| 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.
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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%
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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
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* 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
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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
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Food & Water division− Highlights and comments
MARKETS & ORDER INTAKE
• 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.
PROFITABILITY (EBIT)
• 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
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Marine division− Highlights and comments
MARKETS & ORDER INTAKE
• 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.
PROFITABILITY (EBIT)
• 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
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Service, by division − Order intake
ENERGY FOOD & WATER MARINE
Q119: 23%
Absolute
development
SEQYoY
Absolute
development
SEQYoY
Absolute
development
SEQYoY
+++ + +
Q119: 31% Q119: 23%
-
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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
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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%
| www.alfalaval.com| © Alfa Laval
Report for Q1 2019 Jan Allde
CFO
Alfa Laval Group
| www.alfalaval.com| © Alfa Laval24/04/2019 14
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
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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
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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
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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.
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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
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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
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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:
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“We expect that demand in the second quarter will be somewhat lower than in the first quarter.”
Outlook for the second quarter:
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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
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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
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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)
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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%
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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%
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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.