presentation q3 200815,0 18,0 21,0 24,0 sek millions and in percent of sales * adjusted ebita –...
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Interim Report Q3 2008Interim Report Q3 2008
Mr. Lars RenstrMr. Lars Renströömm
President and CEOPresident and CEO
Alfa Laval GroupAlfa Laval Group
-- Orders received and marginsOrders received and margins
-- HighlightsHighlights
-- Development per segmentDevelopment per segment
-- Geographical developmentGeographical development
-- Financials Financials
-- OutlookOutlook
© Alfa Laval Slide 3 www.alfalaval.com
Key figuresKey figures
�� Orders received decreased 3.4% to SEK 6,784 million.Orders received decreased 3.4% to SEK 6,784 million.
�� Net sales rose 4.9% to SEK 6,632 million.Net sales rose 4.9% to SEK 6,632 million.
�� Adjusted EBITA up 7.8% at SEK 1,444 million. Adjusted EBITA up 7.8% at SEK 1,444 million.
-- Negative currency effect SEK 94 million.Negative currency effect SEK 94 million.
July July –– September 2008September 2008
January January –– September 2008September 2008
�� Orders received up 4.3% at SEK 21,283 million.Orders received up 4.3% at SEK 21,283 million.
�� Net sales up 14.5% at SEK 19,754 million.Net sales up 14.5% at SEK 19,754 million.
�� Adjusted EBITA up 34% at SEK 4,439 million. Adjusted EBITA up 34% at SEK 4,439 million.
-- Negative currency effect SEK 226 million.Negative currency effect SEK 226 million.
© Alfa Laval Slide 4 www.alfalaval.com
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
0
4 000
8 000
12 000
16 000
20 000
24 000
28 000
32 000
SEK millionSEK million
Orders receivedOrders received
SEK million R 12SEK million R 12
= rolling twelve months value= rolling twelve months value
= order intake per quarter= order intake per quarter
Q3
05
Q3
05
Q4
05
Q4
05
Q1
06
Q1
06
Q2
06
Q2
06
Q3
06
Q3
06
Q4
06
Q4
06
Q1
07
Q1
07
Q2
07
Q2
07
Q3
07
Q3
07
Q4
07
Q4
07
Q1
08
Q1
08
Q2
08
Q2
08
+25
%+
25
%
+23
%+
23
%
+28
%+
28
%
+35
%+
35
%
+17
%+
17
%
+40
%+
40
%
+36
%+
36
%
+13
%+
13
%
+30
%+
30
%
0%
0%
+9
%+
9%
+8
%+
8%
= % development at constant rates by = % development at constant rates by
quarter year on yearquarter year on year
++xx%xx%
-- 3%
3%
Q3
08
Q3
08
© Alfa Laval Slide 5 www.alfalaval.com
Order analysisOrder analysis
2007 2007 (SEK millions)(SEK millions)
Structural change, %Structural change, %
Currency effects,%Currency effects,%
Organic development, %Organic development, %
Total, %Total, %
2008 2008 (SEK million)(SEK million)
7,1507,150
July July –– September 2008September 2008
6,7846,784
+ 2.8 + 2.8
-- 1.7 1.7
-- 6.26.2
-- 5.1 5.1
© Alfa Laval Slide 6 www.alfalaval.com
0
225
450
675
900
1 125
1 350
1 575
1 800
0,0
3,0
6,0
9,0
12,0
15,0
18,0
21,0
24,0
SEK millions and in percent of salesSEK millions and in percent of sales
* Adjusted EBITA * Adjusted EBITA –– ””Earnings before interests, taxes, amortization of goodwill and sEarnings before interests, taxes, amortization of goodwill and step up values and comparison distortion items.tep up values and comparison distortion items.””
Adjusted EBITA / margin *Adjusted EBITA / margin *
Q108Q108Q305Q305 Q405Q405 Q106Q106 Q206Q206 Q306Q306 Q406Q406 Q107Q107 Q207Q207 Q307Q307 Q407Q407 Q208Q208 Q308Q308
Interim Report Q3 2008Interim Report Q3 2008
Mr. Lars RenstrMr. Lars Renströömm
President and CEOPresident and CEO
Alfa Laval GroupAlfa Laval Group
-- Orders received and marginsOrders received and margins
-- HighlightsHighlights
-- Development per segmentDevelopment per segment
-- Geographical developmentGeographical development
-- Financials Financials
-- OutlookOutlook
© Alfa Laval Slide 8 www.alfalaval.com
Highlights during the quarterHighlights during the quarter
Large orders, total SEK 200 million (360) Large orders, total SEK 200 million (360)
�� Power order in Russia.Power order in Russia.
Order value SEK 50 million. Delivery during 2009.Order value SEK 50 million. Delivery during 2009.
© Alfa Laval Slide 9 www.alfalaval.com
Highlights during the quarterHighlights during the quarter
�� Power order in Russia.Power order in Russia.
�� Thermal evaporation systems order in India.Thermal evaporation systems order in India.
Order value SEK 150 million. Delivery during 2009.Order value SEK 150 million. Delivery during 2009.
Large orders, total SEK 200 million (360) Large orders, total SEK 200 million (360)
© Alfa Laval Slide 10 www.alfalaval.com
Highlights during the quarterHighlights during the quarter
AcquisitionsAcquisitions
�� German company German company PresskoPressko AG.AG.
Specialist company providing fully welded heat exchangers.Specialist company providing fully welded heat exchangers.
Estimated sales of about SEK 50 million in 2008. Estimated sales of about SEK 50 million in 2008.
© Alfa Laval Slide 11 www.alfalaval.com
Highlights during the quarterHighlights during the quarter
AcquisitionsAcquisitions
�� German company German company PresskoPressko AG.AG.
�� U.S. company Hutchison Hayes Separation. U.S. company Hutchison Hayes Separation.
Provider of separation equipment, parts and services mainly to tProvider of separation equipment, parts and services mainly to the U.S. he U.S.
energyenergy--related industries. Sales of about SEK 150 million in 2007. related industries. Sales of about SEK 150 million in 2007.
Interim Report Q3 2008Interim Report Q3 2008
Mr. Lars RenstrMr. Lars Renströömm
President and CEOPresident and CEO
Alfa Laval GroupAlfa Laval Group
-- Orders received and marginsOrders received and margins
-- HighlightsHighlights
-- Development per segmentDevelopment per segment
-- Geographical developmentGeographical development
-- Financials Financials
-- OutlookOutlook
© Alfa Laval Slide 13 www.alfalaval.com
Orders received by SegmentOrders received by Segment
Comfort & Comfort &
RefrigerationRefrigeration
SanitarySanitary
Marine & DieselMarine & Diesel
Fluids & UtilityFluids & Utility
OEMOEM
Parts & ServiceParts & Service
Life ScienceLife Science
Process IndustryProcess Industry
Energy & EnvironmentEnergy & Environment
FoodFood
July July –– September 2008, September 2008, at constant ratesat constant rates
++++
++++
++++
++++
−−−−
====
−−−−
−−−−
−−−−
++++
© Alfa Laval Slide 14 www.alfalaval.com
Orders received by SegmentOrders received by SegmentThe Process Technology Division, July The Process Technology Division, July –– September 2008, September 2008, at constant ratesat constant rates
�� Slight decrease for Slight decrease for
base businessbase business
�� Food affected by Food affected by
nonnon--repeat ordersrepeat orders
�� Continued strong Continued strong
development for E&Edevelopment for E&E
Life ScienceLife Science
Process IndustryProcess Industry
Energy & EnvironmentEnergy & Environment
FoodFood
++++
++++
====
−−−−
© Alfa Laval Slide 15 www.alfalaval.com
Orders received by SegmentOrders received by SegmentThe Equipment Division, July The Equipment Division, July –– September 2008, September 2008, at constant ratesat constant rates
� Comfort & Refrigeration
affected by slowdown in
construction
� Recovery for OEM due to
growth in heat-pump
demand
� Slowing orders for Marine,
Diesel had strong
development
Comfort & Comfort &
RefrigerationRefrigeration
SanitarySanitary
Marine & DieselMarine & Diesel
Fluids & UtilityFluids & Utility
OEMOEM
++++
−−−−
−−−−
−−−−
++++
© Alfa Laval Slide 16 www.alfalaval.com
Orders received by SegmentOrders received by Segment
Comfort & Comfort &
RefrigerationRefrigeration
SanitarySanitary
Marine & DieselMarine & Diesel
Fluids & UtilityFluids & Utility
OEMOEM
Parts & ServiceParts & Service
Life ScienceLife Science
Process IndustryProcess Industry
Energy & EnvironmentEnergy & Environment
FoodFood
January January –– September 2008, September 2008, at constant ratesat constant rates
++++−−−−
−−−−
++++
++++
++++
====
−−−−
====
−−−−
Interim Report Q3 2008Interim Report Q3 2008
Mr. Lars RenstrMr. Lars Renströömm
President and CEOPresident and CEO
Alfa Laval GroupAlfa Laval Group
-- Orders received and marginsOrders received and margins
-- HighlightsHighlights
-- Development per segmentDevelopment per segment
-- Geographical developmentGeographical development
-- Financials Financials
-- OutlookOutlook
© Alfa Laval Slide 18 www.alfalaval.com
Orders received by RegionOrders received by Region
Centr
Centr. &
East 8
%
. & E
ast 8
%
North
Am
erica
17 %
North
Am
erica
17 %
Asia 33 %Asia 33 %
L. A
merica
7 %
L. A
merica
7 %
Other 2 %
Other 2 %
Western Europe 24 %
Western Europe 24 %
Nord
ic 9
%
Nord
ic 9
%
July July –– September 2008, September 2008, at constant ratesat constant rates
--1111--1919+23+23
+5+5
--44
+3+3
© Alfa Laval Slide 19 www.alfalaval.com
Orders received by RegionOrders received by RegionJuly July –– September 2008, September 2008, at constant ratesat constant rates
Centr
Centr. &
East 8
%
. & E
ast 8
%
North
Am
erica
17 %
North
Am
erica
17 %
Asia 33 %Asia 33 %
L. A
merica
7 %
L. A
merica
7 %
Other 2 %
Other 2 %
Western Europe 24 %
Western Europe 24 %
Nord
ic 9
%
Nord
ic 9
%
+23+23
+3+3
+5+5
--44
--1919--1111
© Alfa Laval Slide 20 www.alfalaval.com
North America North America
�� Base orders up from last yearBase orders up from last year
�� Growth in majority of segmentsGrowth in majority of segments
�� Best performance in Energy & Best performance in Energy &
Environment and Parts & ServiceEnvironment and Parts & Service
Latin America Latin America
�� Brazil boosted by growth in the Brazil boosted by growth in the
ethanol industry as well as food ethanol industry as well as food
industry industry investmentsinvestments
�� Mexico benefitted from investments in Mexico benefitted from investments in
oil and gas industryoil and gas industry
Highlights AmericasHighlights AmericasJulyJuly–– September 2008, September 2008, at constant ratesat constant rates
+3+3
+23+23
© Alfa Laval Slide 21 www.alfalaval.com
Highlights EuropeHighlights Europe
Western Europe incl. NordicWestern Europe incl. Nordic
�� Process Technology dropped Process Technology dropped
due to fewer large ordersdue to fewer large orders
�� Equipment division was stableEquipment division was stable
�� Base business was slightly lowerBase business was slightly lower
Central and Eastern Europe Central and Eastern Europe
�� Process Technology dropped due Process Technology dropped due
to fewer large ordersto fewer large orders
�� Base business had a continued Base business had a continued
positive developmentpositive development
July July –– September 2008, September 2008, at constant ratesat constant rates
--1111--1919
+5+5
© Alfa Laval Slide 22 www.alfalaval.com
Highlights AsiaHighlights Asia
Asia Asia
�� Decline due to slowing Decline due to slowing
Marine marketMarine market
�� Strong development for Process Strong development for Process
Industry and Food TechnologyIndustry and Food Technology
�� Best performance seen in Korea, Best performance seen in Korea,
the Middle East and South East Asiathe Middle East and South East Asia
July July –– September 2008, September 2008, at constant ratesat constant rates
--44
© Alfa Laval Slide 23 www.alfalaval.com
Orders received by RegionOrders received by Region
+14+14
+23+23
January January –– September 2008, September 2008, at constant ratesat constant rates
--77 --77--88
Asia 35%Asia 35%
Centr
Centr . &
East 8
%
. & E
ast 8
%Nord
ic 9
%
Nord
ic 9
%
Western Europe 25 %Western Europe 25 %
Other 2 %
Other 2 %
North
Am
erica
14 %
North
Am
erica
14 %
L. A
merica
6 %
L. A
merica
6 %
00
Interim Report Q3 2008Interim Report Q3 2008
Mr. Thomas ThuressonMr. Thomas Thuresson
CFOCFO
Alfa Laval GroupAlfa Laval Group
-- Orders received and marginsOrders received and margins
-- HighlightsHighlights
-- Development per segmentDevelopment per segment
-- Geographical developmentGeographical development
-- Financials Financials
-- OutlookOutlook
© Alfa Laval Slide 25 www.alfalaval.com
HighlightsHighlights
Order intake Order intake
Net salesNet sales
6,7846,784
6,6326,632
SEK millionsSEK millions JulyJuly –– September 2008September 2008
© Alfa Laval Slide 26 www.alfalaval.com
Gross profit marginGross profit margin
20
30
40
50In percent of salesIn percent of sales
40.640.639.139.1
37.237.2
Q305Q305 Q405Q405 Q106Q106
35.335.3
Q206Q206 Q306Q306 Q406Q406 Q107Q107 Q207Q207 Q307Q307 Q407Q407 Q108Q108 Q208Q208 Q308Q308
© Alfa Laval Slide 27 www.alfalaval.com
HighlightsHighlights
Order intake Order intake
Net salesNet sales
Adjusted EBITAAdjusted EBITA
Adjusted EBITAAdjusted EBITA--marginmargin
Profit before taxProfit before tax
SEK millionsSEK millions JulyJuly -- September 2008September 2008
6,7846,784
6,6326,632
1,4441,444
21.8%21.8%
1,4181,418
© Alfa Laval Slide 28 www.alfalaval.com
Earnings per shareEarnings per share
EarningsEarnings
Earnings, excluding stepEarnings, excluding step--upup
20082008
2.322.32
2.432.43
20072007
2.082.08
2.212.21
July July -- SeptSept Jan Jan -- SeptSept
20082008
6.796.79
7.117.11
20072007
4.724.72
5.105.10
© Alfa Laval Slide 29 www.alfalaval.com
Group FundingGroup Funding–– Summary of credit facilities as per September 30, 2008Summary of credit facilities as per September 30, 2008
CommittedCommitted Utilised MaturityUtilised Maturity
SEKmSEKm SEKmSEKm YearYear
Senior FacilitySenior Facility
-- ““RevolverRevolver”” USD 348 millionUSD 348 million 4,981 4,981 1,775 20121,775 2012
-- ““RevolverRevolver”” EUR 168 millionEUR 168 million
-- ““BulletBullet”” EUR 100 millionEUR 100 million
US Private Placement USD 110 millionUS Private Placement USD 110 million 748 748 748748 20162016
SHB biSHB bi--lateral loan EUR 25 244 lateral loan EUR 25 244 244244 20142014
Sub total: 5,973 2,767Sub total: 5,973 2,767
Local facilities Local facilities -- 559559
Total:Total: 5,973 3,3265,973 3,326
Cash and deposits Cash and deposits -- + 1,156 + 1,156
In addition, uncommitted facilities are available to an amount oIn addition, uncommitted facilities are available to an amount of approx. SEK 1.2 f approx. SEK 1.2 BnBn
© Alfa Laval Slide 30 www.alfalaval.com
Share repurchasesShare repurchases
SeptSept 3030
1 452 4001 452 400
0.30.3
2 658 9002 658 900
0.60.6
Mandate from AGM 2007Mandate from AGM 2007
Number of repurchased shares Jan 1 Number of repurchased shares Jan 1 -- March 31*March 31*
Percentage of outstanding sharesPercentage of outstanding shares
Mandate from AGM 2008Mandate from AGM 2008
Number of repurchased shares April 1 Number of repurchased shares April 1 –– Sept 30Sept 30
Percentage of outstanding sharesPercentage of outstanding shares
Total amount spent on shares held, SEK 364 millionTotal amount spent on shares held, SEK 364 million
* * Remaining after cancellation.Remaining after cancellation.
© Alfa Laval Slide 31 www.alfalaval.com
HighlightsHighlights
Order intake Order intake
Net salesNet sales
Adjusted EBITAAdjusted EBITA
Adjusted EBITAAdjusted EBITA--marginmargin
Profit before taxProfit before tax
Cash flow from operating activitiesCash flow from operating activities
ROCEROCE
ROEROE
SEK millionsSEK millions JulyJuly –– September 2008September 2008
6,7846,784
6,6326,632
1,4441,444
21.8% 21.8%
1,4181,418
1,2561,256
58.2%58.2%
48.8%48.8%
© Alfa Laval Slide 32 www.alfalaval.com
Cash flows fromCash flows from
-- operating activitiesoperating activities
-- investing activitiesinvesting activities
Financial Financial net paidnet paid
TotalTotal
CashCash--flow statement flow statement
Pro Forma FreePro Forma Free--cashcash--flow*flow*
*Incl. operating activities, capital expenditure (excl. product *Incl. operating activities, capital expenditure (excl. product rights), provisions and financial net paidrights), provisions and financial net paid. .
SEK millionsSEK millionsJan Jan –– SeptSept
20082008Jan Jan -- SeptSept
20072007
3,1853,185
-- 1,1741,174
-- 192192
1,8191,819
2,5392,539
2,0142,014
-- 947947
--166166
901901
1,6071,607
© Alfa Laval Slide 33 www.alfalaval.com
Foreign exchangeForeign exchange
SEK millionSEK million
Translation effectTranslation effect
Transaction effectTransaction effect
TotalTotal
*Based on EUR/USD 1.40 and EUR/SEK 9.50*Based on EUR/USD 1.40 and EUR/SEK 9.50
Estimated impact on adjusted EBITA from Estimated impact on adjusted EBITA from FxFx. fluctuations. fluctuations
Q3 08Q3 08
-- 2929
-- 6565
-- 9494
WY 08*WY 08*
-- 120120
-- 180 180
-- 300300
WY 09*WY 09*
--
-- 100 100
-- 100100
9M 089M 08
-- 109109
-- 117117
-- 226226
© Alfa Laval Slide 34 www.alfalaval.com
Order backlog as per Sept 30
SEK millionsSEK millions
For delivery next year or laterFor delivery next year or later
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
6,5676,567
9,306
15,87315,873
6,2566,256
9,058
15,31415,314
5,1745,174
6,665
11,83911,839
For delivery during rest of current yearFor delivery during rest of current year
2008200820062006 20072007
© Alfa Laval Slide 35 www.alfalaval.com
Capital Markets Day, Nov. 18Capital Markets Day, Nov. 18
�� Hilton Hotel Copenhagen Airport, DenmarkHilton Hotel Copenhagen Airport, Denmark
�� 10:30 a.m. 10:30 a.m. -- 4:30 p.m. CET4:30 p.m. CET
�� Business updateBusiness update
�� Structural growth presentationsStructural growth presentations
Interim Report Q3 2008Interim Report Q3 2008
Mr. Lars RenstrMr. Lars Renströömm
President and CEOPresident and CEO
Alfa Laval GroupAlfa Laval Group
-- Orders received and operating margin Orders received and operating margin
-- HighlightsHighlights
-- Development per segmentDevelopment per segment
-- Geographical developmentGeographical development
-- Financials Financials
-- OutlookOutlook
© Alfa Laval Slide 37 www.alfalaval.com
Outlook for the fourth quarterOutlook for the fourth quarter
““We expect demand during the We expect demand during the
fourth quarter to be in line with, or fourth quarter to be in line with, or
somewhat lower, compared to the somewhat lower, compared to the
same period 2007same period 2007””
© Alfa Laval Slide 38 www.alfalaval.com