.
Scope and stakeholders targeted
Applies to all employees and their elected representatives
across all SKF Group companies, including manufacturing
plants, sales and central offices, subsidiaries, and in some
cases strategic suppliers.
Stakeholders involved in the development of directive
Group People Experience and Group Labour Affairs update
the directive. Group Legal & Compliance supervises the
implementation.
Responsibility lies with the Senior Vice president for
Group People Experience, with implementation respon-
sibilities assigned to Business Areas, Business Units,
Country Labour Affairs, and local People Business
Enablers (PBEs). Accountability of the directive lies
with the President & CEO.
18, 20, 22,
23
SKF Group Talent
Development Directive
Establishes a structured, inclusive
framework for continuous talent and
leadership development, ensuring all
employees have equal opportunities
to grow, build critical skills, and support
SKF’s long-term business success.
The directive provides structured
training, leadership development,
and career progression programs
with equal access for all employees.
Establishes a structured, inclusive frame-
work for continuous talent and leadership
development. The directive is designed to:
Prevent, mitigate, and remediate actual
and potential impacts by ensuring all
employees have equal access to develop-
ment opportunities, reducing skill gaps,
and supporting succession planning for
critical roles.
Address risks such as lack of successors,
skill shortages, and reduced competitive-
ness by providing structured training,
leadership development, and career
progression programs.
Pursue opportunities for innovation,
internal mobility, and strategic upskilling,
supporting both individual growth and
long-term business success.
Monitor effectiveness through global
KPIs, PX Scorecard reporting, annual
calibration, and mandatory learning
and development reporting.
Scope and stakeholders targeted
Applies to all SKF employees globally.
Stakeholders involved in the development of directive
Group People Experience, PX Learning and Development
managers, Business leaders, PX Managers and employees
via employee feedback.
Responsibility lies with the Senior Vice president
for Group People Experience, with implementation
responsibilities assigned to Business Units and
People Experience managers. Accountability of the
directive lies with the President & CEO.
20, 21, 22
S1 Own workforce, cont.
S
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S1 Own workforce, cont.
S
S1-2
Process for engaging with own workforce and workers’
representatives about impacts
[S1-2_27a-e; 28]
SKF engages with its workforce through regular direct and
indirect engagement practices that capture employee
insights and inform how material impacts, risks and
opportunities are identified and managed.
Direct worker engagement [S1-2_27a-e, AR 18; AR19]
Direct engagement is facilitated through regular townhall
meetings and team dialogues, which are held across busi-
ness areas, business units, regions and functions. These
sessions provide opportunities for employees to interact
with leadership, including the SKF Group CEO, and to raise
questions or concerns. Additionally, SKF conducts quar-
terly global pulse surveys that aim to anonymously assess
employee engagement and provide input for monitoring
workforce sentiment and well-being.
To ensure a feedback loop, local managers are respon-
sible for reviewing survey dashboards with their teams,
interpreting results by engagement driver, and co-creating
action plans. Progress is tracked centrally, and insights
are escalated to the People Experience committee for
strategic follow-up. Results from surveys are shared during
the CEO-led “CEO Quarterly Updates” sessions, which
are open to all employees globally and employees can
ask questions during the townhall or via the email
ask@skf. com.
Worker representative engagement [S1-2_27a-e, AR22]
SKF engages with worker representatives through formal
consultations and dialogues in line with national and Euro-
pean legislation, as well as the Global Framework Agree-
ment. The European Works Council (EWC) and World
Union Council (WUC) serve as platforms for collaboration
between worker representatives and management
(see S1-8). The WUC convenes annually to discuss labour
matters and share updates on Group priorities, with a dedi-
cated EWC meeting held alongside for European d elegates.
Additional engagement formats, such as union dialogues,
are tailored to specific workforce segments or topics.
Frequency and scope vary depending on the subject
matter. Oversight of the entire worker represen tative
engagement process is provided by the Labour Affairs
Director within the Global People Experience Manage-
ment team.
Insight into the perspectives of vulnerable or
marginalized groups [S1-2_28]
While SKF does not formally categorize its workforce
into specific vulnerable sub-groups, the company
actively seeks to surface the perspectives of potentially
marginalized employees through targeted initiatives and
inclusive engagement formats. Women leadership pro-
grammes such as “SHE Leads” support gender equity in
management roles, while DEI workshops, accessibility
audits, and regional well-being assessments help to iden-
tify, and address potential barriers faced by employees.
Inclusion-related topics are systematically addressed
through surveys and team meetings. To gain deeper
insights, SKF fosters close collaboration between People
Experience (PX), DEI and Wellbeing Leads, and regional
PX teams.
S1-3
Process to remediate negative impacts and
channels for own workforce to raise concerns
Grievance mechanism and the processes for
providing remedy [S1-3_32a-d, AR28; AR30]
SKF is committed to ensuring that all employees have
access to safe, trusted, and effective channels to raise
concerns and seek remedy when negatively impacted.
SKF maintains a structured grievance mechanism and
multiple entry points to support its workforce in voicing
concerns and receiving appropriate follow-up. Employees
are encouraged and expected to report any behaviour
that violates the SKF Code of Conduct. Concerns can be
raised through various ways, such as informal channels,
including direct dialogues with local managers, People
Experience teams, anonymously via surveys or via the pri-
mary formal grievance channel, the Ethics and Compliance
Reporting Line. These channels are designed to address
a wide range of concerns, from workplace misconduct to
potential Code of Conduct violations. The reporting line is
hosted on an external landing page accessible via SKF’s
intranet, Code of Conduct, and skf.com, and it allows for
both written and oral submissions. Additional entry points
include email, phone, physical meetings, or direct dialogue
with a manager. Local and regional management are
responsible for handling day-to-day intake, while Group
Compliance reviews all incoming concerns and assigns
them to the appropriate investigator. Possible remedies are
classified based on the severity of the violation and the
outcomes of any prior corrective actions. Remedies may
include coaching, process changes, or disciplinary action.
Effectiveness of the channels [S1-3_32e, AR32]
Reporting trends and resolution metrics are monitored
by Group Compliance. Awareness is reinforced through
e-learnings, intranet updates and leadership communica-
tion. Feedback is used to continuously improve channel
effectiveness.
Procedures and policies for protection against
retaliation [S1-3_33, AR31]
SKF prohibits retaliation against anyone raising concerns
in good faith, in line with SKF Group whistleblowing policy,
see G1-1. SKF strives to handle all cases professionally,
confidentially and in accordance with established internal
investigation procedures. More details on governance and
oversight are described in section G1-1.
S1-4
Taking action on material impacts on own workforce,
and approaches to managing material risks and
pursing opportunities related to own workforce,
and effectiveness of those actions
SKF has implemented a set of actions to address material
impacts, risks and opportunities (IROs) identified for the
own workforce. Together, these actions aim to prevent and
remediate negative outcomes, strengthen risk manage-
ment, and capture opportunities that enhance safety,
fairness and capability building across the organization.
Outcomes of these actions are reflected in S1-5 metrics,
as well as in observed changes across governance pro-
cesses, workforce practices, and qualitative feedback
mechanisms. This is supported by the policies, directives,
and oversight described in S1-1.
Ensuring health and safety across all operations
[S1-4_36a;38d;40a-b;43, MDR-A_68b-c]
To remediate the negative impacts associated with
work-related injuries and ill-health, SKF operates a Group-
wide occupational health and safety management system
certified to ISO 45001:2018. This system ensures com-
pliance with legal and Group requirements, supports
customer and stakeholder expectations, and provides
a structured framework for systematic and continuous
improvements. High-level principles are defined in the SKF
Group Environmental, Energy, Health and Safety Policy,
while detailed procedures are implemented through the
EHS management system at Group, country, and site levels
to maintain consistency and effectiveness across all
operations. The system is supported by the SKF Code
of Conduct and aligned with the ISO 45001 standard,
ensuring a robust and accountable approach to health
and safety. SKF also requires contractors and other third
parties working on SKF premises or on its behalf to meet
the same health and safety standards as SKF employees.
Before work begins, contractors undergo risk assessments
and safety inductions. For work at customer or supplier
sites, SKF evaluates potential risks and agrees on control
measures before activities start, ensuring a safe work
environment for all parties. The management system
covers both physical and psychological health, aiming to
create a safer work environment and support overall well-
being, with a long-term commitment to zero workplace
accidents. It applies to employees at SKF sites, those travel-
ling or working off-site on behalf of SKF (e.g., maintenance
engineers at customer locations), contractors, and visitors.
SKF applies systematic processes to identify hazards
and assess risks across all operations. Risk assessments
are conducted regularly and are reviewed after accidents
and serious near misses. Corrective and preventive
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S
actions are implemented based on the hierarchy of
controls, prioritizing hazard elimination.
Clear roles and responsibilities for health and safety
are defined at all organizational levels. EHS coordinators
support managers in implementing requirements. All
employees and agency workers receive health and safety
training during onboarding, with additional role-specific
training for high-risk activities such as electrical work,
working at heights, and hot work. Training is provided
during working hours and aligned with legal and Group
requirements to ensure competence and compliance.
SKF fosters a culture of transparency and proactive risk
management. All employees are required to report inci-
dents, and proactive reporting of near misses and unsafe
conditions is required to identify risks early and prevent
harm. Recordable accidents are investigated using a
structured process, resulting in corrective and preventive
measures. Where relevant, findings and lessons learned
are shared across the Group to prevent recurrence. These
actions are ongoing with monthly performance reviews for
health and safety. Progress is assessed through accident
and severity rates, which are expected to decline over
time. Effectiveness can be referred to the Health & Safety
metrics section (S1-14) where the proactivity and accident
graph is presented.
In 2025, SKF implemented a global IT application to
standardize incident reporting, investigation, and
follow-up across all sites.
To strengthen machine safety, during 2025, SKF applied
an “investment-ready” approach, requiring risk assess-
ments and management training before capital invest-
ments in new machinery. This ensures that safety
considerations are integrated into equipment design,
procurement, and installation, reducing long-term risks
and improving compliance with Group standards.
Building an inclusive and equitable workplace
[S1-4_36a-b; 39, MDR-A_68a-c]
To address IROs related to potential discrimination,
non-equal treatment, possible gender pay gaps and
potential human rights violations of the own workforce,
SKF advances its Global Diversity & Inclusion Ambition
running through 2030, supported by the SKF Code of Con-
duct and directives on DEI, Employee Wellbeing, Employee
Feedback and Flexible Work (see S1-1 for detailed informa-
tion). The ambition is operationalized across all major
employee touchpoints, talent acquisition and develop-
ment, succession planning, internal mobility, performance
management and related processes. These are regularly
reviewed to identify and remove bias or barriers, ensuring
equal treatment and opportunities for all. The framework
is tailored to each Business Area and Business Unit and
region’s specific needs and driven by SKF’s Purpose and
Values of Collaboration, Curiosity, Courage and Care.
During 2025, SKF delivered learning opportunities through
various platforms and provided access to training on
psychol ogical safety, diversity and inclusion, anti-harass-
ment and unconscious bias.
SKF engages with its workforce through bi-annual
People Business Reviews and PX scorecard reviews,
involving Business Areas, Business Units and Group
Management in discussions on gender KPIs, senior leader
experience, succession planning, and diversity initiatives.
These scorecards also track effectiveness via inclusion
metrics like the Diversity and Inclusion Pulse Scores from
the Team Pulse survey. Targets linked to actions in the
DE&I 2030 plan include objectives related to leadership
diversity and DEI pulse scores. For detailed information,
including gender balance targets and progress tracking
under the 2024–2030 plan, see S1-5.
Promoting gender equality and pay equity across
SKF’s operations – [S1-4_36a-b, MDR-A_68a-c]
SKF recognizes that longstanding industry practices,
workforce patterns and structural dynamics in manufac-
turing can contribute to gender pay gaps and inequities.
In response to IROs concerning actual negative impact
on gender pay gap and potential negative impact on pay
equity and, more broadly, risks of non-equal treatment,
SKF has taken targeted actions to mitigate these risks
and promote fair compensation. The strategy propelling
this work is built on five pillars: advocacy, education,
tools and analytics, processes, and governance.
Key activities included launching a job architecture
initiative, revitalizing and enhancing SKF’s existing job
role catalogue to strengthen the foundation for equitable
remuneration. Managers accessed e-learnings on salary
setting, covering pay equity, gender pay gaps, and pay
transparency, while recruiting managers received special-
ized training to ensure non-biased hiring practices.
Employees were also given access to these resources in
multiple local languages. SKF continued its annual equal
pay analyses, monitored compensation offers and promo-
tions, and rolled out a new analytics tool enabling regres-
sion analysis to support proactive pay equity actions.
The tool provides visibility to pay equity positioning and
has the capability to suggest pay increases on an individual
basis. Training in the tool was provided to local PX pro-
fessionals, involved in pay equity monitoring. Throughout
the year, SKF has also taken steps to improve employees’
access to a clear and comprehensive overview of their
total remuneration. Efforts to enhance pay transparency
included publishing informative articles on the global
intranet and providing employees with more detailed
insights into the criteria used for salary setting and pro-
gression. These actions are further supported by the SKF
Code of conduct, SKF People policy and its directive for
SKF Group DEI, Employee Wellbeing, Employee Feedback
and Flexible Work directive, and the SKF Group Total
Reward Directive (see S1-1).
Enhancing training and skills development for the future
[S1-4_36a-b, MDR-A_68a-c; 68e]
During 2025, SKF continued to strengthen a culture of
continuous learning by equipping employees with capabil-
ities aligned to the SKF strategy. SKF enhanced access to
flexible, self-driven learning through quarterly ‘SKF Learn-
ing Weeks’, which offered short, focused learning modules
and facilitated team reflections integrated into daily work
routines. Each ‘Learning Week’ was aligned with the cur-
rent strategic theme for that period such as brand transfor-
mation and innovation. Employee participation in each
‘Learning Week’ has ranged from approximately 10 to 20%
of SKF’s total workforce globally. Feedback from partici-
pants is being collected and will inform the design and
focus of future ‘Learning Weeks’. Actions for learning and
development applies to all SKF’s own workforce, with
ongoing implementation and annual and periodic reviews
to ensure continued relevance and impact.
Another key action for training and skills development,
building on the skills-based people practices initiated in
2024, is the start of a structured job architecture initiative.
The aim is to create a clear framework for career paths and
skills development, support transparency, internal mobility,
and targeted learning.
SKF’s actions towards positive impacts for learning and
development is supported by a set of policies and direc-
tives, including the SKF Group DEI, Employee Wellbeing,
Employee Feedback and Flexible Work directive, and the
SKF Group Talent Development directive (see S1-1). The
desired outcome is for SKF employees to feel a strong
sense of professional growth and support, recognizing
clear pathways for career and skill development, fostered
by encouragement and guidance from managers and
mentors.
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S
METRICS AND TARGETS
S1-5
Targets related to managing material negative
impacts, advancing positive impacts, and managing
material risks and opportunities
Targets for IRO equal treatment and opportunities
for all [MDR-T_79b, MDR-T_80; 80b]
While employment decisions are always based on candi-
dates’ merit, skills and qualifications, SKF aims to foster-
ing a more balanced and inclusive workplace. To achieve
this, SKF is taking further actions to improve gender rep-
resentation across all levels of the organization by setting
clear, measurable targets. By 2030, SKF aims to reach at
least 30% representation of historically under-represented
genders across the organization, a minimum of 30% in
management roles, and at least 35% in senior leadership
positions. This initiative is part of the broader objective of
enabling a diverse and inclusive workplace and is linked to
the People Policy, specifically the SKF Group Directive for
DEI, Employee Wellbeing, Employee Feedback and Flexible
Work.
The target setting process
[S1-5_47a-c; MDR-T_80a; 80h]
The Global D&I Ambition 2030 targets were set in consul-
tation with Group People Experience, Business Areas,
Business Units and Group Management. The aim was
for SKF to have realistic achievable targets, yet being
ambitious enough to move the needle visibly towards a
more balanced gender representation by 2030. Progress is
monitored through ‘PX Scorecards’ and D&I targets are
reviewed annually to ensure they remain relevant as well
as compliant with current legislations. Performance is
monitored quarterly, and lessons learned inform adjust-
ments to initiatives and processes.
Scope for target [MDR-T_ 80c, MDR-M, MDR-T (i), BP_2]
The target applies to SKF’s global workforce, with the
exception of employees based in the United States, which
are excluded from global gender and DEI targets. For more
information see accounting principles for S1-9 on diversity
metrics.
Supporting initiatives [MDR-T_80j]
To achieve this target, SKF has established measurable
KPIs and initiatives. One example is “Elevate”, a global
virtual program for female leadership and career develop-
ment, which has been successfully run for six consecutive
years. Going forward, Elevate will be open to all genders,
ensuring equal access to leadership development opportu-
nities. Additionally, SKF’s Global Leadership Development
Programs and the Global Graduate Program each have
gender balance targets for every graduating class.
Baseline metrics for targets [MDR-T_80d]
Baseline values for base year 2023:
• Top Managers (global): 22.2% representation
of the under-represented gender.
• Management roles (global): 20.2% representation
of the under-represented gender.
• Total employees (global): 21.5% representation
of the under-represented gender.
Monitoring and governance
[MDR-T_79a;80e, S1-5_44;47]
Progress toward these targets is monitored through
quarterly PX scorecards and annual reviews. Stakeholder
engagement is integral to this process, involving the Cor-
porate People Experience function, the DEI and Wellbeing
Manager, and local People Experience teams, supported
by People Business Enablers. These efforts are aligned
with the actions described in S1-4 under the Global D&I
Ambition Plan. Specific KPIs are also set by Business
Areas, Business Units and regions, with a time horizon for
aspiring to achieve these targets by 2030, while local tar-
gets may differ based on local business needs and context.
For the material IROs on work-related stress, enabling a
diverse and inclusive workplace, training and skills
development, potential discrimination and non-equal
treatment, possible gender pay gaps and lack of pay
equity, and potential human rights violations of the own
workforce, SKF has not set measurable, time-bound tar-
gets at this stage. Progress is monitored through qualita-
tive measures and key indicators, and SKF is evaluating
the introduction of formal targets as methodologies and
data capabilities evolve.
SKF has a long-term commitment to Zero Accidents
established in year 2000 based on the conviction that
work-related injuries and ill-health can be prevented.
Today, SKF doesn’t set any quantitative or time-bound
targets beyond the overall commitment to zero accident.
This reflects the belief that any level of harm is unaccept-
able and that continuous improvement should be driven
by this uncompromising commitment, see S1-4 actions
for how SKF works proactively with health & safety. Going
forward there is an aim to define and improve a set of indi-
cators to be able to further monitor efforts striving to
support the commitment to zero accidents.
Targets Baseline (baseline year) 2024 status 2025 status
Top Managers (global): 35% representation
of the under-represented gender by 2030
22.2% (2023) 23.1% 25.5%
Management roles (global) 30% representation
of the under-represented gender by 2030
20.2% (2023) 20.7% 21.2%
Total employees (global): 30% representation
of the under-represented gender by 2030
21.5% (2023) 22.5% 23.3%
Targets [MDR-T, S1-5_80d; 80j]
SKF ANNUAL REPORT 2025 76
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S
Employees by Gender and Employment Type [S1-6_50b; AR 55]
Female Male Other Not disclosed Total
Number of employees 8,735 28,536 0 0 37,271
Number of permanent employees 8,079 27,601 0 0 35,680
Number of temporary employees 656 935 0 0 1,591
Number of non-guaranteed hourly employees NA NA NA NA NA
Number of full-time employees 8,219 28,067 0 0 36,286
Number of part-time employees 516 469 0 0 985
Employees by Region and Employment Type [S1-6_50b; AR 55]
EMEA
The
Americas
China and
Northeast Asia
India and
Southeast Asia
Number of employees 19,765 7,518 5,968 4,020
Number of permanent employees 18,754 7,301 5,954 3,671
Number of temporary employees 1,011 217 14 349
Number of non-guaranteed hourly employees NA NA NA NA
Number of full-time employees 18,902 7,407 5,966 4,011
Number of part-time employees 863 111 2 9
[S1-6_50f] The most representative number in the financial statement can be found in Note 25. However, the figures
differ due to different measurement methodologies. S1-6 tables report the actual headcount, defined as the number of
individuals in the workforce as of the reporting date. This figure is based on registered employees at year-end, irrespec-
tive of working time arrangements or notice periods (see accounting principles S1-6). In contrast, Note 25 in the financial
statements reports the ‘average number of employees’, calculated as total working hours divided by the normal working
time for the period.
[S1-6_50c] In the reporting period, the overall employee turnover rate was 13.84%.
Accounting principles S1-6 [MDR-M]
All SKF employees, are maintained in a central master
data system at SKF. All data provided in these sustain-
ability statements are based on this repository. The num-
bers for 2025 include employees from acquisitions being
made throughout the year. The gender data presented in
this report is based on gender as recorded in the master
data and does not fully represent the diversity of gender
identities.
When it comes to the contract-type, SKF is differenti-
ating between permanent and temporary contracts as well
as part-time and full-time. However, SKF is not breaking
down the data into non-guaranteed hourly employees, as
SKF doesn’t primarily engage with these types of insecure
contract arrangements for any of its employees worldwide.
Therefore, this data is not applicable. Global definitions for
these contract types apply across all SKF locations to
ensure consistency and comparability. National definitions
have not been used, and country-level figures have been
aggregated into total values following this standardized
approach.
The number of employees is calculated based on head-
count and reported as of the end of the financial year
(FY25). SKF defines the number of employees based on
their last working day, regardless of whether they still have
a valid employment contract (e.g. during a notice period).
Therefore, employees who have been made redundant are
not included in the count once their final working day has
passed, even if their notice period extends beyond that
date. Representation based on gender is retrieved from
SKF’s employee master data, where such personal data
is stored and linked to employee records. This data is
collected and processed in accordance with applicable
data protection regulations.
S1-6
Characteristics of the Undertaking’s Employees
Employees by Gender [S1-6_50a; AR 55]
Gender
Number of
employees
(head count)
Male 28,536
Female 8,735
Other 0
Not reported 0
Total employees 37,271
Employees by country breakdown
1)
[S1-6_50a; AR 55]
Country
Number of employees
(head count)
China 5,725
Germany 4,908
1)
In accordance with ESRS S1-6 paragraph 50(a), SKF discloses
the number of employees by country for countries in which it
has 50 or more employees representing at least 10% of its total
number of employees. In 2025, China and Germany met both
thresholds and are presented separately.
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Accounting principles S1-8 [S1-8_63b, AR_66, MDR-M]
Collective bargaining is defined as the consultation and
negotiation process between employers and worker repre-
sentatives to establish working conditions. SKF’s defini-
tion of collective bargaining and social dialogue aligns
with the ESRS standards. In the majority of countries
where SKF operates, CBAs have been established with
local unions and/or national unions.
With representatives from 21 countries, SKF is ensuring
representation from Africa, Asia, Europe, North America,
and South America. For further details see worker rep-
resentation in S1-2.
In some non-EEA countries, CBAs are not in place due
to limited union presence, local legislation or socio-politi-
cal factors which could restrict or discourage collective
bargaining practices. Despite this, ensuring fair working
conditions for all employees remains a top priority for SKF.
Through SKF’s global world Union Council framework,
employees in these countries are still covered under
corporate and regional agreements that uphold the
same high labour standards found worldwide.
S1 Own workforce, cont.
S
Collective bargaining coverage
Coverage rate
Employees
EEA countries
1)
Employees
Non-EEA regions
1)
Workplace representation
EEA only
1)
0–19% Asia
20–39% The Americas
40–59%
60–79%
80–100% Germany Germany
1) >50 employees representing >10% total employment
S1-8
Collective bargaining and social dialogue coverage
[S1-8_60a-c; 63a, AR70]
Employee coverage through collective bargaining agree-
ments (CBAs) is considered a key indicator for the quality
of social dialogue. In Europe, SKF has full coverage (100%)
in 9 countries: Austria, Belgium, Finland, France, Italy,
Netherlands, Romania, Spain and Sweden. Other countries
where SKF operates demonstrates substantial levels of
coverage with 90% in Germany, 85% in Czech Republic,
77% in Bulgaria and 75% in Poland, which confirms a wide-
spread commitment to structured and inclusive industrial
relations. Globally, 61% of SKF’s total workforce is covered
by CBA’s.
During 2025, SKF Introduced a SKF Group Freedom
of Association and Collective Bargaining Directive (for
more details see S1-1) that goes beyond local legislation
and reflects SKF’s commitment to international labour
standards and respectful workplace dialogues.
Workforce diversity by gender and age [S1-9_66a-b]
Gender Age
Men Women <30 30-50 >50
The Board 12 3 0 4 11
Group Management 8 4 0 4 8
Top Management 291 99 0 198 192
Managers 3,551 948 85 3,106 1,308
Total employees 28,536 8,735 5,089 21,192 10,990
S1-9
Diversity metrics
SKF’s age distribution shows a majority of employees in
the 30–50 range and a notable presence of employees
over 50 in senior roles, reflecting expected career progres-
sion and contributing to leadership continuity. The lower
representation of employees under 30 highlights the rele-
vance of SKF’s initiatives and actions under S1-4 to attract
and develop early-career talent, ensuring future capability
and resilience. These efforts also support SKF’s S1-5 tar-
gets and contribute to positioning SKF as an attractive
workplace. They also align with principles set out in S1-1
and related directives on diversity, equity and inclusion,
employee well-being, feedback, and flexible work. In addi-
tion, SKF’s evolving approach to skill-based hiring and
development, as referenced in the SKF’s Talent Attraction
and Development directive (S1-1), aims to place greater
emphasis on skills and competencies rather than years of
experience, supporting a more inclusive and future-ready
workforce.
Accounting principles S1-9 [MDR-M]
SKF relies on raw data for its assessments. The calcula-
tions are conducted based on headcount, with data
disaggregated by gender, age, and role. The scope of diver-
sity metrics showing the raw data includes all employees
in SKF’s own workforce, for overall reporting consistency
throughout this report.
The Board refers to the SKF Board of Directors, which
constitutes the highest governance body for the organi-
zation. The absolute numbers mentioned pertains to
Board members elected by the annual general meeting.
Group Management is defined as the operational manage-
ment team of the SKF Group. Top Management refers
to the top 390 managers within the SKF Group, with
the actual number in this population subject to change
over time.
Total employees refer to the overall number of
employees at SKF as of the end of 2025, as set ot in S1-6.
Managers are defined as employees who have at least one
employee as a direct report.
SKF ANNUAL REPORT 2025 78
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S
Percentage of employees with regular performance reviews completed by gender [S1-13_83a;84]
Year Category Total Employees Women Men
2025 Total employees 37,271 (33%) 8,735 (38%) 28,536 (30%)
Eligible employees 12,256 (97%) 3,358 (97%) 8,563 (98%)
2024 Total employees 38,743 (35%) 8,830 (44%) 29,913 (33%)
Eligible employees 12,471 (97%) 3,444 (97%) 9,027 (97%)
Avarage training hours per employee by gender and category [S1-13_83b;84]
Year Category
Total
Avarage Hours
Women
Avarage hours
Men
Avarage hours
2025 Staff 8.5 8.4 8.5
Workers 1.7 2.2 1.6
2024 Staff 14.2 14.4 14.1
Workers 3.5 4.3 3.4
S1-10
Adequate wages
SKF pays adequate wages to all employees in its own
workforce 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.
SKF conducts a central audit annually.
S1-13
Training and skills development metrics
[S1-13_82; 83b]
In an era of consistent change, SKF has embraced a cul-
ture of continuous learning to maintain a competitive edge.
Recognizing the risks associated with skills gaps, talent
attrition and a weakened employer brand, SKF has
prioritized initiatives that create the right environment and
foster self-driven learning and development. This commit-
ment is critical in positioning SKF as a forward-thinking
employer which offers personal and professional growth.
SKF emphasizes the importance of employee-driven
learning to maintain up-to-date competencies. In 2025,
staff recorded an average of 8.5 formal learning hours and
workers 1.7 hours in the learning management system.
These figures exclude informal learning gained through
daily interactions, collaboration, and external training.
SKF emphasizes the significance of informal learning,
which is gained through daily interactions, knowledge
sharing, and collaboration.
Accounting principles S1-13 [AR77 a-b, MDR-M]
SKF reports recordable hours of formal learning captured
in its global Learning Management System (LMS). The cal-
culation set out by ESRS have been used: total number of
training hours offered to and completed by employees per
gender category divided by the total number of employees
per gender category. The headcount figures are based
on S1-6 data. The metric includes all individuals in an
employment relationship with SKF, full-time or part-time,
permanent or temporary, in line with ESRS definitions of
the own workforce and excludes consultants and agency
workers. Informal and social learning, as well as externally
completed formal training, are not captured in the
recordable hours of formal learning. “Staff refers to
white-collar employees, and “workers” to blue-collar
employees.
Performance reviews are conducted once per year
at SKF and aligns with the definition set out by ESRS.
S1-14
Health and safety metrics
SKF gives top priority to health and safety by working sys-
tematically to prevent accidents and reducing health risks.
This commitment is a cornerstone of building a sustain-
able company. Proactive work is central to EHS manage-
ment, with a strong focus on prevention and continuous
improvement to avoid future incidents. See S1-4 for on -
going actions in this area.
Health and safety management system
[S1-14_88a;AR]
At SKF, approximately 79% of all workers including agency
workers (around 33,000 people) are covered by a certified
health and safety management system. The system pri-
marily includes manufacturing sites, workshops, logistics
and technical centres. Among SKF employees, 78%
(around 29,000 people) are covered. In addition, 84% of
the contingent workforce under SKF’s management control
(around 3,800 people) are also covered by the certified
health and safety management system. No specific types
of employees or contingent are excluded.
Proactive incident reporting [S1-14_88b-c:88e]
During the reporting year, SKF recorded a total of 137
work related injuries and cases of work related ill-health,
representing a reduction from 207 cases in the previous
year. Over the same period, proactive incident reporting
continued to increase, demonstrating strengthened risk
identification and prevention efforts across the organi-
zation. No work related fatalities occurred during the
reporting year. The accident rate improved to 2.01 in 2025,
compared with 2.97 in 2024
1),
reflecting a positive develop-
ment in SKF’s overall health and safety performance.
100
150
200
250
300
20232022 2021 2024 2025
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
2
135
1,494
2,002
81,841
1) In the Annual report 2024 the accident rate was 0.59 since the calculation was based on OSHAS recommendation of using
200, 000 worked hours, this year the calculation is following ESRS guideline, where 1,000,000 hours are used instead.
SKF confirms that during the reporting period, no fatali-
ties occurred among other workers (such as value chain
workers) operating on SKF premises due to work-related
injuries or ill-health.
Accounting principles S1-14 [MDR-M]
All health and safety incidents at SKF are addressed and
managed locally where the incident occurred or was iden-
tified, with support from other parts of the organization if
needed.
Work-related recordable accidents are reported within
three working days. SKF encourages all other types of
incidents to be reported as close to the time of occurrence
as possible to support timely response and continuous
improvement, but allows reporting on a monthly basis.
Fatalities are included in the category of serious record-
able accidents, which are defined as work-related injuries
and ill-health that lead to fatality, loss of a body part, or
irreversible damage or illness.
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S1 Own workforce, cont.
S
S1-17
Incidents, complaints and severe human rights impacts [S1-17_103a-c;104a-b]
Incident type Number
Complaints through the SKF Ethics & Compliance Reporting Line 368
Incidents of discrimination including harassment reported 36
Complaints reported through channels other than the SKF reporting line 0
Amount of fines, penalties and compensation for damages provided for complaints
or incidents of discrimination
0
Severe human rights incidents 0
Amount of fines, penalties and compensation for damages provided for severe
human rights incidents
0
Recordable accidents encompass all work-related
injuries and ill-health that result in loss of consciousness,
more than one day away from work, restricted work activity
or job transfer, or require medical treatment beyond first
aid. First aid incidents refer to any one-time treatment
and subsequent observation of minor injuries, such as
scratches, cuts, burns, and splinters, which do not
ordinarily require medical care. Near miss incidents are
defined as occurrences where no injury, ill-health, or
fatality takes place. The accident rate is calculated in
alignment with ESRS: Accident rate, including number
of serious recordable accidents and recordable accidents
are multiplied with 1,000,000 worked hours and divided
by actual worked hours. This indicates the number of work-
related injuries per 500 full time people in the workforce
over a 1-year timeframe.
Until and including 2025, the definitions used by SKF
for reporting injuries and ill-health have not been fully
aligned with ESRS definitions. Specifically, the separation
between accidents and ill-health cases has not been
consistently applied, and in some instances, cases of
ill-health may have been reported under the category of
accidents in the EHS reporting system. An unsafe condi-
tion is one that may cause injury, ill-health or fatality,
while unsafe behaviour refers to the performance of
a task or activity in a manner that may lead to similar
consequences.
Work-related injuries and work-related ill-health arise
from exposure to hazards at work; however, other types
of incidents can occur that are not connected with work
itself. For its first year of reporting under ESRS, SKF has
applied the phase-in option for disclosures related to ill-
health. SKF is currently not able to report the total/com-
bined number of days lost due to work-related injuries and
work-related ill-health. SKF has previously reported lost
days due to injuries and fatalities as separate metrics and
is now currently reviewing how lost days for work-related
ill-health, in accordance with ESRS definition of ill-health,
can be collected on a global scale to ensure inclusion of
this metric for next year.
All health and safety performance data and incidents at
SKF are collected in SKF’s incident management applica-
tion while the data related to headcount has been col-
lected from the SKF financial reporting system for sites
and units included in the Group’s ISO 45001:2018 certifi-
cation.Newly acquired sites and companies are given a
time period before being included in the scope. All certi-
fied sites are subject to internal Group EHS audits every
one to three years.
A number of SKF employees are qualified as Group
internal auditors, and these individuals audit sites to
ensure compliance with the standards, the Group Environ-
mental, Energy, Health and Safety policy, and related
Group instructions and requirements. In addition to inter-
nal audits, SKF engages a third-party certification body
to audit compliance with this standard at both the Group
and site levels.
S1-16
Remuneration metrics [S1-16_97a-c]
Gender pay gap and CEO to median employee pay ratio
[S1-16_95;97a-b]
2025 2024
Gender pay gap 19% 19%
CEO to median
employee pay ratio
69:1 75:1
The global unadjusted gender pay gap is a metric that
compares the average pay by gender across all roles
collectively in SKF, regardless of level or job type. One of
the main individual factors explaining SKF’s gender pay
gap is an under-representation of women in senior and
higher-paid roles, and an over-representation of women
in junior and lower-paid positions. Eliminating the un -
adjusted gender pay gap is an important area of work for
SKF. Mitigating actions are described under S1-4 (building
and inclusive workplace and remuneration metrics) and
includes e.g. tracking gender KPI’s in PX scorecards and
educating managers and PX professionals on the topic
of gender pay gap.
Accounting principles S1-17 [S1-17_103d, MDR-M]
The scope of calculations includes all employees in SKF’s
own workforce, and the company relies on raw data with-
out any estimates. The reporting period for this data spans
from January 1 to December 31. All financial figures are
converted to SEK.
SKF established an Ethics & Compliance Reporting
Line which aligns with the ESRS standard definition for
grievance mechanisms. In 2021, SKF implemented a pro-
cess to ensure that concerns regarding harassment and
discrimination reported locally, whether via email or in per-
son to the People Experience team, are also documented
and reported centrally.
It’s important to distinguish between the so-called
unadjusted gender pay gap and the principle of equal pay.
While the unadjusted gender pay gap is a metric that com-
pares the average pay by gender across all roles collec-
tively worldwide regardless of level or job type, pay equity
refers to when employers offer equal pay for work of equal
value. SKF is committed to ensuring that employees are
paid equally for the same work or work of equal value.
This commitment is embedded in the Group Total Reward
Directive (see S1-1) and reinforced through annual pay
equity analyses with corrective actions where needed.
Accounting principles S1-16 [MDR-M]
Unadjusted gender pay gap
The unadjusted gender pay gap calculation is based on
all employees’ total remuneration per contracted hour
paid out during 2025, see scope of employees in S1-6.
The calculation is aligned with the methodology defined
in ESRS. The broad definition of pay applied reflects the
ESRS requirements, and includes all types of remunera-
tion including fixed and variable pay and benefits (in cash
or in kind) with a monetary value. SKF collects remunera-
tion data from local payroll systems, which is consolidated
at the group level with currency conversions applied
using relevant exchange rates. All figures are converted
to Swedish Krona (SEK) to ensure comparability across
markets. Employees’ from acquisitions finalized in the
fourth quarter of 2025 are excluded from the dataset.
Annual total remuneration ratio
The CEO to median employee pay ratio is determined
using the same data set employed for calculating the
unadjusted gender pay gap. It’s subject to exchange rate
fluctuations, which may affect year-on-year comparisons.
SKF ANNUAL REPORT 2025 80
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STATEMENTS
SOCIAL
SKF has an extensive global value chain, with
workers engaged across diverse industries and
regions. Recognizing the importance of these rela-
tionships, SKF actively collaborates with suppliers
and customers to promote responsible business
conduct throughout the value chain. This includes
improving working conditions, fostering ethical
practices, and ensuring respect for human rights
both upstream and downstream. SKF’s commit-
ment is supported by a policy suite that sets clear
expectations for suppliers, distributors, and other
partners. To uphold these standards, SKF applies
risk-based monitoring through its Responsible
Sourcing Program and engages with downstream
partners to encourage transparency and sustain-
ability in product use and distribution.
Description of IRO Type of IRO Value chain Time horizon
S2 – Working conditions & Equal treatment and opportunities for all
26 Improving working conditions together with suppliers
The SKF Code of Conduct for suppliers and sub-contractors mandates fair work
conditions and health and safety standards. Through responsible sourcing,
theGroup is actively collaborating with suppliers to improve working conditions
in risk regions, resulting in an actual positive impact for workers in the
value chain.
Actual
Positive
Impact
Long-term
27 Work-related injuries and ill-health of workers in the value chain
SKF acknowledges that work-related injuries and health issues can occur
within both the upstream and downstream segments of its value chain, despite
ongoing efforts to mitigate these risks. Workers throughout the value chain may
be exposed to conditions that could lead to injuries or fatalities. As a globally
operating company, SKF sources materials and sells products in various coun-
tries, where there is an inherent risk of potential negative impact on value chain
workers being situated in regions with less stringent labour protections.
Potential
Negative
Impact
Short-term
28 Potential sub-standard working conditions for workers in the value chain
SKF’s upstream and downstream value chain for both direct and indirect
materials is widespread both geographically and across sectors, where some
regions and sectors may have potential risks related to working conditions
(lack of collective bargaining and freedom of association) and unequal
treatment (possible harassment and discrimination) of employees.
Potential
Negative
Impact
Short-term
S2 – Other work-related rights
29 Possible human rights violations in upstream & downstream value chain
SKF’s global and extensive upstream and downstream value chain presents
an inherent risk of negative impact related to human rights, including forced
labour and child labour. These risks pose significant concerns, as certain
regions and sectors may be more susceptible to rights violations. The exist-
ence of such risks underscores the potential for serious negative impacts on
workers in the value chain, particularly in regions where labour protections
are insufficient.
Potential
Negative
Impact
Mid-term
Upstream
Own operations
Downstream
S2 Workers in the value chain
S
of stakeholders (see ESRS 2 SBM-2) underlines the stake-
holder input from regional purchasing teams, responsible
sourcing auditors, Group Sustainability, Group Compliance,
and external industry initiatives (such as the Responsible
Minerals Initiative and NIR) to contributing to identifying
these IROs.
Scope in relation to workers in the value chain
[S2 SBM-3_11a i-v; 11b; 11d-e; 12; 13]
SKF’s disclosures under ESRS 2 include value chain
workers who are likely to be materially impacted through
the company’s upstream and/or downstream operations.
The scope covers workers employed by entities in SKF’s
upstream value chain, such as those involved in the
extraction, processing, and manufacturing of raw materials
and components. This includes tier 1 suppliers and
beyond. Additionally, the scope includes workers on SKF
sites but not part of the company’s own workforce, such
as those employed by third-party service providers for
cleaning, catering, security, and inspection activities. In
the downstream value chain, SKF engages with logistics
providers, distributors, and agents.
Vulnerable Groups [S2 SBM-3_11a-v]
SKF recognizes that certain groups of value chain workers
may be more likely to experience negative impacts due
to their characteristics or context. SKF has conducted
a structured assessment to understand where vulnerable
workers may be present in its upstream value chain. The
assessment applies a negative impact-based lens, focus-
ing on potential existence due to characteristics in the
geographic regions and industrial sectors relevant to SKF.
Migrant Workers
Migrant workers are considered vulnerable due to limited
access to legal protection and susceptibility to poor
recruitment practices. There is heightened potential for
migrant worker presence within Southeast Asia and the
Middle East, within sectors such as metals and bearing
related industries.
STRATEGY
S2 – ESRS 2 SBM 3
Material impacts, risks and opportunities and their
interaction with strategy and business model
[ESRS 2, SBM-3_43]
The material IROs related to value chain workers were
identified through SKF’s double materiality assessment
(DMA), in line with the requirements in ESRS 2 IRO-1.
Some IROs were assessed as material because of the
severity of the impact taking precedence over its likeli-
hood, particularly in relation to child labour, forced labour,
discrimination, and limitations on freedom of association
(see table SBM-3).
Strategic integration of IROs related to workers in the
value chain [ESRS 2, SBM-2_43, ESRS 2 SBM-3_48b, S2
SBM-3_10a;11d]
SKF’s value chain includes tens of thousands of suppliers,
distributors and agents across the globe, spanning multiple
industries, geographies and risk profiles. These partner-
ships are essential for delivering products and services
while also for supporting local economies and creating
job opportunities. SKF’s global reach brings opportunities
but also a clear responsibility: to respect human rights
and promote fair, safe and inclusive working conditions
in all parts of the value chain. This responsibility is deeply
embedded in SKFs business model and strategy and
how SKF approaches sustainability and risk.
Operational context and Interests and views
of stakeholders [S2 SBM-2, S2 SBM-3_10]
All identified IROs apply across SKF’s upstream and/or
downstream value chain and are managed through a
combination of policies (S2-1), supplier screening, audits,
training (S2-4), grievance mechanisms, and escalation
procedure (S2-3). These measures are primarily imple-
mented through the Responsible Sourcing programme
and governed by the SKF Code of Conduct (S2-1).
SKF’s disclosures under ESRS 2 for interest and views
SKF ANNUAL REPORT 2025 81
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Workers in lower-wage, manual or labour-intensive roles
Low skilled workers are considered vulnerable due to low
bargaining power; low wage competitiveness and higher
likelihood of physical labour linked to unsafe working
conditions. Various locations and sectors are linked to
the use of low-skilled labour.
Temporary and seasonal workers
Temporary and seasonal workers are considered vulner-
able due to limited access to legal mechanisms, lower
bargaining power and excessive overtime. Locations
within Eastern Europe and South America, within sectors
such as packaging and manufacturing have a potential
reliance on temporary and seasonal workers.
Female workers
Female workers are considered vulnerable due to eco-
nomic and structural factors such as occupational
segregation. Female workers are commonly utilized in
manufacturing and packaging industries, within South-
East Asia and Central America.
Children and young workers
Children and younger workers are considered vulnerable
due to the imbalance of power and inherent susceptibility
to negative risk factors. Regions such as South and Central
America and South-East Asia within manufacturing and
metal processing, are considered heightened likelihood.
SKF monitors for cases of child labour and confirms none
have been identified within SKF supply chain.
Dependencies and vulnerability in the upstream
value chain
In parallel with evaluating the potential presence of
vulnerable workers, SKF also assessed the mutual
dependencies between the company and its suppliers.
Through this assessment SKF identified that SKF has
a high concentration of spend with a relatively small
group of suppliers, some of which provide components
of strategic importance with limited substitutes available.
SKF also identified that in some instances suppliers are
highly reliant on SKF as a customer, indicating a reverse
dependency.
S2 Workers in the value chain, cont.
S
S2-2
Process engaging with value chain workers about
impacts [S2-2_20; 22a-c; 22e, S2-2_23, AR 18; AR20]
SKF collaborates with a broad range of stakeholder groups,
including workers throughout the value chain, to prevent
and mitigate actual and potential adverse impacts.
This engagement also fosters transparency, strengthens
SKFs due diligence practices, and supports continuous
improvement across sourcing, operations, and product
stewardship.
Direct Worker Engagement [S2-2_22a-b]
Worker interviews are conducted as part of on-site audits,
providing an opportunity to capture workers’ perspectives
on human rights, labour conditions, health and safety, and
access to grievance channels. These interviews are guided
by a standardized audit checklist that includes targeted
questions on working conditions and awareness of rights.
In addition to interviews, SKF maintains an open and
confidential grievance mechanism, the SKF Ethics and
Compliance Reporting Line (see S2-3). Engagement fre-
quency is determined by audit schedules and the nature
of reported concerns. While audits are conducted based
on risk prioritization, the reporting line remains continu-
ously accessible, ensuring that workers can engage with
SKF as needed.
Indirect worker engagement with third parties
[S2-2_22a-b; 22d; 23]
SKF engages indirectly with value chain workers through
participation in multi-stakeholder platforms and third-
party initiatives that serve as credible proxies for worker
perspectives. These include globally recognized networks
such as the UN Global Compact, the Responsible Steel
Initiative (RSI), and the Responsible Minerals Initiative (RMI).
Through these initiatives, SKF remains informed about
emerging risks and trends related to human rights, labour
conditions, and responsible sourcing across high-risk
sectors and geographies. These platforms help SKF under-
stand the broader context in which these workers operate
and inform the company’s approach to risk management.
IMPACTS, RISKS, AND OPPORTUNITIES
MANAGEMENT
S2-1
Policies related to value chain workers
[S2-1_16; 17a-c; 18-19, MDR-P_65a]
The SKF Codes of Conduct are applicable for all SKF
suppliers, subcontractors, distributors, agents, and inter-
mediaries worldwide. These policies explicitly prohibits
human trafficking, forced labour, and child labour and
they are non-negotiable. Requirements are trickled down
through the policies set out in S2-1 table on the next page
and in SKFs purchasing contracts which all applies to rele-
vant industry norms, international standards and guide-
lines, including the International Bill of Human Rights,
ILO Core Conventions and the UN Guiding Principles on
Business and Human Rights.
SKF communicates its 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 train-
ing on the Code of Conduct and as a ongoing part of the
supplier development process. Suppliers agree to adhere
to CoC4S principles by signing the General Terms and
Con dition, as evidence of acceptance and commitment.
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 policies set out in
table S2-1 on the next page. Purchasing practices are con-
tinuously reviewed to ensure alignment with the SKF Code
of Conduct for suppliers, sub-contractors, distributors,
agencies and other intermediaries and to avoid potential
conflicts with any of the SKF policies addressing value
chain workers.
As of the reporting period, SKF has not detected any
cases of non-respect of these international standards in
its upstream or downstream value chain. In addition to
the policies in S2-1, SKF’s suppliers and contractor’s are
required to comply with the principles set out by the SKF
Group Environmental, Energy, Health and Safety Policy
(see S1-1).
The target stakeholder group for both forms of engage-
ment includes all workers in the value chain, with particu-
lar attention to those in high-risk sectors and geographies,
as well as vulnerable groups such as women, migrant
workers, and young workers. These groups are considered
in the design of audit protocols and engagement strate-
gies, although SKF doesn’t currently track engagement
outcomes by demographic category.
Oversight of direct and indirect engagement is provided
by the Responsible Sourcing Committee, Group Compli-
ance, and Regional Purchasing Offices, ensuring that feed-
back is escalated appropriately and informs decision-
making. Effectiveness of SKF’s engagement is assessed
through the quality of feedback received through engage-
ment forums. Insights from direct engagement have led to
updates in the supplier audit checklist. Insights from our
engagement have led to program updates such as the
updated audit checklist.
S2-3
Process to remediate negative impacts and channels
for value chain workers to raise concerns
Process of implementing remedial actions
[S2-3_25; 27a, S2-4_33c, AR 21, S2 SBM-3_11c]
SKF addresses potential and actual negative impacts
on value chain workers through its Responsible Sourcing
Programme, which includes structured risk assessments,
supplier audits, and escalation procedures. Where material
negative impacts are identified, SKF distinguishes between
systemic risks such as forced labour in specific commodity
supply chains, and individual incidents, such as non-
compliance findings during audits. Remedial actions are
initiated when non-compliance is identified through audits
or reported via grievance mechanisms. All deviations,
regardless of audit score, require suppliers to submit
a Corrective Action Report (CAR), outlining root causes,
corrective steps, and timelines. Follow-up audits and
verifications are conducted to ensure that remediation
has been implemented effectively. In cases of severe or
repeated non-compliance, contracts may be reviewed for
suspension or termination.
SKF ANNUAL REPORT 2025 82
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S2 Workers in the value chain, cont.
S
Policies and directives related to value chain workers
Name Background / objective Key content Scope / key stakeholders Accountability IRO number
SKF Code of Conduct for Suppliers
and Sub-Contractors (CoC4S)
Aims to ensure that all suppliers
and sub-contractors uphold
fair working conditions, prevent
work-related injuries and ill-
health, and respect human
rights throughout SKF’s
upstream value chain.
Requires adherence to international human rights
and labour standards (e.g., ILO Core Conventions,
UN Guiding Principles), prohibits child and forced
labour, discrimination, and harsh treatment;
mandates fair wages, working hours, freedom
of association, safe workplaces, grievance
mechanisms, and compliance with all applicable
laws. Also covers environmental responsibility,
anti- corruption, and continuous improvement.
Scope and stakeholders targeted
Applies to all suppliers and sub-contractors globally,
including their own supply chains.
Stakeholders involved in the development of policy
Group Sustainability, Group Legal & Compliance
Accountability for implementation lies within SKF
Business Operations, supported by SKF Group Legal
& Compliance responsible for policy ownership,
governance and oversight.
26, 27, 29
SKF Code of Conduct for Distributors Aims to ensure that distributors
maintain high ethical standards,
prevent sub-standard working
conditions, and respect human
rights in SKF’s downstream
value chain.
Prohibits child and forced labour, discrimination,
and corruption; requires fair treatment, freedom
of association, safe and healthy workplaces, fair
wages, and compliance with all applicable laws.
Emphasizes environmental care and regular
monitoring of adherence.
Scope and stakeholders targeted
Applies to all distributors handling
SKF products and services worldwide.
Stakeholders involved in the development of policy
Group Sustainability, Group Legal & Compliance.
Accountability for implementation lies within SKF
Business Operations, supported by SKF Group Legal
& Compliance responsible for policy ownership,
governance and oversight.
27, 28, 29
SKF Code of Conduct for Agents
and Other Intermediaries
Aims to prevent unethical
practices and human rights
risks among agents and inter-
mediaries acting on behalf of
SKF, ensuring integrity and
fair treatment for all workers
involved.
Demands honesty, integrity, and compliance
with all laws; prohibits child and forced labour,
discrimination, and corruption; requires fair
wages, working hours, freedom of association,
safe workplaces, and environmental responsi-
bility. Mandates transparent ownership and
regular monitoring of adherence.
Scope and stakeholders targeted
Applies to all agents and intermediaries involved
in SKF’s commercial operations globally.
Stakeholders involved in the development of policy
Group Legal & Compliance.
Accountability for implementation lies within SKF
Business Operations, supported by SKF Group Legal
& Compliance responsible for policy ownership,
governance and oversight.
28, 29
Where needed, external partners may support capacity
building and effective remedy, particularly in high-risk
regions. These practices reflect SKF’s broader commit-
ments to human rights and responsible business conduct,
outlined in the SKF Group Code of Conduct.
Whistleblower policy and channels for raising concerns
[S2-3_27b-d; 28, AR22; AR26; AR 28]
SKF recognizes the importance of having effective griev-
ance mechanisms in place for all workers in the value chain.
This is reinforced by SKF Group Speak Up & Whistle blowing
policy, which is aligned with the EU Whistleblower Protec-
tion Directive. The policy guarantees reporter anonymity,
prohibits retaliation, and safeguards personal data (see
G1-1 for detailed information).
SKF provides access to its Ethics and Compliance
Reporting Line for all external stakeholders to raise
concerns directly to SKF. The line can be accessed con-
fidentially via phone, email, mail or an online portal and
reporters may choose to remain anonymous. Information
about the reporting line is distributed during supplier
audits, through the Code of Conduct audit checklist, via
onboarding for distributors, agents and intermediaries.
This ensures that workers across the value chain have
access to channels for raising concerns and seeking
remedy for human rights impacts. Additional information
on how the reporting line is governed and managed is
provided in section G1-1. Value chain workers may also
have access to grievance mechanisms provided by their
direct employer, or through local third-party systems.
SKF supports the use of these mechanisms and encour-
ages suppliers to ensure accessibility and protection for
those who speak up.
In 2025, SKF improved channel awareness and access
among suppliers and their workers by sharing dedicated
materials during Code of Conduct audits, which were also
made available for download from the SKF Responsible
Sourcing web page (see action S2-4).
Procedures and policies for protection against
retaliation [S2-3_28; 27d; AR26]
All individuals affected by SKF’s business activities,
including suppliers, their employees, agents, inter-
mediaries, distributors, and contractors, are encouraged
and expected to report actual or suspected violations.
When concerns involve value chain workers, SKF collabo-
rates with relevant business partners to investigate and
implement appropriate remedial actions. This may include
corrective action plans, follow-up audits, or, in severe
cases, escalation to the Responsible Sourcing Committee.
Effectiveness of the channels [S2-3_27d; AR27]
Awareness-raising and access efforts are ongoing, and
SKF is exploring ways to monitor trust, usage and out-
comes more systematically. SKF’s grievance processes
are guided by the UN Guiding Principles on Business and
Human Rights and prioritize respectful dialogue and fair
resolution.
SKF ANNUAL REPORT 2025 83
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S2 Workers in the value chain, cont.
S
Sourcing programme. Screening is the entry point – and
the first opportunity to identify sustainability risks in the
supply chain.
Once suppliers enter the programme, they are assessed
and monitored through a combination of risk classifica-
tion, audits, and continuous engagement. SKF maintains
a high-risk region list covering 40 countries in Asia, 18 in
the Americas, 45 in Africa, 1 in Oceania, and 5 in Europe.
This list is continuously updated and approved by the
Responsible Sourcing Committee. SKF also applies a
flexible escalation model: if red flags are identified during
other supplier activities such as quality reviews or buyer
visits, the supplier may be escalated for a full Code of Con-
duct audit, even if not originally flagged by the risk model.
In addition to case-by-case escalation, SKF conducts
systemic reviews of the responsible sourcing process to
identify systemic risks or recurring patterns.
The responsible sourcing programme is governed by the
Responsible Sourcing Committee, managed by Supplier
Sustainability as part of Group Sustainability, and imple-
mented in close collaboration with regional purchasing
teams and SKF auditors operating in five key countries.
The Responsible Sourcing Committee evaluates whether
the actions taken for affected workers are sufficient or
whether further steps, such as contract suspension or
termination, are warranted.
In cases where business pressures conflict with impact
mitigation, SKF’s governance structure ensures that
human rights considerations take precedence, with
e scalation to the Responsible Sourcing Committee when
needed. This governance structure allows SKF to ensure
that all actions, whether corrective, preventive, or strate-
gic, are appropriate to the context and contribute
meaningfully to the protection and empowerment of
value chain workers.
SKF also pursues material opportunities for the up -
stream value chain, by embedding responsible labour
practices into procurement onboarding processes, and
capacity-building to support suppliers in improving
their understanding of labour rights, health and safety,
and environmental standards.
S2-4
Taking action on material impacts on value chain
workers, and approaches to managing material risks
and pursuing material opportunities
Process to identify the appropriateness of the actions
[S2-4_31; 32a-b; 32d; 33a-b; 34a-b, AR 29, S2-4_38]
As of the reporting period, SKF doesn’t yet have dedicated
programmes in place to fully address due diligence
requirements related to downstream value chain workers.
Recognizing the importance of responsible business con-
duct across the entire value chain, SKF acknowledges this
gap and is actively exploring ways to enhance its due dili-
gence practices. This includes evaluating the expansion
of the Code of Conduct audit scope and strengthening
engagement with distributors and agents to assess and
mitigate potential human and labour rights risks in down-
stream operations. SKF’s actions focus on upstream
suppliers due to our established leverage and ongoing
relationships with these suppliers. The actions below
do not relate to any downstream value chain partners.
SKF identifies and prioritizes actions to manage
impacts, risks, and opportunities related to impacts
and dependencies on value chain workers through
a structured process embedded in its Responsible
Sourcing Programme.
This process begins with supplier screening and
continues through audits, engagement activities, and
governance escalation mechanisms. The appropri ateness
of actions is assessed through a tiered escalation frame-
work. In procurement, the responsible sourcing process
directly informs internal sourcing decisions including
purchasing, in addition supplier engagement strategies.
All potential suppliers are initially screened against a
set of minimum sustainability and compliance criteria
aligned with the SKF Code of Conduct for suppliers (see
S2-1) where expectations related to product and service
category are included. Suppliers must provide docu-
mentation demonstrating that they meet the minimum
standards which are reviewed by SKF’s internal auditors.
Only suppliers that meet the required baseline qualify to
be onboarded and managed under SKF’s Responsible
Supplier Risk assessments and audits
[S2-4_31; 32d, MDR-A_68a-e, AR 22; AR33-35]
SKF applies a risk-based approach to supplier assess-
ments, with increased audit focus on countries classified
as high-risk according to internationally recognised instru-
ments and SKF’s internal risk. Suppliers in these regions
are regularly audited against the SKF Code of Conduct for
suppliers and sub-contractors, which includes standards
on health and safety, labour rights, ethics and environmen-
tal practices. These audits directly support the manage-
ment of material IROs such as working conditions and
work-related injuries and ill-health. Suppliers may also be
selected for Code of Conduct audits if potential issues are
flagged during quality reviews or site visits by SKF staff.
The 2025 refinements were developed through dedi-
cated working sessions involving Group Sustainability,
Group Compliance, and regional purchasing teams. These
sessions focused on integrating indicators for vulnerable
worker groups, including women, migrant workers, and per-
sons with disabilities, ensuring that the checklist reflects
evolving stakeholder expectations and regulatory require-
ments. The enhanced checklist was rolled out in the sec-
ond half of 2025 and is now used across all Code of Con-
duct audits. It supports SKF’s ability to identify, assess,
and respond to material impacts on value chain workers,
while also enabling comparability and consistency in audit
outcomes.
Audits are conducted on-site, sometimes unannounced,
by SKF’s internal responsible sourcing auditors or external
third parties. Suppliers must provide full access to docu-
mentation and allow confidential worker interviews. Each
audit results in a score, ranging from “Fully approved”
to “Not approved.” All deviations, regardless of score,
require submission of a CAR (see S2-3). Re-audits and
site follow-ups are used to verify that remediation has
been implemented. If critical issues are not resolved,
SKF may terminate the supplier relationship.
During the year, SKF continued to implement targeted
actions to improve supplier audit performance, supported
by enhanced collaboration between sourcing teams and
suppliers on Code of Conduct expectations. As part of
these efforts, 40 suppliers improved their scores following
corrective actions verified through follow-up assessments.
Audit volumes remained stable across the period, indicat-
ing improvement rather than audit dilution. The effective-
ness of this action is tracked through audit score trends,
corrective action closure rates, and follow-up audit out-
comes. Indicators are reviewed quarterly to inform future
audit focus and sourcing decisions. While no specific
numeric target is formally linked to this action, the overall
ambition is to increase the share of suppliers rated “Fully
approved” or “Business approved” over time. This is a
continuous programme with audit and re-audit cycles
scheduled at intervals of 6 months, 12 months, or 3 to 5
years, depending on supplier risk, performance, and
the severity of identified deviations. The programme is
delivered through Group Sustainability, Group Compliance,
and regional purchasing teams. Costs are covered within
SKF’s sustainability and sourcing budgets. Where needed,
external auditors are contracted to supplement internal
capacity.
0
15
30
60
45
Number of audits
The
Americas
India and
Southeast Asia
China and
Northeast Asia
Europe, Middle
East and Africa
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Training and communication
[S2-4_31, MDR-A_68a-e, AR22]
To support the process of identifying actions and manage
material IROs for value chain workers (see S2-4 Managing
Risks, Pursuing Opportunities, and Preventing Negative
Impacts) ongoing actions for training have been performed
as key actions for 2025. SKF auditors provide ongoing
training and support to regional purchasing teams, helping
them align sourcing decisions with programme expecta-
tions. Purchasing teams are responsible for engaging with
suppliers, monitoring improvement plans and contributing
to the suppliers’ remediation. This action contributes to
several material IROs, including working conditions, sub-
standard conditions and occupational health risks, dis-
crimination and harassment, equal treatment and opportu-
nities, and forced and child labour.
In 2025, SKF conducted supplier training sessions
reaching approximately 218 suppliers across China, India,
and the Americas. These sessions focused on the SKF
Code of Conduct for suppliers and sub-contractors, the
audit process, and SKF’s expectations around labour
rights, health and safety, and environmental performance.
Common topics included machine safety, chemical
handling, employment practices, and working hours.
Training materials also addressed grievance mechanisms,
Diversity, Equity & Inclusion, and SKF’s supplier escalation
and remediation process. In parallel, SKF regularly trains
its internal stakeholders, particularly sourcing teams and
responsible sourcing auditors: 85 regional buyers in China
received training on responsible purchasing practices, one
new auditor was trained in India to support audit capacity
in India and Southeast Asia, and three persons in the
Americas were trained to support the auditing team.
These trainings are designed to strengthen awareness
of human rights and labour risks, and to build capacity
for supporting supplier improvement and enforcing the
Code of Conduct.
Since 2020, 807 suppliers have participated in class-
room-based training. Over the years, these efforts have
supported a long-term improvement in supplier perfor-
mance, reflected in a gradual increase in the number
S2 Workers in the value chain, cont.
S
checks, SKF engages with the supplier to verify the origin
and, if necessary, initiates a transition plan to compliant
sourcing. Where no viable remediation pathway exists, SKF
may proceed with disengagement, including termination of
the business relationship as part of escalation measures.
These steps are part of SKF’s supply chain due diligence
process, which also includes annual screening and con-
tinuous improvement through dialogue and monitoring.
SKF is an active member of the Responsible Minerals
Initiative (RMI), which provides tools, audit protocols
and smelter-level traceability data. RMI participation
strengthens SKF’s ability to assess upstream risks, inform
sourcing decisions, and align with international expecta-
tions (see S2-2 for details on third-party stakeholder
engagement).
Effectiveness is monitored through supplier disclosures
and traceability declarations, by follow up actions on
flagged sources, verification of smelters and refiners’
compliance through RMI tools and assessments. Progress
is reviewed annually through supplier screening and the
ongoing development of SKF’s responsible sourcing proto-
cols. See S2-1 for more information on policy oversight and
governance of supplier ethics, business ethics and com-
pliance. SKF aims to minimize reliance on non-compliant
sources and continually improve upstream visibility.
SKF’s actions related to managing impacts on value
chain workers are supported through SKFs existing sustain-
ability and procurement budgets. These resources cover
activities such as supplier audits and training. Costs are
embedded within broader sustainability and sourcing
allocations rather than tracked as a standalone prgramme.
Future funding for these actions will continue to be
allocated through the same internal budgeting process,
primarily within sustainability and procurement cost
centres. SKF anticipates maintaining resources at a
level consistent with current commitments, with flexibility
to adjust based on regulatory developments and risk
assessments. No separate dedicated budget is planned
at this stage.
of suppliers receiving “Business approved” or “Fully
approved” score. This indicates a positive correlation
between training participation and audit outcomes.
Effectiveness is tracked using both qualitative and
quantitative methods. Supplier participants are asked
to submit their three most important takeaways after
each session, which helps tailor content to local needs.
Audit score trends, the number of corrective actions, and
improvements over time are reviewed by Group Sustaina-
bility and Responsible Sourcing Committee and regional
teams. Internally, training engagement is monitored
through attendance tracking and feedback sessions.
Training sessions are planned on an annual rolling basis
and are adapted based on audit results and regional risks.
Trainings are held using a mix of in-house experts and
external facilitators. Costs are embedded in SKF’s
sustainability and sourcing budgets.
Responsible sourcing of raw materials from conflict
affected and high-risk areas [S2-4_31; 32a-b; 32d;
34a-b; 35, MDR-A_68a-e;, AR22]
SKF is committed to promote ethical practices in the
supply chain regarding minerals sourced from conflict-
affected and high-risk areas (CAHRAs), such as the
Eastern Democratic Republic of the Congo (DRC) and
neighbouring countries, to ensure that SKF sourcing
practices do not contribute to human rights abuses,
armed conflicts or environmental degradation.
SKF requires suppliers who provide products which
contain tin, tantalum, tungsten, gold, and the derivatives
of cassiterite, columbite-tantalite, and wolframite
(“ Conflict Minerals”), and whose materials are used in
SKF products sold to the market, to adopt a policy for
responsible sourcing of these materials. These require-
ments are based on the OECD Due Diligence Guidance
for Responsible Supply Chains of Minerals and form a
key component of SKF’s broader Responsible Sourcing
programme.
SKF takes a structured approach to mitigating these
risks. When minerals from non-conflict-free sources are
identified through supplier declarations or traceability
Incidents, complaints and severe human rights impacts
[S2-4_36]
During the reporting period, 11 complaints were reported
via the ethics and compliance reporting line related to the
upstream or downstream value chain. Out of these, none of
them where severe human rights incidents. No other cases
were reported through any other channels.
METRICS AND TARGETS
S2-5
Description of targets related to workers in the value
chain [S2-5_41, MDR-T_81a]
While no numeric targets are in place for the identified
IRO’s, SKF maintains a clear ambition to strengthen trans-
parency and accountability across its value chain by intro-
ducing new actions and tracking their effectiveness.
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Governance
G1 Business Conduct
Ethical business conduct is a cornerstone of
SKF’s culture, and it’s centered around doing
the right thing, together. SKF takes responsibility
towards employees, shareholders, customers,
suppliers, society at large and the local com-
munities in which SKF operates. Business
conduct is guided by the Code of Conduct, which
serves as the foundation for ethical, responsible,
and sustainable operations across its global
organization. Core values are Collaboration,
Curiosity, Courage, and Care to foster integrity,
trust, and innovation throughout the company.
G
Description of IRO Type of IRO Value chain Time horizon
G1 – Corporate culture
30 Fostering a strong corporate culture for a better tomorrow
SKF’s corporate culture entails the Group’s 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 own workforce. SKF’s corporate culture guides its business conduct,
ensuring that all decisions made align with the Group’s core values and prin-
ciples. This adherence to a strong ethical framework, including anti-corruption
and anti-bribery programs, results in better decision-making across the com-
pany contributing with a positive impact not only to the own operations and
value chain, but also society at large.
Actual
Positive
Impact
Short-term
31 Breaches against the SKF Code of Conduct
Any potential breaches of SKF’s Code of Conduct would have a material
negative impact on the group.
Potential
Negative
Impact
Short-term
Description of IRO Type of IRO Value chain Time horizon
G1 – Protection of whistleblowers
32 Protection of whistleblowers
SKF provides a globally available, externally hosted whistleblowing service, the
SKF Ethics and Compliance Reporting Line, which is also accessible externally
for suppliers and customers. SKF’s Group Whistleblowing 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.
Actual
Positive
Impact
Short-term
33 Lack of adequate protection of whistleblowers
The potential lack of sufficient protection for whistleblowers presents an
inherent risk for SKF, given the company’s size and global presence. Employees
who report unethical behaviour or misconduct may face the fear of retaliation,
which could discourage them from coming forward with important information.
This environment may lead to a culture of silence, where critical issues remain
unaddressed, ultimately undermining the company’s commitment to ethical
practices and accountability. Ensuring robust protection for whistleblowers is
essential to fostering a transparent workplace where employees feel safe to
speak up without fear of retribution.
Potential
Negative
Impact
Short-term
G1 – Corruption and bribery
34 Potential corruption and bribery leading to fines and/or reputational
damage including loss of business
SKF recognizes the significant financial risk associated with possible
occurrence of corruption and bribery. Although 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),
some countries where SKF has operations face general issues of corruption.
Risk
Short-term
Upstream
Own operations
Downstream
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G1 Business Conduct, cont.
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), SKF has operations in some
countries where these issues are more prominent. This IRO
becomes material due to a significant potential impact on
EBIT even though the likelihood is considered minimal.
SKF’s policies and actions to manage these IROs
with trainings and by creating awareness are described
under G1-1.
G1-1
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 sets not
only SKF’s expectations in relation to regulatory compli-
ance, 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,
directives and standards related to the SKF Code of Con-
duct which further define the details of the commitments
in the Code. The SKF Code of Conduct and its subordinate
policies, directives and standards apply to all SKF’s units
and employees worldwide. It’s accessible online both inter-
nally and externally. For managing third parties, the Group
has a SKF Code of Conduct for suppliers and subcontrac-
tors, as well as one for distributors, agents and intermedi-
aries, publicly available on skf.com.
In 2025, SKF started the implementation of the new SKF
Code of Conduct, updated at the end of 2024 to align with
its new purpose, values and an evolving regulatory and
technological landscape. While SKF’s core commitments
remain unchanged, SKF recognized the need to refresh the
SKF Code of Conduct to align with both external and inter-
nal developments, ensuring its continued relevance and
effectiveness.
As part of the process to revise the SKF Code of Con-
duct, SKF engaged in an inclusive dialogue with employees
representing different functions of the Group through
IMPACTS, RISKS, AND OPPORTUNITIES
MANAGEMENT
ESRS 2 IRO-1
Description of the process to identify and assess
material impacts, risks and opportunities
SKF has identified and assessed impacts, risks and
opportunities for business conduct based on stakeholder
dialogues. This includes both internal and external stake-
holders, such as customers, suppliers, civil society, and
investors. Interest and views of stakeholders are described
under SBM-2.
Corporate culture
SKF’s efforts to foster a strong corporate culture for a
better tomorrow are considered to have a positive effect.
Combined with a high scale and a widespread impact it’s
a material IRO. At the same time, any potential breaches
of the SKF’s Code of Conduct would have a material nega-
tive impact on the Group.
Protection of whistleblowers
SKF is considered to have an actual positive impact for
protection of whistleblowers. The impact stretches across
the complete value chain as the whistleblowing service is
available not only to own employees, but also externally
for suppliers and customers. SKF deems it to be an actual
positive impact since it is already occurring and moving
beyond the legal requirements. The scale of the impact is
high with spread of the impact being medium, using the
methodology described in IRO-1.
Whilst SKF is considered to have an actual positive
impact within the topic protection of whistleblowers there
is also an inherent risk of the protection not being ade-
quate. Even if the likelihood for lack of adequate protection
of whistleblowers is considered low this IRO becomes
material as the severity is considered to take precedence
over its likelihood.
Corruption and bribery
Addressing corruption and bribery risks is crucial for SKF
as it poses significant financial and reputational risks,
including potential fines and loss of business. Although
SKF has over many years had a strong focus on business
surveys and interviews to identify their needs and expec-
tations, 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 updated version was
approved by SKF’s Board of Directors, Group Management
and trade union representatives.
In 2025, SKF launched a comprehensive review of its
policy governance structure and Group policies to further
strengthen its internal governance framework. This initia-
tive is a key milestone in the implementation of a renewed
governance model that reflects organizational changes and
ensures alignment with the evolving regulatory landscape.
The review process was designed to be inclusive and
transparent. SKF engaged relevant corporate functions
and internal stakeholders in structured dialogues to ensure
that the updated policies address all material internal and
external requirements.
To enhance the robustness and relevance of the policy
framework, SKF also conducted a preliminary benchmark-
ing exercise against industry peers and regulatory best
practices. This ensures that the governance model not
only meets compliance obligations but also supports long-
term value creation and responsible business conduct.
The SKF Code of Conduct is the baseline for SKF corpo-
rate responsibility, business conduct and ethical behaviour
and provides the foundation for compliance documents
within SKF. Below the Code of Conduct, policies, direc-
tives, standards, as well as other supplementary docu-
ments, complete the structure of governing documents
at SKF. As a commitment to transparency, the updated
policies are also published externally.
Key contents in the SKF Code of Conduct
[G1-1_MDR-P_65a]
In the SKF Code of Conduct, the company recognizes the
strong responsibility towards people and business part-
ners, the society and communities SKF operates in, the
environment and the climate. The SKF Code of Conduct
outlines SKF’s overarching commitments and responsibili-
ties in the areas of Governance, 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 behaviour, 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, circular-
ity and environment and use of resources.
Building on the SKF Code of Conduct, the Group up -
holds strong governance practices to ensure adherence to
applicable laws and regulations in all the above- mentioned
areas.
These policies are all part of SKF’s compliance pro-
gramme and supplemented by more detailed Group
directives and standards where appropriate. Both Group
directives and standards are accessible online internally,
while all Group policies are available online internally on
the intranet and externally on the corporate website.
Third party standards and initiatives [G1-1_MDR-P_65d]
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
[G1-1_10g; MDR-A]
SKF has implemented a Group-wide compliance pro-
gramme to prevent, detect and correct non-compliance
with legislation and policies as well as ensure a corporate
culture based on ethical business conduct and good busi-
ness practices. This programme adheres to international
G
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G1 Business Conduct, cont.
G
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 whistleblowing, 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 and Business Units. The Group-wide
compliance programme, together with common processes
and tools governed by the respective corporate functions
provides the respective Business Areas and Business
Units 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 in-house lawyers that
monitor and support the companies to comply with local
requirements beyond the requirements in the Group’s
compliance programme.
In light of the de-centralized operating model, the Busi-
ness Area and Business Unit Presidents are responsible for
the effective implementation of the SKF Code of Conduct
and the Ethics & Compliance programme in their respec-
tive Business Areas and Business Units. The Chief Com-
pliance Officer follows up on the Business Areas’ and
Business Units’ implementation of the same with the
Business Area and Business Units presidents. In addition,
the Chief Compliance Officer chairs the SKF Compliance
Leadership Team consisting of management representa-
tives from all Business Areas and Business Units. The
team shall ensure that priorities and activities are aligned
across the Business Areas and Business Units, as well as
Name Background / objective Key content Scope/key stakeholders Accountability IRO number
Group Anti-Corruption
policy
SKF is fully committed to conducting business
in compliance with applicable laws and
regulations and thereby participate in the
global fight against corruption.
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.
Scope
All SKF’s units.
Key Stakeholder
All employees worldwide.
Stakeholder involved in the
development of the policy
Group Compliance together
with corporate functions.
Described under
implementation,
training and
awareness.
30, 31, 34
Group Fair
Competition policy
Eliminate practices that hinder fair
com petition and to actively foster and
preserve a healthy, competitive economy.
Zero tolerance for engagement in
activities detailed in the policy
which may constitute violations
of applicable antitrust laws and
regulations.
Scope
All SKF’s units.
Key Stakeholder
All employees worldwide.
Stakeholder involved in the
development of the policy
Group Compliance together
with corporate functions.
Described under
implementation,
training and
awareness.
30, 31, 34
Group Communication
policy
Communication is vital to SKF’s business, and
it aims to build trust, strengthen stakeholder
relationships, ensure fair valuation of SKF’s
financial instruments, and attract talent by
aligning with SKF’s core values.
Information on requirements and
obligations related to the prohibition
of insider trading.
Scope
All SKF’s units.
Key Stakeholder
All employees worldwide.
Stakeholder involved in the
development of the policy
Group Compliance together
with corporate functions.
Described under
implementation,
training and
awareness.
30, 31, 34
Policies and directives related to business conduct matters [G1-1_MDR-P]
The following policies are detailing the overarching commitments related to business conduct matters in the SKF Code of Conduct:
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drive risk assessment, participate in investigations
and ensure operational ownership of compliance in
the business operation.
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 all policies are readily accessible
online. In addition, there is a Group-wide programme of
online training courses for general awareness on com-
pliance 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 93% (94%), Corrup-
tion at SKF 95% (96%), How to avoid antitrust risks in the
sales channel 98% (99%), Ethical leadership 86% (85%),
and Reporting ethical concerns 87% (96%), Export control
compliance 78% (92%), Information security awareness
81% (na) and Personal data protection 95% (96%). The
numbers represent the percentage of the total number
of employees in scope who have completed the training
as per January 2026 with last year result in brackets.
Every employee with an SKF email address is assigned
an onboarding package of trainings when starting at SKF.
To ensure continuous awareness and coverage of any
changes in requirements or expectations, 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.
G1 Business Conduct, cont.
G
Name Background / objective Key content Scope/key stakeholders Accountability IRO number
Group
International Trade
policy
SKF is fully committed to conducting
business in compliance with applicable
laws and regulations.
Requiring full compliance with
applicable trade regulations, export
control rules, customs and import
legislation and international sanc-
tions and embargoes.
Scope
All SKF’s units.
Key Stakeholder
All employees worldwide.
Stakeholder involved in the
development of the policy
Group Compliance together
with corporate functions.
Described under
implementation,
training and
awareness.
30, 31, 34
Group Information
Security and Data
Privacy Policy
SKF recognizes that confidentiality, integrity
and availability of information is essential for
innovation, optimizing business operations
and delivering value to our stakeholders.
The minimum requirements on
how SKF shall collect, process
and protect personal data and
any type of information.
Scope
All SKF’s units.
Key Stakeholder
All employees worldwide.
Stakeholder involved in the
development of the policy
Group Compliance together
with corporate functions.
Described under
implementation,
training and
awareness.
30, 31
Group Speak-up
and Whistleblowing
policy
SKF is committed to the high ethical standards
outlined in the SKF Code of Conduct. None-
theless, situations may arise that cause con-
cern and it is crucial for SKF to be informed of
such matters. SKF shall foster an environment
where individuals feel safe expressing their
thoughts and raise concerns without fear of
judgment or retaliation.
Information on SKF’s procedures
for raising concerns including the
whistleblowing channel as well as
SKF’s policy of non-retaliation.
Scope
All SKF’s units.
Key Stakeholder
All employees worldwide.
Stakeholder involved in the
development of the policy
Group Compliance together
with corporate functions.
Described under
implementation,
training and
awareness.
30, 31,
32, 33
Cont. Policies and directives related to business conduct matters [G1-1_MDR-P]
The following policies are detailing the overarching commitments related to business conduct matters in the SKF Code of Conduct:
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G1 Business Conduct, cont.
G
Identification, reporting and investigation of concerns
[G1-1_10a;10c;10e, G1-3_18b-c]
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 whistleblowing line which is
set up subject to the legal requirements in the EU Whistle-
blowing Directive. The reporting line consists of an exter-
nal system hosted by a third party. Reports can be made
anonymously, unless this is prohibited by local legislation.
The SKF Ethics and Compliance Reporting Line is also
available to external parties, such as suppliers and
distributors, through skf.com. SKF employees and others
can report concerns in their own language via a desig-
nated web portal or by calling a local telephone number.
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 independent investigator. Concerns deemed
as critical are communicated on a case-by-case basis to
the General Counsel and SVP Legal & Compliance and to
the Board of Directors’ Audit and Sustainability Commit-
tee. In addition to regularly scheduled dedicated meetings
(as detailed in GOV-1), any time deemed the Chief Compli-
G1-3
Prevention and detection of corruption and bribery
SKF addresses anti-corruption and anti-bribery as part of
the Group’s compliance programme. The SKF Code of Con-
duct outlines the overall prohibition of corrupt practices,
including bribery, and is supplemented by the Group
compliance programme on anticorruption which includes
different elements to support the prevention and detection
of corruption and bribery, such as policies, directives and
standards 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 Con-
duct for Distributors and the SKF Code of Conduct for
Agents and other Intermediaries.
The Group Anti-Corruption Policy, described under G1-1,
is supplemented by directives to provide more detailed
requirements related to the overarching prohibition on
corrupt practices. These are:
• Group directive on Gifts, Hospitality and Third-Party
Travel E xpense s.
• Group directive on Avoidance of Conflict of Interest.
• Group directive on Third-Party Risk Management.
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, directives and standards are all readily
accessible online internally for all employees, and the SKF
Code of Conduct is 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,
compliance with the SKF Code of Conduct for suppliers
and sub-contractors including sections related to prohibi-
tion of corruption and bribery is audited.
ance Officer directly reports material compliance issues,
risks, findings and root causes, as well as remediation
plans where appropriate, to the Board of Directors’ Audit
and Sustainability Committee.
The number of concerns reported and investigated is an
important KPI of the effectiveness of SKF’s compliance
programme. 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 compliance
programme.
SKF’s compliance programme actions to prevent or miti-
gate risks are focused on the main risks identified in the
Group’s yearly compliance risk assessment. During 2025
SKF engaged approximately 500 managers from all Busi-
ness Areas and Business Units, 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 assess-
ment are the basis for mitigation plans per Business Area,
Business Unit and for the Group. For functions most at risk
for corruption and bribery see G1-3.
SKF has dedicated Legal & Compliance officers in all
Business Areas and Business Units. Together with the
Chief Ethics & Compliance Officer, the Business Areas and
Business Units develop a compliance plan based on risks
and incidents. This is approved by the Audit and Sustaina-
bility Committee on an annual basis. Positive examples of
the compliance activities, such as employee and business
partner engagement, are shared with the Group’s Compli-
ance Core Team.
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 under G1-1. These global
training courses are mandatorily assigned to all employees,
including the CEO and the employee representatives in
the board, on a regular basis and on-demand if needed,
and are included in the onboarding programme for new
recruits. In addition, all staff employees are assigned a
conflict of interest training for general awareness purposes
every year, that also includes a step where the employee
shall confirm that any conflicts of interest will be disclosed
as per SKF’s policy.
As described under G1-1, the Business Areas and
Business Units presidents are responsible for implement-
ing the Anti-Corruption compliance programme in their
respective Business Area and Business Unit, thus also
responsible for providing further trainings to address
Business Area and Business Unit specific risks as well
as to conduct due diligence when required.
Allegations and incidents of corruption and bribery
including procedures, investigations and reporting of
findings are described under G1-1.
SKF is continuously working to strengthen its efforts
to fight corruption. In 2025, the Group has reviewed the
anti-corruption compliance programme, including an
update of the policy and directives and of the global train-
ings provided by the Group on anti-corruption, as well as a
reinforcement of the third-party due diligence process, by
updating the minimum requirements and process for third
party due diligence in the new Group directive on third-
party risk due diligence.
The mandatory general awareness e-learning on
anti-corruption at SKF has been updated and re-assigned
to all employees, including those in high-risk functions, for
whom the Group has also planned to provide specialized
training.
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Operations assessed for risks related to corruption
[G1-1_10h, G1-3_21b]
SKF’s compliance risk assessment for 2025 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 has determined that the
purchasing and sales functions carry elevated corruption
exposure risks. Employees in purchasing roles are exposed
to supplier selection and contract negotiation. These
activities inherently carry a heightened risk of unethical
behaviour and key risk factors include conflict of interest
and bribery. Sales personnel often interact with state-
owned entities as well as distributors and local agents,
especially in markets with high corruption risks. Key risk
factors in these interactions include commission arrange-
ments lacking transparency, kickbacks and opportunities
for bribery related to deal-closing.
Together with Group Compliance, each Business Area
and Business Unit consolidates the results and sets an
action plan in accordance with the results of the high-level
risk assessment. 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 2025, 13 such reviews have been carried out.
100% of functions identified as at risk are covered
by the legal and compliance training programme, which
includes both mandatory and optional training assign-
ments designed to enhance awareness and under-
standing of key ethics and compliance topics.
G1 Business Conduct, cont.
G
METRICS AND TARGETS
Targets
SKF does’t have any official targets for Business Conduct
for 2025, although SKF’s ambitions include:
• Assigning dedicated compliance e-learning modules to
all employees, ensuring comprehensive coverage of
relevant compliance topics and fostering awareness
and guidance across the organization.
• Conducting thorough risk assessments across all
Business Areas and Business Units to identify critical
issues and implement targeted mitigation measures
that support a proactive compliance culture.
SKF’s overarching ambition is to achieve 100% compliance
with the Code of Conduct. These ambitions are supported
by internal KPIs to monitor progress and ensure continuous
improvement.
G1-4
Incidents of corruption and bribery
During 2025, SKF confirmed three incidents of corruption
or bribery. Local units have, based on root causes 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.
Accounting principles G1-4 [MDR-M]
Incidents of corruption and bribery is based on actual
reported cases, and periodic awareness campaigns aim
to enhance the reporting of incidents. SKF is continuously
investigating all incidents of corruption and bribery in -
volving SKF employees, and for some cases, external
law firms are consulted. The process is further described
under “Identification, reporting and investigations of
concern” in G1-1.
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GOV-4
Statement on due diligence
Core element of due diligence Paragraphs in the sustainability statement
a. Embedding due diligence
in governance, strategy
and business model
GOV-1 The role of the administrative, management and supervisory bodies
GOV-2 Information provided to, and sustainability matters addressed by the
undertaking’s administrative, management and supervisory bodies
GOV-3 Integration of sustainability-related performance in incentive schemes
GOV-5 Risk management and internal controls over sustainability reporting
SBM-1 Strategy, business model and value chain
SBM-3 Material impacts, risks and opportunities and their interaction with
strategy and business model
G1-1 Business conduct policies and corporate culture
S1 - ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction
with strategy and business model
S2 – ESRS 2 SBM 3 – Material impacts, risks and opportunities and their interaction
with the business model
E1 - ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction
with strategy and business model
E1-1 Transition plan for climate change mitigation
b. Engaging with affected
stakeholders in all key
steps of the due diligence
GOV-2 Information provided to, and sustainability matters addressed by
the undertaking’s administrative, management and supervisory bodies
SBM-1 Strategy, business model and value chain
SBM-2 Interests and views of stakeholders
SBM-3 Material impacts, risks and opportunities and their interaction with strategy
and business model
IRO-1 Description of the process to identify and assess material impacts,
risks and opportunities
S1-2 Process for engaging with own workforce and workers’ representatives about impacts
S1-3 Process to remediate negative impacts and channels for own workforce to raise concerns
S2-2 Process for engaging with value chain workers about impacts
S2-3 Process to remediate negative impacts and channels for value chain workers to
raise concerns
c. Identifying and assessing
adverse impacts
GOV-5 Risk management and internal controls over sustainability reporting
SBM-1 Strategy, business model and value chain
SBM-3 Material impacts, risks and opportunities and their interaction with
strategy and business model
IRO-1 Description of the process to identify and assess material impacts,
risks and opportunities
Core element of due diligence Paragraphs in the sustainability statement
c. Identifying and assessing
adverse impacts, cont.
G1 ESRS IRO-1 Description of the process to identify and assess material impacts,
risks and opportunities
E1 ESRS 2 IRO-1 description of the process to identify and assess material climate-
related impacts, risks and opportunities
d. Taking actions to
address those adverse
impacts
SBM-1 Strategy, business model and value chain
SBM-3 Material impacts, risks and opportunities and their interaction with strategy
and business model
G1-1 Business conduct policies and corporate culture
G1-3 Prevention and detection of corruption and bribery
S1-3 Process to remediate negative impacts and channels for own workforce
to raise concerns
S1-4 Taking action on material impacts on own workforce, and approaches to
managing material risks and pursuing opportunities related to own workforce,
and effectiveness of those actions
S2-4 Taking action on material impacts on value chain workers, and approaches to
managing material risks and pursuing material opportunities
E1-1 Transition plan for climate change mitigation
E1 ESRS 2 IRO-1 Description of the process to identify and assess material climate-
related impacts, risks and opportunities
E1-2 Policies related to climate change mitigation and adaptation
E1-3 Actions and resources in relation to climate change policies
e. Tracking the effective-
ness of these efforts and
communicating
GOV-1 The role of the administrative, management and supervisory bodies
GOV-2 Information provided to, and sustainability matters addressed by the
undertaking’s administrative, management and supervisory bodies
GOV-3 Integration of sustainability-related performance in incentive schemes
GOV-5 Risk management and internal controls over sustainability reporting
SBM-1 Strategy, business model and value chain
G1-1 Business conduct policies and corporate culture
G1-3 Prevention and detection of corruption and bribery
S1-5 Targets related to managing material negative impacts, advancing positive
impacts, and managing material risks and opportunities
S2-5 Targets
E1-1 Transition plan for climate change mitigation
E1-4 Targets related to climate change mitigation and adaption
Appendix
Statement on due diligence
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APPENDIX
Disclosure requirement Data point
SFDR
reference
Pillar 3
reference
Benchmark
regulation
reference
EU
climate Law
reference Page/relevance
ESRS 2, GOV-1 21(d) Board’s gender diversity x x Page 33
21(e) Percentage of board members
who are independent
x Page 33
ESRS 2, GOV-4 30 Statement on due diligence x Page 33
ESRS 2, SBM-1 40(d)(i) Involvement in activities
related to fossil fuel activities
x x x Not relevant
40(d)(ii) Involvement in activities
related to chemical production
x x Not relevant
40(d)(iii) Involvement in activities
related to controversial weapons
x x Not relevant
40(d)(iv) Involvement in activities
related to cultivation and production
of tobacco
x Not relevant
ESRS E-1 14 Transition plan to reach climate
neutrality by 2050
x Pages 46–47
16(g) Undertakings excluded from
Paris-aligned benchmarks
x x Not relevant
ESRS E1-4 34 GHG emission reduction targets x x x Pages 57–58
ESRS E1-5 38 Energy consumption from fossil
sources disaggregated by sources
(only high climate impact sectors)
x Page 59
37 Energy consumption and mix x Page 59
40–43 Energy intensity associated
with activities in high climate impact
sectors
x Page 62
ESRS E1-6 44 Gross scope 1,2,3 and total
GHG emissions
x x x Page 60
53–55 Gross GHG emissions intensity x x x Page 62
ESRS E1-7 56 GHG removals and carbon credits x Page 62
IRO-2
Disclosure requirements in ESRS covered by the undertaking’s sustainability statement
ESRS data points from other EU legislation (IRO-2)
Disclosure requirement Data point
SFDR
reference
Pillar 3
reference
Benchmark
regulation
reference
EU
climate Law
reference Page/relevance
ESRS E1-9 66 Exposure of the benchmark portfolio
to climate-related physical risks
x Not stated
(phase-in)
66(a), 66(c) Disaggregation of monetary
amounts by acute and chronic physical
risk, location of significant assets at
material physical risk
x Not stated
(phase-in)
67 (c) Breakdown of the carrying value
of its real estate assets by energy-
efficiency classes
x Not stated
(phase-in)
69 Degree of exposure of the portfolio
to climate-related opportunities
x Not stated
(phase-in)
ESRS E2-4 28 Amount of each pollutant listed in
Annex II of the E-PRTR Regulation
( European Pollutant Release and Transfer
Register) emitted to air, water and soil
x Not material
ESRS E3-1 9 Water and marine resources x Not material
13 Dedicated policy x Not material
14 Sustainable oceans and seas x Not material
ESRS E3-4 28 (c) Total water recycled and reused x Not material
29 Total water consumption in m
3
per
net revenue on own operations
x Not material
ESRS 2, SBM3 – E4 16 (a) (i) Activities negatively affecting
biodiversity sensitive areas
x Not material
16 (b) Material negative impacts
with regards to land degradation,
desertification or soil sealing
x Not material
16 (c) Whether operations affect
threatened species
x Not material
Disclosure requirements
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Disclosure requirement Data point
SFDR
reference
Pillar 3
reference
Benchmark
regulation
reference
EU
climate Law
reference Page/relevance
ESRS E4-2 24 (b) Sustainable land / agriculture
practices or policies
x Not material
24 (c) Sustainable oceans /
seas practices or policies
x Not material
24 (d) Policies to address deforestation x Not material
ESRS E5-5 37(d) Non-recycled waste x Page 68
39 Hazardous waste and
radioactive waste
x Page 68
ESRS 2, SBM3-S1 14(f) Risk of incidents of forced labour x Page 71
14(g) Risk of incidents of child labour x Page 71
ESRS S1-1 20 Human rights policy commitments x Page 71–73
21 Due diligence policies on issues
addressed by the fundamental
Inter national Labor Organisation
Conventions 1 to 8
x Page 71–73
22 Processes and measures for pre-
venting trafficking in human beings
x Page 71–73
23 Workplace accident prevention
policy or management system
x Page 71–73
ESRS S1-3 32(c) Grievance/complaints-handling
mechanisms
x Page 74
ESRS S1-14 88(b)-(c) Number of fatalities and
number and rate of work- related
accidents
x x Page 79
88 (e) Number of days lost to injuries,
accidents, fatalities, or illness
x Page 79
ESRS S1-16 97(a) Unadjusted gender pay gap x x Page 80
97(b) Excessive CEO pay ratio x Page 80
ESRS S1-17 103 (a) Incidents of discrimination x Page 80
104 (a) Non-respect of UNGPs on
Business and Human Rights, ILO
principles, or OECD guidelines
x x Page 80
ESRS 2, SBM3 – S2 11(b) Significant risk of child labour
or forced labour in the value chain
x Pages 81–82
Disclosure requirement Data point
SFDR
reference
Pillar 3
reference
Benchmark
regulation
reference
EU
climate Law
reference Page/relevance
ESRS S2-1 17 Human rights policy commitments x Page 82
18 Policies related to value chain
workers
x Pages 82–83
19 Non-respect of UNGPs on Business
and Human Rights, ILO principles,
or OECD guidelines
x x Page 82
19 Due diligence policies on issues
addressed by the fundamental
Inter national Labour Organisation
Conventions 1 to 8
x Page 82
ESRS S2-4 36 Human rights issues and incidents
connected to its upstream and down-
stream value chain
x Pages 84–85
ESRS S3-1 16 Policies related to consumers and
end-users
x Not material
17 Non-respect of UNGPs on
Business and Human Rights and
OECD guidelines
x x Not material
ESRS S3-4 36 Human rights issues and incidents x Not material
ESRS S4-1 16 Policies related to consumers
and end-users
x Not material
17 Non-respect of UNGPs on
Business and Human Rights and
OECD guidelines
x x Not material
ESRS S4-4 35 Human rights issues and incidents x Not material
ESRS G1-1 10(b) United Nations Convention
against Corruption
x Pages 87–88
10(d) Protection of whistleblowers x Pages 87–88
ESRS G1-4 24(a) Fines for violation of anti-
corruption and anti-bribery laws
x x Page 91
24(b) Standards of anti-corruption
and anti-bribery
x Page 91
Disclosure requirements, cont.
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ESRS Disclosure requirement Page number
ESRS 2 General disclosures
BP-1 General basis for the preparation of sustainability statements 32
BP-2 Disclosures in relation to specific circumstances 32
GOV-1 The role of the administrative, management and supervisory bodies 32–33
GOV-2 Information provided to and sustainability matters addressed by the
undertaking’s administrative, management and supervisory bodies
33
GOV-3 Integration of sustainability-related performance in incentive schemes 33
GOV-4 Statement on due diligence 33
GOV-5 Risk management and internal controls over sustainability reporting 33–34
SBM-1 Strategy, business model and value chain 34–35
SBM-2 Interest and views of stakeholders 36
SBM-3 Material impacts, risks and opportunities and their interaction with
strategy and business model
37–39
IRO-1 Description of processes to identify and assess material impacts, risks and opportunities 39–40
IRO-2 Disclosure requirements in ESRS covered by the undertaking’s sustainability statement 40
E1 Climate Change
E1-1 Transition plan for climate change mitigation 46–47
E1-2 Policies related to climate change mitigation and adaption 51–52
E1-3 Actions and resources in relation to climate change policies 53–56
E1-4 Targets related to climate change mitigation and adaption 57–58
E1-5 Energy consumption and mix 59
E1-6 Gross scopes 1,2,3 and total GHG emissions 60–62
E1-7 GHG removals and GHG mitigation projects financed through carbon credits 62
E1-8 Internal carbon pricing 62
E5 Resource use and circular economy
E5-1 Policies related to resource use and circular economy 64
E5-2 Actions and resources related to resource use and circular economy 65–66
E5-3 Targets related to resource use and circular economy 66–67
E5-4 Resource inflows 67
E5-5 Resource outflows 67–68
Content index (IRO-2)
ESRS Disclosure requirement Page number
S1 Own workforce
S1-1 Policies related to own workforce 71–73
S1-2 Processes for engaging with own workforce and workers representatives about impacts 74
S1-3 Process to remediate negative impacts and channels for own workforce to raise concerns 74
S1-4 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
74–75
S1-5 Targets related to managing material negative impacts, advancing positive impacts,
and managing material risks and opportunities
76
S1-6 Characteristics of the undertaking’s employees 77
S1-8 Collective bargaining coverage and social dialogue 78
S1-9 Diversity metrics 78
S1-10 Adequate wages 79
S1-13 Training and skills development metrics 79
S1-14 Health and safety metrics 79–80
S1-16 Remuneration metrics 80
S1-17 Incidents, complaints and severe human rights impacts 80
S2 Workers in the value chain
S2-1 Policies related to value chain workers 82
S2-2 Processes for engaging with value chain workers about impacts 82
S2-3 Process to remediate negative impacts and channels for value chain workers
to raise concerns
82–83
S2-4 Taking action on material impacts on value chain workers, and approaches
to managing material risks and pursuing material opportunities
84–85
S2-5 Targets related to managing material negative impacts, advancing positive impacts,
and managing material risks and opportunities
85
G1 Business conduct
G1-1 Business conduct policies and corporate culture 87–90
G1-3 Prevention and detection of corruption and bribery 90–91
G1-4 Incidents of corruption and bribery 91
Content index
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APPENDIX
Auditor’s limited assurance report of AB SKF (publ)’s
statutory sustainability statement
To the general meeting of the shareholders of AB SKF
(publ), corporate identity number 556007-3495
Conclusion
We have conducted a limited assurance engagement of
the sustainability statement for AB SKF (publ) for the
financial year 2025. The sustainability statement is
included on pages 31-95 in this document.
Based on our limited assurance engagement as
described in the section Auditor’s responsibility, nothing
has come to our attention that causes us to believe that
the sustainability statement does not, in all material
respects, meet the requirements of the Swedish Annual
Accounts Act which includes,
• whether the sustainability statement meets the require-
ments of European Sustainability Reporting Standards
(ESRS),
• whether the process the company has carried out to
identify reported sustainability information has been
conducted as described in the sustainability statement,
• compliance with the reporting requirements of the EU’s
Green Taxonomy Regulation Article 8 (EU Taxonomy).
Basis for conclusion
We have conducted the limited assurance engagement in
accordance with FAR’s recommendation RevR 19 Revi-
sorns översiktliga granskning av den lagstadgade hållbar-
hetsrapporten. Our responsibility according to this recom-
mendation is further described in the section Auditor’s
responsibility.
We believe that the evidence we have obtained is suffi-
cient and appropriate to provide a basis for our conclusion.
Other information than the sustainability statement
This document also contains other information than the
sustainability statement and is found on pages 1–29,
98–144 and 147–162. The Board of Directors and the
Chief Executive Officer are responsible for this other
information.
Our conclusion on the sustainability statement does not
cover this other information and we do not express any
form of assurance conclusion regarding this other infor-
mation.
In connection with our limited assurance engagement
on the sustainability statement, our responsibility is to
read the information identified above and consider
whether the information is materially inconsistent with the
sustainability statement. In this procedure we also take
into account our knowledge otherwise obtained in the
limited assurance engagement 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
Chief Executive Officer
The Board of Directors and the Chief Executive Officer are
responsible for the preparation of sustainability statement
in accordance with Chapter 6, paragraphs 12–12f of the
Swedish Annual Accounts Act, and for such internal
control as they determine is necessary to enable the
preparation of the sustainability statement that is free
from material misstatements, whether due to fraud or error.
Other matters
Prior year’s sustainability statement has not been subject
to limited assurance procedures in accordance with FAR’s
recommendation RevR 19 and consequently prior year’s
information in the sustainability statement for 2024 has
not been subject to limited assurance procedures in
accordance with that recommendation.
Auditor’s responsibility
Our responsibility is to express a conclusion on whether
the sustainability statement has been prepared in
accordance with Chapter 6, Sections 12–12f of the
Swedish Annual Accounts Act based on our review.
The limited assurance engagement has been conducted
in accordance with FAR’s recommendation RevR 19
Revisorns översiktliga granskning av den lagstadgade
hållbarhetsrapporten. This recommendation requires that
we plan and perform our procedures to obtain limited
assurance that the sustainability statement is prepared in
accordance with these requirements.
The procedures in a limited assurance engagement vary
in nature and timing from, and are less in extent than for, a
reasonable assurance engagement. Consequently, the
level of assurance obtained in a limited assurance engage-
ment is substantially lower than the assurance that would
have been obtained had a reasonable assurance engage-
ment been performed. This means that it is not possible
for us to obtain such assurance that we become aware of
all significant matters that could have been identified if a
reasonable assurance engagement had been performed.
Our firm applies ISQM 1 (International Standard on
Quality Management), which requires the firm to design,
implement and operate a system of quality management,
including policies and procedures regarding compliance
with ethical requirements, professional standards, and
applicable legal and regulatory requirements.
We are independent of AB SKF (publ) in accordance
with professional ethics for auditors in Sweden and have
otherwise fulfilled our ethical responsibilities in
accordance with these requirements.
A limited assurance engagement involves performing
procedures to obtain evidence to support the sustaina-
bility statement. The auditor selects the procedures to be
performed, including assessing the risks of material mis-
statements in the sustainability statement, whether due to
fraud or error. In this risk assessment, the auditor considers
the parts of the internal control that are relevant to how
the Board of Directors and the Chief Executive Officer
prepare the sustainability statement, in order to design
procedures that are appropriate under the circumstances,
but not for the purpose of providing a conclusion on the
effectiveness of the entity’s internal control. The review
consists of making inquiries, primarily of persons responsi-
ble for the preparation of the sustainability statement, per-
forming analytical review, and conducting other limited
review procedures.
Our review procedures concerning the entity’s process
for identifying sustainability information to be reported
included, but were not limited to:
• Obtained an understanding of the process by:
• Performing inquiries to understand the sources
of the information used by management, and
SKF ANNUAL REPORT 2025 96
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• Reviewing the entity’s internal documentation of
its process
• Evaluated whether the evidence obtained from our
procedures about the process implemented by the
entity is consistent with the description of the process
set out on page 39–40 in the sustainability statement.
The review procedures with respect to the sustainability
statement included but were not limited to the following:
• By inquiries obtain an understanding of the entity’s
control environment, reporting processes, and informa-
tion systems relevant to the preparation of its sustaina-
bility statement
• Evaluate whether information identified to be material
by the entity´s the process for identifying sustainability
information reported, is included in the sustainability
statement
• Evaluate whether the structure and the presentation of
the sustainability statement is in accordance with the
requirements in ESRS
• Perform inquiries of relevant personnel and analytical
procedures on selected disclosures in the sustainability
statement
• Perform substantive assurance procedures on a sample
basis on selected disclosures in the sustainability state-
ment
• Perform inquiries and analytical procedures to evaluate
whether the methods, data and significant assumptions
used to make estimates in the sustainability statement
are appropriate and applied consistently.
The review procedures with respect to the EU Taxonomy
included but were not limited to the following:
• Obtained an understanding of the process to identify
taxonomy-eligible and taxonomy-aligned economic
activities and the corresponding disclosures in the
sustainability statement
• Evaluated whether the activities within the EU
Taxonomy are consistent to the financial statements
and related notes
• Evaluated processes, documentation and assessment
of eligibility and alignment with the economic activities
and technical screening criteria within the EU
Taxonomy
• Evaluated whether the reporting is in accordance with
the requirements in EU Taxonomy.
Inherent limitations
In reporting forward-looking information in accordance
with ESRS, the Board of Directors and the Chief Executive
Officer for AB SKF (publ) are required to prepare the
forward-looking information on the basis of disclosed
assumptions about events that may occur in the future
and possible future actions by the entity. The actual out-
come is likely to be different since anticipated events
frequently do not occur as expected.
Gothenburg, March 6, 2026
Deloitte AB
Signature on Swedish original
Hans Warén
Authorized public accountant
Auditor’s limited assurance report, cont.
SKF ANNUAL REPORT 2025 97
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Financial
statements
Consolidated income statements and consolidated
statements of comprehensive income ........................................... 99
Comments on the consolidated income statements ..............100
Consolidated balance sheets ............................................................ 101
Comments on the consolidated balance sheets .......................102
Consolidated statements of cash flow ............................................103
Comments on the consolidated statements of cash flow ......104
Consolidated statements of changes
in equity and comments ........................................................................106
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Accounting policies ......................................................... 107
Note 2 Segment information ........................................................108
Note 3 Acquisitions .......................................................................... 110
Note 4 Divestment of businesses ............................................. 110
Note 5 Research and development .......................................... 110
Note 6 Expenses by nature ........................................................... 111
Note 7 Other operating income and expenses .................... 111
Note 8 Financial income and financial expenses .............. 111
Note 9 Taxe s........................................................................................ 112
Note 10 Intangible assets ............................................................... 113
Note 11 Property, plant and equipment .................................... 115
Note 12 Right-of-use assets ........................................................... 117
Note 13 Inventories ............................................................................ 118
Note 14 Financial assets ................................................................. 119
Note 15 Other short-term assets ................................................. 120
Note 16 Share capital........................................................................ 121
Note 17 Earnings per share ............................................................ 121
Note 18 Provisions for post-employment benefits .............. 121
Note 19 Other provisions and contingent liabilities ............124
Note 20 Financial liabilities .............................................................126
Note 21 Other short-term liabilities .............................................127
Note 22 Related parties including associated
companies .............................................................................127
Note 23 Remuneration to key management ............................127
Note 24 Fees to the auditors ........................................................... 131
Note 25 Average number of employees ..................................... 131
Note 26 Financial risk management ......................................... 132
Note 27 Non-controlling interests ............................................... 134
Note 28 Assets and liabilities classified
as held for sale .................................................................... 134
Note 29 Subsequent events .......................................................... 134
FINANCIAL STATEMENTS OF THE PARENT COMPANY
Parent Company income statements and statements
of comprehensive income .................................................................... 135
Parent Company balance sheets ...................................................... 136
Parent Company statements of cash flow ..................................... 137
Parent Company statements of changes in equity ....................137
NOTES TO THE FINANCIAL STATEMENTS
OF THE PARENT COMPANY
Note 1 Accounting policies .......................................................... 138
Note 2 Revenues and operating expenses ........................... 138
Note 3 Financial income and financial expenses ............. 138
Note 4 Appropriations .....................................................................139
Note 5 Taxes.........................................................................................139
Note 6 Intangible assets ................................................................139
Note 7 Property, plant and equipment .....................................140
Note 8 Investments in subsidiaries ...........................................140
Note 9 Investments in equity securities ................................. 142
Note 10 Provisions for post-employment benefits ...............143
Note 11 Loans ........................................................................................143
Note 12 Salaries and wages, other remunerations,
average number of employees and men
and women in Management and Board ...................143
Note 13 Contingent liabilities .........................................................143
Amounts in MSEK unless otherwise stated. Amounts
in parentheses refer to comparable figures for 2024.
SKF Group’s formal Annual Report is presented on pages
14–29, 31–95, 98–144 and 148–150. It has been audited
by SKF’s external auditors. See the Auditor’s Report on
pages 145–146.
98SKF ANNUAL REPORT 2025
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STATEMENTS
| Consolidated | |||
| income statements | |||
| January–December | |||
MSEK | Note | 2025 | 2024 |
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 | 2025 | 2024 |
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 | – |
99SKF ANNUAL REPORT 2025
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Comments on the
consolidated income statements
General
The Group’s income statement for 2025 included
the result of the divested ring and seal operation
in Hanover, Pennsylvania, USA for the period
1 J anuary–30 April.
Net sales
In 2025, net sales amounted to MSEK 91,583 (98,722)
corresponding to a decrease of –7.2% compared to
2024. The change of the Swedish krona towards other
currencies had a negative impact in 2025 of –6.6%.
Structural changes accounted for –0.2%. Net sales in
local currencies decreased with –0.4%.
Sales development
y-o-y, % Q1 Q2 Q3 Q4
Full
year
Organic –3.5 –0.2 2.0 0.0 –0.4
Structure 0.5 –0.4 –0.2 –0.5 –0.2
Currency 0.0 –9.0 –6.9 –10.6 –6.6
Total –3.0 –9.6 –5.1 –11.1
–7.2
Operating profit
Operating profit for the year was MSEK 7,755
(10,339). Operating profit included items affecting
comparability of MSEK –3,918 (–1,844), whereof
MSEK –2,946 (–1,364) related to ongoing restruc-
turing and cost reduction activities, including the
full cost of the rightsizing activity in the Industrial
business. In addition, MSEK –1,356 (–133) related
to the separation of the Automotive business and
MSEK –584 (–347) primarily related to impairment
of fixed assets. It also included MSEK +224 related
to profit from sale of the manufacturing site in Luton,
UK as well as MSEK +744 related to profit from sale
of the aerospace business in Hanover, USA.
Financial income and expenses, net
The financial income and expenses, net for 2025 was
MSEK –1,330 (–1,250). Exchange rate fluctuations
had a more negative impact in 2025 compared to
2024 while interest expenses were higher in 2024.
For more information about the changes year-over-
year, see Note 8.
Taxe s
The effective tax rate for the year was 33.9% (24.2).
The tax rate was negatively impacted by the Auto-
motive separation and adjustments due to differences
between local and functional currency. Excluding
these items, the effective tax rate was 26.8% in 2025.
For more information, see Note 9.
Values by quarter
MSEK Q1 Q2 Q3 Q4
Full
year
Net sales 23,966 23,166 22,482 21,969 91,583
Operating profit 2,885 1,300 2,007 1,563 7,755
Profit before
taxes 2,595 859 1,687 1,284 6,425
Basic earnings
per share (SEK) 3.95 1.13 2.30 1.25 8.62
2024 2025
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 MSEK
7,755
–1,549
613 389
37
–2,074
10,339
202320222021 20252024
Operating profit
0
2.5
5.0
7.5
10.0
12.5 BSEK
100SKF ANNUAL REPORT 2025
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STATEMENTS
| Consolidated balance sheets | |||
| As of 31 December | |||
MSEK | Note | 2025 | 2024 |
| 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 %
202520242023
Return on capital employed
0
10
20
30
40
50 %
202520242023
Equity/assets
0
10
20
40
30
50 %
202520242023
Gearing
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Comments on the
consolidated balance sheets
Net working capital
On 31 December 2025, net working capital as
percentage of sales was 30.4% (30.6) consisting
of the following components:
• Inventories amounted to MSEK 23,677 (26,182)
being 25.9% (26.5) of annual sales. The decline in
inventories was attributed to volumes by
MSEK +144, net of divestments and acquisitions,
and to currencies by MSEK –2,649.
• Trade receivables amounted to MSEK 15,408
(16,600) which is 16.8% (16.8) of annual sales.
The change in trade receivables was attributable
to volume increase with MSEK +667, net of divest-
ments and acquisitions, and to currencies with
MSEK –1,859. The average days of outstanding
trade receivables were 65 days (67).
• Trade payables amounted to MSEK 11,207 (12,553)
corresponding to 12.2% (12.7) of annual sales. The
change attributable to volume was MSEK –313, net
of divestments and acquisitions, and the remaining
MSEK –1,033 was attributable to currencies.
Property, Plant and Equipment
On 31 December 2025, plant and property amounted
to MSEK 27,785 (30,470). This was as a percentage of
annual sales 30.3% (30.9). The change attributable
to currencies was MSEK –3,174.
Net debt
Net debt amounted to MSEK 12,052 (16,472) at
the end of 2025.
Post-employment benefit provisions totaled
MSEK 6,372 (7,729) at year end, representing a net
decrease of MSEK 1,357 (net decrease of 848), which
was attributable to:
• Cash payments of MSEK –924 (–1,411)
• Actuarial gains and losses of MSEK –623 (–731)
• Expenses of MSEK 759 (945)
• Acquired/divested businesses of MSEK 0 (0)
• The remainder was attributable to currency
differences.
Loans totaled MSEK 12,089 (16,526), at the end of
2025, representing a decrease of MSEK 4,437. The
change was primarily attributable to the repayment
of bonds of MSEK –3,483.
Equity
During the year, equity decreased from MSEK 61,969
to MSEK 55,668. Net profit amounted to MSEK 4,249
(6,887) and dividends paid were MSEK 3,613 (3,833).
Currency translation had a negative effect of
MSEK –7,243 (2,914). Remeasurements had a posi-
tive net of tax effect of MSEK 623 (731). 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 frame-
work, operating cash flow to fund investments 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 2025, the net debt/equity ratio,
excluding pension liabilities, was 10.2% (14.1).
0
10
20
30
40%
Net working capital as % of annual sales
Trade payables
Trade receivables
Inventories
Target
Net working capital
Q1
2023
Q2 Q3 Q4 Q1
2024
Q2 Q3 Q4 Q1
2025
Q2 Q3 Q4
0
10
20
40
% 60
50
2021 20252022 2023 2024
30
Property, Plant and Equipment as % of net sales
0
5
10
15
20
30 BSEK
Property, Plant and Equipment
Property, Plant and Equipment
% of net sales
25
0
40
80
120
% 160
2021 2022 2023 2024 2025
Net debt/equity
0
10
20
30
40 BSEK
Net debt
Net debt/equity ratio
102SKF ANNUAL REPORT 2025
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| Consolidated statements of cash flow | |||
| January–December | |||
MSEK | Note | 2025 | 2024 |
| 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 | ||
Tax payments related to sales of business | – | ||
Investment in/sale of equity securities | – | ||
Net cash flow used in investing activities | – | – | |
Net cash flow after investments before financing |
| January–December | |||
MSEK | Note | 2025 | 2024 |
| 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 | – | – | |
Other financing items | |||
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 |
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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 8,392 (10,792) in 2025. Other
non-cash items included expenses for which the
cash flow has not yet occurred. The lower cash flow
is mainly driven by a lower operating profit in 2025
due to high items affecting comparability while
changes in working capital were on same levels as
in 2024. Cash outflow from items affecting compara-
bility during 2025 is estimated to approximately
BSEK –3. Interest and other financial items included
interest paid of MSEK –567 (–786), interest received
of MSEK 318 (443), and the remainder related pri-
marily to realized derivatives on commercial flows
between Group companies.
Cash flow after investments before financing
Cash flow after investments before financing reached
MSEK 6,892 (5,190) in 2025. Adjusted for acquisitions
and divestments of businesses, the cash flow
amounted to MSEK 4,914 (5,777). During the year
the Group divested the ring and seal operation
in Hanover, Pennsylvania, USA which generated
a net cash inflow of MSEK 1,978.
Cash flow used in financing activities
Cash flow used in financing activities included
a payment of MSEK –200 (–210), net of taxes,
related to contribution to the defined benefit
retirement plan in the USA.
20242023 2025
Cash flow from
operating activities
0
3,000
6,000
9,000
12,000
15,000 MSEK
202520242023
Additions to Property,
Plant and Equipment
0
1,500
3,000
4,500
6,000 MSEK
202520242023
Cash flow from operating activities
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
2027
2028
2029
2031
Debt structure
20242023 2025
Paid dividend
per A and B share
0
2
4
8 SEK
6
The Board of Directors’ proposed
distribution of surplus for the year
2025, which is subject to approval
at the Annual General Meeting in
April 2026, includes an ordinary
dividend of SEK 7.75 per share,
see Note 16.
104SKF ANNUAL REPORT 2025
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Comments on the consolidated statements of cash flow, cont.
Change in net debt
MSEK
2025
Closing balance
Cash
changes
Businesses
acquired/sold
Other non-cash
changes
Translation
effect
2025
Opening balance
Loans
1)
12,089 –3,483 — 31 –985 16,526
Post-employment benefits, net
2)
6,372 –924 — 44 –477 7,729
Lease liabilities 2,895 –901 — 664 –384 3,516
Other short-term financial assets
3)
–320 –92 — –4 44 –268
Cash and cash equivalents –8,984 3,585 –2,188 — 650 –11,031
Net debt 12,052 –1,815 –2,188 735 –1,152 16,472
Derivatives
4)
included in Other financing items — — — — — —
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 — — — — — —
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 –92 (8) is explained by investment in financial assets
of MSEK –186 (–7) and sale of financial assets of MSEK 94 (15).
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 2024 | ||||||||
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 | ||||||||
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 2025 | – | – |
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 | 2025 | 2024 | 2025 | 2024 |
Argentina | 1 | ARS | 0.01 | 0.01 | 0.01 | 0.01 |
China | 1 | CNY | 1.37 | 1.47 | 1.31 | 1.51 |
EMU countries | 1 | EUR | 11.06 | 11.44 | 10.81 | 11.46 |
India | 100 | INR | 11.31 | 12.63 | 10.23 | 12.87 |
Brazil | 1 | BRL | 1.76 | 1.97 | 1.65 | 1.78 |
United Kingdom | 1 | GBP | 12.95 | 13.53 | 12.41 | 13.83 |
USA | 1 | USD | 9.85 | 10.57 | 9.19 | 11.01 |
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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 2025 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 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.
New accounting principles 2026
IASB issued several amended accounting standards that
were endorsed by EU, effective date 1 January 2026. 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, 30%
1
Aerospace, 7%
2
High speed machinery
and electrical drives, 5%
3
Other industrial, 4%
4
5
Heavy industries, 5%
Railway, 5%
6
Agriculture, food
and beverage, 3%
7
Renewable energy, 3%
Marine, 3%
8
9
Off-highway, 2%
10
Traditional energy, 2%
11
Material handling, 2%
12
Automation, 1%
13
Light vehicles, 15%
1
Vehicle aftermarket, 9%
2
Commercial vehicles, 4%
3
1
2
3
7
6
5
8
9
2
3
1
4
13
10
11
12
Net sales by customer industry
– Industrial
Industrial distribution, 41%
1
Aerospace, 9%
2
High speed machinery
and electrical drives, 8%
3
Other industrial, 6%
4
5
Heavy industries, 7%
Railway,7%
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, 33%
2
Commercial vehicles, 15%
3
1
2
3
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2 Segment information, cont.
Net sales by geographic area
– total
China and
Northeast Asia, 19%
India and
Southeast Asia, 11%
The Americas, 29%
Europe, Middle East
and Africa, 41%
Net sales by geographic area
– Industrial
China and
Northeast Asia, 20%
India and
Southeast Asia, 10%
The Americas, 28%
Europe, Middle East
and Africa, 42%
Net sales by geographic area
– Automotive
China and
Northeast Asia, 17%
India and
Southeast Asia, 11%
The Americas, 32%
Europe, Middle East
and Africa, 40%
| Net sales by | Contribution to | |||
| customer industri | profit before tax | |||
MSEK | 2025 | 2024 | 2025 | 2024 |
Industrial | 65,614 | 69,475 | 7,975 | 9,285 |
Automotive | 25,969 | 29,247 | –220 | 1,054 |
Subtotal operating segments | 91,583 | 98,722 | 7,755 | 10,339 |
Financial net | — | — | –1,330 | –1,250 |
Total | 91,583 | 98,722 | 6,425 | 9,089 |
| Additions to property, | ||||||
| Depreciation and | plant and equipment, intangible | |||||
| amortization | Impairments | assets and right-of-use assets | ||||
MSEK | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 |
Industrial | 3,514 | 3,580 | 490 | 310 | 3,574 | 5,039 |
Automotive | 561 | 506 | 59 | 36 | 847 | 987 |
Total | 4,075 | 4,086 | 549 | 346 | 4,421 | 6,026 |
Assets | Liabilities | |||
MSEK | 2025 | 2024 | 2025 | 2024 |
Industrial | 62,489 | 70,089 | 14,772 | 15,427 |
Automotive | 20,019 | 22,719 | 6,530 | 6,568 |
Subtotal operating segments | 82,508 | 92,808 | 21,302 | 21,995 |
Financial and tax items | 16,355 | 17,710 | 24,057 | 30,113 |
Eliminations and other unallocated items | 7,559 | 8,895 | 5,395 | 5,337 |
Total | 106,422 | 119,413 | 50,754 | 57,445 |
| Net sales by | Non-current | |||
| Geographic disclosure | customer location | assets | ||
| MSEK | 2025 | 2024 | 2025 | 2024 |
Sweden | 2,160 | 2,248 | 3,484 | 3,354 |
Europe, Middle East and Africa excl. Sweden | 35,413 | 37,528 | 16,927 | 18,262 |
The Americas | 26,843 | 30,758 | 14,118 | 17,826 |
China and Northeast Asia | 17,463 | 18,158 | 8,788 | 10,316 |
India and Southeast Asia | 9,704 | 10,030 | 2,399 | 2,491 |
Eliminations | — | — | 204 | –196 |
Total | 91,583 | 98,722 | 45,920 | 52,053 |
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NOTES
3 Acquisitions
MSEK | 2025 | 2024 |
| 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 | 9 | –78 |
Current liabilities | — | –105 |
Fair value net assets acquired | 9 | 428 |
Goodwill | –9 | 240 |
Total acquisition cost | — | 668 |
Cash and cash equivalents acquired | — | –103 |
Cash outflow | — | 565 |
4 Divestment of businesses
MSEK | 2025 | 2024 |
Goodwill | 467 | — |
Other intangible assets | 206 | — |
Property, plant and equipment | 183 | — |
Deferred tax assets | — | — |
Other non-current assets | — | — |
Current assets | 618 | — |
Deferred tax provisions | — | — |
Non-current liabilities | — | — |
Current liabilities | –31 | — |
Non-controlling interest | — | — |
Net assets disposed of | 1,443 | — |
Profit/loss | 745 | — |
Total consideration | 2,188 | — |
Cash and cash equivalents divested | — | — |
Cash outflow for previous years divestments | — | — |
Total cashflow | 2,188 | — |
5 Research and development
0
1
3
2
4
6
5
% 7
20232022 2021 2024 2025
Research and development % of net sales
0
500
1,000
1,500
3,500 MSEK
3,000
2,500
2,000
Research and development
Research and development % of net sales
Research and development expenditure, excluding
developing IT solutions, totalled MSEK 3,409 (3,326),
corresponding to 3.7% (3.4) of annual sales.
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NOTES
6 Expenses by nature
MSEK | 2025 | 2024 |
Employee benefit expenses including social charges | 26,907 | 28,023 |
Raw material and components consumed including traded products | 28,754 | 32,972 |
Change in work in process and finished goods | 22,821 | –1,347 |
Depreciation, amortization and impairments | 4,624 | 4,432 |
Other expenses, primarily purchased services, shop supplies and utilities | 979 | 23,959 |
Total operating expenses | 84,085 | 88,039 |
| Depreciation, amortization | 2025 | 2024 | ||||||
| and impairments are | ||||||||
| accounted for as (MSEK) | Depre ciation | Amortization | Impairments | Total | Depre ciation | Amortization | Impairments | Total |
Cost of goods sold | 3,042 | 77 | 549 | 3,668 | 3,014 | 84 | 196 | 3,294 |
Selling expenses | 440 | 516 | — | 956 | 432 | 556 | 150 | 1,138 |
Total | 3,482 | 593 | 549 | 4,624 | 3,446 | 640 | 346 | 4,432 |
7 Other operating income and expenses
8 Financial income and financial expenses
MSEK | 2025 | 2024 |
Interest income | 249 | 436 |
Interest expenses | –611 | –816 |
| Net gains/losses: | ||
Net interest cost on post-employment benefits | –291 | –273 |
Exchange differences, net | –722 | –396 |
Other financial income including dividends | 216 | 66 |
Other financial expenses 1) | –171 | –267 |
Financial net | –1,330 | –1,250 |
2025 | 2024 | |||||
| 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 | 139 | — | — | 264 | — | — |
Derivatives held for trading | 1 | –119 | 451 | — | –274 | –50 |
Financial assets classified as amortized cost | 109 | — | –335 | 172 | — | –264 |
Financial assets classified as fair value through other comprehensive income | — | — | 12 | — | — | 1 |
Other financial liabilities, primarily loans | — | –492 | –634 | — | –542 | –17 |
Other liabilities including post-employment benefits | — | — | –462 | — | — | –541 |
Total | 249 | –611 | –968 | 436 | –816 | –870 |
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9 Taxe s
2025 | 2024 | |||||
| Other | Other | |||||
| Income | comprehensive | Total | Income | comprehensive | Total | |
| Tax expenses (MSEK) | statement | income | taxes | statement | income | taxes |
Current taxes | –3,018 | — | –3,018 | –2,077 | — | –2,077 |
Deferred taxes | 842 | –241 | 601 | –125 | –150 | –275 |
Total | –2,176 | –241 | –2,417 | –2,202 | –150 | –2,352 |
Reconciliation of the statutory tax in Sweden to the actual tax (MSEK) | 2025 | 2024 |
Tax calculated using statutory tax rate in Sweden | –1,324 | –1,872 |
Difference between statutory tax rate in Sweden and foreign subsidiaries | –287 | 253 |
Other taxes | –349 | –50 |
Tax credits and similar items | 17 | 49 |
Non-deductible/Non-taxable profit items | –260 | –914 |
Changes in tax rates | — | — |
Tax loss carry-forwards | –9 | 95 |
Current tax referring to previous years | –119 | 150 |
Other | 155 | 87 |
Tax expense in the Income Statement | –2,176 | –2,202 |
2025 | 2024 | |||
| Deferred tax | Deferred tax | Deferred tax | Deferred tax | |
| Gross deferred taxes per type (MSEK) | assets | liabilities | assets | liabilities |
Intangibles and other assets | 121 | 1,228 | 289 | 1,365 |
Property, plant and equipment | 295 | 1,283 | 111 | 1,388 |
Right of use assets | 90 | 79 | 52 | 239 |
Inventories | 661 | 533 | 743 | 622 |
Trade receivables | 88 | 1 | 109 | 3 |
Provisions for post-employment benefits | 1,258 | 256 | 1,559 | 140 |
Other accruals and liabilities | 1,167 | 167 | 1,324 | 41 |
Tax loss carry-forwards | 1,409 | — | 690 | — |
Tax credit carry-forwards | 509 | — | 339 | — |
Other | 149 | 60 | 137 | 92 |
Gross deferred taxes | 5,747 | 3,607 | 5,353 | 3,890 |
Net deferred taxes presented in the Consolidated balance sheet | 4,095 | 1,955 | 3,369 | 1,905 |
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10 Intangible assets
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10 Intangible assets, cont.
| 2025 | 2025 | |||||||
| Closing | Businesses | Translation | Opening | |||||
| MSEK | balance | Additions | acquired/sold | Disposals | Impairments | Other 1) | effects | balance |
| Acquisition cost | ||||||||
Goodwill | 11,454 | — | –476 | — | — | 469 | –1,687 | 13,148 |
| Patents, tradenames | ||||||||
and similar rights | 2,895 | 1 | –129 | — | — | 128 | –482 | 3,377 |
Internally developed software | 2,701 | 2 | — | — | — | –3 | –15 | 2,717 |
Customer relationships | 4,450 | — | –301 | — | — | 309 | –671 | 5,113 |
Leaseholds | 23 | — | — | — | — | –61 | –9 | 93 |
Product development | 209 | — | — | — | — | –8 | –14 | 231 |
Technology | 1,213 | — | –127 | — | — | 127 | –175 | 1,388 |
Other intangible assets | 346 | 1 | — | — | — | 44 | –18 | 319 |
Total | 23,291 | 4 | –1,033 | — | — | 1,005 | –3,071 | 26,386 |
| 2025 | 2025 | |||||||
| Closing | Amorti- | Businesses | Translation | Opening | ||||
| MSEK | balance | zations | acquired/sold | Disposals | Impairments | Other 1) | effects | balance |
| Accumulated amortization | ||||||||
| and impairments | ||||||||
Goodwill | 529 | — | — | — | 53 | — | –98 | 574 |
| Patents, tradenames | ||||||||
and similar rights | 580 | 34 | — | — | 2 | –3 | –33 | 580 |
Internally developed software | 2,216 | 167 | — | — | 14 | –2 | –12 | 2,049 |
Customer relationships | 4,079 | 282 | –229 | — | — | 237 | –581 | 4,370 |
Leaseholds | 15 | — | — | — | — | –10 | –3 | 28 |
Product development | 198 | 12 | — | — | — | –8 | –13 | 207 |
Technology | 1,097 | 81 | –122 | — | — | 122 | –160 | 1,176 |
Other intangible assets | 166 | 17 | — | — | — | –4 | –4 | 157 |
Total | 8,880 | 593 | –351 | — | 69 | 332 | –904 | 9,141 |
Net book value | 14,412 | 17,245 |
| 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 |
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10 Intangible assets, cont.
2025 | 2024 | |||
| Auto- | Auto- | |||
| Industrial | motive | Industrial | motive | |
Goodwill, MSEK | 10,661 | 264 | 12,189 | 385 |
Tradenames, MSEK | 1,998 | 209 | 2,406 | 238 |
| Average revenue | ||||
growth rate, % | 2.3 | 1.6 | 7.1 | 3.9 |
Discount rate, pre tax, % | 9.4 | 9.7 | 10.6 | 11.1 |
| Terminal growth | ||||
factor, % | 2.5 | 2.5 | 2.5 | 2.5 |
11 Property, plant and equipment
29%
2025
27%
2024
China and Northeast Asia
7% 7%
20252024
India and Southeast Asia
17%
2025
16%
2024
The Americas
2025
50%
2024
47%
Europe, Middle East
and Africa
2024
2025
Geographical distribution of property, plant and equipment 2024–2025
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11 Property, plant and equipment, cont.
| 2025 | Businesses | 2025 | ||||||
| MSEK | Closing balance | Additions | acquired/sold | Disposals | Impairments | Other 1) | Translation effects | Opening balance |
| Acquisition cost | ||||||||
Buildings | 12,760 | 593 | –91 | –153 | — | –36 | –1,276 | 13,723 |
Land and land improvements | 946 | 203 | — | –6 | — | 1 | –84 | 832 |
Machinery and supply systems | 39,400 | 1,734 | –273 | –306 | — | –1,770 | –4,182 | 44,197 |
Machine tooling and factory fittings | 6,194 | 289 | –12 | –54 | — | 551 | –559 | 5,979 |
Assets under construction including advances 2) | 6,741 | 1,002 | — | — | — | –779 | –721 | 7,239 |
Total | 66,041 | 3,821 | –376 | –519 | — | –2,033 | –6,822 | 71,970 |
| 2025 | 2025 | |||||||
| MSEK | Closing balance | Depre ciation | Businesses sold | Disposals | Impairments | Other | Translation effects | Opening balance |
| Accumulated depreciation and impairments | ||||||||
Buildings | 6,178 | 356 | –43 | –123 | 213 | –132 | –527 | 6,434 |
Land improvements | 110 | 3 | — | — | 6 | –14 | –14 | 129 |
Machinery and supply systems | 26,897 | 2,135 | –144 | –291 | 256 | –2,420 | –2,615 | 29,976 |
Machine tooling and factory fittings | 5,071 | 190 | –6 | –41 | 7 | 452 | –492 | 4,961 |
Total | 38,256 | 2,684 | –193 | –455 | 482 | –2,114 | –3,648 | 41,500 |
Net book value | 27,785 | 30,470 |
| 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 |
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12 Right-of-use assets
MSEK | 2025 | 2024 |
Short-term lease expenses | 272 | 310 |
Low-value asset lease expenses | 75 | 66 |
Variable lease payments not included in lease liability | 22 | 14 |
Other | — | 5 |
Total | 369 | 395 |
| 2025 | 2025 | ||||||
| Closing | Opening | ||||||
| MSEK | balance | Additions | Modi fications | Impairments | Reclassi fication 1) | Translation effects | balance |
| Acquisition cost | |||||||
Premises | 4,537 | 308 | 3 | — | –282 | –578 | 5,086 |
Vehicles | 900 | 198 | –115 | — | –150 | –73 | 1,040 |
Forklifts | 342 | 85 | –8 | — | –59 | –21 | 345 |
Machinery | 30 | 2 | — | — | –6 | –2 | 36 |
Office equipment | 8 | 2 | — | — | — | –1 | 7 |
Other | 318 | 1 | — | — | –9 | –49 | 375 |
Total | 6,135 | 596 | –120 | — | –506 | –724 | 6,889 |
| 2025 | 2025 | ||||||
| Closing | Opening | ||||||
balance | Depre ciation | Modi fications | Impairments | Reclassi fication | Translation effects | balance | |
| Accumulated | |||||||
depreciation and impairments | |||||||
Premises | 2,264 | 533 | 65 | –2 | –284 | –258 | 2,210 |
Vehicles | 597 | 188 | –108 | — | –148 | –49 | 714 |
Forklifts | 249 | 63 | — | — | –51 | –16 | 253 |
Machinery | 28 | 1 | 1 | — | –15 | –2 | 43 |
Office equipment | 12 | 1 | — | — | — | –1 | 12 |
Other | 85 | 12 | — | — | –9 | –11 | 93 |
Total | 3,235 | 798 | –42 | –2 | –507 | –337 | 3,325 |
Net book value | 2,900 | 3,564 |
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12 Right-of-use assets, cont.
| 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 | ||||||
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 |
13 Inventories
MSEK | 2025 | 2024 |
Finished goods | 12,134 | 14,573 |
| Raw materials | ||
and supplies | 9,754 | 9,294 |
Work in process | 1,789 | 2,315 |
Total | 23,677 | 26,182 |
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14 Financial assets
| Financial assets per category 2025 | 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 | 15,408 | — | — | — | 15,408 | 15,408 |
Cash and cash equivalents | 5,374 | — | 3,610 | — | 8,984 | 8,984 |
Equity securities | — | 89 | — | — | 89 | — |
Marketable securities | — | — | — | 839 | 839 | — |
Trading derivatives | — | — | — | 162 | 162 | 162 |
Debt securities | — | 30 | — | — | 30 | — |
Other loans and receivables | 600 | — | — | — | 600 | 319 |
Carrying amount | 21,382 | 119 | 3,610 | 1,001 | 26,112 | 24,873 |
Fair value | 21,382 | 119 | 3,610 | 1,001 |
| 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 |
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14 Financial assets, cont.
| Fair value hierarchy for financial | ||||||||
assets at fair value (MSEK) | Level 1 | Level 2 | Level 3 | 2025 | Level 1 | Level 2 | Level 3 | 2024 |
Fair value through other comprehensive income | ||||||||
Equity securities | 89 | — | — | 89 | 400 | — | — | 400 |
Debt securities | 30 | — | — | 30 | 26 | — | — | 26 |
Fair value through profit or loss | ||||||||
Trading securities | — | — | 839 | 839 | — | — | 918 | 918 |
Cash and cash equivalents | 3,610 | — | — | 3,610 | 4,412 | — | — | 4,412 |
Hedging derivatives | — | 162 | — | 162 | — | 62 | — | 62 |
Trading derivatives | — | — | — | — | — | — | — | — |
Total | 3,729 | 162 | 839 | 4,730 | 4,838 | 62 | 918 | 5,818 |
| Cash and Cash equvialents | ||
(MSEK) | 2025 | 2024 |
Cash | 6,516 | 6,434 |
Cash Equivalents | 2,468 | 4,597 |
8,984 | 11,031 |
| 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 |
2025 | 15,408 | 13,405 | 1,319 | 433 | 157 | 94 |
2024 | 16,600 | 14,448 | 1,528 | 371 | 150 | 103 |
| Specification of reserve for | ||
credit losses (MSEK) | 2025 | 2024 |
Opening balance 1 January | 445 | 403 |
Additions | 637 | 474 |
Reversals | –601 | –382 |
| Changes through the income | ||
statement | 36 | 92 |
| Allowances used to cover | ||
write-offs | –19 | –69 |
Acquired/Divested companies | 2 | 3 |
Currency translation adjustments | –39 | 15 |
Closing balance 31 December | 425 | 445 |
15 Other short-term assets
MSEK | 2025 | 2024 |
Value added tax receivables, net | 1,907 | 2,364 |
Income tax receivables | 1,556 | 1,555 |
Prepaid expenses | 1,151 | 897 |
Accrued income | 205 | 231 |
Advances to suppliers | 154 | 316 |
Other current receivables | 807 | 694 |
Total | 5,780 | 6,057 |
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16 Share capital
| Number of shares authorized and outstanding | ||||
| Share capital | ||||
A Shares | B Shares | Total | (MSEK) | |
Opening balance 1 January 2024 | 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 |
Conversion of A shares to B shares | –53,175 | 53,175 | — | — |
Closing balance 31 December 2025 | 28,930,824 | 426,420,244 | 455,351,068 | 1,138 |
17 Earnings per share
2025 | 2024 | |
Net profit attributable to owners of AB SKF (MSEK) | 3,927 | 6,474 |
Weighted average number of ordinary shares outstanding | 455,351,068 | 455,351,068 |
Basic earnings per share (SEK) | 8.62 | 14.22 |
Dilutive shares from Performance Share Programmes | — | — |
Weighted average diluted number of shares | 455,351,068 | 455,351,068 |
Diluted earnings per share (SEK) | 8.62 | 14.22 |
18 Provisions for post-employment benefits
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18 Provisions for post-employment benefits, cont.
| 2025 | |||||||
| 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 | 285 | 417 | 564 | — | 232 | 661 | 2,159 |
Present value of funded defined benefit obligation | 5,821 | — | 8,556 | 2,655 | 2,355 | 1,517 | 20,904 |
Less: Fair value of plan assets | –5,421 | — | –5,791 | –3,187 | –902 | –1,430 | –16,731 |
Impact of asset ceiling | — | — | — | — | — | 40 | 40 |
Total | 685 | 417 | 3,329 | -532 | 1,685 | 788 | 6,372 |
| Reflected as: | |||||||
Other long-term assets | — | — | — | — | — | –632 | –632 |
Provisions for post-employment benefits | 685 | 417 | 3,329 | –532 | 1,685 | 1,420 | 7,004 |
Total | 685 | 417 | 3,329 | -532 | 1,685 | 788 | 6,372 |
| 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 |
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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 91% 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.
2025 | 2024 | |||||
| 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 | 26,292 | –18,563 | 7,729 | 25,713 | –17,135 | 8,578 |
Interest expenses/(income) | 1,016 | –725 | 291 | 980 | –707 | 273 |
Current service cost | 265 | — | 265 | 492 | — | 492 |
Past service cost | –46 | — | –46 | 2 | — | 2 |
Settlements | –12 | 3 | –9 | –3 | 2 | –1 |
Other | 244 | 14 | 258 | 160 | 19 | 179 |
Subtotal expenses | 1,467 | –708 | 759 | 1,631 | –686 | 945 |
Difference between actual return and interest (income)/expenses | — | 42 | 42 | — | –897 | –897 |
Actuarial (gains)/losses – demographic assumptions | 37 | — | 37 | 70 | — | 70 |
Actuarial (gains)/losses – financial assumptions | –858 | — | –858 | 28 | — | 28 |
Experience adjustments (gains)/losses | 121 | — | 121 | 89 | — | 89 |
Change in asset ceiling | — | 35 | 35 | — | –21 | –21 |
Subtotal remeasurements in OCI | –700 | 77 | –623 | 187 | –918 | –731 |
Employer contribution | — | –209 | –209 | — | –686 | –686 |
Employee contribution | 29 | –5 | 24 | 42 | –6 | 36 |
Benefit payments | –1,647 | 908 | –739 | –1,676 | 910 | –766 |
Subtotal cash flow 1) | –1,618 | 694 | -924 | –1,634 | 218 | –1,416 |
Other | 8 | –100 | –92 | 61 | –25 | 36 |
Translation differences | –2,386 | 1,909 | –477 | 334 | –17 | 317 |
Closing balance 31 December | 23,063 | –16,691 | 6,372 | 26,292 | –18,563 | 7,729 |
1) Cash outflows for 2026 are expected to be some MSEK 741 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) | 2025 | 2024 |
Post-employment defined benefit expenses | 759 | 945 |
Post-employment defined contribution expenses | 634 | 693 |
Total post-employment benefit expenses | 1,393 | 1,638 |
| Whereof amounts charged to: | ||
Cost of goods sold | 530 | 736 |
Selling expenses | 470 | 498 |
Administrative expenses | 102 | 131 |
Financial expenses | 291 | 273 |
Total | 1,393 | 1,638 |
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18 Provisions for post-employment benefits, cont.
2025 | 2024 | |||||
Plan asset composition (MSEK) | Quoted | Unquoted | Total | Quoted | Unquoted | Total |
Government bonds | 3,804 | 40 | 3,844 | 4,600 | — | 4,600 |
Corporate bonds | 5,269 | — | 5,269 | 6,356 | — | 6,356 |
Equity instruments | 3,400 | 1,900 | 5,300 | 3,237 | 1,837 | 5,074 |
Real estate | 57 | 593 | 650 | 260 | 827 | 1,087 |
Other, primarily cash and other financial receivables | 281 | 1,388 | 1,669 | 373 | 1,078 | 1,451 |
Total | 12,811 | 3,921 | 16,732 | 14,826 | 3,742 | 18,568 |
| Impact on defined benefit obligations, | ||
Sensitivity analysis of significant assumptions | Change in actuarial assumption | MSEK |
Discount rate | +1% | –1,082 |
–1% | 2,576 | |
Salary growth rate | +0.5% | 168 |
–0.5% | –168 | |
Pension increase rate | +0.5% | 725 |
–0.5% | –697 | |
Longevity | +1 year | 676 |
–1 year | –706 |
| 2025 | ||||||
| Significant weighted-average assumptions | USA | USA | Germany | U.K. | Sweden | |
| at end of year | pension | medical | pension | pension | pension | Other |
Discount rate | 5.2 | 5.1 | 4.0 | 5.7 | 3.7 | 3.1 |
Pension increase rate 1) | n/a | n/a | 1.9 | 2.9 | 2.0 | n/a |
Salary growth rate 2) | n/a | n/a | 2.2 | 2.9 | 3.4 | 3.4 |
Longevity male/female 3) | 20.9/22.8 | 20.8/22.8 | 21.0/24.3 | 21.8/24.1 | 20.0/20.1 | 19.0/21,8 |
| Weighted average duration | ||||||
of the plan (in years) 4) | 8.4 | 7.1 | 14.1 | 13.1 | 16.2 | 9.0 |
| 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 |
19 Other provisions and contingent liabilities
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19 Other provisions and contingent liabilities, cont.
| 2025 | Reversal | 2025 | |||||
| Closing | Provisions | Utilized | unutilized | Translation | Opening | ||
| MSEK | balance | for the year | amounts | amounts | Other | effect | balance |
Claims | 287 | 118 | –52 | –27 | — | –19 | 267 |
Other employee benefits | 616 | 84 | –79 | –7 | –33 | –36 | 687 |
Restructuring | 2,247 | 3,350 | –1,875 | –25 | –80 | –160 | 1,037 |
Other | 616 | 117 | –58 | –55 | 62 | –40 | 590 |
Total | 3,766 | 3,669 | –2,064 | –114 | –51 | –255 | 2,581 |
| 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 |
| 2025 | |
| MSEK | Of which current |
Claims | 227 |
Other employee benefits | 55 |
Restructuring | 1,476 |
Other | 277 |
Total | 2,035 |
| 2024 | |
| MSEK | Of which current |
Claims | 204 |
Other employee benefits | 55 |
Restructuring | 622 |
Other | 276 |
Total | 1,157 |
| Contingent liabilities | ||
at nominal values (MSEK) | 2025 | 2024 |
Guarantees | 8 | 45 |
Tax claims | 1,572 | 2,203 |
Other contingent liabilities | 132 | 52 |
Total | 1,712 | 2,300 |
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20 Financial liabilities
2025 | 2024 | ||||
MSEK | Maturity | Carrying amount | Fair value | Carrying amount | Fair value |
| Long-term financial liabilities | |||||
MUSD 100 | 2027 | 918 | 950 | 1,101 | 1,128 |
MEUR 400 | 2028 | 4,294 | 4,344 | 4,557 | 4,617 |
MEUR 300 | 2029 | 3,235 | 3,057 | 3,429 | 3,224 |
MEUR 300 | 2031 | 3,212 | 2,890 | 3,307 | 3,048 |
Long-term lease liabilities | 2027 and thereafter | 2,167 | 2,167 | 2,714 | 2,714 |
Other long-term loans | 2027–2030 | 171 | 171 | 200 | 200 |
Derivatives held for hedge accounting | 23 | 23 | 91 | 91 | |
Derivatives held for trading | 148 | 148 | — | — | |
Subtotal long-term financial liabilities | 14,168 | 13,750 | 15,399 | 15,022 | |
| Short-term financial liabilities | |||||
MUSD 3 | 2025 | — | — | 3 | 3 |
MEUR 300 | 2025 | — | — | 3,444 | 3,400 |
Trade payables | 2026 | 11,207 | 11,207 | 12,553 | 12,553 |
Of which trade payable under vendor financing arrangement | 984 | 984 | 1,546 | 1,546 | |
Short-term lease liabilities | 2026 | 728 | 728 | 802 | 802 |
Short-term loans | 2026 | 259 | 259 | 485 | 485 |
Derivatives held for hedge accounting | 2026 | — | — | — | — |
Derivatives held for trading | 2026 | 185 | 185 | 627 | 627 |
Subtotal short-term financial liabilities | 12,379 | 12,379 | 17,914 | 17,870 | |
Total | 26,547 | 26,129 | 33,313 | 32,892 |
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21 Other short-term liabilities
MSEK | 2025 | 2024 |
Employee related accruals | 3,725 | 3,700 |
Accrual for rebates | 1,591 | 1,728 |
Income tax payables | 1,368 | 949 |
Deferred income | 369 | 449 |
Customer advances | 427 | 415 |
Value added taxes payables, net | 647 | 659 |
Other current liabilities | 1,027 | 925 |
Other accrued expenses | 2,173 | 2,105 |
Total | 11,327 | 10,930 |
22 Related parties including associated companies
| Transactions with Associated | ||
companies (MSEK) | 2025 | 2024 |
Sales of goods and services | 35 | 41 |
Purchases of goods and services | 510 | 528 |
Receivables as of 31 December | — | 92 |
Liabilities as of 31 December | 9 | 17 |
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 Directors’ 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 2025,
irrespective of the principles of remuneration for Group
Management, resolved on SKF’s Performance Share Pro-
gramme 2025 for senior managers and key employees,
where Group Manage ment is included. For more informa-
tion on SKF’s Performance Share Programme 2025,
see page 129.
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 long-term 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.
Other benefits can for instance be a company car or health
and medical insurance. Premiums and other costs relating
to such benefits shall depend on and follow local
conditions and local practice but shall represent, as a gen-
eral rule, a limited value and may amount to not more than
10% of the accumulated annual fixed salary of the mem-
bers of Group Management.
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
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23 Remuneration to key management, cont.
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23 Remuneration to key management, cont.
CDP Climate Change score | Performance achievement |
A | 100% |
A– | 75% |
B | 50% |
<B | 0% |
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23 Remuneration to key management, cont.
Fixed salary and other benefits 1) /fixed | Short-term | Performance | Remuneration for | Gross | |||||||||||||
| Board remuneration | variable salary | Share Programmes | committee work | pension costs 2) | |||||||||||||
| Effect from | |||||||||||||||||
| change in mar- | |||||||||||||||||
| Fixed board fee/ | ket value of | ||||||||||||||||
| Amounts | Value of synthetic | Synthetic | Number of | Amounts | Amounts | Amounts paid | Amounts | Amounts | Amounts | Amounts | Total | Total | |||||
| expensed in | Amounts | shares at grant | Shares issued | syntehtic shares | paid in 2025 | expensed | in 2025 related | expensed | paid | expensed | expensed | expensed | expensed | ||||
| Amounts in SEK | 2025 3) | paid in 2025 3) | date | 2025 | allocated 2025 6) | related to 2024 3) | in 2025 3) | to prior years 3) | in 2025 3) | in 2025 3) | in 2025 3) | in 2025 3) | in 2025 | in 2024 | |||
| Board of directors of AB SKF | |||||||||||||||||
Hans Stråberg | 2,887,500 | 2,117,500 | 907,500 | 269,145 | 4,786 | — | — | — | — | 495,000 | 495,000 | — | 3,789,145 | 3,200,000 | |||
Håkan Buskhe | 1,445,000 | 1,060,500 | 454,500 | 134,928 | 2,397 | — | — | — | — | 440,000 | 440,000 | — | 2,089,928 | 1,975,000 | |||
Mats Rahmström | 757,500 | 1,060,500 | 454,500 | 134,928 | 2,397 | — | — | — | — | — | — | — | 1,649,928 | — | |||
Hock Goh | 945,000 | 693,000 | 297,000 | 88,169 | 1,566 | — | — | — | — | — | — | — | 1,078,169 | 1,050,000 | |||
Geert Follens | 945,000 | 693,000 | 297,000 | 88,169 | 1,566 | — | — | — | — | 275,000 | 275,000 | — | 1,353,169 | 1,300,000 | |||
Susanna Schneeberger | 693,000 | 945,000 | 297,000 | 88,169 | 1,566 | — | — | — | — | 165,000 | 165,000 | — | 1,243,169 | 1,050,000 | |||
Beth Ferreira | 693,000 | 945,000 | 297,000 | 88,169 | 1,566 | — | — | — | — | — | — | — | 1,078,169 | 1,050,000 | |||
Therese Friberg | 693,000 | 945,000 | 297,000 | 88,169 | 1,566 | — | — | — | — | — | — | — | 1,078,169 | 1,150,000 | |||
Richard Nilsson | 693,000 | 945,000 | 297,000 | 88,169 | 1,566 | — | — | — | — | 385,000 | 385,000 | — | 1,463,169 | 1,250,000 | |||
Niko Pakalén | 693,000 | 945,000 | 297,000 | 88,169 | 1,566 | — | — | — | — | 440,000 | 440,000 | — | 1,518,169 | 1,200,000 | |||
CEO | 16,815,994 | 16,971,409 | — | — | — | 4,581,500 | 6,134,520 | 3,627,639 | 8,195,784 | — | — | 6,236,252 | 37,382,549 | 31,272,565 | |||
Group Management 5) | 63,356,016 | 64,300,549 | — | — | — | 11,759,002 | 11,846,836 | 6,460,455 | 19,910,759 | — | — | 13,864,433 4) | 108,978,045 | 113,320,462 | |||
whereof AB SKF | 38,668,699 | 39,613,232 | — | — | — | 5,965,084 | 5,872,479 | 6,460,455 | 14,677,260 | — | — | 12,740,095 | 71,958,534 | 69,414,748 | |||
Total 2025 | 89,261,510 | 92,976,958 | — | — | — | 16,340,502 | 17,981,356 | 10,088,094 | 28,106,543 | 2,200,000 | 2,200,000 | 20,100,685 | 162,701,776 | — | |||
whereof AB SKF | 64,574,193 | 68,289,641 | — | — | — | 10,546,584 | 12,006,999 | 10,088,094 | 22,873,043 | 2,200,000 | 2,200,000 | 18,976,347 | 125,682,682 | — | |||
Total 2024 | 97,389,907 | 94,027,294 | — | — | — | 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 | 68,049,541 | 64,686,928 | — | — | — | 24,331,015 | 13,967,524 | 17,861,178 | 9,991,171 | 2,800,000 | 2,800,000 | 19,104,078 | — | 113,912,314 | |||
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 individual, 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 63.
5) Exclusive of CEO.
6) Based on weighted average stock price for SKF B Share in the period 28 April to 5 May 2025: SEK 189.59.
2025 | 2024 | |||
Men and women in Board of Directors and Group Management | Number of persons | Whereof men | Number of persons | Whereof men |
| Board of Directors of the Parent Company elected | ||||
by the AGM incl. CEO | 11 | 73% | 10 | 70% |
Board of Directors of the Parent Company incl. CEO | 13 | 77% | 12 | 75% |
Group Management incl. CEO | 12 | 67% | 13 | 77% |
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24 Fees to the auditors
Fees to the SKF Group statutory auditors were split as follows (MSEK) | 2025 | 2024 |
| Deloitte | ||
Audit fees | 69 | 66 |
Where of Deloitte AB | 14 | 13 |
Audit related fees | 2 | 2 |
Where of Deloitte AB | 2 | 2 |
Tax fees | 1 | 2 |
Where of Deloitte AB | — | — |
Other fees | 5 | 1 |
Where of Deloitte AB | 4 | 1 |
77 | 71 |
The Parent Company’s share (MSEK) | 2025 | 2024 |
| Deloitte | ||
Audit fees | 11 | 11 |
Audit related fees | 2 | 2 |
Tax fees | — | — |
Other fees to auditors | 4 | 1 |
17 | 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
2025 | 2024 | |||
| Number of | Whereof | Number of | Whereof | |
| employees | men, % | employees | men, % | |
Parent Company in Sweden | 590 | 61 | 652 | 62 |
Subsidiaries in Sweden | 1,589 | 79 | 1,854 | 80 |
Subsidiaries abroad | 34,319 | 74 | 35,225 | 77 |
36,498 | 74 | 37,731 | 77 |
2025 | 2024 | |||
| Geographic specification of average number of employees | Number of | Whereof | Number of | Whereof |
| in subsidiaries abroad | employees | men, % | employees | men, % |
France | 2,508 | 80 | 2,386 | 80 |
Italy | 3,096 | 76 | 2,723 | 77 |
Germany | 4,405 | 86 | 4,889 | 87 |
Other Western Europe excluding Sweden | 2,740 | 82 | 3,145 | 81 |
Central and Eastern Europe | 2,727 | 58 | 2,760 | 62 |
USA | 2,762 | 75 | 3,201 | 74 |
Canada | 188 | 77 | 184 | 76 |
Mexico | 2,196 | 66 | 1,955 | 66 |
Latin America | 2,328 | 33 | 2,673 | 88 |
China | 6,525 | 73 | 7,046 | 70 |
India | 2,752 | 90 | 2,148 | 91 |
Other Asian countries/Pacific | 1,796 | 79 | 1,758 | 79 |
Middle East and Africa | 296 | 74 | 357 | 72 |
34,319 | 74 | 35,225 | 77 |
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26 Financial risk management
Key figures 1) | 2025 | 2024 |
Total equity, MSEK | 55,668 | 61,969 |
Gearing, % | 27.7 | 30.9 |
Equity/assets ratio, % | 52.3 | 51.9 |
| Net debt/equity ratio, excluding | ||
post- employment benefits, % | 10.2 | 14.1 |
| Adjusted return on capital | ||
employed 2) , % | 14.3 | 14.2 |
Net currency flows (MSEK) | 2025 | 2024 |
CAD | 768 | 1,049 |
CNY | 1,638 | 1,523 |
DKK | 346 | 461 |
EUR | –9,438 | –8,009 |
AUD | 415 | 598 |
THB | 518 | 594 |
TRY | 1,257 | 1,564 |
USD | 5,618 | 6,345 |
Other 1) | 2,660 | 2,207 |
SEK | –3,782 | –6,332 |
INRGBP USDCNY EUR
0
60
30
90
150
120
Effect of translation on operating profits
to SEK of a 5% weaker SEK
180 MSEK
Other
1)
1) Other is a sum comprising 41 different currencies.
−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 9 different currencies.
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26 Financial risk management, cont.
2025 | Cash flows | |||
| 2028– | 2031 and | |||
MSEK | 2026 | 2027 | 2030 | thereafter |
Loans | –551 | –238 | –8,714 | –3,214 |
Trade payables | –11,207 | — | — | — |
Derivatives, net | 22 | — | –23 | — |
Lease liabilities | –796 | –611 | –1,200 | –684 |
Total | –12,532 | –849 | –9,937 | –3,898 |
Credit risk (MSEK) | 2025 | 2024 |
Trade receivables | 15,408 | 16,600 |
Other receivables | 1,469 | 1,292 |
Derivatives | 162 | 62 |
Cash and cash equivalent | 8,984 | 11,031 |
Total | 26,023 | 28,985 |
| Financial | Financial | |
| MSEK | expense 2025 | expense 2024 |
| Financial liabilities | ||
(hedged items) | –45 | –118 |
| Cross-currency interest-rate | ||
swaps (hedging instruments) | 45 | 128 |
Difference (inefficiency) | — | 10 |
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26 Financial risk management, cont.
Derivative net (MSEK) | Category | 2025 | 2024 |
| Interest rate and currency swaps | |||
| Fair value hedges | Hedge accounting | –23 | –456 |
Economic hedges | Trading | — | — |
| Currency forwards/ currency options | |||
Economic hedges | Trading | –172 | –202 |
| Share swaps | |||
Economic hedges | Trading | 1 | 1 |
–194 | –657 |
27 Non-controlling interests
Significant non-controlling interests
During 2025, there has been an additon of significant
non-controlling interests. The largest non-controlling inter-
ests are now attribut able to SKF India Ltd and SKF India
(Industrial) Ltd. The non-controlling interests holds a 47.4%
(47.4) shareholding in both companies. This represents
2.4% (2.3) of the Group’s total equity. The table presents
the summarized financial information of SKF India Ltd and
SKF India (Industrial) Ltd.
| Summarized income statement | January–December | |
| (MSEK) | 2025 | 2024 |
Net sales | 5,948 | 6,106 |
Operating profit | 953 | 947 |
Net income | 468 | 656 |
Other comprehensive income | –646 | 167 |
Total comprehensive income | –178 | 824 |
Profit allocated to NCI | 222 | 311 |
Dividends paid to NCI | –37 | –369 |
| As of 31 December | ||
Summarized balance sheet (MSEK) | 2025 | 2024 |
Non-current assets | 1,092 | 994 |
Current assets | 4,360 | 3,610 |
Total assets | 5,452 | 4,604 |
Equity attributable to shareholders of AB SKF | 1,462 | 1,607 |
Equity attributable to NCI | 1,317 | 1,449 |
Non-current liabilites | 51 | 16 |
Current liabilities | 2,622 | 1,532 |
Total equity and liabilities | 5,452 | 4,604 |
28 Assets and liabilities classified as held for sale
| Assets classified | As of 31 December | |
| as held for sale MSEK | 2025 | 2024 |
| Non-current assets | ||
Goodwill | 51 | 583 |
Other Intangible assets | — | 240 |
Property, plant and equipment | 18 | 58 |
| Current assets | ||
Inventories | 109 | 536 |
Trade receivables | 28 | 175 |
Other current assets | — | 1 |
Assets classified as held for sale | 206 | 1,594 |
| 29 Subsequent events | |||
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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 subsidiaries amounted to
MSEK 7,135 (3,187), of which MSEK 4,077 relates to
distributions of ownership interests in subsidaries.
Net investments in subsidiaries increased by
MSEK 5,217 (–1,634), whereof MSEK –212 (–500) is
attributable to impairments, MSEK 5,429 (125) to additions
and capital contributions. Shares with a booked value
of MSEK 0 (–1,259) 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 25,967 (22,839).
Parent Company, AB SKF Parent Company income statements
Parent Company statements of
comprehensive income
January–December
MSEK Note 2025 2024
Revenue 2 4,389 7,362
Cost of revenue 2 –5,703 –5,528
General management and administrative expenses 2 –1,880 –1,639
Other operating income and expenses, net 2 72 17
Operating profit –3,122 212
Financial income and expenses, net 3 6,701 2,499
Profit after financial items 3,579 2,711
Appropriations 4 3,359 400
Profit before tax 6,938 3,111
Income taxes 5 –7 –86
Net profit 6,931 3,025
January–December
MSEK Note 2025 2024
Net profit 6,931 3,025
Items that will not be reclassified to the income statement
Assets at fair value through other comprehensive income 9 –309 78
Items that may be reclassified to the income statement
Assets at fair value through other comprehensive income 9 — —
Other comprehensive income, net of tax –309 78
Total comprehensive income 6,622 3,103
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Parent Company balance sheets
As of 31 December
MSEK Note 2025 2024
ASSETS
Non-current assets
Intangible assets 6
531
712
Property, plant and equipment 7
76
63
Investments in subsidiaries 8
26,014
20,797
Long-term receivables from subsidiaries
11,668
12,483
Investments in jointly controlled and associated companies
2
2
Investments in equity securities 9
22
331
Other long-term receivables
31
17
Deferred tax assets 5
622
524
38,966
34,929
Current assets
Short-term receivables from subsidiaries
5,015
8,207
Other short-term receivables
96
217
Prepaid expenses and accrued income
412
328
Cash and cash equivalents
3
12
5,526
8,764
Total assets
44,492
43,693
As of 31 December
MSEK Note 2025 2024
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
Retained earnings
19,036
19,674
Net profit
6,931
3,025
25,967
22,839
28,023
24,895
Untaxed reserves 4
—
—
Provisions
Provisions for post-employment benefits 10
757
727
Other provisions
60
4
817
731
Non-current liabilities
Long-term loans 11
11,666
12,480
11,666
12,480
Current liabilities
Short-term loans 11
—
3,446
Trade payables
729
531
Short-term liabilities to subsidiaries
2,151
781
Other short-term liabilities
248
239
Accrued expenses and deferred income
858
590
3,986
5,587
Total equity and liabilities
44,492
43,693
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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 2024 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
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
Net profit — — — 6,931 6,931
Components of other comprehensive
income
Change in assets to fair value through
other comprehensive income — — –140 –169 –309
Transactions with shareholders
Cost under Performance Share
Programmes
2)
— — — 35 35
Dividends — — — –3,529 –3,529
Closing balance 31 December 2025 1,138 918 — 25,967 28,023
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 2025 2024
Operating activities
Operating loss/profit –3,122 212
Adjustments for
Depreciation, amortization and impairments 6, 7 189 324
Other non-cash items 193 170
Payments under post-employment defined benefit plans 10 –52 –58
Income taxes paid/received 100 41
Changes in working capital
Trade payables 198 65
Other operating assets and liabilities, net 7,911 1,633
Interest received 267 343
Interest paid –320 –428
Other financial items –205 –181
Net cash flow from operating activities 5,159 2,121
Investing activities
Additions to intangible assets 6 — —
Additions to property, plant and equipment 7 –21 –5
Dividends received from subsidiaries 3 3,058 3,187
Investments in subsidiaries 8 –1,352 –125
Sales of shares in subsidiaries 8 — 1,259
Capital repayments from subsidiaries 8 — —
Investments in equity securities — –2
Net cash flow used in investing activities 1,685 4,314
Net cash flow after investments before financing 6,844 6,435
Financing activities
Repayment of medium- and long-term loans –3,324 –3,010
Cash dividends to AB SKF’s shareholders –3,529 –3,415
Net cash flow used in financing activities –6,853 –6,425
Increase(+)/decrease(–) in cash and cash equivalents –9 10
Cash and cash equivalents at 1 January 12 2
Cash and cash equivalents at 31 December 3
12
.
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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.
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 2025 2024
Income from participations in Group companies
Dividends from subsidiaries 7,135 3,187
Other financial income from investments in subsidiaries 7 –8
Impairment and disposals of investments in subsidiaries –212 –500
Total 6,930 2,679
Financial income
Interest income from subsidiaries 267 343
Interest income from external parties 4 2
Other financial income 11 —
Total 282 345
Financial expenses
Interest expenses to subsidiaries –57 –99
Interest expenses to external parties –285 –355
Other financial expense –169 –71
Total –511 –525
from subsidiaries. Cost of revenue include research and
development expenses totalling MSEK 3,046 (2,950).
Of the total operating expenses, MSEK 4,494 (4,395)
was invoiced from subsidiaries.
1 Accounting policies 2 Revenues and operating expenses
3 Financial income and financial expenses
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STATEMENTS
PARENT COMPANY
Appropriations (MSEK) 2025 2024
Paid/received group contribution 3,359 400
Untaxed reserves
Change in accelerated depreciation reserve — —
3,359 400
Untaxed reserves
Accelerated depreciation reserve — —
Taxes on profit before tax (MSEK) 2025 2024
Current taxes — —
Other taxes –105 –144
Deferred tax 98 58
–7 –86
Net deferred assets per type net (MSEK) 2025 2024
Provisions for post-employment benefits 124 131
Tax credit carry-forwards 498 393
Tax loss carry-forwards — —
Deferred tax assets 622 524
Reconciliation of the statutory tax in Sweden and the actual tax (MSEK) 2025 2024
Tax calculated using the statutory tax rate in Sweden –1,429 –641
Non-taxable dividends and other financial income 1,472 655
Tax referring to previous years –2 –9
Other non-deductible and non-taxable profit items, net –48 –91
Actual tax –7 –86
The corporate statutory income tax rate in Sweden is 20.6% (20.6).
MSEK
2025
Closing balance Additions Impairments Derecognitions
2025
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
2025
Closing balance Amortization Impairments Derecognitions
2025
Opening balance
Accumulated amortization
Goodwill 39 1 — — 38
Technology, Intellectual property
and similar items 1,004 20 — — 984
Internally developed software 1,834 160 — — 1,674
2,877 181 — — 2,696
Net book value 531 712
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
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 6 Intangible assets
5 Taxes
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MSEK
2025
Closing balance Additions Disposals Other
2025
Opening balance
Acquisition cost
Buildings 6 1 — — 5
Machine toolings and factory fittings 106 — — 1 105
Assets under construction
including advances 29 20 — –1 10
141 21 — — 120
MSEK
2025
Closing balance Depreciation Disposals Other
2025
Opening balance
Accumulated depreciation
Buildings 4 1 — — 3
Machine toolings and factory fittings 61 7 — — 54
65 8 — — 57
Net book value 76 63
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
Investments in subsidiaries
held on 31 December (MSEK) 2025 Additions Impairment
Disposals
and capital
repayments 2024 Additions Impairment
Disposals
and capital
repayments 2023
Investments in
subsidiaries 26,014 5,429 –212 — 20,797 125 –500 –1,259 22,431
The Group is composed of 187 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 inter-
mediate holding companies. This legal structure is
designed to effectively manage legal requirements,
administration, financing and taxes in the countries
in which the Group operates.
During 2025, several intra-group share transactions in
group companies were completed in connection with the
establishment of the Automotive group structure, whereby
the current subsidiary SKF Interim AB will become the
parent company.
The tables on the next pages list, firstly, the subsidiaries
owned directly by the Parent Company, and secondly, the
most significant of the indirectly owned 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.
8 Investments in subsidiaries7 Property, plant and equipment
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PARENT COMPANY
Book value (MSEK)
Name of directly owned subsidiaries
Country/
Region
Registration
number
No. of
shares
%
ownership 2025 2024
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 Automotive Belgium I NV Belgium — 1 100 1 — O
SKF Automotive Belgium II NV Belgium — 1 100 1 — S
SKF do Brasil Ltda. Brazil — 517,294,748 99.9
2)
626 626 M, S
SKF Industrial Brasil Ltda. Brazil — 100 100 2 — 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 Automotive Canada Inc Canada — 1 100 — — 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.S France — 1 100 3,371 3,371 O
SKF GmbH Germany — 200 20
2)
227 315 M, S
SKF Holding Deutschland GmbH Germany — 2,500 100 27 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 — — — — 87 M, S
SKF India (Industrial) Ltd. India — 25,992,059 52.6 868 — 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 — 465,000 100 653 912 M, S
SKF Japan Ltd. Japan — 32,400 100 153 174 M, S
SKF Malaysia Sdn. Bhd. Malaysia — 1,000,000 100 57 57 S
SKF de México, S.A. de C.V. Mexico — 375,670,256 99.9
2)
101 101 M, S
SKF Industrial Mexico S.A.
de C.V
Mexico
— 50,000 100 — — M, S
Book value (MSEK)
Name of directly owned subsidiaries
Country/
Region
Registration
number
No. of
shares
%
ownership 2025 2024
Main
activities
1)
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 32 37 O
SKF Polska Sp. z o.o. Poland — 3,701,466 100 156 156 M, S
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 97 S
Barseco (PTY) Ltd. South Africa — 1,422,480 100 157 157 O
SKF Espanola S.A Spain — — — — 383 M, S
SKF Industrial Spain S.L.U Spain — 3,650,000 100 105 — M, S
SKF Förvaltning AB Sweden 556350-4140 124,500 99.6
2)
5,438 4,144 O
SKF International AB Sweden 556036-8671 20,000 100 1,320 1,320 O
SKF Interim AB Sweden 559505-9022 30,140,196 100 3,317 — O
ThePatentBay AB Sweden 559548-5854 25,000 100 — — O
Återförsäkringsaktiebolaget SKF Sweden
516401-7658 30,000 100 125 125 O
Bagaregården 16:7 KB Sweden 916622-8529 — 99.9
2)
106 98 O
SKF Eurotrade AB Sweden 556206-7610 83,500 100 12 12 S
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
SKF (U.K) Ltd. United
Kingdom — 37,100,000 100 644 — M, S
Trelanoak Ltd. United
Kingdom — 6,965,000 100 7 120 O
PSC SKF Ukraine Ukraine — 1,267,495,630 100 140 207 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
26,014 20,797
1) M=Manufacturing, S=Sales, O=Other incl treasury, reinsurance, holding and/or dormant activities.
2) Parent Company together with subsidiares own 100%.
8 Investments in subsidiaries, cont.
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Name of indirectly owned subsidiaries Country/Region
% Owner-
ship
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
Kaydon Corporation USA 100 USA M, S
Lincoln Industrial Corporation USA 100 USA M, S
M3M S.A.S France 100 France M, S
Ningbo General Bearing Ltd. China 100 Barbados M, S
Nya Gamlestaden 2:9 AB Sweden 100 Sweden O
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
PT SKF Lubrication Indonesia
Indonesia
100 Singapore M
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 (Xinchang) Bearings and Precision Technologies China 100 China M
SKF Aeroengine France S.A.S. France 100 France M, S
SKF Aerospace France S.A.S. France 100 France M, S
SKF Automotive Germany GmbH Germany 100 Sweden M, S
SKF Automotive Italy S.r.l. Italy 100 Sweden M, S
SKF Automotive Sweden AB Sweden 100 Sweden M, S
SKF Automative USA Inc. USA 100 Sweden 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 Espanola S.A Spain 100 Sweden M, S
SKF France S.A.S. France 100 France M, S
SKF India Limited India 53 Sweden M, S
SKF Latin Trade S.A.S Colombia 100 Chile S
SKF Lubrication PTY LTD Australia 100 Australia M
SKF Lubrication Systems CZ s.r.o Czech Republic 100 Germany M
SKF Magnetic Mechatronics S.A.S. France 99 France M, S
SKF Marine GmbH Germany 100 Germany M, S
Name of indirectly owned subsidiaries Country/Region
% Owner-
ship
Owned by
subsidiary in
Main
activities
1)
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
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 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
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
2025
Book value
2024
Book value
Wafangdian Bearing Company Limited, China HKD — 309
Other SEK 22 22
Total 22 331
In February 2025 the equity securities in Wafangdian Bearing Company Limited, China, was transferred to an NGO with
a loss of MSEK–309.
8 Investments in subsidiaries, cont.
9 Investments in equity securities
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STATEMENTS
PARENT COMPANY
Amount recognized in the balance sheet (MSEK) 2025 2024
Present value of funded pension obligations 954 907
Fair value of plan assets –355 –344
Net obligation 599 563
Present value of unfunded pension obligations 158 164
Net provisions 757 727
Change in net provision for the year (MSEK) 2025 2024
Opening balance 1 January 727 721
Defined benefit expense 82 64
Pension payments –52 –58
Closing balance 31 December 757 727
Components of expense (MSEK) 2025 2024
Pension cost 71 89
Interest expense 22 22
Return on plan assets –11 –47
Defined benefit expense 82 64
Defined contribution expense 111 103
Total post-employment benefit expense 193 167
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 1.6% (6.48).
Next year’s expected cash outflows for pension obliga-
tions are MSEK 186.
2025 2024
MSEK Maturity Interest rate
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Bonds
MUSD 3 2025 0.00 — — 3 3
MEUR 300 2025 1.25 — — 3,443 3,399
MUSD 100 2027 4.06 918 950 1,101 1,128
MEUR 400 2028 3.13 4,300 4,344 4,549 4,617
MEUR 300 2029 0.88 3,236 3,057 3,429 3,224
MEUR 300 2031 0.25 3,212 2,890 3,401 3,048
Total 11,666 11,241 15,926 15,419
MSEK 2025 2024
Salaries and wages, and other remuneration 907 768
Social charges (whereof post- employment benefit expense) 523 (193) 396 (167)
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 2025 2024
General partner 2 1
Other contingent liabilites 38 37
Total 40 38
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
12 Salaries and wages, other remunerations, average number of
employees and men and women in Management and Board
13 Contingent liabilities
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Proposed distribution of surplus
Fair value reserve SEK 0
Retained earnings SEK 19,036,231,442
Net profit for the year SEK 6,930,677,423
Total surplus SEK 25,966,908,865
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 SEK 22,437,938,088
SEK 25,966,908,865
1) Suggested to be paid in two instalments. The first instalment amount is proposed to SEK 4.00 per share with a record date on Thursday
23 April 2026, and the second instalment amount to SEK 3.75 per share with a record date on Thursday 15 October 2026.
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.
The results of operations and the financial position of the Parent Company, AB SKF, and the Group for
the year 2025 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 prepared
in accordance with generally accepted accounting principles in Sweden and that the consolidated
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 posi-
tion and profit or loss of the Company and the Group, and that the management report for the Company
and for the Group gives a fair review of the development and performance 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.
The Board of Directors and the President certify that the Sustainability Statements have been pre-
pared in accordance with European Sustainability Reporting Standards (ESRS) as adopted by the EU.
The annual report was approved on 2 March 2026
Gothenburg, 2 March 2026
Hans Stråberg, Chair
Håkan Buskhe, Vice chair
Mats Rahmström, 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 auditor’s report for this Annual report and the consolidated Annual Report, and our assurance report
on the Sustainability Statements, was issued on 6 March 2026.
Deloitte AB
Hans Warén
Authorized Public Accountant
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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 consoli-
dated accounts of AB SKF (publ) for the financial year
1 January–31 December 2025, with the exception of
the Corporate Governance Report on pages 19–29 and
the Sustainability Statements on pages 31–95. The annual
accounts and consolidated accounts of the company are
included on pages 14–29, 31–95, 98–144 and 148–150
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 2025 and its financial
performance and cash flow for the year then ended
in accordance with the Annual Accounts Act. The con-
solidated 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 December 2025 and their financial performance
and cash flow for the year then ended in accordance
with IFRS Accounting Standards, 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 and Sustainability Committee in accord-
ance 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 2025, AB SKF (publ) accounts for good-
will in the consolidated balance sheet amounting to SEK
10,925 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 1–13, 31–95 and 151–162. 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 and Sustainability Committee shall, without
prejudice to the Board of Director’s responsibilities and
tasks in general, among other things oversee the com-
pany’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
description 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
2025 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
SKF ANNUAL REPORT 2025 145
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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.
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 2025.
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 de -
scribed in more detail in the Auditors’ responsibility section.
We are independent of AB SKF (publ) 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 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 1 April 2025
and has been the company’s auditor since 25 March 2021.
Gothenburg, 6 March, 2026
Deloitte AB
Signature on Swedish original
Hans Warén
Authorized Public Accountant
Auditor’s report, cont.
SKF ANNUAL REPORT 2025 146
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other
information
147SKF ANNUAL REPORT 2025
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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 strategic framework,
operating cash flow to fund investments 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 2025, the net debt/
equity ratio, excluding pension liabilities was 10.2% (14.1).
Financing
SKF’s policy is to have long-term financing of its
operations.
As of 31 December 2025, the average maturity of SKF’s
loans was approximately four years. SKF has three notes
issued on the European bond market. MEUR 400 per
2028, MEUR 300 per 2029, and one with an out standing
amount of MEUR 300, due in 2031. The bonds maturing in
2028 and 2029 are both issued under SKF’s Green Finance
Framework. By the end of 2025, the proceeds from both
bonds have been fully allocated to 220 eligible projects
totaling MEUR 700, supporting SKF’s climate transition
strategy. Although the allocation phase is complete, both
bonds remain active until maturity. As there are no allo-
cation changes to report on for 2025, a separate Investor
Letter and Impact Report will not be issued for 2025.
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 down-
grade 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 MUSD 100 due in 2027. Furthermore,
SKF has signed a long-term credit facility of MEUR 430,
with the European Investment 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 2030.
Credit rating
On 31 December 2025, 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 struc-
ture 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
dividend, a redemption scheme or a repurchase of the com-
pany’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 generation
capacity and outlook, the Board of Directors proposes a
dividend of SEK 7.75 (7.75) per share to be paid in two
instalments. The first instalment amount is proposed
to SEK 4.00 per share with a record date on Thursday,
23 April 2026, and the second instalment amount to
SEK 3.75 per share with a record date on Thursday,
15 October 2026. Subject to resolution by the Annual
General Meeting 2026 in accordance with this proposal,
it is expected that Euroclear will distribute the first
instalment on Tuesday, 28 April 2026, and the second
instalment on Tuesday, 20 October 2026, see page 144,
Proposed distribution of surplus.
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 no deputies. The
Annual General Meeting shall, inter alia, determine the
number of Board members, and preside over the elections
of 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.
Remuneration to Group Management
The principles of remuneration for Group Management
members were adopted at the annual general meeting in
2020 and revised in 2022 and are summarized in the
Annual Report 2025, Consolidated Financial Statements,
Note 23. The Board of Directors has proposed new guide-
lines for remuneration to the Annual General Meeting
2026. The full content of the new proposal is outlined
on pages 149–150.
Nomination of Board members and
notice of Annual General Meeting
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The Board of Directors’ proposal for a resolution on guidelines
for remuneration to senior executives
The Board of Directors of AB SKF (“SKF”) has decided to
submit the following guidelines for remuneration to senior
executives to the Annual General Meeting 2026.
Scope
These guidelines apply to remuneration to SKF’s President
and the other members of the management team (collec-
tively “Group Management”). The guidelines shall apply to
remuneration agreed after the adoption of the guidelines
by the Annual General Meeting 2026, as well as to amend-
ments to existing agreements thereafter. These guidelines
do not apply to any remuneration resolved by the Share-
holders’ Meeting.
The guidelines’ promotion of SKF’s business strategy
and long-term interests, including its sustainability
A prerequisite for the successful implementation of SKF’s
business strategy and safeguarding of its long-term inter-
ests, including its sustainability, is that SKF is able to
recruit and retain qualified personnel. To this end, it is
necessary that SKF offers competitive remuneration.
These guidelines enable SKF to offer the Group Manage-
ment a competitive total remuneration and at the same
time support the shareholders’ best interests. Variable
salary covered by the guidelines shall be linked to prede-
termined and measurable criteria, aiming to promote the
SKF Group’s business strategy and long-term interests,
including its sustainability. For further information on SKF
Group’s strategy, please refer to skf.com and the Annual
Report.
Since 2008, SKF’s Annual General Meeting has resolved
each year upon a performance share programme for senior
managers and key employees, including Group Manage-
ment. Since the performance share programmes have
been resolved by the Shareholders’ Meeting, they are
excluded from these guidelines. SKF’s performance share
programme shall have the aim to link the long-term inter-
ests of its participants and the shareholders. The per-
formance criteria used to assess the outcome of the
performance share programme shall be linked to the busi-
ness strategy and thereby to SKF Group’s long-term value
creation, including its sustainability. For further informa-
tion on SKF’s performance share programmes, including
the criteria on which the outcome depends, please refer to
the Board of Directors’ proposal to each Annual General
Meeting.
Types of remuneration
The total remuneration package for a Group Management
member shall consist of the following components: fixed
salary, variable salary, pension benefits, and other benefits
such as a company car. The components shall create a
well-balanced remuneration reflecting individual perfor-
mance and responsibility as well as the SKF Group’s
overall performance. The Shareholders’ Meeting may
also – irrespective of these guidelines – resolve on other
remuneration components, e.g. SKF’s performance share
programme.
For employments governed by rules other than Swedish,
remuneration 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
guidelines.
In addition to remuneration set out above, Group Man-
agement members who are expatriates to or from their
home country, or who work in multiple countries, may
receive additional remuneration and other benefits to the
extent reasonable in light of the special circumstances
associated with the cross border arrangement, taking into
account, to the extent possible, the overall purpose of
these guidelines and the general policies and practices
within the SKF Group applicable to cross border work.
Fixed salary
The fixed salary of a Group Management member shall be
at a market competitive level. It shall be based on compe-
tence, 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 com-
pensate value-creating achievements in order to support
operational, financial and sustainability targets and
thereby promote the SKF Group’s business strategy and
long-term interests, including its sustainability.
The performance-based programme shall have prede-
termined and measurable criteria which can be both finan-
cial and non-financial and which contribute to SKF’s long-
term 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, or shall promote sustainability targets
of the SKF Group.
The satisfaction of criteria for awarding variable salary
shall be measured over a period of one year. The extent to
which the criteria for awarding variable salary have been
satisfied shall be determined when the measurement
period has ended. The Board of Directors is responsible for
the evaluation so far as it concerns variable salary to the
President. For variable salary to other members of Group
Management, the President is responsible for the evalua-
tion. For financial targets, the evaluation shall be based on
financial information made public by SKF. The maximum
variable salary may not amount to more than 70% of the
annual fixed salary.
Further variable salary may be awarded in extraordinary
circumstances, provided that such extraordinary arrange-
ments are limited in time and only made on an individual
basis, either for the purpose of recruiting or retaining
Group Management members, or as remuneration for
extraordinary performance beyond the individual’s ordi-
nary tasks. Such remuneration may not exceed an amount
corresponding to 100% of the annual fixed salary and may
not be paid more than once each year per individual. Any
resolution on such remuneration to the President shall be
made by the Board of Directors based on a proposal from
the People Committee, and any resolution on such remu-
neration to other Group Management members shall be
made by the Chair of the Board of Directors based on a
proposal from the President.
The Board of Directors shall have the possibility, under
applicable law or contractual provisions and subject to the
restrictions that may apply under law or contract, to:
(i) reduce, in whole or in part, payment of variable remu-
neration if an employee has committed a material breach
of the SKF Code of Conduct (or any other significant policy
document) (malus); or
(ii) reclaim, in whole or in part, variable remuneration
paid on incorrect grounds or if an employee has commit-
ted a material breach of the SKF Code of Conduct (or any
other significant policy document) (claw-back).
Other benefits
The SKF Group may provide other benefits to Group
Management members in accordance with local practice.
Other benefits can for instance be a company car or
health care and medical insurance (Sw. sjukvårds-
försäkring). Premiums and other costs relating to such
benefits shall depend on and follow local conditions and
local practice but shall represent a limited value and may
not amount to more than 10% of the annual fixed salary.
Pension
Pension plans, including health insurance (Sw: sjuk-
försäkring), shall be based on defined contribution models
unless a defined benefit pension plan is required by man-
datory law or collective agreement provisions. Variable
salary shall qualify for pension benefits to the extent
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required by mandatory law or collective agreement
provisions.
In addition to the base pension plan (for Swedish
members usually the ITP pension plan), a Group
Management member shall generally be covered by
a supplementary defined contribution pension plan.
By offering this supplementary defined contribution
plan, it is ensured that Group Management members
are entitled to earn pension benefits based on the
annual fixed salary above the level of the base pension.
The total cost of the premiums for a Group
Management member’s base defined contribution
pension plan (including health insurance) and
supplementary pension plan may not amount to
more than 40% of the annual fixed salary.
Notice of termination and severance pay
The notice period may not exceed six months if notice of
termination of employment is given by SKF. Fixed salary
during the notice period and severance pay may together
not exceed an amount corresponding to the fixed salary
for two years. When termination is given by the Group
Management member, the notice period may not exceed
six months, without any right to severance pay.
Remuneration for a non-compete undertaking may be
paid to cover lost income, but not during period with sever-
ance pay. Unless required by mandatory law or collective
agreement, it cannot exceed 60% of the fixed monthly
salary at termination and is limited to 18 months for the
President and 12 months for other Group Management
members
Salary and terms of employment for employees
When preparing these guidelines, the Board of Directors
has paid regard to the salary and terms of employment of
SKF’s employees. 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 Directors’ and the People
Committee’s evaluation of the fairness of the guidelines
for remuneration and the limitations which the guidelines
entail. The Board of Directors has also considered SKF’s
People Policy.
The decision-making process to determine, review
and implement the guidelines
The Board of Directors has established a People Commit-
tee. The People Committee prepares all matters relating to
the guidelines for remuneration to senior executives, as
well as the terms of employment for the President. The
Board of Directors must approve the terms of employment
for the President.
The guidelines for remuneration to senior executives
are presented by the People Committee to the Board of
Directors that, at least every fourth year, submits a pro-
posal for such guidelines to the Annual General Meeting
for approval. The guidelines for remuneration shall be valid
until new guidelines have been adopted by the Sharehold-
ers’ Meeting. The People Committee shall also monitor and
evaluate programmes for variable remuneration for Group
Management, the application of the guidelines for remu-
neration to senior executives and applicable remuneration
structures and levels of the SKF Group.
The members of the People Committee are independent
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
guidelines for remuneration
The Board of Directors may temporarily resolve to derogate
from these guidelines, in whole or in part, if in a specific
case there is special cause for the derogation and a dero-
gation is necessary to serve SKF’s long-term interests,
including its sustainability, or to ensure SKF’s financial
viability. As set out above, the People Committee’s tasks
include preparing the Board of Directors’ resolutions in
remuneration related matters. This includes any resolu-
tions to derogate from the guidelines.
Description of material changes to
the guidelines
In comparison with the guidelines decided by the Annual
General Meeting 2022, the proposed guidelines have been
updated in order to:
• Enable the award of additional variable salary in
extraordinary circumstances, provided that such
extraordinary arrangements are limited in time and only
made on an individual basis, either for the purpose of
recruiting or retaining Group Management members, or
as remuneration for extraordinary performance beyond
the individual’s ordinary tasks.
• Broaden the possibility to make adjustments for
employments governed by rules other than Swedish
to comply with mandatory rules or established local
practice.
• Allow for additional remuneration and benefits to be
granted to expatriates relocating to or from their home
country, to increase flexibility and improve retention and
attraction of key employees.
• Clarify that the Board of Directors may reduce or reclaim
variable remuneration, in whole or in part, under certain
circumstances, to strengthen accountability and protect
shareholders’ interests.
• Clarify the pension provisions and remove the provision
on pensionable age.
• Amend the provisions regarding termination of employ-
ment and related compensation, including allowing for
compensation for non-compete undertakings.
Finally, certain editorial changes and clarifications have
been made for increased clarity and improved structure.
The Board of Directors considers the revisions to reflect
the general interest of the shareholders.
The Board of Directors’ proposal, cont.
150SKF ANNUAL REPORT 2025
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STATEMENTS
Seven-year review
MSEK unless otherwise stated 2025 2024 2023 2022 2021 2020 2019
Income statements
Net sales 91,583 98,722 103,881 96,993 81,732 74,852 86,013
Operating income/expenses
incl. associated comp. –83,828 –88,383 –92,797 –88,401 –70,974 –67,783 –76,618
Operating profit 7,755 10,339 11,084 8,532 10,758 7,069 9,395
Financial income and expense, net –1,330 –1,250 –1,903 –1,239 –695 –769 –926
Profit before taxes 6,425 9,089 9,181 7,293 10,063 6,300 8,469
Taxes –2,176 –2,202 –2,404 –2,438 –2,484 –1,826 –2,677
Net profit 4,249 6,887 6,777 4,855 7,579 4,474 5,792
Balance sheets
Intangible assets 14,412 17,245 17,007 18,193 16,942 16,242 18,397
Deferred tax assets 4,095 3,369 3,107 3,173 3,839 4,800 4,437
Property, plant and equipment 27,785 30,470 26,820 24,897 20,723 18,161 18,420
Right of use assets 2,900 3,564 2,961 3,084 2,661 2,517 2,991
Non-current financial and other assets 2,693 2,971 2,091 1,781 1,674 1,939 2,019
Inventories 23,677 26,182 23,194 26,052 20,997 15,733 18,051
Trade receivables 15,408 16,600 16,811 16,905 13,972 12,286 14,006
Other current assets 15,452 19,012 19,912 16,838 18,820 18,879 15,787
Total assets 106,422 119,413 111,903 110,923 99,628 90,557 94,108
Equity 55,668 61,969 54,956 54,043 45,365 35,712 37,366
Provisions for post-employment benefits 7,004 8,502 8,797 8,748 11,781 15,170 15,366
Deferred tax provisions 1,955 1,905 1,220 1,365 1,040 792 960
Other provisions 3,766 2,582 2,584 2,305 2,517 3,482 2,474
Financial liabilities 15,340 20,760 21,954 22,135 19,336 18,349 19,017
Trade payables 11,207 12,553 11,236 11,594 9,881 8,459 8,266
Other liabilities 11,482 11,142 11,156 10,733 9,709 8,593 10,659
Total equity and liabilities 106,422 119,413 111,903 110,923 99,628 90,557 94,108
MSEK unless otherwise stated 2025 2024 2023 2022 2021 2020 2019
Key figures
1)
Operating margin, % 8.5 10.5 10.7 8.8 13.2 9.4 10.9
EBITA 8,347 10,971 11,741 9,173 11,340 7,681 10,008
EBITDA 12,380 14,771 15,381 12,316 14,064 10,470 12,892
Return on capital employed, % 9.6 12.1 13.3 10.6 14.8 9.8 13.2
Return on equity, % 7.4 11.7 12.0 9.5 18.8 12.1 15.7
Net working capital, % of sales 30.4 30.6 27.7 32.4 30.7 26.1 27.7
Net debt/equity, % 21.6 26.6 29.5 35.2 38.3 51.7 59.3
Net debt/EBITDA 1.0 1.1 1.1 1.5 1.2 1.8 1.7
Turnover of total assets, times 0.82 0.85 0.90 0.90 0.85 0.79 0.90
Gearing, % 27.7 30.9 35.2 35.6 40.5 48.0 47.1
Equity/assets, % 52.3 51.9 49.1 48.7 45.5 39.4 39.7
Net cash flow after investments before financing 6,892 5,190 7,916 295 2,100 5,259 4,953
Investments and employees
Additions to property,
plant and equipment 3,821 5,078 5,749 5,030 3,822 3,332 3,461
Research and development
expenses 3,409 3,326 3,303 3,177 2,751 2,515 2,691
Patents – number of first filings 213 261 245 240 241 200 201
Average number of employees 36,498 37,731 39,672 40,773 40,861 38,385 41,559
Number of employees registered
at 31 December 37,271 38,743 40,396 42,641 42,602 40,963 43,360
1) See page 154 for definitions.
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STATEMENTS
Three-year review
MSEK unless otherwise stated 2025 2024 2023
Industrial
Net sales 65,614 69,475 73,393
Operating profit 7,975 9,285 9,735
Operating margin, % 12.2 13.4 13.3
Assets and liabilities, net 47,718 54,662 50,420
Registered number of employees 30,639 32,465 34,017
Automotive
Net sales 25,969 29,247 30,488
Operating profit –220 1,054 1,349
Operating margin, % –0.8 3.6 4.4
Assets and liabilities, net 13,489 16,151 14,611
Registered number of employees 3,962 3,879 4,089
Alternative performance measures
MSEK unless otherwise stated 2025 2024
EBITA and EBITDA
Net profit 4,249 6,887
Taxes 2,176 2,202
Financial income and expense, net 1,330 1,250
Operating profit 7,755 10,339
Amortizations of intangible assets 593 632
EBITA 8,348 10,971
Depreciation and impairments of intangible and tangible assets 4,031 3,800
EBITDA 12,379 14,771
Adjusted EBITA and Adjusted EBITDA
Net profit 4,249 6,887
Taxes 2,176 2,202
Financial income and expense, net 1,330 1,250
Items affecting comparability 3,918 1,844
Adjusted Operating profit 11,673 12,183
Amortizations of intangible assets 593 632
Adjusted EBITA 12,266 12,815
Depreciation 3,482 3,455
Adjusted EBITDA 15,748 16,270
Operating profit 7,755 10,339
Items affecting comparability
1)
3,918 1,844
Adjusted operating profit 11,673 12,183
Total net sales 91,583 98,722
Inventories 23,677 26,182
Trade receivables 15,408 16,600
Trade payables –11,207 –12,553
Net working capital 27,878 30,229
Net working capital, % of 12 months rolling sales (NWC) 30.4 30.6
1) For more information, see page 100.
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MSEK unless otherwise stated 2025 2024
Net profit 4,249 6,887
Equity (rolling 12-months average) 57,223 58,852
Return on equity (ROE), % 7.4 11.7
Total assets 111,158 116,558
Provisions 4,998 4,158
Other non-current liabilities 85 90
Trade payables 11,364 11,777
Other current liabilities 11,415 11,612
Non-interest bearing liabilities 27,862 27,636
Capital employed 83,297 88,922
Operating profit 7,755 10,339
Interest income 249 436
Operating profit plus interest income 8,004 10,775
Capital employed (rolling 12-months average) 83,297 88,922
Return on capital employed (ROCE), % 9.6 12.1
Adjusted operating profit 11,673 12,183
Interest income 249 436
Adjusted operating profit plus interest income 11,922 12,619
Capital employed (rolling 12-months average) 83,297 88,922
Adjusted ROCE, % 14.3 14.2
MSEK unless otherwise stated 2025 2024
Debt and Net debt
Long term loans – total 11,830 12,594
Current financial liabilities 1,172 5,361
Short term derivative liabilities –186 –627
Post-employment benefits – other 667 810
Post-employment benefits – pension 6,337 7,692
Defined benefit assets –632 –773
Long term lease liabilities 2,167 2,714
Debt 21,355 27,771
Current financial assets –9,466 –11,361
Short term derivative assets 162 62
Net debt 12,052 16,472
Shareholder's equity 55,668 61,969
Debt 21,355 27,771
Gearing, % 27.7 30.9
Shareholder's equity 55,668 61,969
Total assets 106,422 119,413
Equity/assets ratio, % 52.3 51.9
Shareholder's equity 55,668 61,969
Net debt 12,052 16,472
Net debt/equity, % 21.6 26.6
Shareholder's equity 55,668 61,969
Net debt, excluding post-employment benefits 5,680 8,743
Net debt/equity, excl post-employment benefits, % 10.2 14.1
Net debt 12,052 16,472
Adjusted EBITDA 15,748 16,270
Net debt/Adjusted EBITDA 0.8 1.0
Net debt 12,052 16,472
EBITDA 12,379 14,771
Net debt/EBITDA 1.0 1.1
Alternative performance measures, cont.
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STATEMENTS
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.
Adjusted earnings/loss per share in SEK
Basic earnings per share 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.
Definitions
Gross margin
Gross income as a percentage of net sales.
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 (NWC)
Trade receivables plus inventories minus trade payables.
Net working capital, % of 12 months
rolling 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.
Scope 1, 2 and 3
Scope 1 is emissions that SKF controls directly, e.g.
equipment using fossil fuel. Scope 2 is emissions that
SKF causes indirectly, e.g. from electricity purchase.
Scope 3 is emissions that SKF is indirectly responsible
for up the value chain, e.g. steel purchase or logistics.
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.
Turnover of total assets
Net sales in relation to twelve-month rolling
average of total assets.
154SKF ANNUAL REPORT 2025
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General information
Annual General Meeting
The Annual General Meeting will be held at Elite Park
Avenue, Kungsportsavenyn 36–38, Gothen burg,
Sweden, at 14.00 on Tuesday, 21 April 2026.
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 to be paid in two instalments.
The first instalment amount is proposed to
SEK 4.00 per share with a record date on
Thursday, 23 April 2026, and the second instal-
ment amount to SEK 3.75 per share with a record
date on Thursday, 15 October 2026. Subject to
resolution by the Annual General Meeting in accord-
ance with this proposal, it is expected that Euro-
clear will distribute the first instalment on Tuesday,
28 April 2026, and the second instalment on
Tuesday, 20 October 2026.
Financial information and reporting
Publishing dates for financial reports in 2026:
Annual Report 2025 6 March
Q1 report 21 April
Q2 report 17 July
Q3 report 21 October
Q4 report 27 January 2027
The reports are available in Swedish and English
on skf.com/group/investors. A subscription service
for press releases and interim reports, sent via
e-mail, is available on the website.
Contact information
Sophie Arnius
Head of Investor Relations
www.skf.com/group/investors
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 6 March 2026 at
13.00 CEST.
® SKF, ALEMITE, DST, GBC, KAYDON, Lincoln, PEER, and
RecondOil are registered trademarks of AB SKF (publ).
© SKF GROUP 2026. 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 20309 EN · March 2026
SKF ANNUAL REPORT 2025 was published on
6 March 2026.
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 will be published
in connection with the notice to the Annual General
Meeting 2026.
155SKF ANNUAL REPORT 2025
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remuneration
report
156SKF ANNUAL REPORT 2025
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REPORT
FINANCIAL
STATEMENTS
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 2025. 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
aligning with the best interests of shareholders.
Closely linked to long term ambitions,
targets and strategy
SKF’s strategy has been centred around two key con-
cepts: Intelligent and clean. Intelligent reflects the
commitment to provide connected and customized
solutions for customers leveraging technology to
boost operational efficiency. Clean emphasize SKF’s
role in driving a more sustainable industry and con-
ducting business transparently and responsibly. SKF
continue to build on this platform through each of the
long-term value creation plans established for Indus-
trial and Automotive, which are set to become two
standalone businesses during 2026.
To create long-term value, SKF Industrial will focus
on three strategic pillars; Reignite growth, Innovation
leadership and establishing a Business-driven value
chain. To reignite growth SKF will continue to capitalize
on attractive high-growth industries and geographies,
scale SKF’s recurring service and intelligent solutions
business, accelerate Specialized Industrial Solutions
and pursue value accretive bolt-on acquisitions.
Achieving innovation leadership will rely heavily on
differentiation through customer-centric innovation
and AI. As for creating a fully business-driven value
chain, key levers include completing current regional-
ization initiatives and optimizing the supply chain.
The Automotive business will focus on five strate-
gic levers to accelerate profitable growth and
become faster and more efficient. These are: contin-
uing to win in leading segments through focus on
core areas and continuous improvements to current
portfolio; strengthen innovation leadership; expand-
ing the addressable market; ensuring a lean company
setup; and developing an integrated value chain
closely tailored to Automotive needs.
For deeper insights into the strategic direction of
the SKF’s Industrial and Automotive businesses,
please refer to SKF’s Capital Markets Day material
from 11 November 2025, available at www.skf.com.
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 contribu-
tion to a more sustainable industry e.g. through reduc-
tion of greenhouse gas emissions, thereby driving
both financial performance and sustainability. Read
more about the performance measures in the Presi-
dent’s letter in the SKF Annual Report 2025.
Transparency and comparability
When it comes to salaries and compensation, SKF
is committed 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 feedback from shareholders.
Key highlights 2025
For information about key highlights 2025,
please see the President’s letter in the SKF
Annual Report 2025.
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 in the Group's Annual Report for 2025
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 People
Committee responsible for the preparation of mat-
ters relating to remuneration to the Group Manage-
ment. The People Committee has no executive
directors i.e. no-one from the Group Management
is part of the People Committee. Information on the
work of the People Committee in 2025 is set out
in the Corporate Governance report in the Annual
Report 2025. Remuneration of the Board of Direc-
tors is not covered by the remuneration report.
Such remuneration is resolved annually by the
Annual General Meeting and disclosed in note 23
in the Annual Report 2025.
Each year, the People Committee evaluates the
overall remuneration package to Group Manage-
ment and proposes to the Board of Directors, 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 addition to remunera-
tion 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 informa-
tion is found on pages 161.
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
commitment from Group Management to achieve
the ambitious goals to timely, efficiently and suc-
cessfully create two robust and high-performing
businesses while simultaneously driving business
results and growth, the Board of Directors decided
to introduce a separate incentive programme in
2024. As disclosed in SKF’s 2024 Remuneration
Report, implementing a transformative project as
described above while at the same time managing
ongoing business performance was 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.
As the programme continued to be active through-
out 2025 (though no payments were planned or
made), further details on this programme is avail-
able on page 162.
Beyond what is described above, the principles
of remuneration have been fully implemented and
no derogations from the procedure for implementa-
tion 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 remuner-
ation 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 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 busi-
ness strategy, sustainability and long-term interests. The performance-based programme shall
have predetermined 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. This is a key
enabler for the pursuit of a M&A agenda.
3. Organic revenue growth: By incentivizing organic growth, SKF encourage innovation and mar-
ket expansion. 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 support-
ing 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.
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 Manage-
ment 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 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.
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.
158SKF ANNUAL REPORT 2025
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Change of remuneration for the President and CEO and company performance over the last reported financial years (kSEK)
1)
2025 2025 vs. 2024 2024 vs. 2023 2023 vs. 2022 2022 vs. 2021 2021 vs. 2020
Remuneration 37,940 +7,739 (+26%) –5,789 (–16%) +11,223 (+45%)
1)
+868 (+3.6%) +2,506 (+11.7%)
Adjusted operating profit
2)
11,673,000 –510,000 (–4%) –794,000 (–6%) +2,773,000 (+27%) –635,000 (–5.9%) +1,645,000 (+17.9%)
Cash flow
3)
8,392,000 –2,400,000 (–22%) –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 1,163 +76 (+7%) –50 (–4%) +86 (+8%) +3 (+0.3%) +18 (+1.7%)
1) 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 and CEO participated in and was allotted shares.
2) Operating profit excluding items affecting comparability.
3) Net cash flow from operating activities.
Total remuneration in 2025 (KSEK)
Fixed remuneration Variable remuneration
Year
Fixed salary
(including
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
2025 16,682 289 6,236 6,135 8,598
1)
— 37,940 61/39
2024 15,712 266 6,013 4,582 3,628
2)
— 30,201 73/27
1) The multi-year variable consists of the PSP 2023 programme that vested on 6 February 2026. The share price at vesting was SEK 247.90
2) The multi-year variable consists of the PSP 2022 programme that vested on 7 February 2025. The share price at vesting was SEK 221.40.
Total remuneration of the President and CEO 2025
The table below sets out the total remuneration earned to SKF's President and CEO.
variable
Proportion of fixed and variable renumeration
Variable renumeration, 39%
Fixed renumeration, 61%
2025
2024
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 2025
The table above shows the CEO and average
employee remuneration, along with the Group’s
financial performance development from 2020 to
2025. 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 2025, SKF’s financial performance remains
solid with an improved adjusted operating margin
year-over-year, despite significant currency head-
wind and soft market conditions causing lower
volumes and negatively impacting the adjusting
operating profit.
Year-over-year CEO remuneration increased, pri-
marily due to the multi-year variable component.
In 2023, the CEO received a higher PSP award com-
pared to 2022, which was his first year of partici-
pation. The 2023 PSP cycle also introduced a new
climate related performance criterion, a higher
weighting on this fully vested climate-related metric,
and a stronger achievement against the financial
criteria all contributing to a higher payout than the
previous year. In addition, the CEO received a posi-
tive fixed-salary adjustment based on strong indi-
vidual performance in 2024. The one-year variable
outcome also improved, with a payout of 53.6%
( compared to 42.5% in the prior year), mainly driven
by a greater emphasis on organic growth within the
2025 plan. While the absolute organic growth was
relatively flat, performance improved relative to last
year (–0.4% vs. –5.4%).
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One-year variable remuneration
The Board of Directors, each year, after preparation
in the People Committee, resolve on the performance
criteria for the one-year variable remuneration pro-
gramme. 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 2025
Performance
achievement 2025
Actual award
2025, KSEK
Rickard Gustafson,
President and CEO
Adjusted operating margin 40% 12.7% 25.0%
Net working capital 20% 33.0% 0.0%
Organic growth 30% –0.4% 18.6%
Reduction greenhouse
gas emission 10%
76,000 CO
2
e metric
tonnes reduction
2)
10%
100% 53.6% 6,135
One-year variable performance 2025 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 remunera-
tion is capped and cannot generate more than a 100% payout.
2) See more details on achieved CO
2
reduction in the Sustainability Statements.
Performance criteria and weighting for the 2026
one-year variable remuneration programme
interest of the SKF Group. In the selection of per for-
mance criteria, the strategic objectives, sustain-
ability, short-term and long-term business priorities
for 2025 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 2026 programme, the Board have resolved
on the same performance criteria and the same
relative weighting of the performance criteria as for
the 2025 programme. See second table for the 2026
performance criteria.
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Performance Share Programme expired in 2025
The SKF Performance Share Programme 2023 expired at the end of 2025.
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 2023
1 Jan 2023–
31 Dec 2025
February
2026
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% 43,923 6,070 MSEK
1)
43.17%
CDP Climate
Change score
2)
Weighted average of the annual performance
achievement for the performance period. An aver-
age 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% 10,981 A/A/A 20%
100% 54,904
3)
63.17% 34,683
Ongoing Performance Share Programme
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
2)
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
3)
Programme Performance period Performance criteria Conditions
Relative weighting
performance criteria
Possible
outcome
Maximum share awards
granted to CEO
PSP 2025
1 Jan 2025–
31 Dec 2027
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% 52,660
3)
1) Average TVA achieved during the performance period. Note that TVA targets are set annually, and the programme’s overall TVA result reflects the average achievement across the yearly targets. This methodology, introduced with PSP 2023 to improve relevance and stability,
differs from previous programmes where a single target range applied to the full period. As a result, similar absolute TVA outcomes in PSP 2023 and PSP 2022 may lead to different performance achievements.
2) 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.
3) Shares corresponding to a value of 75% of the fixed base salary on day one of the relevant programme’s performance period.
PSP, performance periods
20242023
PSP 2023
PSP 2025
PSP 2024
2025
2026
2027
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.
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Creation of two robust and
high-performing businesses
As communicated in SKF’s Remuneration Report
2024, the Board of Directors decided to implement a
separate incentive program for Group Management in
2024, following the announcement to initiate a sepa-
ration of the Automotive business with the aim of a
separate listing on Nasdaq Stockholm. The purpose
was to incentivize sustained dedication, focus, and
commitment from Group Management to reach the
ambitious objective of timely, efficient, and success-
ful creation of two robust and high- performing busi-
nesses while driving business results and growth.
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.
162SKF ANNUAL REPORT 2025
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OTHER
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AB SKF
SE-415 50 Gothenburg, Sweden
Telephone +46 31 337 10 00
www.skf.com