Alfa Laval AB · OMXSTO:ALFA
Alfa Laval AB — Q4 2014 Earnings Presentation
38 slides from Alfa Laval AB's earnings presentation, February 2015
Slide 1: Alfa Laval
Slide 2: Report for Q4 2014
Report for Q4 2014 - Key figures - Orders received and margins - Highlights - Development per segment - Geographical development - Financials Mr. Lars Renström - Outlook President and CEO Alfa Laval Group
Slide 3: Key figures
Key figures Oct – Dec 2014 Orders received rose 29% to SEK 10,509 million. Net sales grew 25% to SEK 10,775 million. Adjusted EBITA increased 37% to SEK 1,940 million. Adjusted EBITA margin 18.0% vs 16.4% - Positive currency effect SEK 97 million. Jan – Dec 2014 Orders received rose 21% to SEK 36,66
Slide 4: Integration of Frank Mohn AS
Integration of Frank Mohn AS - Certain items in the Q4 P&L Group MSEK Q4 2014 Framo Excluding certain Framo items Impact The change to IFRS reporting in Order intake 10,509 1,001 9,508 Frank Mohn AS, together with the Order backlog 22,293 952 21,341 considerable weakening of the NOK, had a big impac
Slide 5: Board proposal to the AGM
Board proposal to the AGM Dividend The Board of directors proposes a dividend of SEK 4.00 (3.75) © Alfa Laval Slide 5 www.alfalaval.com
Slide 6: Report for Q4 2014
Report for Q4 2014 - Key figures - Orders received and margins - Highlights - Development per segment - Geographical development - Financials - Outlook
Slide 7: Orders received
Orders received SEK million SEK million R 12 12 000 40000 35000 10 000 30000 8 000 25000 6 000 20000 15000 +23% +16% +22% +11% 4 000 +9% 10000 2 000 5000 0 0 Q410 Q212 Q312 Q412 Q213 Q313 Q413 Q214 Q314 Q414 Q211 Q112 Q113 Q114 Q311 Q411 Q111 = Order intake per quarter “large” = Rolling twelve month
Slide 8: Order analysis
Order analysis Q4 2014 versus Q4 2013 and versus Q3 2014 (MSEK) Q4 2013 8,133 Q3 2014 9,708 Structural change, % + 21.8 + 0.1 Organic development, % + 0.7 + 6.4 Total + 22.5 + 6.5 Currency effects,% + 6.7 + 1.8 Total, % + 29.2 + 8.3 Q4 2014 10,509 Q4 2014 10,509 © Alfa Laval Slide 8 www.alfalaval.co
Slide 9: Adjusted EBITA / margin
Adjusted EBITA / margin* SEK millions and in percent of sales 2 000 24,0 1 750 21,0 1 500 18,0 1 250 15,0 1 000 12,0 750 9,0 500 6,0 250 3,0 0 0,0 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 * Adjusted EBITA – ”Earnings before interests, taxes, amortization of goodwill and step
Slide 10: Report for Q4 2014
Report for Q4 2014 - Key figures - Orders received and margins - Highlights - Development per segment - Geographical development - Financials - Outlook
Slide 11: Highlights in the quarter
Highlights in the quarter Process Technology Process Technology OLMI air-cooled heat exchangers for an oil and gas Packinox heat exchanger to a petrochemical plant in production facility in Kazakhstan. South Korea. Value: SEK 85 million. Value: SEK 290 million Fuel oil treatment system for a power p
Slide 12: Report for Q4 2014
Report for Q4 2014 - Key figures - Orders received and margins - Development per segment - Geographical development - Financials - Outlook
Slide 13: Orders received by customer segment
Orders received by customer segment Oct. – Dec. 2014, at constant rates and like for like PTD Service - - Industrial Equipment - Sanitary Equipment Water & Waste - = OEM Food & Life Science - + EQD Service Energy & Process + = Marine & Diesel Eq. + Marine & Offshore Syst. + Marine & Offshore* MDD Se
Slide 14: Equipment division
Equipment division Highlights and sequential comments Industrial Industrial Equipment down amid seasonally lower Equipment 8%* activity for heating and cooling installations. Unchanged demand for refrigeration products. - - Sanitary saw generally higher demand from dairy, Sanitary non-viscous food a
Slide 15: Marine & Diesel division
Marine & Diesel division Highlights and sequential comments M&D Equipment declined, mainly due to lower Marine & Diesel Equipment demand for environmental solutions. Diesel power 7%* was somewhat lower, while demand for products going into new ships was unchanged. = - M&O Systems boosted by EGC syst
Slide 16: Process Technology division
Process Technology division Highlights and sequential comments Energy & Process 18%* Energy & Process lifted by the largest order to date in oil & gas. Power, petrochemicals and refinery all did well. Oil & gas base business declined due to + + slower activity among customers. Food & Life Science 8%
Slide 17: Orders received by customer segment
Orders received by customer segment January – December 2014, at constant rates and like for like Industrial PTD Service + = Equipment Water & Waste - = Sanitary Equipment Food & Life Science - = OEM = EQD Service Energy & Process = + Marine & Diesel Eq. + Marine & Offshore Syst. + Marine & Offshore
Slide 18: Report for Q4 2014
Report for Q4 2014 - Key figures - Orders received and margins - Highlights - Development per segment - Geographical development - Financials - Outlook
Slide 19: Orders received by Region
Orders received by Region Oct – Dec 2014, development at constant rates Latin America 5% -4 North America 18% +5 +23 +8 +58 Asia 40% Western Europe 21% -4 Central Nordic 7% & Eastern Europe 8% Year-on-year comparison © Alfa Laval www.alfalaval.com
Slide 20: Highlights Asia
Highlights Asia Oct – Dec 2014, at constant rates, sequential comments Asia: Orders grew as Framo’s backlog was revaluated. Excluding that, orders were slightly lower, mainly due to the effect from shipyard +58 +7 contracting. Marine project orders remained on a high level. In Process Technology bot
Slide 21: Highlights Europe
Highlights Europe Oct – Dec 2014, at constant rates, sequential comments -4 -2 +5 +40 +23 +22 Western Europe incl. Nordic: Central and Eastern Europe: Region as a whole saw higher order intake Very strong due to good base business as both base business and large projects as well as a number of large
Slide 22: Highlights Americas
Highlights Americas Oct – Dec 2014, at constant rates, sequential comments North America: Decline in both the US and Canada, mainly due to the non-repeat of large projects, particularly in Energy & Process. The base business also declined somewhat. +8 -15 Favourable development in Sanitary, M & D Eq
Slide 23: Orders received by Region
Orders received by Region January – December 2014, development at constant rates Latin America 5% -2 North America 19% -2 +11 +18 +41 Asia 38% Western Europe 21% -5 Central & Eastern Nordic 8% Europe 7% Year-on-year comparison © Alfa Laval www.alfalaval.com
Slide 24: Top markets
Top 10 markets* SEK million at prevailing rates = WY 2014 *The development of the 2013 top ten markets. = WY 2013 © Alfa Laval Slide 24 www.alfalaval.com
Slide 25: Report for Q4 2014
Report for Q4 2014 - Key figures - Orders received and margins - Highlights - Development per segment - Geographical development - Financials Mr. Thomas Thuresson - Outlook CFO Alfa Laval Group
Slide 26: Highlights
Highlights SEK millions Oct – Dec 2014 Order intake 10,509 Net sales 10,775 © Alfa Laval Slide 26 www.alfalaval.com
Slide 27: Gross profit margin
Gross profit margin In percent of sales 45 40 37.8 37.0 36.3 34.3 35 30 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 © Alfa Laval www.alfalaval.com
Slide 28: Gross profit margin
Gross profit margin Q4 2014 versus Q4 2013 and versus Q3 2014 Q4 2013 36.3 Q3 2014 35.3 Mix/price --- - Load/volume - = FX + + Structure mix -- - FX, unrealized --- Q4 2014 34.3 Q4 2014 34.3 © Alfa Laval Slide 28 www.alfalaval.com
Slide 29: Highlights
Highlights SEK millions Oct – Dec, 2014 Order intake 10,509 Net sales 10,775 Adjusted EBITA 1,940 Adjusted EBITA-margin 18.0% Profit before tax 1,177 Earnings per share 2.15 Earnings per share, excl step-up 2.62 ROCE 20.5% ROE 17.6% © Alfa Laval Slide 29 www.alfalaval.com
Slide 30: Divisional performance
Divisional performance Equipment Process Technology Marine & Diesel Q4 2014 2013 2014 2013 2014 2013 Orders 2,523 2,408 3,928 3,886 4,058 1,839 Backlog 1,571 1,495 8,440 8,393 12,282 4,680 Sales 2,629 2,518 4,356 4,256 3,790 1,826 Op. profit 407 339 636 806 737 419 Op margin (%) 15.5 13.5 14.6 18.9
Slide 31: Cash-flow statement
Cash-flow statement Q4 Q4 FY FY SEK millions 2014 2013 2014 2013 Cash flow from - operating activities 1,690 1,230 5,123 4,233 - investing activities -180 - 165 -14,970 - 951 Financial net paid - 320 - 51 - 433 - 102 Dividend - - 1,578 -1,468 Total 1,190 1,014 - 11,858 1,712 Pro Forma Free cash-flow
Slide 32: Foreign exchange
Foreign exchange Estimated impact on adjusted EBITA from FX fluctuations SEK million Q4 14 FY 14 FY 15* Translation effect 82 100 150 Transaction effect 15 - 30 130 Total 97 70 280 *Based on EUR/USD 1.20 and EUR/SEK 9.45 Projected FX-effect for 2014 as communicated at the CMD: Between SEK 25 and SEK
Slide 33: Order backlog as per Dec 31
Order backlog as per Dec 31 SEK millions 25 000 22,293 5,043 20 000 14,568 15 000 3,130 10 000 11,438 17,250 5 000 book to bill 0 Q410 Q411 Q412 Q413 Q414 For delivery after 2015 For delivery in 2015 © Alfa Laval Slide 33 www.alfalaval.com
Slide 34: Sales
Sales Full year 2015 SEK (bln) Full year 2014 35.1 Order backlog, like-for-like + 1.0 FX-translation + 1.0 Acquisitions + 1.6 Subtotal 38.7 Orders “in-for-out” ? Price ? Full year 2015 www.alfalaval.com
Slide 35: Report for Q4 2014
Report for Q4 2014 - Key figures - Orders received and margins - Highlights - Development per segment - Geographical development - Financials Mr. Lars Renström - Outlook President and CEO Alfa Laval Group
Slide 36: Outlook for the first quarter
Outlook for the first quarter “We expect that demand during the first quarter will be somewhat lower than in the fourth quarter.” © Alfa Laval Slide 36 www.alfalaval.com
Slide 37: www.alfalaval.com
© Alfa Laval Slide 37 www.alfalaval.com
Slide 38: 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