Report for Q1 2019 - Alfa Laval · Q1 2019 FY 2019 FY 2020* Transaction effect 20 225 185 Revaluation 20 - - Translation effect 55 160 - Total 95 385 185 Projected FX-effect for 2019

| www.alfalaval.com| © Alfa Laval

Report for Q1 2019 Tom Erixon

President and CEO

Alfa Laval Group

24/04/2019 2

| www.alfalaval.com| © Alfa Laval24/04/2019 3

Key figures− January - March, 2019

Q1 2019 Q1 2018 %-change %-change

excl fx

Order intake 12,213 10,025 22 16

Net sales 10,158 8,851 15 9

Adjusted EBITA* 1,728 1,497 15

Adjusted EBITA-margin (%) 17.0 16.9

*) Positive currency effect SEK 95 million.


Orders received

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

50 000

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119

SEK million SEK million R 12

+22%

+14%

+14%

-22%

+32%

= Order intake per quarter

= Order intake per quarter “large” = Rolling twelve months value

= % development by quarter, year on year+XX%


Organic growth pace− Compared with same quarter last year (%), excluding currency effects

-30

-20

-10

0

10

20

30

Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119

= Organic order growth from Marine Environmental


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

0,0

3,0

6,0

9,0

12,0

15,0

18,0

21,0

24,0

0

250

500

750

1 000

1 250

1 500

1 750

2 000

Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119

24/04/2019 6

Adjusted EBITA/margin*− SEK millions and in percent of sales

SEK million Percent of sales

17.016.915.716.3


Energy division− Highlights and comments

MARKETS & ORDER INTAKE

• Broad-based growth in the quarter.

• Order intake from hydro carbon chain was overall

higher, mainly driven by mid-sized orders and LNG

projects. HVAC lifted by investments in data

centers and higher demand for heat pumps.

• Two large orders; compact heat exchangers to a

refinery/petrochemical plant in China worth SEK 75

million and air-cooler systems to a U.S. gas-

processing plant, worth SEK 110 million

PROFITABILITY (EBIT)

• Improved despite slightly lower sales, as earlier

imbalances in certain units were successfully

addressed.

Q1 19 Q1 18 YoY %-

change

Q4 18

ORDERS 3,448 2,915 +18.3 3,330

SALES 2,807 2,812 -0.2 3,343

EBIT 399 381 438

EBIT (%) 14.2 13.5 13.1

0

200

400

600

800

1 500

2 000

2 500

3 000

3 500

4 000

Q115

Q215

Q315

Q415

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Q318

Q418

Q119

Sales EBIT


Food & Water division− Highlights and comments


• Order intake lifted by broad-based growth for the

base business.

• Pharma & biotech, water & waste and protein

businesses all contributed to the positive

development.

• Large order for decanters for a US wastewater

treatment plant, worth SEK 160 million.


• Volume growth had a positive effect on profitability

as did mix.

Q1 19 Q1 18 YoY %-

change

Q4 18

ORDERS 3,480 3,411 +2.0 3,540

SALES 3,153 2,880 +9.5 3,604

EBIT 524 454 607

EBIT (%) 16.6 15.8 16.8

0

200

400

600

800

1 500

2 000

2 500

3 000

3 500

4 000

Q414

Q115

Q215

Q315

Q415

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Q318

Q418

Q119

Sales EBIT


Marine division− Highlights and comments


• Strong quarter due to high demand for Alfa Laval

PureSOx and PureBallast.

• Demand for products/systems for new ships also

showed significant growth, reflecting contracting

level and ship mix last year.

• Offshore declined vs last year which included

several large orders.

• Service agreement for scrubbers, signed with

leading Chinese shipping company.


• Positive impact from volume, driven by PureSOx,

PureBallast and pumping systems.

Q1 19 Q1 18 YoY %-

change

Q4 18

ORDERS 4,963 3,295 +50.6 4,439

SALES 3,932 2,795 +40.7 3,869

EBIT 761 499 659

EBIT (%) 19.4 17.9 17.0

0

200

400

600

800

1 000

1 500

2 000

2 500

3 000

3 500

4 000

Q414

Q115

Q215

Q315

Q415

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Q318

Q418

Q119

Sales EBIT


Service, by division − Order intake

ENERGY FOOD & WATER MARINE

Q119: 23%

Absolute

development

SEQYoY

Absolute

development

SEQYoY

Absolute

development

SEQYoY

+++ + +

Q119: 31% Q119: 23%

-


Divisional profitability

ENERGY FOOD & WATER MARINE

Q1 2019 2018 2019 2018 2019 2018

Sales 2,807 2,812 3,153 2,880 3,932 2,795

Op. profit 399 381 524 454 761 499

Op. margin, % 14.2 13.5 16.6 15.8 19.4 17.9


Orders received by region− January - March 2019, year on year development at constant rates

20%;

North America

+31%

+18%

+9%

+19%

+26%

-37%

1%;

Africa & Oceania

13%; Nordic

21%;

Western Europe

5%;

Central- & Eastern

Europe37%; Asia

3%;

Latin America

-40%


Report for Q1 2019 Jan Allde

CFO

Alfa Laval Group


Sales− MSEK

0

10 000

20 000

30 000

40 000

50 000

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19

= Sales per quarter = Rolling 12-months value

= % development year on year+XX%

+15%

+9%

-1%

-10%

+38%

10,158

SEK million R 12SEK million


Gross profit margin− In percent of sales

30

35

40

45

Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119

38.038.337.137.0

Q1 2018 38.3 Q4 2018 35.4

Mix/price = +

Load/volume - =

PPV/metals = +

FX + +

Structure = =

Q1 2019 38.0 Q1 2019 38.0


Key figures− January – March, SEK million

Q1 2019 Q1 2018

Sales 10,158 8,851

Gross profit 3,604 3,133

Sales & Admin -1,669 -1,555

R&D -260 -217

Net other cost/income -212 -55

Operating income 1,471 1,310

Financial net 151 159

Profit before tax 1,622 1,469

Taxes -397 -420

EPS 2.90 2.49


Cash-flow statement− SEK Million

Q1 2019 Q1 2018

Cash flow from- operating activities- investing activities

959-494

666-110

Financial net paid 183 -57

Total 648 499

Pro Forma Free cash-flow* 708 428

*Incl. operating activities, capital expenditure and financial net paid.


Foreign exchange− Estimated impact on adjusted EBITA from FX fluctuations, in SEK Million

Q1 2019 FY 2019 FY 2020*

Transaction effect 20 225 185

Revaluation 20 - -

Translation effect 55 160 -

Total 95 385 185

Projected FX-effect for 2019 communicated with Q4 report: SEK 200 million

*) Based on EUR/USD 1.164 and EUR/SEK 10.432


Order backlog as per March 31− SEK billion

0

5

10

15

20

25

Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119

1.03

25.7

16.6

9.1

19.5

6.1

13.4

book to bill1.201.121.13 1.15

= For delivery this year

= For delivery after 2019


Sales− FY 2019, SEK billion

Q1 sales 10.2

Backlog, for delivery current year +16.6

Divestments - 0.7

Subtotal 26.1

Price

“In-for-out”*

FX translation

Acquisitions

Full year 2019

*IFO Q2-Q4 2018 was SEK 18.4.

For you to consider:

| www.alfalaval.com| © Alfa Laval | www.alfalaval.com| Public | Alfa Laval | ©24/04/2019 21

“We expect that demand in the second quarter will be somewhat lower than in the first quarter.”

Outlook for the second quarter:


Organic growth pace− Compared with same quarter last year (%), excluding currency effects

-30

-20

-10

0

10

20

30

Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119

= order intake growth


Top ten markets*− SEK million at prevailing rates

0 1000 2000 3000 4000 5000 6000 7000 8000

India

Benelux

Mid Europe

South East Asia

Adriatic

Japan

South Korea

Nordic

China

United States

*The order intake development of the 2018 top ten markets.

= WY 2018

= Q1 LTM 2019


Activity split O&G, total− Distribution of orders Q1 2019 (MSEK)

Marine

Alfa Laval

Share of totalAlfa Laval

Energy

Drilling Processing &Transportation

PetrochemicalsRefinery

Grand total SEQ/YOY

1,295 (-/+)

502 (-/-)

=1,797*(-/+)

= 14.7%3.3% 3.2%2.7%5.5%

71

330

= 401

499

172

= 671

332

0

= 332

393

0

= 393

*) incl. aftermarket

(SEQ/YoY)


Marine Division’s industry split− Distribution of orders LTM, end of March

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

27%3%

21%

41%8%


Marine Division’s industry split− Distribution of sales LTM end of March

Share

Driver

37%

Marine Offshore oil and gas

Engine power Service

5%

27%

World trade &

fleet capacity

Oil & gas demand

and prices

Electrical

power needs

World trade

Environment & Energy, Marine

23%

Legislation &

fuel cost

8%


Cautionary statement

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.

Documents

Report for Q1 2019 - Alfa Laval · Q1 2019 FY 2019 FY 2020* Transaction effect 20 225 185 Revaluation 20 - - Translation effect 55 160 - Total 95 385 185 Projected FX-effect for 2019