Alfa Laval AB · OMXSTO:ALFA
Alfa Laval AB — Q3 2018 Earnings Presentation
36 slides from Alfa Laval AB's earnings presentation, 2018
Slide 1: www.alfalaval.com
www.alfalaval.com
Slide 2: Report for Q3 2018
Report for Q3 2018 Mr. Tom Erixon President and CEO Alfa Laval Group www.alfalaval.com
Slide 3: Key figures
Key figures July – September 2018 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. January – September 2018 Orders
Slide 4: Order analysis
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 www.alfalaval.com 4
Slide 5: Orders received
Orders received SEK million SEK million R 12 14 000 50 000 45 000 12 000 40 000 10 000 35 000 30 000 8 000 25 000 6 000 20 000 +26% +15% +26% -15% -14% 4 000 15 000 10 000 2 000 5 000 0 0 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 = Order intake per quarter
Slide 6: Highlights in the quarter
Highlights in the quarter Energy Marine Alfa Laval Niagara evaporative air cooler Framo pumping systems for an FPSO. systems for a gas processing plant in the Value: SEK 70 million. U.S. Value: SEK 100 million. Alfa Laval Compabloc heat exchangers Two fleet agreements for Alfa Laval for a petrochemi
Slide 7: 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 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 * Adjusted EBITA – ”Earnings before interests, taxes, amortization of goodwill and step
Slide 8: Energy division
Energy division - Highlights and comments MARKETS & ORDER INTAKE Q3 18 Q2 18 %- Q3 17 change Continued positive sentiment across end ORDERS 3,039 3,401 -9.6 2,513 markets. Sequential order decline due to seasonality in HVAC and fewer mid-sized SALES 3,043 3,215 -4.9 2,598 and large orders from ref
Slide 9: Food & Water division
Food & Water division - Highlights and comments MARKETS & ORDER INTAKE Q3 18 Q2 18 %- Q3 17 Orders declined sequentially, following two change strong quarters. No change in end-market ORDERS 3,151 3,589 -11.6 2,788 sentiment. SALES 3,336 3,390 -1.0 2,882 Continued good development for the EBIT 5
Slide 10: Marine division
Marine division - Highlights and comments MARKETS & ORDER INTAKE Q3 18 Q2 18 %- Q3 17 High activity in the scrubber market. change Contracting-related order intake on a ORDERS 4,903 4,685 +3.6 2,725 somewhat higher level than last year. SALES 3,433 3,486 -1.4 2,322 Continued good market activity
Slide 11: Greenhouse
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 industria
Slide 12: Service, by division
Service, by division Order intake ENERGY FOOD & WATER MARINE 12 SERVICE SHARE SERVICE SHARE SERVICE SHARE Q3: 27% Q2: 32% Q2: 21% ABSOLUTE ABSOLUTE ABSOLUTE DEVELOPMENT DEVELOPMENT DEVELOPMENT + + + - + = YoY SEQ YoY SEQ YoY SEQ © Alfa Laval www.alfalaval.com
Slide 13: Orders received by business unit
Orders received by business unit - July – September 2018, at constant rates, like for like and year-on-year “Greenhouse”- + Brazed & fusion-bonded HEX Pumping Systems + + Energy Separation Marine Separation & Heat Transfer + + GPHE + WHE + Decanters Boilers & Gas Systems + + Food Heat Transfer High-
Slide 14: Organic order growth
Organic order growth - Compared with same quarter last year (%), excluding currency effects 30 20 10 0 -10 -20 -30 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 www.alfalaval.com 14
Slide 15: Organic order growth
Organic order growth - Compared with same quarter last year (%), excluding currency effects 30 20 10 0 -10 -20 -30 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 = Organic order growth from Marine Environmental in % = Organic order growth in %, excluding Marine
Slide 16: Orders received by region
Orders received by region - July – September 2018, development at constant rates Africa & Nordic Oceania 9% +20 -7 North 2% America +9 -7 16% +4 -9 +14 -19 Western +45 -1 Europe 18% CEE 5% +58 +33 Asia 45% Year-on-year comparison Sequential comparison www.alfalaval.com 16
Slide 17: Report for Q3 2018
Report for Q3 2018 Mr. Jan Allde CFO Alfa Laval Group www.alfalaval.com
Slide 18: Highlights 2018
Highlights 2018 - July – September, SEK million Order intake 11,357 Net sales 10,131 © Alfa Laval www.alfalaval.com 18
Slide 19: Gross profit margin
Gross profit margin - In percent of sales 45 40 35.2 35.7 37.0 36.6 35 30 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 © Alfa Laval www.alfalaval.com 19
Slide 20: Gross profit margin
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 www.alfalaval.com 20
Slide 21: Highlights 2018
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 www.alfalaval.com 21
Slide 22: Divisional performance
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
Slide 23: Cash-flow statement
Cash-flow statement SEK million Q3 Q3 9M 9M 2018 2017 2018 2017 Cash flow from - operating activities 1,350 1,044 3,393 2,890 - investing activities -415 -121 -765 -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 activ
Slide 24: Foreign exchange
Foreign exchange - Estimated impact on adjusted EBITA from FX fluctuations SEK million Q3 9M FY 2018 FY 2018 2018 2019** Transaction effect -25 -65* -80 120 Revaluation 5 0 - - Translation effect 70 70 80 0 Total 50 5 0 120 *1H transaction effect has been restated to -40, from the reported 0. **Base
Slide 25: Order backlog as per September 30
Order backlog as per September 30 SEK million 25 000 22,773 20 000 18,674 14,852 11,705 15 000 10 000 7,921 6,969 5 000 1.08 1.03 0.97 1.13 1.12 book to bill 0 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 = For delivery after 2018 = For delivery this year www.
Slide 26: Sales
Sales Full 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 “In-for-out” +/-? Price +/-? Acquisitions +? Full year 2018 In-for-out, © Alfa Laval same period 2017: SEK 3.1 bln. www.alfalaval.com 26
Slide 27: Report for Q3 2018
Report for Q3 2018 Mr. Tom Erixon President and CEO Alfa Laval Group www.alfalaval.com
Slide 28: Outlook for the fourth quarter
Outlook for the fourth quarter “We expect that demand during the fourth quarter will be somewhat higher than in the third quarter.” © Alfa Laval www.alfalaval.com 28
Slide 29: www.alfalaval.com
www.alfalaval.com
Slide 30: Activity split O&G, total
Activity split O&G, total Distribution of orders Q3 (MSEK) 2018 Drilling Processing & Refinery Petrochemicals Transportation Grand total SEQ/YOY Energy 64 469 106 433 1,072 (-/+) Marine 162 171 0 0 333 (-/+) Alfa Laval = 226 = 640 = 106 = 433 =1,405*(-/+) Share of total Alfa Laval 2.0% 5.6% 1.0% 3.8
Slide 31: Marine Division's industry split
Marine Division’s industry split - Distribution of orders LTM September Marine Offshore oil Environment & Engine power Service and gas Energy, Marine World trade & Oil & gas demand Legislation & Electrical World trade Driver fleet capacity and prices fuel cost power needs 23% 33% Share 4% 8% 32% © A
Slide 32: Marine Division's industry split
Marine Division’s industry split - Distribution of sales LTM September Marine Offshore oil Environment & Engine power Service and gas Energy, Marine World trade & Oil & gas demand Legislation & Electrical World trade Driver fleet capacity and prices fuel cost power needs 30% Share 41% 5% 6% 18% © Al
Slide 33: Orders received by business unit
Orders received by business unit - January – September 2018, at constant rates, like for like and year-on-year “Greenhouse” - + Brazed & fusion-bonded HEX + Energy Separation Pumping Systems + + GPHE Marine Separation & Heat Transfer + = WHE Boilers & Gas Systems + = Decanters High-speed Separators
Slide 34: Top ten markets
Top ten markets* - SEK million at prevailing rates United States China Nordic South Korea Mid Europe Japan Adriatic South East… Benelux India 0 1000 2000 3000 4000 5000 6000 7000 = LTM Q3 2018 = WY 2017 *The development of the 2017 top ten markets. www.alfalaval.com 34
Slide 35: Orders received by region
Orders received by region - January – September 2018, development at constant rates Africa & Oceania Nordic 2% 10% +38 North America = 17% +6 +8 Western Europe 20% +35 CEE 5% +43 Asia 41% Year-on-year comparison www.alfalaval.com 35
Slide 36: 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