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www.alfalaval.com
www.alfalaval.com
Report for Q2 2017
- Key figures
- Orders received and margins
- Development per segment- Geographical development
- Financials
- Outlook
Mr. Tom ErixonPresident and CEO
Alfa Laval Group
2
www.alfalaval.com
April – June 2017
Key figures
� Orders received grew 19% to SEK 9,629 million.
� Net sales unchanged at SEK 8,907 million.
� Adjusted EBITA* largely unchanged at SEK 1,410 million.
� Adjusted EBITA margin at 15.8% vs 15.6%.
*) Positive currency effect SEK 96 million.
© Alfa Laval
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January – June 2017
� Orders received grew 17% to SEK 18,430 million.
� Net sales declined 1% to SEK 17,033 million.
� Adjusted EBITA* largely unchanged at SEK 2,689 million.
� Adjusted EBITA margin at 15.8% vs 15.9%.
*) Positive currency effect SEK 171 million.
www.alfalaval.com
Highlights in the quarter
Energy Marine Food & WaterAlfa Laval Compact heat exchangers to a refinery in China. Value: SEK 210
million.
Two frame agreements for Alfa Laval PureBallast signed, estimated to
generate orders of SEK 200 million over a three-year period.
Process solution for soybean oil refinery in Brazil. Value: SEK 125 million.
Alfa Laval Niagara evaporative air cooler systems for a gas processing
plant in the US. Value: SEK 85 mln.
PureBallast order intake in the quarter: SEK 198 million.
Compact plate heat exchangers for a refinery in China. Value: SEK 90 mln.
PureSOx: order intake in the quarter of SEK 219 million.
© Alfa Laval
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www.alfalaval.com
Orders received
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
0
2 000
4 000
6 000
8 000
10 000
12 000
Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217
= Order intake per quarter
= Order intake per quarter “large”
SEK million SEK million R 12
= Rolling twelve months value
= % development at constant rates by quarter, year on year+XX%
+14%
-9%
-7%
+18%
+1%
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www.alfalaval.com
Order analysis- Q2 2017 versus Q2 2016 and versus Q1 2017 (MSEK)
Q2 2016 8,101 Q1 2017 8,801
Structural change, % - -
Organic development, % + 14.0 + 9.7
Total + 14.0 + 9.7
Currency effects, % + 4.9 - 0.3
Total, % + 18.9 + 9.4
Q2 2017 9,629 Q2 2017 9,629
© Alfa Laval
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www.alfalaval.com
Adjusted EBITA/margin*- SEK millions and in percent of sales
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
Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217
* Adjusted EBITA – ”Earnings before interests, taxes, amortization of goodwill and step up values and comparison distortion items.”
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www.alfalaval.com
Orders received by business unit- April-June 2017, at constant rates, like for like and year-on-year
Brazed & fusion-bonded HEX
GPHE
Energy Separation
WHE
Food Heat Transfer
Decanters
Food Systems
Pumping Systems
Boilers & Gas Systems
Marine Separation & Heat Transfer
High-speed Separators
+
-
Hygienic Fluid Handling
Energy Food & Water Marine Year-on-year comparison
+
+
-
+
“Greenhouse” - +
+
+
+
+
+
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“Greenhouse”
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www.alfalaval.com
Energy division- Highlights and sequential comments
� Brazed & Fusion up, partly due to seasonal upswing in demand for heat pumps and A/C.
� Energy separation lifted by base business. Project business positively impacted by wastewater treatment orders for mining.
� GPHE saw seasonal uptick for HVAC as well as growth in inorganics
and organic chemicals. Large order contributed to positive development.
� Welded grew, mainly driven by the base business, which grew, not only throughout the hydro carbon chain, but also in areas like inorganic
chemicals and mining.
Order Backlog Sales
Q2 2017 3,136 5,032 2,861
Brazed & Fusion Bonded HEX
6%*
* Share of Group total
Energy Separation
3%*
GPHE15%*
WHE9%*
+
+
+
+
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Sequential comparison
www.alfalaval.com
� Decanters boosted by water treatment and waste water sectors.
� Food heat transfer was unchanged with some food-related end
markets reporting a slight contraction while pharma grew.
� Food Systems did well amid continued high project activity, as well as one large order in Brazil for soy bean refining.
� Hygienic fluid handling unchanged as slight increase in dairy and
pharma was neutralized by small decline in broader food markets.
� HSS growth driven by traditional food markets such as dairy, brewery
and starch.
Decanters7%*
*Share of Group total
Food heat transfer
6%*
FoodSystems
6%*
Hygienic fluid handling
11%*
HSS6%*
+
=
+
=
+
10
Food & Water division- Highlights and sequential comments
Order Backlog Sales
Q2 2017 3,385 4,702 2,923 Sequential comparison
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www.alfalaval.com
� Boilers & Gas systems declined amid lower demand for boilers. Demand for scrubbers grew.
� Separation & Heat transfer increased, boosted by higher demand for ballast water treatment systems.
� Pumping system reported growth, reflecting increased contracting of chemical tankers and higher offshore demand.
*Share of Group total
Boiler and gas systems
7%*
Separation & heat transfer
11%*
PumpingSystems
9%*
-
+
+
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Marine division- Highlights and sequential comments
Order Backlog Sales
Q2 2017 2,678 8,414 2,672 Sequential comparison
www.alfalaval.com
Service versus capital sales
Energy
25%
Food & Water
31%
Marine
38%
= Capital sales
= Service
12
YoY SEQ YoY SEQ YoY SEQ
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www.alfalaval.com
Greenhouse- Highlights and comments
� Order intake grew sequentially, mainly
driven by a seasonal uptick in demand for
air heat exchangers and heat exchanger
systems.
� Orders declined versus a year ago, due to
structural initiatives that were completed or
under implementation.
� The year-on-year profitability improvement
is explained by higher volume and the
effects from completed measures.
© Alfa Laval
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www.alfalaval.com
Orders received by regionOrders received by region- April-June 2017, development at constant rates
North America 20%
Western Europe 21%
Nordic8%
Latin America 5%
CEE 7%
Asia 37%
+8
+9
+9
+8
+9
+7
+23 +13
-5
+10
+13
Year-on-year comparison Sequential comparison
14
+35
Africa & Oceania
2%
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www.alfalaval.com
Top ten markets*- SEK million at prevailing rates
*The development of the 2016 top ten markets.
0 1000 2000 3000 4000 5000 6000 7000
France
Benelux
South Korea
SEA
Adriatic
Mid Europe
Japan
Nordic
China
United States
= WY 2016
= LTM Q2 2017
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www.alfalaval.com
Report for Q2 2017
- Key figures
- Orders received and margins
- Development per segment- Geographical development
- Financials
- Outlook
Mr. Thomas ThuressonCFO
Alfa Laval Group
9
www.alfalaval.com
Highlights 2017- April-June, SEK million
Order intake 9,629
Net sales 8,907
© Alfa Laval
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www.alfalaval.com
Gross profit margin- In percent of sales
30
35
40
45
Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217
36.436.236.336.3
© Alfa Laval
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www.alfalaval.com
Gross profit margin- Q2 2017 versus Q2 2016 and versus Q1 2017
Q2 2016 36.2 Q1 2017 37.1
Mix/price - --
Load/volume - -
PPV + +
FX + +
Structure = =
Q2 2017 36.4 Q2 2017 36.4
© Alfa Laval
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www.alfalaval.com
Highlights 2017- April-June, SEK million
Order intake 9,629
Net sales 8,907
Adjusted EBITA 1,410
Adjusted EBITA margin, % 15.8
Profit before tax 733
Earnings per share, % 1.14
Earnings per share, excl. step-up, % 1.57
ROCE 15.3
ROE 8.9
© Alfa Laval
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www.alfalaval.com
Reorganisation & capacity adjustment programme- Update as per June 30th, 2017
© Alfa Laval
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R&DS&A
Other
COGS
RealizedQ2, 2017
Realized1H, 2017
Target RealizedQ2, 2017
Realized1H, 2017
Target
- 75 - 450 - 450 + 75 + 135 +300
- 50 - 150 - 550 + 4 + 5 + 200
Total - 125 - 600 - 1,000 + 79 + 140 + 500
EMPLOYEE IMPACT, FTE TOTAL SAVINGS, MSEK
Savings expected to be reached to 75% level by end 2017 and completely by end of 2018
www.alfalaval.com
Divisional performance
Energy Marine Food & Water
Q2 2017 2016 2017 2016 2017 2016
Orders 3,136 2,443 2,678 2,324 3,385 2,910
Backlog 5,032 4,316 8,414 9,918 4,702 3,937
Sales 2,861 2,676 2,672 3,102 2,923 2,813
Op. profit 384 299 421 576 408 430
Op. margin, % 13.4 11.2 15.8 18.6 14.0 15.3
Comments onoperating profit
- Volume (pos)- Costs (pos)
- Volume (neg)
- Price/mix (neg)- Load (neg)
- FX (pos)
- Volume (pos)- Price/mix (neg)
© Alfa Laval
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www.alfalaval.com
Cash-flow statement
SEK million Q2 2017
Q2 2016
1H2017
1H2016
Cash flow from- operating activities- investing activities
1,042-196
1,233-128
1,846-316
2,143-227
Financial net paid -86 21 - 89 -2
Total 760 1,126 1,441 1,914
Pro Forma Free cash-flow* 818 1,157 1,499 1,951
*Incl. operating activities, capital expenditure and financial net paid.
© Alfa Laval
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www.alfalaval.com
Foreign exchange- Estimated impact on adjusted EBITA from FX fluctuations
SEK million Q2 2017 1H 2017 FY 2017 FY 2018*
Transaction effect 46 94 200 130
Translation effect 50 77 -20 -
Total 96 171 180 130
Projected FX-effect for 2017 communicated with the Q1 report: SEK 280 million
*Based on EUR/USD 1.11 and EUR/SEK 9.75
© Alfa Laval
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www.alfalaval.com
Order backlog as per June 30
= For delivery in 2017
= For delivery later than 2017
SEK million
0
5 000
10 000
15 000
20 000
25 000
Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217
1.08
18,662
11,0
37
7,6
25
18,599
7,8
10
10,7
89
book to bill0.90 1.080.88 0.88
25
www.alfalaval.com
SalesFull year 2017, SEK (bn)
YTD 2017 17.0
Backlog, current year + 11.0
Orders “in-for-out” 2H 2016 + 7.7
Subtotal 35.7
© Alfa Laval
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Change in “in-for-out” +/-?
Price +/-?
Full year 2017 xx
14
www.alfalaval.com
Report for Q2 2017
- Key figures
- Orders received and margins
- Development per segment- Geographical development
- Financials
- Outlook
Mr. Tom ErixonPresident and CEO
Alfa Laval Group
www.alfalaval.com
Outlook for the third quarter
“We expect that demand during
the third quarter will be lower than
in the second quarter.”
© Alfa Laval
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www.alfalaval.com
www.alfalaval.com
Marine
Alfa Laval
Share of totalAlfa Laval
Energy
Activity split O&G, totalDistribution of orders Q2 (MSEK) 2017
Drilling Processing &Transportation
PetrochemicalsRefinery
Grand total
1,206 (+)
179 (+)
=1,385*(+)
= 14.4%
* including Service
1.8% 4.0%3.6%5.0%
63
110
= 173
417
69
= 486
343
0
= 343
383
0
= 383
30
Sequential direction within
parentheses
16
www.alfalaval.com
Share
Driver
Marine Division’s industry split- Distribution of orders LTM June 2017
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
36%
6%
42%
13%3%
© Alfa Laval
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www.alfalaval.com
Share
Driver
48%
Marine Offshore oil and gas
Diesel power Service
4%
34%
World trade &fleet capacity
Oil & gas demand and prices
Electrical power needs
World trade
Environment & Energy, Marine
10%
Legislation & fuel cost
4%
© Alfa Laval
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Marine Division’s industry split- Distribution of sales LTM June 2017
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www.alfalaval.com
Orders received by business unit- January-June 2017, at constant rates and like for like
Brazed & fusion-bonded HEX
GPHE
Energy Separation
WHE
Food Heat Transfer
Decanters
Food Systems
Pumping Systems
Boilers & Gas Systems
Marine Separation & Heat Transfer
High-speed Separators
+
-
Hygienic Fluid Handling
Energy Food & Water Marine Year-on-year comparison
+
+
=
+
“Greenhouse” = +
+
+
+
+
+
33
“Greenhouse”
www.alfalaval.com
Western Europe incl. Nordic� Region reported a modest decline as lower order
intake in Marine outweighed growth in Food &
Water. The Energy division was flat. � Nordic area did well, as did France while Benelux
saw orders decline across all three divisions.
Central and Eastern Europe
� Region boosted by Russia , where all three divisions reported growth for both capital sales and service.
+8 +10
+9 -5
+8 +7
34
Highlights EuropeApril – June 2017, at constant rates, sequential comments
Sequential comparisonYear-on-year comparison
18
www.alfalaval.com© Alfa Laval
Highlights AsiaApril – June 2017, at constant rates, sequential comments
Asia� The region reported sequential growth, mainly driven
by a strong Marine development in South Korea. The
Marine activities in the rest of the region, however, remained on a low level.
� China remained on the strong level seen in the previous quarter. Food & Water had a very positive
development, while the Marine Division declined.
Sequential comparison
+23 +13
35
Year-on-year comparison
www.alfalaval.com
North America � Growth was driven by a very positive development in
the US, where both the Energy and Marine Division
grew. Energy’s development was partly explained by a large natural gas order.
Latin America � All parts of the region recovered from a weak first
quarter. � Brazil still has a weak underlying market situation, so
the positive development in the country was explained by a large vegetable oil order.
+9 +13
+9 +35
36
Highlights AmericasApril – June 2017, at constant rates, sequential comments
Sequential comparisonYear-on-year comparison
19
www.alfalaval.com
Orders received by regionOrders received by region- January-June 2017, development at constant rates
North America 20%
Western Europe 23%
Nordic8%
Latin America 4%
CEE 7%
Asia 36%
+14
+8
-11
+14
+17
+12
Year-on-year comparison
37
Africa & Oceania
2%
www.alfalaval.com
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.
© Alfa Laval
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