Alfa Laval Ab · OMXSTO:ALFA
Alfa Laval Ab — Q1 2017 Earnings Presentation
36 slides from Alfa Laval Ab's earnings presentation, 2017
Slide 1: www.alfalaval.com
www.alfalaval.com
Slide 2: Report for Q1 2017
Report for Q1 2017 - Key figures - Orders received and margins - Development per segment - Geographical development Mr. Tom Erixon - Financials President and CEO - Outlook Alfa Laval Group www.alfalaval.com
Slide 3: Key figures
Key figures January – March 2017 Orders received grew 14% to SEK 8,801 million. Net sales declined 1% to SEK 8,126 million. Adjusted EBITA* declined 4% to SEK 1,279 million. Adjusted EBITA margin at 15.7% vs 16.3%. *) Positive currency effect SEK 75 million. © Alfa Laval www.alfalaval.com 3
Slide 4: Highlights in the quarter
Highlights in the quarter Energy Marine Alfa Laval Packinox heat exchangers to a Waste heat recovery systems for diesel petrochemical plant in China. power plants to be built in Asia. Value: SEK 170 million. Value: SEK 80 million. Alfa Laval Packinox heat exchangers for Order for eight Alfa Laval Pu
Slide 5: Orders received
Orders received SEK million SEK million R 12 12 000 45 000 40 000 10 000 35 000 8 000 30 000 25 000 6 000 20 000 +19% -19% +5% +9% -5% 4 000 15 000 10 000 2 000 5 000 0 0 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 = Order intake per quarter “large” = Rolling
Slide 6: Order analysis
Order analysis - Q1 2017 versus Q1 2016 and versus Q4 2016 (MSEK) Q1 2016 7,710 Q4 2016 8,709 Structural change, % - - Organic development, % + 8.8 + 1.9 Total + 8.8 + 1.9 Currency effects, % + 5.4 - 0.8 Total, % + 14.2 + 1.1 Q1 2017 8,801 Q1 2017 8,801 © Alfa Laval www.alfalaval.com 6
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 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 * Adjusted EBITA – ”Earnings before interests, taxes, amortization of goodwill and step
Slide 8: Orders received by business unit
Orders received by business unit - January-March 2017, at constant rates and like for like “Greenhouse”+ + Brazed & fusion-bonded HEX Pumping Systems + = Energy Separation = GPHE Marine Separation & Heat Transfer = + WHE Boilers & Gas Systems - High-speed Separators = + Decanters Hygienic Fluid Hand
Slide 9: Energy division
Energy division - Highlights and sequential comments Brazed & Fusion Brazed & Fusion boosted by demand for refrigeration and HVAC. Bonded HEX + 6%* Energy separation down due to non-repeats. Base business grew. Energy GPHE affected by the non-repeat of a large nuclear service order. Separation
Slide 10: Food & Water division
Food & Water division - Highlights and sequential comments Decanters did well, boosted by demand from olive oil and crude Decanters 7%* + palm oil markets. Water treatment and waste water was unchanged. Food heat Food Heat transfer saw broad-based positive development with transfer 6%* + dairy,
Slide 11: Marine division
Marine division - Highlights and sequential comments Boiler and gas Boilers & Gas systems grew on the back of increased demand for systems + 8%* Alfa Laval PureSOx. Marine boilers were unchanged. Separation & Heat transfer unchanged, reflecting a continued low Separation & level of demand follow
Slide 12: Service versus capital sales
Service versus capital sales 28% 31% 42% Energy Food & Water Marine YoY SEQ YoY SEQ YoY SEQ = Service = Capital sales www.alfalaval.com 12
Slide 13: Greenhouse
Greenhouse - Highlights and comments Order intake rose 6% vs Q1 2016 and the unit returned to profit. Sequentially, orders declined, on the back of non-repeat orders for engine cooling, refrigeration and HVAC. Underlying demand remained steady. Heat exchanger systems saw good demand for district
Slide 14: Orders received by region
Ordersreceived Orders receivedbyby region region - January-March 2017, development at constant rates Africa & Oceania Nordic 2% 8% +21 -3 North America +21 -5 20% +5 +7 +26 -9 Western +2 +17 Europe 24% Latin America 4% CEE -28 -24 7% Asia 35% Year-on-year comparison Sequential comparison www.alfalav
Slide 15: Top ten markets
Top ten markets* - SEK million at prevailing rates United States China Nordic Japan Mid Europe Adriatic SEA South Korea Benelux France 0 1000 2000 3000 4000 5000 6000 7000 = LTM Q1 2017 = WY 2016 *The development of the 2016 top ten markets. www.alfalaval.com 15
Slide 16: Report for Q1 2017
Report for Q1 2017 - Key figures - Orders received and margins - Development per segment - Geographical development Mr. Thomas Thuresson - Financials CFO - Outlook Alfa Laval Group www.alfalaval.com
Slide 17: Highlights 2017
Highlights 2017 - January-March, SEK million Order intake 8,801 Net sales 8,126 © Alfa Laval www.alfalaval.com 17
Slide 18: Gross profit margin
Gross profit margin - In percent of sales 45 39.4 40 37.0 37.1 36.7 35 30 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 © Alfa Laval www.alfalaval.com 18
Slide 19: Gross profit margin
Gross profit margin - Q1 2017 versus Q1 2016 and versus Q4 2016 Q1 2017 37.0 Q4 2016 34.3 Mix/price - ++ Load/volume - - PPV + + FX ++ + Structure = = Q1 2017 37.1 Q1 2017 37.1 © Alfa Laval www.alfalaval.com 19
Slide 20: Highlights 2017
Highlights 2017 - January-March, SEK million Order intake 8,801 Net sales 8,126 Adjusted EBITA 1,279 Adjusted EBITA margin, % 15.7 Profit before tax 1,268 Earnings per share, % 1.84 Earnings per share, excl. step-up, % 2.33 ROCE 15.1 ROE 11.1 © Alfa Laval www.alfalaval.com 20
Slide 21: Reorganisation & capacity adjustment programme
Reorganisation & capacity adjustment programme - Update as per March 31st 2017 EMPLOYEE IMPACT, FTE TOTAL SAVINGS, MSEK Realized Target Realized Target Q1, 2017 Q1, 2017 R&D S&A Other - 375 - 450 + 60 +300 - 100 - 550 +1 + 200 COGS Total - 475 - 1,000 + 61 + 500 Savings expected to be reached to 75%
Slide 22: Divisional performance
Divisional performance Energy Marine Food & Water Q1 2017 2016 2017 2016 2017 2016 Orders 2,674 2,366 2,556 2,369 3,162 2,613 Backlog 4,780 4,543 8,476 10,632 4,263 3,842 Sales 2,283 2,381 2,658 2,995 2,758 2,478 Op. profit 255 326 432 556 402 358 Op. margin, % 11.2 13.7 16.3 18.6 14.6 14.5 Comments
Slide 23: Cash-flow statement
Cash-flow statement SEK million Q1 2017 Q1 2016 Cash flow from - operating activities 804 910 - investing activities -120 -99 Financial net paid -3 -23 Total 681 788 Pro Forma Free cash-flow* 681 794 *Incl. operating activities, capital expenditure and financial net paid. © Alfa Laval www.alfalaval.
Slide 24: Foreign exchange
Foreign exchange - Estimated impact on adjusted EBITA from FX fluctuations SEK million Q1 2017 FY 2017 FY 2018* Transaction effect 48 200 150 Translation effect 27 80 - Total 75 280 150 *Based on EUR/USD 1.07 and EUR/SEK 9.55 Projected FX-effect for 2017 communicated with the Q4 report: SEK 275 mill
Slide 25: Order backlog as per March 31
Order backlog as per March 31 SEK million 25 000 19,380 18,057 20 000 6,505 6,048 15 000 10 000 12,009 12,875 5 000 0.94 0.90 0.88 0.88 1.08 book to bill 0 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 = For delivery later than 2017 = For delivery in 2017 www.a
Slide 26: Sales
Sales Full year 2017, SEK (bn) FY 2016 35.6 Backlog, like-for-like - 2.7 FX translation + 0.8 Acquisitions +? Subtotal 33.7 Change in “in-for-out” +/-? Price +/-? Full year 2017 xx © Alfa Laval www.alfalaval.com 26
Slide 27: Report for Q1 2017
Report for Q1 2017 - Key figures - Orders received and margins - Development per segment - Geographical development Mr. Tom Erixon - Financials President and CEO - Outlook Alfa Laval Group www.alfalaval.com
Slide 28: Outlook for the second quarter
Outlook for the second quarter “We expect that demand during the second quarter will be in line with or somewhat lower than in the first 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 Q1 (MSEK) 2017 Drilling Processing & Refinery Petrochemicals Transportation Grand total Energy 40 282 162 573 1,057 (+) Marine 100 59 0 0 159 (-) Alfa Laval = 140 = 341 = 162 = 573 =1,216*(-) Share of total 1.6% 3.9% 1.8% 6.5% Alfa Laval = 13.8% * inc
Slide 31: Marine Division's industry split
Marine Division’s industry split - Distribution of orders LTM March 2017 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 36% 43% Share 3% 12% 6% ©
Slide 32: Marine Division's industry split
Marine Division’s industry split - Distribution of sales LTM March 2017 Marine Offshore oil Environment & Diesel power Service and gas Energy, Marine World trade & Oil & gas demand Legislation & Electrical World trade Driver fleet capacity and prices fuel cost power needs 32% Share 49% 3% 6% 10% © A
Slide 33: Highlights Europe
Highlights Europe January – March 2017, at constant rates, sequential comments Western Europe incl. Nordic Region declined due to non-repeat orders in the Energy Division. Service, however, did well. Mid Europe, France and UK grew. Central and Eastern Europe +21 -3 Lower order intake for pumpi
Slide 34: Highlights Asia
Highlights Asia January – March 2017, at constant rates, sequential comments Asia Sequential growth across all three divisions. Main drivers were increased demand for pumping systems as well as large petrochemical orders in the Energy division. Food & +2 +17 Water was up on larger orders and a str
Slide 35: Highlights Americas
Highlights Americas January – March 2017, at constant rates, sequential comments North America Order intake grew in both Canada and the US. In the US, Food & Water was the main driver, while growth in the Energy division explained the positive +5 +7 development in Canada. Latin America Region
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