Financial update

Thomas Thuresson

CFO

Alfa Laval Group

www.alfalaval.com

0

0,4

0,8

1,2

1,6

2

2,4

2,8

3,2

3,6

0

100

200

300

400

500

600

700

800

900

2005 2007

R&D spend

SEK million

2009 2011

Percent of sales

R&D as percent of sales

2013 2015

Development of R&D spend

www.alfalaval.com

0

100

200

300

400

500

600

700

800

900

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

Capital expenditure

2003 2005 2007

Cap ex Depr acc to plan (excl step-up)

2009 2011

Percent of sales

2013 2015 2017

SEK million Percent of sales

www.alfalaval.com

Guidance - A summary

R & D-spend in relation to total revenues, 2.0 – 2.5

(>= 2.5) %

Taxes in the P&L, 28 % of PBT

Capital expenditure in relation to total revenues,

<= 2.0 %, + projects 2016 - 2017

Dividend pay-out ratio, 40 – 50 % of adjusted EPS*

*) Excluding net effect of step-up amortisation

www.alfalaval.com © Alfa Laval

Gross profit margin

30

35

40

45In percent of sales

35.2 35.3

36.7

Q315

37.0

Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q312

www.alfalaval.com © Alfa Laval Slide 7

Gross profit margin - Q3 2015 vs Q2 2015

Q2 2015:

Mix/price

Load/volume

FX

Structure

36.3

35.2

=

- -

- -

=

Q3 2015:

www.alfalaval.com © Alfa Laval Slide 8

Foreign exchange - Estimated impact on adjusted EBITA from FX fluctuations

SEK million

Translation effect

Transaction effect

Revaluation in w/c

Total

*) Transaction based on EUR/USD 1.07 and EUR/SEK 9.30

Translation based on closing rates as per October 31, -15

FY 16*

20

475

80

575

FY 15

290

300

-80

510

Q3 15

45

95

-100

40

9M 15

260

210

-100

370

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Sales revenue

Cost structure of products - Insight to assess possible effect of volume variations

COGS

Gross profit, appr 36 %

Other overhead, > 15 %

Indirect personnel, appr 7 %

Direct personnel, appr 8 %

Direct materials, other

variable & subcontract,

< 70 %

Contribution 50 %

www.alfalaval.com

0

100

200

300

400

500

600

700

800

900

1 000

1 100

1 200

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

12 000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Step-up values up to 2019 - Closing balance and amortization according to plan, SEK million

Closing balance Amortization

LBO-related Acquisitions Amortization acc to plan

2019 2018

www.alfalaval.com

Order backlog development

0

10

20

30

40

50

60

70

80

0

3 000

6 000

9 000

12 000

15 000

18 000

21 000

24 000

2001 2003 2005 2007 2009 2011 2013 2015

% of LTM-sales

Order backlog % of LTM (last twelve months) sales

SEK millions

www.alfalaval.com

Order backlog as per Sept 30 - For delivery after December 31, MSEK at prevailing rates

Other Segments

0

2000

4000

6000

8000

10000

12000

14000

16000

4,576

4,730

9,306

4,099

4,959

9,058

2,327

4,338

6,665

Marine & Diesel

2008 2006 2007

1,733

1,820

3,553

2005

7,705

3,655

4,050

2010

5,751

2,155

3,596 5,572

3,219

8,791

2012 2009 2011

8,650

3,508

5,142

2013

5,336

3,063

8,399

2014

5,297

9,732

15,029

5,162

8,940

14,103

2015

www.alfalaval.com

Order backlog as per Sept 30 - SEK million at prevailing rates

For delivery next year

0

4000

8000

12000

16000

20000

24000

7,324

6,567

13,192

8,766

15,873

6,256

15,314

8,330

For delivery later than next year

2009 2008 2007

For next year,

SEK 13,4 (13.4) Bn,

”like-for-like”

SEK - 1.1 Bn!

For delivery during the rest of current year

5,487

11,689

5,480

5,937

2010 2012

6,705

8,387

15,496

6,418

8,050

15,068

2011

15,071

7,993

6,672

2013 2014

7,371

13,364

22,400

2015

22,117

13,359

8,014

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Sales - 2014 and 2015

BnSEK

LTM Q315 39.7

Change order backlog Q4, y-o-y + 0.6

Fx. Translation - / + 0.x

Acquisitions + 0.0

Demand, in-for-out Q415 - 0.x

Full year 2015 appr 39.4*

*) SME.Direkt, concensus estimate as per November 12, 2015

www.alfalaval.com

BnSEK

Full year 2015 appr 39.4*

Change in order backlog y-o-y -

Fx. Translation + 0.1

Acquisitions during 2015 + 0.0

Subtotal: 39.5

Price + / - ?

Demand + / - ?

Further acquisitions + ?

Full year 2016: ?

Sales - 2015 and 2016

*) SME.Direkt, concensus estimate as per November 12, 2015

www.alfalaval.com

0

5

10

15

20

25

30

0

1000

2000

3000

4000

5000

6000

Cash generation - Over the last decade +

2002 2004 2006

Free cash-flow’

SEK million

2008 2010

Percent of sales

Free cash-flow*, % of sales

2012 2014

*) Free cash-flow defined as; cash-flow before acquisitions, divestments and dividends

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