Alfa Laval AB · OMXSTO:ALFA

Alfa Laval AB — Q4 2019 Earnings Presentation

30 slides from Alfa Laval AB's earnings presentation, Feb 4, 2020

  1. Slide 1: www.alfalaval.com

    www.alfalaval.com

  2. Slide 2: Report for Q4 2019

    Change picture Report for Q4 2019 Tom Erixon President and CEO Alfa Laval Group 04/02/2020 | © Alfa Laval 2 | www.alfalaval.com

  3. Slide 3: Key figures

    Key figures Q4 2019 Q4 2018 %-change %-▲,org* Order intake 11,153 11,561 -4 -5 Net sales 12,964 11,209 16 15 Adjusted EBITA** 2,250 1,787 26 Adjusted EBITA-margin (%) 17.4 15.9 FY 2019 FY 2018 %-change %-▲,org* Order intake 44,119 45,005 -2 -4 Net sales 46,517 40,666 14 12 Adjusted EBITA*** 7,989 6,

  4. Slide 4: Orders received

    Orders received SEK million SEK million R 12 14 000 49 000 12 000 42 000 10 000 35 000 8 000 28 000 6 000 21 000 +12% +18% -10% -4% -8% 4 000 14 000 2 000 7 000 0 0 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 = Order intake per quarter “large” = Rolling twelv

  5. Slide 5: Orders received excluding Marine Environmental

    Orders received − Orders received excluding the “Marine Environmental”* business SEK million SEK million R 12 14 000 49 000 12 000 42 000 10 000 35 000 8 000 28 000 6 000 21 000 +9% +9% +3% -8% -8% 4 000 14 000 2 000 7 000 0 0 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q21

  6. Slide 6: Service, by division

    Service, by division − Order intake Q4, share and development ENERGY FOOD & WATER MARINE Q419: 25% Q419: 28% Q419: 35% Absolute development Absolute development Absolute development + = + YoY YoY YoY = Service share of total order intake 04/02/2020 | © Alfa Laval 6 | www.alfalaval.com

  7. Slide 7: Orders received by region

    Orders received by region − October – December 2019 & development Q4 vs Q4 / FY vs FY, at constant rates 2%; +6% / -6% Africa & Oceania 10%; Nordic +79% / +36% 16%; -22% / -1% North America +1% / +2% 3%; -17% / -15% Latin America 22%; Western Europe -9% / -18% -17% / -14% 11%; 36%; Asia Central- & E

  8. Slide 8: Top ten markets

    Top ten markets* − SEK million at prevailing rates United States China Nordic South Korea Japan Adriatic South East Asia Mid Europe Benelux India 0 1000 2000 3000 4000 5000 6000 7000 8000 = FY 2019 = FY 2018 *The order intake development of the 2018 top ten markets. 04/02/2020 | © Alfa Laval 8 | www

  9. Slide 9: Adjusted EBITA/margin

    Adjusted EBITA/margin* − SEK millions and in percent of sales SEK million Percent of sales 2 500 20,0 2 250 19,0 2 000 17.4 18,0 1 750 17,0 15.0 15.9 15.9 1 500 16,0 1 250 15,0 1 000 14,0 750 13,0 500 12,0 250 11,0 0 10,0 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 * Adjusted EB

  10. Slide 10: Energy division

    Energy division − Highlights and comments MARKETS & ORDER INTAKE Q4 19 Q4 18 YoY %- Q3 19 change • Orders from the hydro carbon chain were overall higher, driven by continued high investment levels in ORDERS 3,594 3,330 +7.9 3,355 the refinery and petrochemical segments. SALES 3,961 3,343 +18.5 3,51

  11. Slide 11: Food & Water division

    Food & Water division − Highlights and comments MARKETS & ORDER INTAKE Q4 19 Q4 18 YoY %- Q3 19 change • Demand in most end markets remained stable on a high level. ORDERS 3,720 3,540 +5.1 3,306 • The positive demand trends in waste water and edible SALES 3,938 3,604 +9.3 3,763 oil applications cont

  12. Slide 12: Marine division

    Marine division − Highlights and comments MARKETS & ORDER INTAKE Q4 19 Q4 18 YoY %- Q3 19 • Despite low contracting levels demand remained stable change in most businesses. ORDERS 3,840 4,439 -13.5 4,006 • Continued strong demand for PureBallast systems, SALES 5,017 3,869 +29.7 4,715 while demand fo

  13. Slide 13: Report for Q4 2019

    Report for Q4 2019 Jan Allde CFO Alfa Laval Group | © Alfa Laval | www.alfalaval.com

  14. Slide 14: Sales

    Sales − MSEK SEK million SEK million R 12 14 000 12,964 49 000 12 000 42 000 10 000 35 000 8 000 28 000 6 000 21 000 +/-0% +11% +16% +2% -8% 4 000 14 000 2 000 7 000 0 0 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 Q2 19 Q3 19 Q4 19 = Sales per quarter = Rollin

  15. Slide 15: Adjusted gross margin

    Adjusted gross margin − In percent of sales 45 Q4 2018 35.4 Mix/price - 40 Load/volume - 34.3 36.3 35.4 35.0 PPV/metals + FX = 35 Structure = Q4 2019 35.0 30 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 04/02/2020 | © Alfa Laval 15 | www.alfalaval.com

  16. Slide 16: Key figures

    Key figures − MSEK Q4 2019 Q4 2018 Sales 12,964 11,209 Gross profit 4,329 3,719 Sales & Admin -1,777 -1,754 R&D -287 -318 Net other cost/income -238 -94 Operating income 2,037 1,548 Financial net -177 -78 Profit before tax 1,860 1,470 Taxes -436 -173 EPS 3.39 3.07 04/02/2020 | © Alfa Laval 16 | www.

  17. Slide 17: Cash-flow statement

    Cash-flow statement − MSEK Q4 Q4 FY FY 2019 2018 2019 2018 Cash flow from - operating activities 2,392 1,490 5,223 4,883 - investing activities -504 -528 -1,027 -1,293 Financial net paid -604 -69 -421 -135 Dividend -2,097 -1,783 Total 1,284 893 1,678 1,672 Pro Forma Free cash-flow* 1,289 893 3,472 3

  18. Slide 18: Foreign exchange

    Foreign exchange − Estimated impact on adjusted EBITA from FX fluctuations, MSEK Q4 2019 FY 2019 FY 2020* Transaction effect 105 230 380 Revaluation 20 - - Translation effect 30 200 - Total 155 430 380 *) Based on EUR/USD 1.134 and EUR/SEK 10.595 Projected FX-effect for 2019 communicated with Q3 rep

  19. Slide 19: Order backlog as per December 31

    Order backlog as per December 31 − SEK billion 25 23.2 21.6 5.5 20 5.2 15 16.4 17.7 10 5 0 1.03 1.20 0.88 0.89 0.86 book to bill Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 = For delivery during next year = For delivery later than next year 04/02/2020 | © Alf

  20. Slide 20: Sales FY 2020

    Sales − FY 2020, SEK billion FY 2019 46.5 Change in OBL y-o-y* -1.0 Acquisitions / divestments during 2019 -0.4 Subtotal 45.1 For you to consider: Price “In-for-out”** FX translation Acquisitions Full year 2020 * Change in OBL y-o-y excluding acquisitions/divestments **IFO in 2019 excluding acquisit

  21. Slide 21: Board's proposal to the AGM

    Board’s proposal to the AGM The board proposes a dividend of SEK 5:50 (5:00) 04/02/2020 | © Alfa Laval 21 | www.alfalaval.com

  22. Slide 22: Outlook for the first quarter

    Outlook for the first quarter: “We expect that demand in the first quarter will be on about the same level as in the fourth quarter.” 04/02/2020 | © Alfa Laval 22 | www.alfalaval.com

  23. Slide 23: www.alfalaval.com

    www.alfalaval.com

  24. Slide 24: Activity split O&G, total

    Activity split O&G, total − Distribution of orders Q4 2019 (MSEK) Drilling Processing & Refinery Petrochemicals Transportation (SEQ/YoY) Grand total SEQ/YOY Energy 36 359 646 501 1,542 (+/+) Marine 301 117 0 0 418 (-/-) Alfa Laval = 337 = 476 = 646 = 501 =1,960*(+/-) Share of total Alfa Laval 3.0% 4

  25. Slide 25: Marine Division's industry split

    Marine Division’s industry split − Distribution of orders LTM, end of December Marine Offshore oil Environment & Engine power Service and gas Energy, Marine World trade & Oil & gas demand Legislation & Electrical power World trade Driver fleet capacity and prices fuel cost needs 28% 31% Share 4% 6%

  26. Slide 26: Marine Division's industry split

    Marine Division’s industry split − Distribution of sales LTM end of December Marine Offshore oil Environment & Engine power Service and gas Energy, Marine World trade & Oil & gas demand Legislation & Electrical power World trade Driver fleet capacity and prices fuel cost needs 26% 30% Share 4% 8% 32

  27. Slide 27: Divisional sales and profitability

    Divisional sales and profitability ENERGY FOOD & WATER MARINE Q4 2019 2018 2019 2018 2019 2018 Sales 3,961 3,343 3,938 3,604 5,017 3,869 Op. profit 593 438 664 607 985 659 Op. margin, % 15.0 13.1 16.9 16.8 19.6 17.0 04/02/2020 | © Alfa Laval 27 | www.alfalaval.com

  28. Slide 28: Organic growth pace

    Organic growth pace − Compared with same quarter last year (%), excluding currency effects 30 20 10 0 (10) (20) (30) Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 = Order intake growth 04/02/2020 | © Alfa Laval 28 | www.alfalaval.com

  29. Slide 29: Cautionary statement

    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 assura

  30. Slide 30: www.alfalaval.com

    www.alfalaval.com

Alfa Laval — Q4 2019 Earnings Presentation on 6ix