Alfa Laval Ab · OMXSTO:ALFA
Alfa Laval Ab — Merger or Acquisition (July 2020)
20 slides from Alfa Laval Ab's merger presentation, Jul 13, 2020
Slide 1: www.alfalaval.com
www.alfalaval.com
Slide 2: Important information
Important information • THIS PRESENTATION MAY NOT BE RELEASED, PUBLISHED OR OTHERWISE DISTRIBUTED, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE’S REPUBLIC OF CHINA, JAPAN, NEW ZEALAND, SOUTH AFRICA, OR ANY OTHER JURI
Slide 3: Important information: Information to shareholders in the United States
Important information Information to shareholders in the United States • Shareholders in the United States are advised that the shares in Neles are not listed on a U.S. securities exchange and that Neles is not subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 193
Slide 4: Important information: Forward-looking statements
Important information Forward-looking statements • This presentation contains statements that, to the extent they are not historical facts, constitute "forward-looking statements". Forward-looking statements include statements concerning plans, expectations, projections, objectives, targets, goals,
Slide 5: Alfa Laval and Neles, a perfect match
Tom Erixon President and CEO Alfa Laval Group Alfa Laval and Neles, a perfect match Jan Allde − Alfa Laval launches voluntary recommended public cash tender offer to CFO purchase all of the issued and outstanding shares in Neles Corporation Alfa Laval Group 13/07/2020 | © Alfa Laval 5 | www.alfalava
Slide 6: The announcement
The announcement • Alfa Laval will make a voluntary recommended public cash tender offer for all issued and outstanding shares in Neles Corporation • Alfa Laval has identified the industrial flow control market as a key growth area. The transaction enables Alfa Laval to considerably strengthen its p
Slide 7: Neles, a global leader in industrial flow control
Neles, a global leader in industrial flow control • Finnish Neles is a global leader in flow control solutions and services • The company’s valves and valve automation technologies are known for quality, reliability and highest safety • The customers of Neles operate in oil and gas refining, pulp, p
Slide 8: Alfa Laval’s competitive strengths
Alfa Laval’s competitive strengths • A global company • Highly engineered products • Global market leading position • Large customer and geographical diversification • Large base of installed products • Strong brand recognition • Nordic heritage and culture • Clear growth strategy 13/07/2020 | © Alf
Slide 9: Alfa Laval portfolio view – the white spot
Alfa Laval portfolio view – the white spot HEAT TRANSFER SEPARATION FLUID HANDLING ENERGY DIVISION ENERGY DIVISION ENERGY DIVISION - Brazed & Fusion Bonded Heat Exchangers - Energy Separation - The “white spot” - Gasketed Plate Heat Exchangers - Welded Heat Exchangers FOOD & WATER DIVISION FOOD & WA
Slide 10: Alfa Laval’s business model fits with Neles
Alfa Laval’s business model fits with Neles ● Product based Business Units with full accountability ● Significant investments into new products and technologies ● Strong focus on developing the global service business, including connected solutions ● Major investments programs to secure competitive
Slide 11: The rationale
The rationale − Strong industrial logic in the acquisition of Neles Diversified fluid handling end- Attractive business model serving Strong track record of integrating Attractive financial profile market focus as a platform for future growth large transactions ● A unique opportunity to add a ● The
Slide 12: A perfect match
A perfect match Service centers > 100 Service in more than 160 countries Fluid handling ≈ 50 years Valves for industries with high hygiene requirements Major industrial/energy end markets ● HVAC ● Oil and gas ● Petrochemicals ● Manufacturing industry ● Refineries ● Cooling ● Power generation Global
Slide 13: Strong historical growth and resilient profitability
Strong historical growth and resilient profitability − Metso Flow Control historical financials Orders received, MEUR * Orders received Adj. EBITA margin (%) 681 607 627 577 591 555 518 504 475 16,7% 17,3% 15,6% 15,2% 15,8% 14,4% 13,5% 11,6% 10,1% 2011 2012 2013 2014 2015 2016 2017 2018 2019 Operati
Slide 14: Alfa Laval and Neles side-by-side
Alfa Laval and Neles side-by-side − Based on 2019 financials & 46,517 53,489 Sales (MSEK)1 6,972 Increased scale ~17,500 ~20,400 Number of employees ~2,900 17.2% 9,008 7,989 16.8% Adj. EBITA 14.6% Strong margin profile & margin1,2 1,019 EMEA EMEA EMEA Sales split 42% 36% 24% Balanced 40% 36% North &
Slide 15: Financing of acquisition
Financing of acquisition − Before and after The tender offer is fully financed through a combination of Alfa Laval’s own funds and debt facilities from SEB As per Q1 2020 Actual Pro-forma1 Net debt / LTM EBITDA2 0.9x 2.6x Debt ratio3 0.3 1.0 Source: Company filings 1) Based on an acquisition of 100%
Slide 16: Alfa Laval’s Capital structure
Alfa Laval’s Capital structure − Proven ability to deleverage post a sizeable acquisition Net Debt / EBITDA (excluding IFRS 16) Capital structure target and strategy • Company target: In the long term, Net Debt / 3,0x EBITDA should not exceed 2.0x 2,5x 2.5x • ~SEK 5 billion/year in operating cash fl
Slide 17: Indicative timetable
Indicative timetable Event Date Estimated date for publication of offer document On or about August 13, 2020 Start of the offer acceptance period On or about August 13, 2020 Expiration of the offer acceptance period On or about October 22, 2020 13/07/2020 | © Alfa Laval 17 | www.alfalaval.com
Slide 18: www.alfalaval.com
www.alfalaval.com
Slide 19: Neles figures 2019
Neles figures 2019 Valves & valve automation Orders Sales Adjusted EBITA Expertise & innovation EUR 681 million EUR 660 million EUR 97 million Since 1950’s 2019 2019 2019 (14.6% margin) Cash generating Resilient business ~70% of sales OPEX business model ~2,900 ~40 employees Countries driven, recurr
Slide 20: Alfa Laval’s figures 2019
Alfa Laval’s figures 2019 − MEUR (1 EUR = SEK 10.563) INVOICING ROCE 4 176 4 403 23% ORDER INTAKE 17 387 17.2% 756 AVERAGE NO OF ADJUSTED EBITA EMPLOYEES AS % OF SALES ADJUSTED EBITA 13/07/2020 | © Alfa Laval 20 | www.alfalaval.com