q1 20 orders 3,396 3,520 -3.5 3,612 sales 3,241 3,335 -2.8 3,118 ebit 533 473 498 ebit (%) 16.4 14.2...

www.alfalaval.com

www.alfalaval.com21/07/2020 | © Alfa Laval 2 |

Report for Q2 2020Tom Erixon

President and CEO

Alfa Laval Group

Change

picture

UPDATE PicturePicture

TBU

www.alfalaval.com

Key figures

21/07/2020 | © Alfa Laval 3 |

Q2 2020 Q2 2019 %-change %-▲,org*

Order intake 9,749 10,025 -3 -3

Net sales 10,455 11,339 -8 -5

Adjusted EBITA** 1,802 1,870 -4

Adjusted EBITA-margin (%) 17.2 16.5

YTD 2020 YTD 2019 %-change %-▲,org*

Order intake 21,626 22,238 -3 -2

Net sales 21,045 21,497 -2 -1

Adjusted EBITA*** 3,552 3,598 -1

Adjusted EBITA-margin (%) 16.9 16.7

*) Organic growth i.e. excluding currency effects and structural changes.

**) Positive currency effect SEK 60 million (95) ***) Positive currency effect SEK 150 million (190).

www.alfalaval.com

− Highlights and comments

Food & Water division

21/07/2020 | © Alfa Laval 4 |

MARKETS & ORDER INTAKE

• Overall demand remained stable with some end

market variations.

• Demand was especially strong in the wastewater and

pharma & biotech segments.

• Service grew in the quarter on the back of spare parts

and service agreements.

PROFITABILITY (EBIT)

• Generally lower cost in combination with a stable

invoicing and gross margin generated an improved

operating margin.

Q2 20 Q2 19 YoY %-

change

Q1 20

ORDERS 3,396 3,520 -3.5 3,612

SALES 3,241 3,335 -2.8 3,118

EBIT 533 473 498

EBIT (%) 16.4 14.2 16.0

0

200

400

600

800

1 000

1 500

2 000

2 500

3 000

3 500

4 000

Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220

Sales EBIT

www.alfalaval.com


Energy division

21/07/2020 | © Alfa Laval 5 |


• Overall investment activity levels in the hydrocarbon

chain negatively impacted by COVID-19.

• Demand in HVAC/refrigeration continued on a stable

level.

• COVID-19 related closures and lower activity levels at

oil and gas customers had a negative impact on

service in the quarter.


• Positive effects from the cost reduction program

secured a stable operating margin in line with last

year.

Q2 20 Q2 19 YoY %-

change

Q1 20

ORDERS 3,279 3,566 -8.0 3,197

SALES 2,979 3,531 -15.6 3,039

EBIT 476 558 488

EBIT (%) 16.0 15.8 16.1

0

200

400

600

800

1 000

1 500

2 000

2 500

3 000

3 500

4 000


Sales EBIT

www.alfalaval.com


Marine division

21/07/2020 | © Alfa Laval 6 |


• Order intake in BU Pumping systems was solid.

• Demand for PureBallast systems continued on a

high level, while the retrofit demand for PureSOx

was low.

• Service negatively affected by travel and

accessibility restrictions in the quarter.


• Operating margin negatively affected by mix within

capital sales and continued negative FX effects.

Q2 20 Q2 19 YoY %-

change

Q1 20

ORDERS 3,074 3,144 -2.2 5,068

SALES 4,235 4,329 -2.2 4,433

EBIT 705 809 708

EBIT (%) 16.6 18.7 16.0

0

200

400

600

800

1 000

1 200

1 400

2 000

2 500

3 000

3 500

4 000

4 500

5 000

5 500


Sales EBIT

www.alfalaval.com

− Order intake Q2, share and development

Service, by division

21/07/2020 | © Alfa Laval 7 |

ENERGY FOOD & WATER MARINE

Q220: 23%

Absolute development

YoY


YoY


YoY

+ -

Q220: 32% Q220: 32%

-

= Service share of total order intake

www.alfalaval.com

Orders received

21/07/2020 | © Alfa Laval 8 |

0

7 000

14 000

21 000

28 000

35 000

42 000

49 000

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000


SEK million SEK million R 12

-3%

-17

%

+2

5%

+1

9%

-11

%

= Order intake per quarter

= Order intake per quarter “large” = Rolling twelve months value

= % development by quarter, year on year+XX%

www.alfalaval.com

− Development Q2 vs Q2 / YTD vs YTD, at constant rates

Orders received by region

21/07/2020 | © Alfa Laval 9 |

19%;

North America

+30% / -17%

-17% / -11%

-10% / +9%

+10% / +10%

-3% / -15%

-10% / +3%

1%;

Africa & Oceania9%; Nordic

20%;

Western Europe

7%;

Central- & Eastern

Europe

40%; Asia

4%;

Latin America

-26% / +13%

vs Q2-19 / vs YTD 2019Share %: April – June 2020

www.alfalaval.com

− SEK million at prevailing rates

Top ten markets*

21/07/2020 | © Alfa Laval 10 |

0 1000 2000 3000 4000 5000 6000 7000 8000

France

Benelux

Japan

South East Asia

Mid Europe

Adriatic

Korea, South

Nordic

China

United States

*The order intake development of the 2019 top ten markets.= FY 2019

= LTM 2020

www.alfalaval.com

− SEK millions and in percent of sales

Adjusted EBITA/margin*

21/07/2020 | © Alfa Laval 11 |

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

10,0

11,0

12,0

13,0

14,0

15,0

16,0

17,0

18,0

19,0

20,0

0

250

500

750

1 000

1 250

1 500

1 750

2 000

2 250

2 500

Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220

SEK million Percent of sales

17.216.516.2

15.8

| www.alfalaval.com| © Alfa Laval

Report for Q2 2020 Jan Allde

CFO

Alfa Laval Group

www.alfalaval.com

− MSEK

Sales

21/07/2020 | © Alfa Laval 13 |

0

7 000

14 000

21 000

28 000

35 000

42 000

49 000

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

= Sales per quarter = Rolling 12-months value

= % development year on year+XX%

-8%

+8

%

+1

8%

+0

%

-12

%

10,455

SEK million R 12SEK million

www.alfalaval.com

− In percent of sales

Adjusted gross margin

21/07/2020 | © Alfa Laval 14 |

30

35

40

45

Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220

35.435.935.436.4

Q2 2019 35.9

Mix/price -

Load/volume +

PPV/metals =

FX -

Structure =

Q2 2020 35.4

www.alfalaval.com

− MSEK

S&A Expense development

21/07/2020 | © Alfa Laval 15 |

Q2 2020 Q2 2019 YTD 2020 YTD 2019

Sales costs 1,002 1,204 -16.8% 2,159 2,376 -9.1%

Admin costs 446 568 -21.5% 959 1,065 -10.0%

Total S&A costs 1,448 1,772 -18.3% 3,118 3,441 -9.4%

Excl. FX impacts and

acq./divestments

-16.9% -8.7%

www.alfalaval.com

− MSEK

Key figures

21/07/2020 | © Alfa Laval 16 |

Q2 2020 Q2 2019

Sales 10,455 11,339

Gross profit 3,483 3,812

Sales & Admin -1,448 -1,772

R&D -251 -272

Net other cost/income -211 39

Operating income 1,580 1,808

Financial net 140 24

Profit before tax 1,720 1,832

Taxes -424 -420

EPS 3.07 3.36

www.alfalaval.com

− MSEK

Cash-flow statement

21/07/2020 | © Alfa Laval 17 |

Q2 2020 Q2 2019 1H 2020 1H 2019

EBITDA 2,068 2,300 4,096 4,249

Other non-cash items 23 -223 3 -173

Working Capital 1,012 -1,025 557 -1,506

Taxes paid -259 -443 -853 -986

Cash flow from operating activities 2,844 609 3,803 1,584

Capital expenditures -192 -172 -399 -606

Disposals -1 375 131 376

Acquisitions 0 0 -8 -61

Cash flow from investing activities -193 203 -276 -291

Financial net paid -26 41 -373 208

Cash flow 2,625 853 3,154 1,501

Free cash flow* 2,626 478 3,031 1,186

*) Incl. cash flow from operating activities, capital expenditure and financial net paid.

www.alfalaval.com

− MSEK

Net Debt by June 30, 2020

21/07/2020 | © Alfa Laval 18 |

Cash & Bank 8,783

-8,783

Senior FacilitySEKSEB & NordeaBondsOther incl. Comm Paper

01,0481,9988,355

145

11,546

Lease payables 2,508

14,054

Net Debt 5,271

• Net Debt / EBITDA: 0.58 (1.3)*

• Net Debt / Equity: 0.19 (0.42)*

*) Lease payables increased by

2,766 MSEK due to IFRS 16

implementation. Excluding this Net

Debt equals 2,763 MSEK; Net Debt /

EBITDA excl. IFRS 16 impact: 0.30

and Net Debt / Equity: 0.10

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− Estimated impact on adjusted EBITA from FX fluctuations, MSEK

Foreign exchange

21/07/2020 | © Alfa Laval 19 |

Q2 2020 FY 2020 FY 2021*

Transaction effect 90 440 290

Translation effect -30 -180 -

Total 60 260 290

Projected FX-transaction effect for 2020 communicated with Q1 report: SEK 530 million

Note: Excludes FX effects caused by revaluation of balance items in foreign currency.

*) Based on EUR/USD 1.133 and EUR/SEK 10.470

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− SEK billion

Order backlog as per June 30

21/07/2020 | © Alfa Laval 20 |

0

5

10

15

20

25


21.9

12

.19

.8

24.6

13

.511

.0

book to bill0.860.88

= For delivery next year or later

= For delivery during the current year

0.89 1.12 0.93

www.alfalaval.com

− FY 2020, SEK billion

Sales

21/07/2020 | © Alfa Laval 21 |

YTD Sales 21.0

Backlog, for delivery current year +12.1

Subtotal 33.1

Price

“In-for-out”*

FX translation

Acquisitions

Full year 2020

*IFO in Q3-Q4 2019 excluding acquisitions/divestments was SEK 11.5 bln.

For you to consider:

www.alfalaval.comwww.alfalaval.com21/07/2020 | © Alfa Laval 22 |

“We expect demand in the third quarter to be somewhat lower than in the second quarter.”

Outlook for the third quarter:

www.alfalaval.com

www.alfalaval.com

− Distribution of orders Q2 2020 (MSEK)

Activity split O&G, total

21/07/2020 | © Alfa Laval 24 |

Marine

Alfa Laval

Share of totalAlfa Laval

Energy

Drilling Processing &Transportation

PetrochemicalsRefinery

Grand total SEQ/YOY

1,127 (+/-)

263 (+/+)

=1,390*(-/-)

= 14.3%1.2% 4.6%2.9%5.6%

21

99

= 120

383

164

= 547

278

0

= 278

445

0

= 445

*) incl. aftermarket

(SEQ/YoY)

www.alfalaval.com

− Distribution of orders LTM, end of June

Marine Division’s industry split

21/07/2020 | © Alfa Laval 25 |

Share

Driver

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

32%

4%25%8%

31%

www.alfalaval.com

− Distribution of sales LTM end of June

Marine Division’s industry split

21/07/2020 | © Alfa Laval 26 |

Share

Driver

30%

Marine Offshore oil and gas

Engine power Service

3%

26%

World trade &

fleet capacity

Oil & gas demand

and prices

Electrical power

needs

World trade

Environment & Energy, Marine

34%

Legislation &

fuel cost

7%

www.alfalaval.com

− Compared with same quarter last year (%), excluding currency effects

Organic growth pace

21/07/2020 | © Alfa Laval 27 |

(30)

(20)

(10)

0

10

20

30

Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220

= Order intake growth

www.alfalaval.com

− Orders received excluding the “Marine Environmental”* business

Orders received

21/07/2020 | © Alfa Laval 28 |

0

7 000

14 000

21 000

28 000

35 000

42 000

49 000

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000


SEK million SEK million R 12

-3%

-13

%

+1

7%

+1

7%

-11

%

= Order intake per quarter

= Order intake per quarter “ Marine Environmental”

”

= Rolling twelve months value, excluding “Marine Environmental”

= % development by quarter, year on year, excluding “Marine Environmental”+XX%

*) Alfa Laval PureSOx and Alfa Laval PureBallast.

www.alfalaval.com

Cautionary statement

21/07/2020 | © Alfa Laval 29 |

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.

www.alfalaval.com

q1 20 orders 3,396 3,520 -3.5 3,612 sales 3,241 3,335 -2.8 3,118 ebit 533 473 498 ebit (%) 16.4 14.2...

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