Report for Q1 2013 - Alfa Laval · Report for Q1 2013 Mr. Lars Renström President and CEO Alfa...

22/04/2013

© Alfa Laval 1

Report for Q1 2013Report for Q1 2013

Mr. Lars RenströmMr. Lars Renström

President and CEOPresident and CEO

Alfa Laval GroupAlfa Laval Group

-- Key figures Key figures

--Orders received and marginsOrders received and margins

--Highlights Highlights

-- Development per segmentDevelopment per segment

-- Geographical developmentGeographical development

-- Financials Financials

-- OutlookOutlook

22/04/2013

© Alfa Laval 2

www.alfalaval.com© Alfa Laval Slide 3

Key figuresKey figures

�� Orders received declined 9% to SEK 7,160 million.Orders received declined 9% to SEK 7,160 million.

�� Net sales dropped 4% to SEK 6,535 million.Net sales dropped 4% to SEK 6,535 million.

�� Adjusted EBITA declined 5% to SEK 1,067 million. Adjusted EBITA declined 5% to SEK 1,067 million.

�� Adjusted EBITA margin 16.3% Adjusted EBITA margin 16.3% vsvs 16.5%16.5%

-- Negative currency effect SEK 32 million.Negative currency effect SEK 32 million.

January January –– March 2013March 2013

Report for Q1 2013Report for Q1 2013-- Key figures Key figures

--Orders received and marginsOrders received and margins

--Highlights Highlights




-- OutlookOutlook

22/04/2013

© Alfa Laval 3

www.alfalaval.com

0

4 000

8 000

12 000

16 000

20 000

24 000

28 000

32 000

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

= = Order Order intake per intake per quarter quarter

= = Order Order intake per intake per quarter “large”quarter “large”

SEK millionSEK million

Orders receivedOrders received

SEK million R 12SEK million R 12

= = Rolling Rolling twelve months valuetwelve months value

Q1

09

Q1

09

Q4

10

Q4

10

Q11

1Q

111

Q3

11

Q3

11

Q11

2Q

112

Q2

12

Q2

12

Q3

12

Q3

12

= % development at constant rates by = % development at constant rates by quarter, year on yearquarter, year on year

+XX%+XX%

Q4

12

Q4

12

Q11

3Q

113

Q2

09

Q2

09

Q3

09

Q3

09

Q4

09

Q4

09

Q11

0Q

110

Q2

10

Q2

10

Q3

10

Q3

10

Q2

11

Q2

11

--5%

5%

Q4

11

Q4

11

+2

1%

+2

1%

+3

8%

+3

8%

--6%

6%

--32

%3

2%


Order analysisOrder analysis

Q1 2012 Q1 2012 Q4 2012Q4 2012

Structural change, %Structural change, %

Organic development, %Organic development, %

TotalTotal

Currency effects,%Currency effects,%

7,8957,895

Q1 2013 versus Q1 2012 and versus Q4 2012 (MSEK)Q1 2013 versus Q1 2012 and versus Q4 2012 (MSEK)

7,1607,160

+ + 3.2 3.2

-- 8.08.0

-- 4.84.8

-- 4.54.5

7,2527,252

7,1607,160

+ 1.7 + 1.7

-- 0.70.7

+ 1.0+ 1.0

-- 2.32.3

Total, %Total, %

Q1 2013Q1 2013

-- 9.3 9.3 -- 1.31.3

Q1 2013 Q1 2013

22/04/2013

© Alfa Laval 4


0,00,0

3,03,0

6,06,0

9,09,0

12,012,0

15,015,0

18,018,0

21,021,0

24,024,0

00

225225

450450

675675

900900

1 1251 125

1 3501 350

1 5751 575

1 8001 800

SEK millions and in percent of salesSEK millions and in percent of sales

* Adjusted EBITA * Adjusted EBITA –– ”Earnings before interests, taxes, amortization of goodwill and step up values and comparison distortion item”Earnings before interests, taxes, amortization of goodwill and step up values and comparison distortion items.”s.”

Adjusted EBITA / Adjusted EBITA / margin*margin*

Q211Q211 Q212Q212 Q113Q113Q110Q110 Q210Q210 Q310Q310 Q410Q410 Q111Q111 Q311Q311 Q411Q411 Q112Q112 Q312Q312 Q412Q412


-- Orders received and marginsOrders received and margins

-- Highlights Highlights




-- OutlookOutlook

22/04/2013

© Alfa Laval 5

www.alfalaval.com

Highlights in the quarter

Compact heat exchangers for processing

of shale gas in the U.S. Value: SEK 55

million.

Alfa Laval Aalborg heaters to Daewoo for

an FPSO vessel. Value: SEK 130 million.

Heavy fuel oil treatment systems to a

power plant in the Middle East. Value:SEK

90 million.

Pure Ballast systems to a yard in South

Korea. Value: SEK 50 million.

Compact heat exchangers to a new gas

plant in Russia. Value: SEK 60 million.

Acquisition of a gas combustion activity.

Expected to generate sales of SEK 40

million in 2013.

Heat exchangers for oil cooling

applications in Canada. Value: SEK 60

million.

Process TechnologyProcess Technology Marine & DieselMarine & Diesel



-- Orders received and margins Orders received and margins




-- OutlookOutlook

22/04/2013

© Alfa Laval 6

www.alfalaval.com

Industrial EquipmentIndustrial Equipment

OEMOEM

Sanitary EquipmentSanitary Equipment

EQD Parts EQD Parts & Service& Service

Equipment divisionEquipment division

Marine & Diesel divisionMarine & Diesel division

Process Technology divisionProcess Technology division

Orders received by customer segmentOrders received by customer segment

==

--

++

==

Marine & Diesel Marine & Diesel

EquipmentEquipment

Marine & Offshore Marine & Offshore

SystemsSystems

MDD Parts MDD Parts & & ServiceService

--

--

++

PTD Parts PTD Parts & Service& Service

Process IndustryProcess Industry

Food TechnologyFood Technology

Energy & EnvironmentEnergy & Environment

==

==

--

--

YearYear--onon--year comparisonyear comparison

Jan. Jan. –– March 2013, at constant rates and like for likeMarch 2013, at constant rates and like for like

www.alfalaval.com

Order Sales Backlog

Q1 2013 2,257 2,178 1,598

Q1 2012 2,339 2,233 1,501

Equipment divisionEquipment division

Slide 12

�� Sanitary affected by nonSanitary affected by non--repeat of larger projects. repeat of larger projects.

�� Industrial Equipment somewhat lower as rising Industrial Equipment somewhat lower as rising demand for refrigeration did not manage to demand for refrigeration did not manage to compensate for slow development in district compensate for slow development in district heating. heating.

�� OEM unchanged as the long winter led to lower OEM unchanged as the long winter led to lower demand for air conditioning units while demand demand for air conditioning units while demand from boiler manufacturers grew. from boiler manufacturers grew.

�� P&S had an overall good development. P&S had an overall good development.

SanitarySanitary10%*10%*

Industrial Industrial EquipmentEquipment

12%12%

OEMOEM3%3%

Parts & ServiceParts & Service6%6%

== ++

-- ==

== --

++ --


Sequential comparisonSequential comparison

Highlights and sequential commentsHighlights and sequential comments

*Share of Group total*Share of Group total

22/04/2013

© Alfa Laval 7

www.alfalaval.com

Order Sales Backlog

Q1 2013 3,288 2,842 8,636

Q1 2012 3,600 2,778 7,723

Process Technology divisionProcess Technology division

Slide 13

�� Food declined, affected by Brewery, Beverage & Food declined, affected by Brewery, Beverage & Viscous food. Strong growth for vegetable oil.Viscous food. Strong growth for vegetable oil.

�� Energy & Environment boosted by large orders, Energy & Environment boosted by large orders, primarily in oil and gas exploration. Power also primarily in oil and gas exploration. Power also contributed to the positive development.contributed to the positive development.

�� Process Industry declined due to fewer large Process Industry declined due to fewer large contracts than in the fourth quarter. The base contracts than in the fourth quarter. The base business had a stable development, reflecting the business had a stable development, reflecting the underlying activity level in the end markets.underlying activity level in the end markets.


== ==

== --

-- ++

-- --




Food Tech.Food Tech.7%*7%*

Energy & Energy & EnvironEnviron..14%14%

Process IndustryProcess Industry11%11%


www.alfalaval.com

Order Sales Backlog

Q1 2013 1,615 1,515 4,457

Q1 2012 1,956 1,820 5,665

Marine & Diesel divisionMarine & Diesel division

Slide 14

�� Marine & Diesel Equipment reported growth for Marine & Diesel Equipment reported growth for the traditional marine portfolio, diesel power the traditional marine portfolio, diesel power plants and, in particular, environmental plants and, in particular, environmental solutions. solutions.

�� Marine & Offshore Systems was boosted by a Marine & Offshore Systems was boosted by a large offshore gas order in South Korea. The large offshore gas order in South Korea. The base business was stable. base business was stable.

�� P&S rose, mainly due to a good repair activity. P&S rose, mainly due to a good repair activity.

++ ++

-- ++

-- ++




Marine & Diesel Marine & Diesel Equipment Equipment

8%*8%*

Marine & Marine & Offshore SystemsOffshore Systems

5%5%



22/04/2013

© Alfa Laval 8

www.alfalaval.com

New test and training centreNew test and training centre

�� Alfa Laval Alfa Laval PureSOxPureSOx

�� Alfa Laval WHRAlfa Laval WHR

�� Alfa Laval Alfa Laval PureBallastPureBallast

Alfa Laval boilers, scrubbers, separators, Alfa Laval boilers, scrubbers, separators,

heat exchangers, filters, tank equipment, heat exchangers, filters, tank equipment,

control and automation systems to the control and automation systems to the

marine industrymarine industry







-- OutlookOutlook

22/04/2013

© Alfa Laval 9

www.alfalaval.com© Alfa Laval

Orders received by RegionOrders received by Region

Central Central and and

Eastern Eastern Europe 8%Europe 8%

North America North America 21%21%

Asia Asia 31%31%

Latin Latin America America

7%7%

Western Europe Western Europe 22%22%

Nordic Nordic 9%9%


-10

-14

-7

-1

-9

+9

January January –– March 2013, development at constant ratesMarch 2013, development at constant rates


Highlights AsiaHighlights Asia



January January –– March 2013 , at constant rates, sequential commentsMarch 2013 , at constant rates, sequential comments

Asia: Asia:

�� Marine & Diesel Division performed the Marine & Diesel Division performed the best, P&S was unchanged, while Process best, P&S was unchanged, while Process Technology declined due to fewer large Technology declined due to fewer large projects than in the fourth quarter. projects than in the fourth quarter.

�� China declined somewhat, affected by a China declined somewhat, affected by a continued waitcontinued wait--andand--see mode among see mode among customers . South Korea, Malaysia and customers . South Korea, Malaysia and Japan were among the best performers. Japan were among the best performers.

-14 -1

22/04/2013

© Alfa Laval 10


Highlights EuropeHighlights Europe



January January –– March 2013, at constant rates, sequential commentsMarch 2013, at constant rates, sequential comments

Western Europe incl. Nordic:Western Europe incl. Nordic:

�� Fewer large contracts explain the Fewer large contracts explain the decline. Base business and Parts & decline. Base business and Parts & Service had a positive development.Service had a positive development.

-10 +33

-9 -8

+9 -5

Central Central and Eastern and Eastern Europe: Europe:

�� Strong increase, driven by oil & gas and Strong increase, driven by oil & gas and refinery in Russia. refinery in Russia.

�� The base business was stable and The base business was stable and Parts & Service saw a very good Parts & Service saw a very good development. development.


Highlights AmericasHighlights Americas



-7 +11

-1 +4

-7 +11

-1 +4

January January –– March 2013, at constant rates, sequential commentsMarch 2013, at constant rates, sequential comments

North North America: America:

�� Growth in both the U.S. and Canada, following Growth in both the U.S. and Canada, following

the development for large contracts. The base the development for large contracts. The base

business also grew. business also grew.

�� Energy & Environment did particularly well. Energy & Environment did particularly well.

Latin America: Latin America:

�� A slight increase due to project orders in the A slight increase due to project orders in the

Process Technology Division. Orders for capital Process Technology Division. Orders for capital

equipment declined in Equipment and Marine & equipment declined in Equipment and Marine &

Diesel divisions. Diesel divisions.

�� Parts & Service saw an overall good Parts & Service saw an overall good

development. development.

22/04/2013

© Alfa Laval 11


Top 10 markets*Top 10 markets*

0 1 000 2 000 3 000 4 000 5 000

Canada

Brazil

Adriatic

Russia

Mid Europe

South East Asia

Korea, South

Nordic

China

United States

SEK million at prevailing ratesSEK million at prevailing rates

= = WY 2012WY 2012

= = R12 as per end of MarchR12 as per end of March *The development of the 2012 top ten markets.*The development of the 2012 top ten markets.


Mr. Thomas Mr. Thomas ThuressonThuresson

CFOCFO








-- OutlookOutlook

22/04/2013

© Alfa Laval 12


HighlightsHighlights

Order intake Order intake

Net salesNet sales

SEK millionsSEK millions January January –– March 2013March 2013

7,1607,160

6,5356,535


Gross profit marginGross profit margin

3030

4040

5050

In percent of salesIn percent of sales

38.238.238.538.5

40.440.4

Q212Q212

42.742.7

Q412Q412 Q113Q113Q110Q110 Q210Q210 Q310Q310 Q410Q410 Q111Q111 Q211Q211 Q311Q311 Q411Q411 Q112Q112 Q312Q312

22/04/2013

© Alfa Laval 13


HighlightsHighlights

Order intake Order intake

Net salesNet sales

Adjusted EBITAAdjusted EBITA

Adjusted EBITAAdjusted EBITA--marginmargin

Profit before taxProfit before tax

Earnings per shareEarnings per share

Earnings per share, excl stepEarnings per share, excl step--upup

ROCEROCE

ROEROE

SEK millionsSEK millions January January –– March 2013March 2013

7,1607,160

6,5356,535

1,0671,067

16.3% 16.3%

927927

1.671.67

1.941.94

25.8%25.8%

21.4%21.4%


Cash flow fromCash flow from

-- operating activitiesoperating activities

-- investing activitiesinvesting activities

Financial Financial net paidnet paid

TotalTotal

CashCash--flow statement flow statement

Pro Forma Pro Forma Free cashFree cash--flowflow**

SEK millionsSEK millions

Jan Jan –– MarchMarch20132013

Jan Jan –– MarchMarch20122012

974974

-- 150150

4343

935935

1,0371,037

-- 694694

-- 1313

930930

867867 330330

*Incl. operating activities, capital expenditure and financial net paid. *Incl. operating activities, capital expenditure and financial net paid.

22/04/2013

© Alfa Laval 14

www.alfalaval.com

Change in IAS

© Alfa Laval Slide 27

Accounting for Employee Benefits Accounting for Employee Benefits –– IAS 19 IAS 19

Implications on Alfa Laval in short:

-a restatement of the closing balance sheet as per Dec. 31st, 2011, giving a reduction in equity for Alfa Laval of SEK 791 million.

- that any changes in unrecognized actuarial gains/losses from Jan. 1st

2012 are to be charged to the P&L, as part of “other comprehensive

income”, i.e. below net income and impacting equity.

- that the impact on Alfa Laval under the restatement was a negative SEK 164 million for 2012.


Foreign exchangeForeign exchange

SEK millionSEK million

Translation effectTranslation effect

Transaction effectTransaction effect

TotalTotal

*Based on EUR/USD 1.30 and EUR/SEK 8.35*Based on EUR/USD 1.30 and EUR/SEK 8.35

Estimated impact on adjusted EBITA from FX fluctuationsEstimated impact on adjusted EBITA from FX fluctuations

FY 14*FY 14*

00

-- 100100

-- 100100

FY 13FY 13

-- 165165

-- 3030

-- 195195

Projected FXProjected FX--effect for 2013 as communicated with the Q4 report effect for 2013 as communicated with the Q4 report SEK SEK --140 million 140 million

Q1 13Q1 13

-- 4242

1010

-- 3232

22/04/2013

© Alfa Laval 15


Order backlog as per March 31 Order backlog as per March 31

SEK millionsSEK millions

For delivery For delivery in 2013in 2013

00

2 0002 000

4 0004 000

6 0006 000

8 0008 000

10 00010 000

12 00012 000

14 00014 000

16 00016 000

For delivery For delivery later than 2013later than 2013

Q113Q113Q109Q109 Q110Q110 Q111Q111 Q112Q112

1.0

31.0

3

0.8

90.8

9

1.1

01.1

0

1.1

61.1

6

1.0

11.0

1

BookBookto billto bill

14,69114,691

10,93210,932

3,7593,759

14,88914,889

10,71510,715

4,1744,174

www.alfalaval.com

SalesSales

SEK (SEK (blnbln))

Full year 2012Full year 2012 29.829.8

Order backlog, likeOrder backlog, like--forfor--likelike -- 0.10.1

FXFX--translation translation -- 1.21.2

AcquisitionsAcquisitions ++ 0.70.7

SubtotalSubtotal 29.229.2

Orders “inOrders “in--forfor--out” ?out” ?

Price ?Price ?

Full year 2013Full year 2013

Full year 2013Full year 2013

22/04/2013

© Alfa Laval 16


Mr. Lars RenströmMr. Lars Renström

President and CEOPresident and CEO








-- OutlookOutlook


Outlook for the second quarterOutlook for the second quarter

“We expect that demand “We expect that demand

during the second quarter will during the second quarter will

be on about the same level as be on about the same level as

in the first quarter.”in the first quarter.”

22/04/2013

© Alfa Laval 17


www.alfalaval.com

Cautionary statementCautionary 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 Slide 34

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