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www.alfalaval.com
www.alfalaval.com21/07/2020 | © Alfa Laval 2 |
Report for Q2 2020Tom Erixon
President and CEO
Alfa Laval Group
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picture
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TBU
www.alfalaval.com
Key figures
21/07/2020 | © Alfa Laval 3 |
Q2 2020 Q2 2019 %-change %-▲,org*
Order intake 9,749 10,025 -3 -3
Net sales 10,455 11,339 -8 -5
Adjusted EBITA** 1,802 1,870 -4
Adjusted EBITA-margin (%) 17.2 16.5
YTD 2020 YTD 2019 %-change %-▲,org*
Order intake 21,626 22,238 -3 -2
Net sales 21,045 21,497 -2 -1
Adjusted EBITA*** 3,552 3,598 -1
Adjusted EBITA-margin (%) 16.9 16.7
*) Organic growth i.e. excluding currency effects and structural changes.
**) Positive currency effect SEK 60 million (95) ***) Positive currency effect SEK 150 million (190).
www.alfalaval.com
− Highlights and comments
Food & Water division
21/07/2020 | © Alfa Laval 4 |
MARKETS & ORDER INTAKE
• Overall demand remained stable with some end
market variations.
• Demand was especially strong in the wastewater and
pharma & biotech segments.
• Service grew in the quarter on the back of spare parts
and service agreements.
PROFITABILITY (EBIT)
• Generally lower cost in combination with a stable
invoicing and gross margin generated an improved
operating margin.
Q2 20 Q2 19 YoY %-
change
Q1 20
ORDERS 3,396 3,520 -3.5 3,612
SALES 3,241 3,335 -2.8 3,118
EBIT 533 473 498
EBIT (%) 16.4 14.2 16.0
0
200
400
600
800
1 000
1 500
2 000
2 500
3 000
3 500
4 000
Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220
Sales EBIT
www.alfalaval.com
− Highlights and comments
Energy division
21/07/2020 | © Alfa Laval 5 |
MARKETS & ORDER INTAKE
• Overall investment activity levels in the hydrocarbon
chain negatively impacted by COVID-19.
• Demand in HVAC/refrigeration continued on a stable
level.
• COVID-19 related closures and lower activity levels at
oil and gas customers had a negative impact on
service in the quarter.
PROFITABILITY (EBIT)
• Positive effects from the cost reduction program
secured a stable operating margin in line with last
year.
Q2 20 Q2 19 YoY %-
change
Q1 20
ORDERS 3,279 3,566 -8.0 3,197
SALES 2,979 3,531 -15.6 3,039
EBIT 476 558 488
EBIT (%) 16.0 15.8 16.1
0
200
400
600
800
1 000
1 500
2 000
2 500
3 000
3 500
4 000
Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220
Sales EBIT
www.alfalaval.com
− Highlights and comments
Marine division
21/07/2020 | © Alfa Laval 6 |
MARKETS & ORDER INTAKE
• Order intake in BU Pumping systems was solid.
• Demand for PureBallast systems continued on a
high level, while the retrofit demand for PureSOx
was low.
• Service negatively affected by travel and
accessibility restrictions in the quarter.
PROFITABILITY (EBIT)
• Operating margin negatively affected by mix within
capital sales and continued negative FX effects.
Q2 20 Q2 19 YoY %-
change
Q1 20
ORDERS 3,074 3,144 -2.2 5,068
SALES 4,235 4,329 -2.2 4,433
EBIT 705 809 708
EBIT (%) 16.6 18.7 16.0
0
200
400
600
800
1 000
1 200
1 400
2 000
2 500
3 000
3 500
4 000
4 500
5 000
5 500
Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220
Sales EBIT
www.alfalaval.com
− Order intake Q2, share and development
Service, by division
21/07/2020 | © Alfa Laval 7 |
ENERGY FOOD & WATER MARINE
Q220: 23%
Absolute development
YoY
Absolute development
YoY
Absolute development
YoY
+ -
Q220: 32% Q220: 32%
-
= Service share of total order intake
www.alfalaval.com
Orders received
21/07/2020 | © Alfa Laval 8 |
0
7 000
14 000
21 000
28 000
35 000
42 000
49 000
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220
SEK million SEK million R 12
-3%
-17
%
+2
5%
+1
9%
-11
%
= Order intake per quarter
= Order intake per quarter “large” = Rolling twelve months value
= % development by quarter, year on year+XX%
www.alfalaval.com
− Development Q2 vs Q2 / YTD vs YTD, at constant rates
Orders received by region
21/07/2020 | © Alfa Laval 9 |
19%;
North America
+30% / -17%
-17% / -11%
-10% / +9%
+10% / +10%
-3% / -15%
-10% / +3%
1%;
Africa & Oceania9%; Nordic
20%;
Western Europe
7%;
Central- & Eastern
Europe
40%; Asia
4%;
Latin America
-26% / +13%
vs Q2-19 / vs YTD 2019Share %: April – June 2020
www.alfalaval.com
− SEK million at prevailing rates
Top ten markets*
21/07/2020 | © Alfa Laval 10 |
0 1000 2000 3000 4000 5000 6000 7000 8000
France
Benelux
Japan
South East Asia
Mid Europe
Adriatic
Korea, South
Nordic
China
United States
*The order intake development of the 2019 top ten markets.= FY 2019
= LTM 2020
www.alfalaval.com
− SEK millions and in percent of sales
Adjusted EBITA/margin*
21/07/2020 | © Alfa Laval 11 |
* Adjusted EBITA – ”Earnings before interests, taxes, amortization of goodwill and step up values and comparison distortion items.”
10,0
11,0
12,0
13,0
14,0
15,0
16,0
17,0
18,0
19,0
20,0
0
250
500
750
1 000
1 250
1 500
1 750
2 000
2 250
2 500
Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220
SEK million Percent of sales
17.216.516.2
15.8
| www.alfalaval.com| © Alfa Laval
Report for Q2 2020 Jan Allde
CFO
Alfa Laval Group
www.alfalaval.com
− MSEK
Sales
21/07/2020 | © Alfa Laval 13 |
0
7 000
14 000
21 000
28 000
35 000
42 000
49 000
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20
= Sales per quarter = Rolling 12-months value
= % development year on year+XX%
-8%
+8
%
+1
8%
+0
%
-12
%
10,455
SEK million R 12SEK million
www.alfalaval.com
− In percent of sales
Adjusted gross margin
21/07/2020 | © Alfa Laval 14 |
30
35
40
45
Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220
35.435.935.436.4
Q2 2019 35.9
Mix/price -
Load/volume +
PPV/metals =
FX -
Structure =
Q2 2020 35.4
www.alfalaval.com
− MSEK
S&A Expense development
21/07/2020 | © Alfa Laval 15 |
Q2 2020 Q2 2019 YTD 2020 YTD 2019
Sales costs 1,002 1,204 -16.8% 2,159 2,376 -9.1%
Admin costs 446 568 -21.5% 959 1,065 -10.0%
Total S&A costs 1,448 1,772 -18.3% 3,118 3,441 -9.4%
Excl. FX impacts and
acq./divestments
-16.9% -8.7%
www.alfalaval.com
− MSEK
Key figures
21/07/2020 | © Alfa Laval 16 |
Q2 2020 Q2 2019
Sales 10,455 11,339
Gross profit 3,483 3,812
Sales & Admin -1,448 -1,772
R&D -251 -272
Net other cost/income -211 39
Operating income 1,580 1,808
Financial net 140 24
Profit before tax 1,720 1,832
Taxes -424 -420
EPS 3.07 3.36
www.alfalaval.com
− MSEK
Cash-flow statement
21/07/2020 | © Alfa Laval 17 |
Q2 2020 Q2 2019 1H 2020 1H 2019
EBITDA 2,068 2,300 4,096 4,249
Other non-cash items 23 -223 3 -173
Working Capital 1,012 -1,025 557 -1,506
Taxes paid -259 -443 -853 -986
Cash flow from operating activities 2,844 609 3,803 1,584
Capital expenditures -192 -172 -399 -606
Disposals -1 375 131 376
Acquisitions 0 0 -8 -61
Cash flow from investing activities -193 203 -276 -291
Financial net paid -26 41 -373 208
Cash flow 2,625 853 3,154 1,501
Free cash flow* 2,626 478 3,031 1,186
*) Incl. cash flow from operating activities, capital expenditure and financial net paid.
www.alfalaval.com
− MSEK
Net Debt by June 30, 2020
21/07/2020 | © Alfa Laval 18 |
Cash & Bank 8,783
-8,783
Senior FacilitySEKSEB & NordeaBondsOther incl. Comm Paper
01,0481,9988,355
145
11,546
Lease payables 2,508
14,054
Net Debt 5,271
• Net Debt / EBITDA: 0.58 (1.3)*
• Net Debt / Equity: 0.19 (0.42)*
*) Lease payables increased by
2,766 MSEK due to IFRS 16
implementation. Excluding this Net
Debt equals 2,763 MSEK; Net Debt /
EBITDA excl. IFRS 16 impact: 0.30
and Net Debt / Equity: 0.10
www.alfalaval.com
− Estimated impact on adjusted EBITA from FX fluctuations, MSEK
Foreign exchange
21/07/2020 | © Alfa Laval 19 |
Q2 2020 FY 2020 FY 2021*
Transaction effect 90 440 290
Translation effect -30 -180 -
Total 60 260 290
Projected FX-transaction effect for 2020 communicated with Q1 report: SEK 530 million
Note: Excludes FX effects caused by revaluation of balance items in foreign currency.
*) Based on EUR/USD 1.133 and EUR/SEK 10.470
www.alfalaval.com
− SEK billion
Order backlog as per June 30
21/07/2020 | © Alfa Laval 20 |
0
5
10
15
20
25
Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220
21.9
12
.19
.8
24.6
13
.511
.0
book to bill0.860.88
= For delivery next year or later
= For delivery during the current year
0.89 1.12 0.93
www.alfalaval.com
− FY 2020, SEK billion
Sales
21/07/2020 | © Alfa Laval 21 |
YTD Sales 21.0
Backlog, for delivery current year +12.1
Subtotal 33.1
Price
“In-for-out”*
FX translation
Acquisitions
Full year 2020
*IFO in Q3-Q4 2019 excluding acquisitions/divestments was SEK 11.5 bln.
For you to consider:
www.alfalaval.comwww.alfalaval.com21/07/2020 | © Alfa Laval 22 |
“We expect demand in the third quarter to be somewhat lower than in the second quarter.”
Outlook for the third quarter:
www.alfalaval.com
www.alfalaval.com
− Distribution of orders Q2 2020 (MSEK)
Activity split O&G, total
21/07/2020 | © Alfa Laval 24 |
Marine
Alfa Laval
Share of totalAlfa Laval
Energy
Drilling Processing &Transportation
PetrochemicalsRefinery
Grand total SEQ/YOY
1,127 (+/-)
263 (+/+)
=1,390*(-/-)
= 14.3%1.2% 4.6%2.9%5.6%
21
99
= 120
383
164
= 547
278
0
= 278
445
0
= 445
*) incl. aftermarket
(SEQ/YoY)
www.alfalaval.com
− Distribution of orders LTM, end of June
Marine Division’s industry split
21/07/2020 | © Alfa Laval 25 |
Share
Driver
Marine Offshore oil and gas
Engine power Service
World trade &
fleet capacity
Oil & gas demand
and prices
Electrical power
needs
World trade
Environment & Energy, Marine
Legislation &
fuel cost
32%
4%25%8%
31%
www.alfalaval.com
− Distribution of sales LTM end of June
Marine Division’s industry split
21/07/2020 | © Alfa Laval 26 |
Share
Driver
30%
Marine Offshore oil and gas
Engine power Service
3%
26%
World trade &
fleet capacity
Oil & gas demand
and prices
Electrical power
needs
World trade
Environment & Energy, Marine
34%
Legislation &
fuel cost
7%
www.alfalaval.com
− Compared with same quarter last year (%), excluding currency effects
Organic growth pace
21/07/2020 | © Alfa Laval 27 |
(30)
(20)
(10)
0
10
20
30
Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220
= Order intake growth
www.alfalaval.com
− Orders received excluding the “Marine Environmental”* business
Orders received
21/07/2020 | © Alfa Laval 28 |
0
7 000
14 000
21 000
28 000
35 000
42 000
49 000
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220
SEK million SEK million R 12
-3%
-13
%
+1
7%
+1
7%
-11
%
= Order intake per quarter
= Order intake per quarter “ Marine Environmental”
”
= Rolling twelve months value, excluding “Marine Environmental”
= % development by quarter, year on year, excluding “Marine Environmental”+XX%
*) Alfa Laval PureSOx and Alfa Laval PureBallast.
www.alfalaval.com
Cautionary statement
21/07/2020 | © Alfa Laval 29 |
This presentation contains forward-looking statements that are based on the
current expectations of the management of Alfa Laval Group.
Although management believes that the expectations reflected in such forward-
looking statements are based on reasonable assumptions, 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, other government actions and
fluctuations in exchange rates. Alfa Laval undertakes no obligation to publicly
update or revise these forward-looking statements, other than as required by law
or other regulations.
www.alfalaval.com