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www.alfalaval.com
www.alfalaval.com
Report for Q1 2017
- Key figures
- Orders received and margins
- Development per segment
- Geographical development
- Financials
- Outlook
Mr. Tom Erixon
President and CEO
Alfa Laval Group
www.alfalaval.com
January – March 2017
Key figures
Orders received grew 14% to SEK 8,801 million.
Net sales declined 1% to SEK 8,126 million.
Adjusted EBITA* declined 4% to SEK 1,279 million.
Adjusted EBITA margin at 15.7% vs 16.3%.
*) Positive currency effect SEK 75 million.
© Alfa Laval
3
www.alfalaval.com
Highlights in the quarter
4
Energy MarineAlfa Laval Packinox heat exchangers to a
petrochemical plant in China.
Value: SEK 170 million.
Waste heat recovery systems for diesel
power plants to be built in Asia.
Value: SEK 80 million.
Alfa Laval Packinox heat exchangers for
petrochemical plant in China.
Value: SEK 155 million.
Order for eight Alfa Laval Pure SOx, for
two ships. Value: SEK 125 million.
Alfa Laval Packinox heat exchangers to
a refinery in West Africa.
Value: SEK 55 million.
© Alfa Laval
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
Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117
= 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%
+9%
-19%
+19%
+5%
-5%
5
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Order analysis- Q1 2017 versus Q1 2016 and versus Q4 2016 (MSEK)
Q1 2016 7,710 Q4 2016 8,709
Structural change, % - -
Organic development, % + 8.8 + 1.9
Total + 8.8 + 1.9
Currency effects, % + 5.4 - 0.8
Total, % + 14.2 + 1.1
Q1 2017 8,801 Q1 2017 8,801
© 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
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117
* Adjusted EBITA – ”Earnings before interests, taxes, amortization of goodwill and step up values and comparison distortion items.”
7
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Orders received by business unit- January-March 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” + +
=
=
+
+
+
8
“Greenhouse”
www.alfalaval.com
Energy division- Highlights and sequential comments
Brazed & Fusion boosted by demand for refrigeration and HVAC.
Energy separation down due to non-repeats. Base business grew.
GPHE affected by the non-repeat of a large nuclear service order.
In general, however, the demand situation was good.
Fewer larger projects in power, gas production and petrochemicals
affected WHE. The large Packinox orders could not compensate.
Order Backlog Sales
Q1 2017 2,674 4,780 2,283
Brazed & Fusion Bonded HEX
6%*
* Share of Group total
Energy Separation
3%*
GPHE13%*
WHE8%*
+
-
-
-
9
Sequential comparison
www.alfalaval.com
Decanters did well, boosted by demand from olive oil and crude
palm oil markets. Water treatment and waste water was unchanged.
Food Heat transfer saw broad-based positive development with
dairy, pharma and biotech doing particularly well.
Food Systems declined on the back of non-repeat brewery orders.
HSS did very well thanks to positive demand situation in everything
from fish, meat and crude palm oil to biotech and pharma.
Decanters7%*
*Share of Group total
Food heat transfer
6%*
FoodSystems
5%*
Hygienic fluid handling
12%*
HSS6%*
+
+
-
=
+
10
Food & Water division- Highlights and sequential comments
Order Backlog Sales
Q1 2017 3,162 4,263 2,758 Sequential comparison
www.alfalaval.com
Boilers & Gas systems grew on the back of increased demand for
Alfa Laval PureSOx. Marine boilers were unchanged.
Separation & Heat transfer unchanged, reflecting a continued low
level of demand following weak contracting last year. PureBallast,
recorded growth in the quarter.
Pumping system rose on the back of increased contracting of
chemical tankers.
*Share of Group total
Boiler and gas systems
8%*
Separation & heat transfer
11%*
PumpingSystems
10%*
+
=
+
11
Marine division- Highlights and sequential comments
Order Backlog Sales
Q1 2017 2,556 8,476 2,658 Sequential comparison
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Service versus capital sales
Energy
28%
Food & Water
31%
Marine
42%
= Capital sales
= Service
12
YoY SEQ YoY SEQ YoY SEQ
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Greenhouse- Highlights and comments
Order intake rose 6% vs Q1 2016 and the
unit returned to profit. Sequentially, orders
declined, on the back of non-repeat orders
for engine cooling, refrigeration and HVAC.
Underlying demand remained steady.
Heat exchanger systems saw good demand
for district heating systems in several
geographies.
Closure of air products factory in China.
© Alfa Laval
13
www.alfalaval.com
Orders received by regionOrders received by region- January-March 2017, development at constant rates
North
America
20%
Western
Europe 24%
Nordic
8%
Latin America
4%
CEE
7%
Asia 35%
+21
+5
-28
+21
+26
-5
+2 +17
-9
-3
+7
Year-on-year comparison Sequential comparison
14
-24
Africa &
Oceania
2%
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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 Q1 2017
15
www.alfalaval.com
Report for Q1 2017
- Key figures
- Orders received and margins
- Development per segment
- Geographical development
- Financials
- Outlook
Mr. Thomas Thuresson
CFO
Alfa Laval Group
www.alfalaval.com
Highlights 2017- January-March, SEK million
Order intake 8,801
Net sales 8,126
© Alfa Laval
17
www.alfalaval.com
Gross profit margin- In percent of sales
30
35
40
45
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117
37.137.036.7
39.4
© Alfa Laval
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www.alfalaval.com
Gross profit margin- Q1 2017 versus Q1 2016 and versus Q4 2016
Q1 2017 37.0 Q4 2016 34.3
Mix/price - ++
Load/volume - -
PPV + +
FX ++ +
Structure = =
Q1 2017 37.1 Q1 2017 37.1
© Alfa Laval
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www.alfalaval.com
Highlights 2017- January-March, SEK million
Order intake 8,801
Net sales 8,126
Adjusted EBITA 1,279
Adjusted EBITA margin, % 15.7
Profit before tax 1,268
Earnings per share, % 1.84
Earnings per share, excl. step-up, % 2.33
ROCE 15.1
ROE 11.1
© Alfa Laval
20
www.alfalaval.com
Reorganisation & capacity adjustment programme- Update as per March 31st 2017
© Alfa Laval
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R&D
S&A
Other
COGS
Realized
Q1, 2017
Target Realized
Q1, 2017
Target
- 375 - 450 + 60 +300
- 100 - 550 + 1 + 200
Total - 475 - 1,000 + 61 + 500
EMPLOYEE IMPACT, FTE TOTAL SAVINGS, MSEK
Savings expected to be reached to 75% level by end 2017 and completely by end of 2018
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Divisional performance
Energy Marine Food & Water
Q1 2017 2016 2017 2016 2017 2016
Orders 2,674 2,366 2,556 2,369 3,162 2,613
Backlog 4,780 4,543 8,476 10,632 4,263 3,842
Sales 2,283 2,381 2,658 2,995 2,758 2,478
Op. profit 255 326 432 556 402 358
Op. margin, % 11.2 13.7 16.3 18.6 14.6 14.5
Comments onoperating profit
- Price/mix (neg)
- Volume (neg)- Volume (neg)
- Price/mix (neg)
- Load (neg)
- FX (pos)
- Volume (pos)
© Alfa Laval
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www.alfalaval.com
Cash-flow statement
SEK million Q1 2017 Q1 2016
Cash flow from- operating activities- investing activities
804-120
910-99
Financial net paid -3 -23
Total 681 788
Pro Forma Free cash-flow* 681 794
*Incl. operating activities, capital expenditure and financial net paid.
© Alfa Laval
23
www.alfalaval.com
Foreign exchange- Estimated impact on adjusted EBITA from FX fluctuations
SEK million Q1 2017 FY 2017 FY 2018*
Transaction effect 48 200 150
Translation effect 27 80 -
Total 75 280 150
Projected FX-effect for 2017 communicated with the Q4 report: SEK 275 million
*Based on EUR/USD 1.07 and EUR/SEK 9.55
© Alfa Laval
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www.alfalaval.com
Order backlog as per March 31
= For delivery in 2017
= For delivery later than 2017
SEK million
0
5 000
10 000
15 000
20 000
25 000
Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117
0.94
18,057
12,0
09
6,0
48
19,380
6,5
05
12,8
75
book to bill0.90 1.080.88 0.88
25
www.alfalaval.com
SalesFull year 2017, SEK (bn)
FY 2016 35.6
Backlog, like-for-like - 2.7
FX translation + 0.8
Acquisitions + ?
Subtotal 33.7
© Alfa Laval
26
Change in “in-for-out” +/-?
Price +/-?
Full year 2017 xx
www.alfalaval.com
Report for Q1 2017
- Key figures
- Orders received and margins
- Development per segment
- Geographical development
- Financials
- Outlook
Mr. Tom Erixon
President and CEO
Alfa Laval Group
www.alfalaval.com
Outlook for the second quarter
“We expect that demand during
the second quarter will be in line
with or somewhat lower than in
the first quarter.”
© Alfa Laval
28
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Marine
Alfa Laval
Share of totalAlfa Laval
Energy
Activity split O&G, totalDistribution of orders Q1 (MSEK) 2017
Drilling Processing &Transportation
PetrochemicalsRefinery
Grand total
1,057 (+)
159 (-)
=1,216*(-)
= 13.8%
* including Service
1.6% 6.5%1.8%3.9%
40
100
= 140
282
59
= 341
162
0
= 162
573
0
= 573
30
www.alfalaval.com
Share
Driver
Marine Division’s industry split- Distribution of orders LTM March 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%
43%
12%3%
© Alfa Laval
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www.alfalaval.com
Share
Driver
49%
Marine Offshore oil and gas
Diesel power Service
6%
32%
World trade &
fleet capacity
Oil & gas demand
and prices
Electrical
power needs
World trade
Environment & Energy, Marine
10%
Legislation &
fuel cost
3%
© Alfa Laval
32
Marine Division’s industry split- Distribution of sales LTM March 2017
www.alfalaval.com
Western Europe incl. Nordic
Region declined due to non-repeat orders in the
Energy Division. Service, however, did well.
Mid Europe, France and UK grew.
Central and Eastern Europe
Lower order intake for pumping systems as well as
fewer larger Energy orders explain the region’s
decline.
+21 -3
+26 -9
+21 -5
33
Highlights EuropeJanuary – March 2017, at constant rates, sequential comments
Sequential comparisonYear-on-year comparison
www.alfalaval.com© Alfa Laval
Highlights AsiaJanuary – March 2017, at constant rates, sequential comments
Asia
Sequential growth across all three divisions. Main drivers
were increased demand for pumping systems as well as
large petrochemical orders in the Energy division. Food &
Water was up on larger orders and a strong base business,
across most countries in the region.
China did very well in the quarter, reflecting a good base-
business development in Marine and Food & Water, as well
as two large petrochemical orders in the Energy Division.
Sequential comparison
+2 +17
34
Year-on-year comparison
www.alfalaval.com
North America
Order intake grew in both Canada and the US.
In the US, Food & Water was the main driver, while
growth in the Energy division explained the positive
development in Canada.
Latin America
Region declined, mainly due to the non-repeat of larger
orders in Mexico.
Brazil grew on the back of Service growth across the
three divisions. Capital sales was unchanged.
+5 +7
-28 -24
35
Highlights AmericasJanuary – March 2017, at constant rates, sequential comments
Sequential comparisonYear-on-year comparison
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
36
