Innovation for the real world:

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1 Innovation for the real world: Reliable rotation by SKF Victoria Van Camp CTO and President, Innovation & Business Development

2 Providing reliable rotation how?

3 Detect Solve Rebuild or Remanufacture

4 Gain insights and make customers better Detect Solve Rebuild or Remanufacture

5 The P-F* curve Reaction time for maintenance planning Failure Vibration Defect starts P-F: Potential failure Functional failure Time Slide 5 28/11/2018

6 Technology development enabling our REP business models

7 The more we can detect, the more insight and opportunity we generate # of points monitored is important but # of points connected to REP Centers is KEY How do we get there? Ease of connection and use: your daily work tool Seamless and enjoyable UX Connected to bearings / housings from the start AI for detection, analysis and action

8 Quick Collect: Seamless connections Create profile Create asset Measure asset API API API API Pulse Check SKF Digital Platform

9 SKF Multilog IMx-16Plus 4G Extended modbus capabilities for data sharing Dual master and slave mode Up to 4 connections to slaves and/or masters Connectivity: Mobile data connectivity (4G) Wi-Fi

10 Next Generation Systems IMx-1 low cost sensor computer: 2.4GHz ISM band mesh Acceleration, velocity, enveloping, temperature Onboard alarm assessment logic Configurable measurement and transmit rates Smart Gateway: Sensor interface for configuration and control Patented 2.4 GHz coexistence technology Fast time synchronization between sensors Enables data sharing with 3rd party systems

11 Prognostic algorithm Detection algorithm Data generation Parameter evaluation AI and physics for real life prognostics Test Simulation 1 2 F, ω, l etc. SKF small damage propagation model Influence factors Verification tests Spall information SKF large damage propagation model Spall growth prognosis

12 Developing REP Ready bearings

13 Gain insights and make customers better Detect Solve Rebuild or Remanufacture

14 Bearings need protection! Cement roller press in Thailand

15 241/1250: SKF s largest sealed SRB design patented! Seal is almost 1.9m in diameter Seal weighs about 20 kg Possible to screw in outer-ring Possible to remove seal lip without discarding entire seal =

16 Vibration levels of sealed and open SRBs 12 months

17 Fee-based models in process industries Customer s need: Improve reliability and reduce total cost of ownership Customer s problem: CAPEX cap Solution: Function provided OPEX Cost Time Provide product every time it needs replaced Monthly fee for providing a function Products Equipment performance

18 When one seal is not enough the Three Barrier Solution 1 st barrier: external housing seal 2 nd barrier: housing grease 3 rd barrier: integral bearing seal Slide November 2018

19 Providing a function: Steel- and aluminum production 4-row CRBs face challenging conditions: Flooded housings => smearing Water in oil (5% to 25%) => surface wear and severe corrosion Fretting corrosion causing bearing to jam The result: Bearing runs hrs when it could run hrs or more. Sealing improvement Bearing solution

20 Coated 4-row CRB for metal production: WISCO China Lab tests and simulations showed 4x life improvement with new design => prototype built and in field trial F Water in oil August 2017: Start of operation November 2018: 6 400h and still running 50% cost out Voice of the customer: Very satisfied with the achieved running hours Competitor running hours to failure: Competitor A: <2000h ring crack Competitor B: <2000h Competitor C: ~5000h

21 Before and after remanufacturing

22 REP ready for extreme environments

23 Large air conditioning units: lubricating with refrigerant Bearings, normally oillubricated Cooling capacity ~ 1 MW ~ 5-8 % savings on system efficiency with SKF solution Weight > 10 Tons when running - of which one ton refrigerant Rotor wheel to compress refrigerant

24 Film thickness analogy: Oil vs Refrigerant Oil lubricated ~ 500 nm Refrigerant lubr. ~ 20 nm Slide November, 2018

25 Why hybrid bearings? Hybrid bearings main advantage Bearing grade silicon nitride (ceramic) rolling elements Bearing grade super-tough steel rings Speed Lubrication - Contamination +20% higher speed of rotation > increased efficiency in machine tools 3 times longer grease life Less sensitive to contamination > longer mainentance intervalls Rollers Weight Lower weight > lower fuel consumption in aero applications Insulation Eliminated electrial damage on bearings > reduced risk for failure and replacement Balls Engineering polymer cage Longer Service Life Higher System Efficiency Performance based approach Innovation - Drop in solution

26 L10 [Mrev] For the design engineer: New life calculation for Hybrid bearings Not covered with standard ISO life calculation 2x life under worst possible conditions L10 hybrid L10 steel C/P Increasing load

27 Designing for cost

28 Everything you need, nothing you don t Cost Design with cost in mind Manufacturing Purchasing Cost-driver removal Value innovation Value Design with value in mind Flexibility Predictability Serviceability Remanufacturing Mounting

29 Design for what matters, save cost on the rest SKF Competitor Kossan Glove manufacturing 12 months in operation, no issues Lower cost, longer life Engineering knowledge to optimize dimensions, material, seal and grease Food producers world wide Hygienic design to FDA standards wash it down at night No detergent ingress Low friction yet protective seal

30 Gain insights and make customers better Detect Solve Rebuild or Remanufacture Control process

31 SKF Fibre Optic Sensing Sensing load by light alone Hands-on realization of Industry 4.0. Bearings ideal for IoT SKF partners with Telecom to digitalize rotating equipment Bearings become Process Control instruments REP Technology leap: Control the process & prevent failures Scalable. Potential to make in normal SKF factory

32 Our focus: Reliable Rotation at Lowest Cost Fee based agreements capture the value as it is being delivered Insights from every touchpoint - making us and the customer better