Presentation Q3 200815,0 18,0 21,0 24,0 SEK millions and in percent of sales * Adjusted EBITA – ”Earnings before interests, taxes, amortization of goodwill and s tep up values

Interim Report Q3 2008Interim Report Q3 2008

Mr. Lars RenstrMr. Lars Renströömm

President and CEOPresident and CEO

Alfa Laval GroupAlfa Laval Group

-- Orders received and marginsOrders received and margins

-- HighlightsHighlights

-- Development per segmentDevelopment per segment

-- Geographical developmentGeographical development

-- Financials Financials

-- OutlookOutlook

© Alfa Laval Slide 3 www.alfalaval.com

Key figuresKey figures

�� Orders received decreased 3.4% to SEK 6,784 million.Orders received decreased 3.4% to SEK 6,784 million.

�� Net sales rose 4.9% to SEK 6,632 million.Net sales rose 4.9% to SEK 6,632 million.

�� Adjusted EBITA up 7.8% at SEK 1,444 million. Adjusted EBITA up 7.8% at SEK 1,444 million.

-- Negative currency effect SEK 94 million.Negative currency effect SEK 94 million.

July July –– September 2008September 2008

January January –– September 2008September 2008

�� Orders received up 4.3% at SEK 21,283 million.Orders received up 4.3% at SEK 21,283 million.

�� Net sales up 14.5% at SEK 19,754 million.Net sales up 14.5% at SEK 19,754 million.

�� Adjusted EBITA up 34% at SEK 4,439 million. Adjusted EBITA up 34% at SEK 4,439 million.

-- Negative currency effect SEK 226 million.Negative currency effect SEK 226 million.


0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

0

4 000

8 000

12 000

16 000

20 000

24 000

28 000

32 000

SEK millionSEK million

Orders receivedOrders received

SEK million R 12SEK million R 12

= rolling twelve months value= rolling twelve months value

= order intake per quarter= order intake per quarter

Q3

05

Q3

05

Q4

05

Q4

05

Q1

06

Q1

06

Q2

06

Q2

06

Q3

06

Q3

06

Q4

06

Q4

06

Q1

07

Q1

07

Q2

07

Q2

07

Q3

07

Q3

07

Q4

07

Q4

07

Q1

08

Q1

08

Q2

08

Q2

08

+25

%+

25

%

+23

%+

23

%

+28

%+

28

%

+35

%+

35

%

+17

%+

17

%

+40

%+

40

%

+36

%+

36

%

+13

%+

13

%

+30

%+

30

%

0%

0%

+9

%+

9%

+8

%+

8%

= % development at constant rates by = % development at constant rates by

quarter year on yearquarter year on year

++xx%xx%

-- 3%

3%

Q3

08

Q3

08


Order analysisOrder analysis

2007 2007 (SEK millions)(SEK millions)

Structural change, %Structural change, %

Currency effects,%Currency effects,%

Organic development, %Organic development, %

Total, %Total, %

2008 2008 (SEK million)(SEK million)

7,1507,150

July July –– September 2008September 2008

6,7846,784

+ 2.8 + 2.8

-- 1.7 1.7

-- 6.26.2

-- 5.1 5.1


0

225

450

675

900

1 125

1 350

1 575

1 800

0,0

3,0

6,0

9,0

12,0

15,0

18,0

21,0

24,0

SEK millions and in percent of salesSEK millions and in percent of sales

* Adjusted EBITA * Adjusted EBITA –– ””Earnings before interests, taxes, amortization of goodwill and sEarnings before interests, taxes, amortization of goodwill and step up values and comparison distortion items.tep up values and comparison distortion items.””

Adjusted EBITA / margin *Adjusted EBITA / margin *

Q108Q108Q305Q305 Q405Q405 Q106Q106 Q206Q206 Q306Q306 Q406Q406 Q107Q107 Q207Q207 Q307Q307 Q407Q407 Q208Q208 Q308Q308










-- OutlookOutlook


Highlights during the quarterHighlights during the quarter

Large orders, total SEK 200 million (360) Large orders, total SEK 200 million (360)

�� Power order in Russia.Power order in Russia.

Order value SEK 50 million. Delivery during 2009.Order value SEK 50 million. Delivery during 2009.



�� Power order in Russia.Power order in Russia.

�� Thermal evaporation systems order in India.Thermal evaporation systems order in India.

Order value SEK 150 million. Delivery during 2009.Order value SEK 150 million. Delivery during 2009.

Large orders, total SEK 200 million (360) Large orders, total SEK 200 million (360)



AcquisitionsAcquisitions

�� German company German company PresskoPressko AG.AG.

Specialist company providing fully welded heat exchangers.Specialist company providing fully welded heat exchangers.

Estimated sales of about SEK 50 million in 2008. Estimated sales of about SEK 50 million in 2008.



AcquisitionsAcquisitions

�� German company German company PresskoPressko AG.AG.

�� U.S. company Hutchison Hayes Separation. U.S. company Hutchison Hayes Separation.

Provider of separation equipment, parts and services mainly to tProvider of separation equipment, parts and services mainly to the U.S. he U.S.

energyenergy--related industries. Sales of about SEK 150 million in 2007. related industries. Sales of about SEK 150 million in 2007.










-- OutlookOutlook


Orders received by SegmentOrders received by Segment

Comfort & Comfort &

RefrigerationRefrigeration

SanitarySanitary

Marine & DieselMarine & Diesel

Fluids & UtilityFluids & Utility

OEMOEM

Parts & ServiceParts & Service

Life ScienceLife Science

Process IndustryProcess Industry

Energy & EnvironmentEnergy & Environment

FoodFood

July July –– September 2008, September 2008, at constant ratesat constant rates

++++

++++

++++

++++

−−−−

====

−−−−

−−−−

−−−−

++++


Orders received by SegmentOrders received by SegmentThe Process Technology Division, July The Process Technology Division, July –– September 2008, September 2008, at constant ratesat constant rates

�� Slight decrease for Slight decrease for

base businessbase business

�� Food affected by Food affected by

nonnon--repeat ordersrepeat orders

�� Continued strong Continued strong

development for E&Edevelopment for E&E




FoodFood

++++

++++

====

−−−−


Orders received by SegmentOrders received by SegmentThe Equipment Division, July The Equipment Division, July –– September 2008, September 2008, at constant ratesat constant rates

� Comfort & Refrigeration

affected by slowdown in

construction

� Recovery for OEM due to

growth in heat-pump

demand

� Slowing orders for Marine,

Diesel had strong

development

Comfort & Comfort &


SanitarySanitary



OEMOEM

++++

−−−−

−−−−

−−−−

++++


Orders received by SegmentOrders received by Segment

Comfort & Comfort &


SanitarySanitary



OEMOEM

Parts & ServiceParts & Service




FoodFood

January January –– September 2008, September 2008, at constant ratesat constant rates

++++−−−−

−−−−

++++

++++

++++

====

−−−−

====

−−−−










-- OutlookOutlook


Orders received by RegionOrders received by Region

Centr

Centr. &

East 8

%

. & E

ast 8

%

North

Am

erica

17 %

North

Am

erica

17 %

Asia 33 %Asia 33 %

L. A

merica

7 %

L. A

merica

7 %

Other 2 %

Other 2 %

Western Europe 24 %

Western Europe 24 %

Nord

ic 9

%

Nord

ic 9

%


--1111--1919+23+23

+5+5

--44

+3+3


Orders received by RegionOrders received by RegionJuly July –– September 2008, September 2008, at constant ratesat constant rates

Centr

Centr. &

East 8

%

. & E

ast 8

%

North

Am

erica

17 %

North

Am

erica

17 %

Asia 33 %Asia 33 %

L. A

merica

7 %

L. A

merica

7 %

Other 2 %

Other 2 %

Western Europe 24 %

Western Europe 24 %

Nord

ic 9

%

Nord

ic 9

%

+23+23

+3+3

+5+5

--44

--1919--1111


North America North America

�� Base orders up from last yearBase orders up from last year

�� Growth in majority of segmentsGrowth in majority of segments

�� Best performance in Energy & Best performance in Energy &

Environment and Parts & ServiceEnvironment and Parts & Service

Latin America Latin America

�� Brazil boosted by growth in the Brazil boosted by growth in the

ethanol industry as well as food ethanol industry as well as food

industry industry investmentsinvestments

�� Mexico benefitted from investments in Mexico benefitted from investments in

oil and gas industryoil and gas industry

Highlights AmericasHighlights AmericasJulyJuly–– September 2008, September 2008, at constant ratesat constant rates

+3+3

+23+23


Highlights EuropeHighlights Europe

Western Europe incl. NordicWestern Europe incl. Nordic

�� Process Technology dropped Process Technology dropped

due to fewer large ordersdue to fewer large orders

�� Equipment division was stableEquipment division was stable

�� Base business was slightly lowerBase business was slightly lower

Central and Eastern Europe Central and Eastern Europe

�� Process Technology dropped due Process Technology dropped due

to fewer large ordersto fewer large orders

�� Base business had a continued Base business had a continued

positive developmentpositive development


--1111--1919

+5+5


Highlights AsiaHighlights Asia

Asia Asia

�� Decline due to slowing Decline due to slowing

Marine marketMarine market

�� Strong development for Process Strong development for Process

Industry and Food TechnologyIndustry and Food Technology

�� Best performance seen in Korea, Best performance seen in Korea,

the Middle East and South East Asiathe Middle East and South East Asia


--44


Orders received by RegionOrders received by Region

+14+14

+23+23

January January –– September 2008, September 2008, at constant ratesat constant rates

--77 --77--88

Asia 35%Asia 35%

Centr

Centr . &

East 8

%

. & E

ast 8

%Nord

ic 9

%

Nord

ic 9

%

Western Europe 25 %Western Europe 25 %

Other 2 %

Other 2 %

North

Am

erica

14 %

North

Am

erica

14 %

L. A

merica

6 %

L. A

merica

6 %

00


Mr. Thomas ThuressonMr. Thomas Thuresson

CFOCFO







-- OutlookOutlook


HighlightsHighlights

Order intake Order intake

Net salesNet sales

6,7846,784

6,6326,632

SEK millionsSEK millions JulyJuly –– September 2008September 2008


Gross profit marginGross profit margin

20

30

40

50In percent of salesIn percent of sales

40.640.639.139.1

37.237.2

Q305Q305 Q405Q405 Q106Q106

35.335.3

Q206Q206 Q306Q306 Q406Q406 Q107Q107 Q207Q207 Q307Q307 Q407Q407 Q108Q108 Q208Q208 Q308Q308




Net salesNet sales

Adjusted EBITAAdjusted EBITA

Adjusted EBITAAdjusted EBITA--marginmargin

Profit before taxProfit before tax

SEK millionsSEK millions JulyJuly -- September 2008September 2008

6,7846,784

6,6326,632

1,4441,444

21.8%21.8%

1,4181,418


Earnings per shareEarnings per share

EarningsEarnings

Earnings, excluding stepEarnings, excluding step--upup

20082008

2.322.32

2.432.43

20072007

2.082.08

2.212.21

July July -- SeptSept Jan Jan -- SeptSept

20082008

6.796.79

7.117.11

20072007

4.724.72

5.105.10


Group FundingGroup Funding–– Summary of credit facilities as per September 30, 2008Summary of credit facilities as per September 30, 2008

CommittedCommitted Utilised MaturityUtilised Maturity

SEKmSEKm SEKmSEKm YearYear

Senior FacilitySenior Facility

-- ““RevolverRevolver”” USD 348 millionUSD 348 million 4,981 4,981 1,775 20121,775 2012

-- ““RevolverRevolver”” EUR 168 millionEUR 168 million

-- ““BulletBullet”” EUR 100 millionEUR 100 million

US Private Placement USD 110 millionUS Private Placement USD 110 million 748 748 748748 20162016

SHB biSHB bi--lateral loan EUR 25 244 lateral loan EUR 25 244 244244 20142014

Sub total: 5,973 2,767Sub total: 5,973 2,767

Local facilities Local facilities -- 559559

Total:Total: 5,973 3,3265,973 3,326

Cash and deposits Cash and deposits -- + 1,156 + 1,156

In addition, uncommitted facilities are available to an amount oIn addition, uncommitted facilities are available to an amount of approx. SEK 1.2 f approx. SEK 1.2 BnBn


Share repurchasesShare repurchases

SeptSept 3030

1 452 4001 452 400

0.30.3

2 658 9002 658 900

0.60.6

Mandate from AGM 2007Mandate from AGM 2007

Number of repurchased shares Jan 1 Number of repurchased shares Jan 1 -- March 31*March 31*

Percentage of outstanding sharesPercentage of outstanding shares

Mandate from AGM 2008Mandate from AGM 2008

Number of repurchased shares April 1 Number of repurchased shares April 1 –– Sept 30Sept 30

Percentage of outstanding sharesPercentage of outstanding shares

Total amount spent on shares held, SEK 364 millionTotal amount spent on shares held, SEK 364 million

* * Remaining after cancellation.Remaining after cancellation.




Net salesNet sales

Adjusted EBITAAdjusted EBITA

Adjusted EBITAAdjusted EBITA--marginmargin

Profit before taxProfit before tax

Cash flow from operating activitiesCash flow from operating activities

ROCEROCE

ROEROE

SEK millionsSEK millions JulyJuly –– September 2008September 2008

6,7846,784

6,6326,632

1,4441,444

21.8% 21.8%

1,4181,418

1,2561,256

58.2%58.2%

48.8%48.8%


Cash flows fromCash flows from

-- operating activitiesoperating activities

-- investing activitiesinvesting activities

Financial Financial net paidnet paid

TotalTotal

CashCash--flow statement flow statement

Pro Forma FreePro Forma Free--cashcash--flow*flow*

*Incl. operating activities, capital expenditure (excl. product *Incl. operating activities, capital expenditure (excl. product rights), provisions and financial net paidrights), provisions and financial net paid. .

SEK millionsSEK millionsJan Jan –– SeptSept

20082008Jan Jan -- SeptSept

20072007

3,1853,185

-- 1,1741,174

-- 192192

1,8191,819

2,5392,539

2,0142,014

-- 947947

--166166

901901

1,6071,607


Foreign exchangeForeign exchange

SEK millionSEK million

Translation effectTranslation effect

Transaction effectTransaction effect

TotalTotal

*Based on EUR/USD 1.40 and EUR/SEK 9.50*Based on EUR/USD 1.40 and EUR/SEK 9.50

Estimated impact on adjusted EBITA from Estimated impact on adjusted EBITA from FxFx. fluctuations. fluctuations

Q3 08Q3 08

-- 2929

-- 6565

-- 9494

WY 08*WY 08*

-- 120120

-- 180 180

-- 300300

WY 09*WY 09*

--

-- 100 100

-- 100100

9M 089M 08

-- 109109

-- 117117

-- 226226


Order backlog as per Sept 30

SEK millionsSEK millions

For delivery next year or laterFor delivery next year or later

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

6,5676,567

9,306

15,87315,873

6,2566,256

9,058

15,31415,314

5,1745,174

6,665

11,83911,839

For delivery during rest of current yearFor delivery during rest of current year

2008200820062006 20072007


Capital Markets Day, Nov. 18Capital Markets Day, Nov. 18

�� Hilton Hotel Copenhagen Airport, DenmarkHilton Hotel Copenhagen Airport, Denmark

�� 10:30 a.m. 10:30 a.m. -- 4:30 p.m. CET4:30 p.m. CET

�� Business updateBusiness update

�� Structural growth presentationsStructural growth presentations





-- Orders received and operating margin Orders received and operating margin





-- OutlookOutlook


Outlook for the fourth quarterOutlook for the fourth quarter

““We expect demand during the We expect demand during the

fourth quarter to be in line with, or fourth quarter to be in line with, or

somewhat lower, compared to the somewhat lower, compared to the

same period 2007same period 2007””


Documents

Presentation Q3 200815,0 18,0 21,0 24,0 SEK millions and in percent of sales * Adjusted EBITA – ”Earnings before interests, taxes, amortization of goodwill and s tep up values