www.alfalaval.com
www.alfalaval.com
Report for Q3 2018
Mr. Tom Erixon
President and CEO
Alfa Laval Group
www.alfalaval.com
July – September 2018
Key figures
Orders received grew 35% to SEK 11,357 million.
Net sales increased 24% to SEK 10,131 million.
Adjusted EBITA* up 33% at SEK 1,736 million.
Adjusted EBITA margin at 17.1% vs 16.0%.
*) Positive currency effect SEK 50 million.
© Alfa Laval
3
January – September 2018
Orders received grew 25% to SEK 33,444 million.
Net sales increased 17% to SEK 29,457 million.
Adjusted EBITA* increased 23% to SEK 4,931 million.
Adjusted EBITA margin at 16.7% vs 15.9%.
*) Positive currency effect SEK 5 million.
www.alfalaval.com
Order analysis- Q3 2018 versus Q3 2017 and versus Q2 2018 (MSEK)
Q3 2017 8,418 Q2 2018 12,062
Structural change, % - 1.0 -
Organic development, % + 27.1 - 5.8
Total + 26.1 - 5.8
Currency effects, % + 8.8 -
Total, % + 34.9 - 5.8
Q3 2018 11,357 Q3 2018 11,357
© Alfa Laval
4
www.alfalaval.com
Orders received
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
50 000
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318
= Order intake per quarter
= Order intake per quarter “large”
SEK million SEK million R 12
= Rolling twelve months value
= % development at constant rates by quarter, year on year+XX%
+26%
+15%
-14%
-15%
+26%
5
www.alfalaval.com
Highlights in the quarter
6
Energy MarineAlfa Laval Niagara evaporative air cooler
systems for a gas processing plant in the
U.S. Value: SEK 100 million.
Framo pumping systems for an FPSO.
Value: SEK 70 million.
Alfa Laval Compabloc heat exchangers
for a petrochemical plant in the US.
Value: SEK 85 million
Two fleet agreements for Alfa Laval
PureBallast, covering retrofit installations
onboard 80 vessels between 2019 and
2024.
© Alfa Laval
www.alfalaval.com
Adjusted EBITA/margin*- SEK millions and in percent of sales
0,0
3,0
6,0
9,0
12,0
15,0
18,0
21,0
24,0
0
250
500
750
1 000
1 250
1 500
1 750
2 000
Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318
* Adjusted EBITA – ”Earnings before interests, taxes, amortization of goodwill and step up values and comparison distortion items.”
7
www.alfalaval.com
Energy division- Highlights and comments
MARKETS & ORDER INTAKE
Continued positive sentiment across end
markets. Sequential order decline due to
seasonality in HVAC and fewer mid-sized
and large orders from refineries and
petrochemicals.
Good service growth with increased demand
for service contracts in oil & gas industry.
PROFITABILITY (EBIT)
Supported by higher volumes, while there
was a negative impact from mix (ASS/CS).
Cost, which reflects higher S&A due to
increased activity, compares with a quarter
when it was extraordinarily low.
8
Q3 18 Q2 18 %-change
Q3 17
ORDERS 3,039 3,401 -9.6 2,513
SALES 3,043 3,215 -4.9 2,598
EBIT 461 490 417
EBIT mrgn (%) 15.1 15.2 16.1
0
200
400
600
800
1 500
2 000
2 500
3 000
3 500
Q314
Q414
Q115
Q215
Q315
Q415
Q116
Q216
Q316
Q416
Q117
Q217
Q317
Q417
Q118
Q218
Q318
Sales EBIT
www.alfalaval.com
Food & Water division- Highlights and comments
MARKETS & ORDER INTAKE
Orders declined sequentially, following two
strong quarters. No change in end-market
sentiment.
Continued good development for the
component business while project-related
activity was a bit slower.PROFITABILITY (EBIT)
Volume and mix had a positive effect on
profitability. A favourable development within
capital sales outweighed the impact from a
smaller service share.
9
Q3 18 Q2 18 %-
change
Q3 17
ORDERS 3,151 3,589 -11.6 2,788
SALES 3,336 3,390 -1.0 2,882
EBIT 542 507 410
EBIT mrgn (%) 16.2 15.0 14.2
0
200
400
600
800
1 500
2 000
2 500
3 000
3 500
Q314
Q414
Q115
Q215
Q315
Q415
Q116
Q216
Q316
Q416
Q117
Q217
Q317
Q417
Q118
Q218
Q318
Sales EBIT
www.alfalaval.com
Marine division- Highlights and comments
MARKETS & ORDER INTAKE
High activity in the scrubber market.
Contracting-related order intake on a
somewhat higher level than last year.
Continued good market activity offshore.
PROFITABILITY (EBIT)
Volume had a positive impact, driven by
scrubbers and pumping systems. The
uptick in capital sales led to a smaller
service share and hence a negative mix
effect.
10
Q3 18 Q2 18 %-
change
Q3 17
ORDERS 4,903 4,685 +3.6 2,725
SALES 3,433 3,486 -1.4 2,322
EBIT 599 571 361
EBIT mrgn (%) 17.4 16.4 15.5
200
300
400
500
600
700
800
1 500
2 000
2 500
3 000
3 500
4 000
Q314
Q414
Q115
Q215
Q315
Q415
Q116
Q216
Q316
Q416
Q117
Q217
Q317
Q417
Q118
Q218
Q318
Sales EBIT
www.alfalaval.com
Greenhouse- Highlights and sequential comments
Greenhouse EBIT-margin at 6.7 percent, meaning
the business has turned around from last year’s
loss-making level.
Air heat exchangers affected by non-repeats as well
as seasonally lower demand for commercial
refrigeration. Applications in industrial refrigeration
and data centre cooling, however, saw continued
good demand.
The remaining tubular business reported growth, as
recently signed OEM agreements, started to
generated orders for engine cooling applications in
the U.S.
© Alfa Laval
11
www.alfalaval.com
Service, by division
© Alfa Laval
12ENERGY FOOD & WATER MARINE
Q3: 27%
SERVICE SHARE
ABSOLUTE
DEVELOPMENT
SEQYoY
Q2: 32%
SERVICE SHARE
ABSOLUTE
DEVELOPMENT
SEQYoY
Q2: 21%
SERVICE SHARE
ABSOLUTE
DEVELOPMENT
SEQYoY
+
Order intake
=+ ++ -
www.alfalaval.com
Orders received by business unit- July – September 2018, at constant rates, like for like and year-on-year
Brazed & fusion-bonded HEX
GPHE
Energy Separation
WHE
Food Heat Transfer
Decanters
Food Systems
Pumping Systems
Boilers & Gas Systems
Marine Separation & Heat Transfer
High-speed Separators
+
+
Hygienic Fluid Handling
Energy Food & Water Marine Year-on-year comparison
+
-
++
“Greenhouse” - +
+
+
+
+
+
13
“Greenhouse”
www.alfalaval.com
-30
-20
-10
0
10
20
30
14
Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318
Organic order growth- Compared with same quarter last year (%), excluding currency effects
www.alfalaval.com
-30
-20
-10
0
10
20
30
15
Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318
= Organic order growth in %, excluding Marine Environmental
= Organic order growth from Marine Environmental in %
Organic order growth- Compared with same quarter last year (%), excluding currency effects
www.alfalaval.com
Orders received by region- July – September 2018, development at constant rates
North
America
16%
Western
Europe 18%
Nordic
9%
CEE
5%
Asia 45%
+9
+4
+58
+20
+14
-7
+45 -1
-19
-7
-9
Year-on-year comparison Sequential comparison
16
+33
Africa &
Oceania
2%
www.alfalaval.com
Report for Q3 2018
Mr. Jan Allde
CFO
Alfa Laval Group
www.alfalaval.com
Highlights 2018- July – September, SEK million
Order intake 11,357
Net sales 10,131
© Alfa Laval
18
www.alfalaval.com
Gross profit margin- In percent of sales
30
35
40
45
Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318
36.637.035.735.2
© Alfa Laval
19
www.alfalaval.com
Gross profit margin- Q3 2018 versus Q3 2017 and versus Q2 2018
Q3 2017 37.0 Q2 2018 35.4
Mix/price - - =
Load/volume + =
PPV/metals - -
FX + ++
Structure = =
Q3 2018 36.6 Q3 2018 36.6
© Alfa Laval
20
www.alfalaval.com
Highlights 2018- July - September, SEK million
Order intake 11,357
Net sales 10,131
Adjusted EBITA 1,736
Adjusted EBITA margin, % 17.1
Profit before tax 1,458
Earnings per share 2.56
Earnings per share, excl. step-up 3.06
ROCE 22.1
ROE 20.0
© Alfa Laval
21
www.alfalaval.com
Divisional performance
Energy Marine Food & Water
Q3 2018 2017 2018 2017 2018 2017
Orders 3,039 2,513 4,903 2,725 3,151 2,788
Backlog 4,852 4,883 12,529 8,714 4,917 4,541
Sales 3,043 2,598 3,433 2,322 3,336 2,882
Op. profit 461 417 599 361 542 410
Op. margin, % 15.1 16.1 17.4 15.5 16.2 14.2
Comments onoperating margin
Volume/load (pos)
Mix (neg)
S&A cost (neg)
Volume/load (pos)
Mix (neg)
Volume/load (pos)
Mix (pos)
© Alfa Laval
22
www.alfalaval.com
Cash-flow statement
SEK million Q3 2018
Q3 2017
9M2018
9M2017
Cash flow from- operating activities- investing activities
1,350-415
1,044-121
3,393-765
2,890-437
Financial net paid -58 -145 -66 -234
Total 877 778 2,562 2,219
Pro Forma Free cash-flow* 876 779 2,396 2,263
*Incl. operating activities, capital expenditure and financial net paid.
© Alfa Laval
23
www.alfalaval.com
Foreign exchange- Estimated impact on adjusted EBITA from FX fluctuations
SEK million Q3 2018
9M 2018
FY 2018 FY 2019**
Transaction effect -25 -65* -80 120
Revaluation 5 0 - -
Translation effect 70 70 80 0
Total 50 5 0 120
Projected FX-effect for 2018 communicated with the Q2 earnings’ release: SEK 150 million
**Based on EUR/USD 1.1608 and EUR/SEK 10.3130
© Alfa Laval
24
*1H transaction effect has been restated to -40, from the reported 0.
www.alfalaval.com
Order backlog as per September 30
= For delivery this year
= For delivery after 2018
SEK million
0
5 000
10 000
15 000
20 000
25 000
Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318
1.08
22,773
7,9
21
14,8
52
18,674
11,7
05
6,9
69
book to bill1.03 1.120.97
25
1.13
www.alfalaval.com
SalesFull year 2018, SEK (bn)
9M sales 29.5
Backlog, for delivery current year + 7.9
FX translation + 0.3
Divestments - 0.1
Subtotal 37.6
© Alfa Laval
26
“In-for-out” +/-?
Price +/-?
Acquisitions +?
Full year 2018
In-for-out, same period 2017: SEK 3.1 bln.
www.alfalaval.com
Report for Q3 2018
Mr. Tom Erixon
President and CEO
Alfa Laval Group
www.alfalaval.com
Outlook for the fourth quarter
“We expect that demand during
the fourth quarter will be somewhat
higher than in the third quarter.”
© Alfa Laval
28
www.alfalaval.com
www.alfalaval.com
Marine
Alfa Laval
Share of totalAlfa Laval
Energy
Activity split O&G, totalDistribution of orders Q3 (MSEK) 2018
Drilling Processing &Transportation
PetrochemicalsRefinery
Grand total SEQ/YOY
1,072 (-/+)
333 (-/+)
=1,405*(-/+)
= 12.4%
* including Service
2.0% 3.8%1.0%5.6%
64
162
= 226
469
171
= 640
106
0
= 106
433
0
= 433
30
www.alfalaval.com
Share
Driver
Marine Division’s industry split- Distribution of orders LTM September
Marine Offshore oil and gas
Engine power Service
World trade &
fleet capacity
Oil & gas demand
and prices
Electrical
power needs
World trade
Environment & Energy, Marine
Legislation &
fuel cost
33%4%
23%
32%8%
© Alfa Laval
31
www.alfalaval.com
Marine Division’s industry split- Distribution of sales LTM September
Share
Driver
41%
Marine Offshore oil and gas
Engine power Service
5%
30%
World trade &
fleet capacity
Oil & gas demand
and prices
Electrical
power needs
World trade
Environment & Energy, Marine
18%
Legislation &
fuel cost
6%
© Alfa Laval
32
www.alfalaval.com
Orders received by business unit- January – September 2018, at constant rates, like for like and year-on-year
Brazed & fusion-bonded HEX
GPHE
Energy Separation
WHE
Food Heat Transfer
Decanters
Food Systems
Pumping Systems
Boilers & Gas Systems
Marine Separation & Heat Transfer
High-speed Separators
+
+
Hygienic Fluid Handling
Energy Food & Water Marine Year-on-year comparison
+
=+
“Greenhouse” - +
+
+
=
=
+
33
“Greenhouse”
+
www.alfalaval.com
Top ten markets*- SEK million at prevailing rates
*The development of the 2017 top ten markets.
0 1000 2000 3000 4000 5000 6000 7000
India
Benelux
South East…
Adriatic
Japan
Mid Europe
South Korea
Nordic
China
United States
= WY 2017
= LTM Q3 2018
34
www.alfalaval.com
Orders received by region- January – September 2018, development at constant rates
North
America
17%
Western
Europe 20%
Nordic
10%
CEE
5%
Asia 41%
=
+6
+43
+38
+8
+35
Year-on-year comparison
35
Africa &
Oceania
2%
www.alfalaval.com
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 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
36
Top Related