Alfa Laval Ab · OMXSTO:ALFA
Alfa Laval Ab — Q3 2014 Earnings Presentation
37 slides from Alfa Laval Ab's earnings presentation, 2014
Slide 1: Alfa Laval
Slide 2: Report for Q3 2014
Report for Q3 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 July – Sep 2014 Orders received rose 31% to SEK 9,708 million. Net sales grew 29% to SEK 9,272 million. Adjusted EBITA increased 29% to SEK 1,545 million. Adjusted EBITA margin 16.7% vs 16.7% - Negative currency effect SEK 7 million. Jan – Sep 2014 Orders received rose 18% to SEK 26,151
Slide 4: Report for Q3 2014
Report for Q3 2014 - Key figures - Orders received and margins - Highlights - Development per segment - Geographical development - Financials - Outlook
Slide 5: Orders received
Orders received SEK million SEK million R 12 12 000 36 000 33 000 10 000 30 000 27 000 8 000 24 000 21 000 6 000 18 000 15 000 4 000 12 000 9 000 +23% +37% +26% +4% -6% 2 000 6 000 3 000 0 0 Q310 Q410 Q212 Q312 Q412 Q213 Q313 Q413 Q214 Q314 Q211 Q311 Q411 Q112 Q113 Q114 Q111 = Order intake per quart
Slide 6: Order analysis
Order analysis Q3 2014 versus Q3 2013 and versus Q2 2014 (MSEK) Q3 2013 7,415 Q2 2014 8,969 Structural change, % + 20.0 + 10.4 Organic development, % + 5.7 - 4.5 Total + 25.7 + 5.9 Currency effects,% + 5.2 + 2.3 Total, % + 30.9 + 8.2 Q3 2014 9,708 Q3 2014 9,708 © Alfa Laval Slide 6 www.alfalaval.com
Slide 7: Adjusted EBITA / margin
Adjusted EBITA / margin* SEK millions and in percent of sales 1 800 24,0 1 575 21,0 1 350 18,0 1 125 15,0 900 12,0 675 9,0 450 6,0 225 3,0 0 0,0 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 * Adjusted EBITA – ”Earnings before interests, taxes, amortization of goodwill and step up
Slide 8: Report for Q3 2014
Report for Q3 2014 - Key figures - Orders received and margins - Highlights - Development per segment - Geographical development - Financials - Outlook
Slide 9: Highlights in the quarter
Highlights in the quarter Process Technology Marine & Diesel Order to supply air cooler systems for a natural Order to supply Framo pumping systems for an gas liquids export terminal in the U.S. FPSO to be built by Samsung in South Korea. Value: SEK 95 million Value: SEK 240 million Energy efficienc
Slide 10: Report for Q3 2014
Report for Q3 2014 - Key figures - Orders received and margins - Development per segment - Geographical development - Financials - Outlook
Slide 11: Orders received by customer segment
Orders received by customer segment July – Sep. 2014, at constant rates and like for like Industrial PTD Service + + Equipment Water & Waste - - Sanitary Equipment Food & Life - - OEM Science + EQD Service Marine & Diesel Energy & Process = + Equipment Marine & Offshore + Systems + Marine & Offshore
Slide 12: Equipment division
Equipment division Highlights and sequential comments Industrial Industrial Equipment down due to lower activity in Equipment areas requiring refrigeration products, such as food 10%* related cold chains. Good demand for HVAC. Sanitary negatively affected by dairy as well as an + - Sanitary overall
Slide 13: Marine & Diesel division
Marine & Diesel division Highlights and sequential comments Marine & Diesel M&D Equipment showed very modest decline. Equipment Demand for environmental solutions and diesel 8%* power partly offset lower demand from the yards for equipment going into new ships. + - Marine & M&O Systems dropped as Q2
Slide 14: Process Technology division
Process Technology division Highlights and sequential comments Energy & Process 16%* In Energy & Process, Oil & Gas did very well while Refinery and Petrochem declined. Food & Life Science boosted by Brewery as well as = = Food & Life Life Science & Renewable Resources. Science 8%* Water & Waste did
Slide 15: Orders received by customer segment
Orders received by customer segment January – September 2014, at constant rates and like for like Industrial PTD Service + = Equipment Water & Waste - + Sanitary Equipment Food & Life - Science = OEM = EQD Service Marine & Diesel Energy & Process - + Equipment Marine & Offshore + Systems MDD Service
Slide 16: Report for Q3 2014
Report for Q3 2014 - Key figures - Orders received and margins - Highlights - Development per segment - Geographical development - Financials - Outlook
Slide 17: Orders received by Region
Orders received by Region July – Sep. 2014, development at constant rates Latin America 5% +10 North America 21% = +4 +47 +46 Asia 40% Western Europe 18% -20 Central Nordic 8% & Eastern Europe 6% Year-on-year comparison © Alfa Laval www.alfalaval.com
Slide 18: Highlights Asia
Highlights Asia July – Sep. 2014, at constant rates, sequential comments Asia: Orders declined slightly excl. Framo, due to non-repeat large projects. Base business and Service both did well. +46 +15 China saw a broad-based positive development, driven by the base business and Marine. Fewer of the l
Slide 19: Highlights Europe
Highlights Europe July – Sep. 2014, at constant rates, sequential comments +10 +5 = -11 +4 -12 Western Europe incl. Nordic: Central and Eastern Europe: Fewer large orders and a decline in the Down due to fewer large orders and a base business explains the decline in decline in the base business. Wes
Slide 20: Highlights Americas
Highlights Americas July – Sep. 2014, at constant rates, sequential comments North America: Continued good growth in the region, driven by large orders. The base business was unchanged. Energy & Process, Water & Waste and Marine & +47 +19 Offshore Pumping did particularly well. Latin America: Declin
Slide 21: Orders received by Region
Orders received by Region January – September 2014, development at constant rates Latin America 5% -2 North America 20% -4 +7 +22 +35 Asia 37% Western Europe 21% -6 Central & Eastern Nordic 8% Europe 7% Year-on-year comparison © Alfa Laval www.alfalaval.com
Slide 22: Top markets
Top 10 markets* SEK million at prevailing rates = R12 as per end of September *The development of the 2013 top ten markets. = WY 2013 © Alfa Laval Slide 22 www.alfalaval.com
Slide 23: Report for Q3 2014
Report for Q3 2014 - Key figures - Orders received and margins - Highlights - Development per segment - Geographical development - Financials Mr. Thomas Thuresson - Outlook CFO Alfa Laval Group
Slide 24: Highlights
Highlights SEK millions July – Sep, 2014 Order intake 9,708 Net sales 9,272 © Alfa Laval Slide 24 www.alfalaval.com
Slide 25: Gross profit margin
Gross profit margin In percent of sales 45 40 38.3 37.0 36.7 35.3 35 30 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 © Alfa Laval www.alfalaval.com
Slide 26: Highlights
Highlights SEK millions July – Sep, 2014 Order intake 9,708 Net sales 9,272 Adjusted EBITA 1,545 Adjusted EBITA-margin 16.7% Profit before tax* 991 Earnings per share 1.65 Earnings per share, excl step-up 2.13 ROCE 20.6% ROE 17.9% *Includes a one-time charge of SEK260 million for cost-cutting measur
Slide 27: Cost savings program
Cost savings program • Measures under implementation to have reduced the number of employees with some 400 by Q4 2015. The net number, once completed, is estimated at 300 employees • Annualized savings level of approximately SEK 300 million seen in Q4 2015. • Implementation estimated to lead to non-
Slide 28: Divisional performance
Divisional performance Equipment Process Technology Marine & Diesel Q3 ´14 Q3 ´13 Q3 ´14 Q3 ´13 Q3 ´14 Q3 ´13 Orders 2,462 2,360 3,586 3,522 3,660 1,533 Backlog 1,665 1,614 8,777 8,790 11,958 4,667 Sales 2,531 2,443 3,619 3,210 3,122 1,519 Op. profit 306 365 523 525 550 221 Op margin (%) 12,1 14,9 1
Slide 29: Quarterly highlight: Corporate bonds replace bridge loan
Quarterly highlight Corporate bonds replace bridge loan Alfa Laval raised EUR 800 million in the corporate bond market in Q3. The bonds replace the bridge loan take in connection with the acquisition of Frank Mohn AS. The bonds were raised in two tranches, EUR 300 million with a maturity of five yea
Slide 30: Cash-flow statement
Cash-flow statement Q3 Q3 9M 9M SEK millions 2014 2013 2014 2013 Cash flow from - operating activities 1,667 994 3,433 3,003 - investing activities -152 - 96 -14,790 - 786 Financial net paid - 262 - 32 -113 - 51 Total 1,253 866 -11,470 2,166 Pro Forma Free cash-flow* 1,261 857 2,922 2,667 *Incl. ope
Slide 31: Foreign exchange
Foreign exchange Estimated impact on adjusted EBITA from FX fluctuations SEK million Q3 14 9M 14 FY 14 FY 15* Translation effect 36 18 50 120 Transaction effect - 43 - 45 - 35 130 Total -7 - 27 15 250 *Based on EUR/USD 1.26 and EUR/SEK 9.14 Projected FX-effect for 2014 as communicated in Q2 report:
Slide 32: Order backlog as per Sep. 30
Order backlog as per Sep. 30 SEK millions 22,400 15,029 20 000 15,071 15 000 8,399 10 000 7,371 6,672 5 000 Book to bill 0 Q310 Q311 Q312 Q313 Q314 For delivery later than 2014 For delivery in 2014 © Alfa Laval Slide 32 www.alfalaval.com
Slide 33: Sales
Sales Full year 2014 SEK (bln) Full year 2013 29.8 Order backlog, like-for-like - 0.2 FX-translation + 0.5 Acquisitions + 3.0 Subtotal 33.1 Orders “in-for-out” ? Price ? Full year 2014 www.alfalaval.com
Slide 34: Report for Q3 2014
Report for Q3 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 35: Outlook for the fourth quarter
Outlook for the fourth quarter “We expect that demand during the fourth quarter will be on about the same level as in the third quarter.” © Alfa Laval Slide 35 www.alfalaval.com
Slide 36: www.alfalaval.com
© Alfa Laval Slide 36 www.alfalaval.com
Slide 37: 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