report for q4 2016 - alfa laval order sales backlog q4 2016 2,759 2,874 1,695 q4 2015 2,526 2,694...
TRANSCRIPT
Report for Q4 2016
Mr. Tom Erixon
President and CEO
Alfa Laval Group
- Key figures
- Orders received and margins
- Development per segment
- Geographical development
- Financials
- Outlook
www.alfalaval.com© Alfa Laval Slide 3
Key figures
Orders received declined 8% to SEK 8,709 million.
Net sales dropped 8% to SEK 9,904 million.
Adjusted EBITA* declined 15% to SEK 1,488 million.
Adjusted EBITA margin at 15.0% vs 16.2%
Non-recurring charge of SEK 400 million.
*Positive currency effect SEK 141 million.
October – December 2016
January – December 2016
Orders received declined 14% to SEK 32,060 million.
Net sales dropped 10% to SEK 35,634 million.
Adjusted EBITA* declined 18% to SEK 5,553 million.
Adjusted EBITA margin at 15.6% vs 17.1%
Non-recurring charge of SEK 1,500 million.
*Positive currency effect SEK 478 million.
www.alfalaval.com
Highlights in the quarter
Alfa Laval OLMI heat exchangers to a petrochemical
plant in the Middle East. Value: SEK 125 million.
Waste heat recovery systems for diesel power plants
to be built in Asia. Value: SEK 65 million.
Equipment for a power plant in the Middle East.
Value: SEK 50 million.
Alfa Laval PureBallast receives type approval from the
U.S. Coast Guard.
Alfa Laval OLMI heat exchangers to a power plant in
the Middle East. Value: SEK 100 million.
Order for service upgrade of compact heat exchangers
in nuclear power plant in France. Value: SEK 55
million.
Compact heat exchangers to a natural gas plant in the
Middle East. Value: SEK 150 million.
Process Technology Marine & Diesel
In 2016 large orders worth SEK 710 mln were booked (SEK 2,400 mln)
www.alfalaval.com
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
0
2 000
4 000
6 000
8 000
10 000
12 000
= Order intake per quarter
= Order intake per quarter “large”
SEK million
Orders received
SEK million R 12
= Rolling twelve months value
Q2
13
Q11
5
Q2
15
Q4
15
Q2
16
Q3
16
Q4
16
= % development at constant rates by
quarter, year on year+XX%
Q4
12
Q11
3
Q3
13
Q4
13
Q11
4
Q2
14
Q3
14
Q4
14
Q3
15
-11
%
Q11
6
-11
%
+2
2%
+1
6%
+11
%
www.alfalaval.com© Alfa Laval Slide 6
Order analysis
Q4 2015 Q3 2016
Structural change, %
Organic development, %
Total
Currency effects,%
9,422
Q4 2016 versus Q4 2015 and versus Q3 2016 (MSEK)
8,709
-
- 11.3
- 11.3
+ 3.7
7,540
8,709
-
+ 12.8
+ 12.8
+ 2.7
Total, %
Q4 2016 Q4 2016
+ 15.5- 7.6
www.alfalaval.com© Alfa Laval Slide 7
0,0
3,0
6,0
9,0
12,0
15,0
18,0
21,0
24,0
0
250
500
750
1 000
1 250
1 500
1 750
2 000
SEK millions and in percent of sales
* Adjusted EBITA – ”Earnings before interests, taxes, amortization of goodwill and step up values and comparison distortion items.”
Adjusted EBITA / margin*
Q314 Q315 Q216 Q316 Q416Q413 Q114 Q214 Q414 Q115 Q215 Q415 Q116
www.alfalaval.com
Order Sales Backlog
Q4 2016 2,759 2,874 1,695
Q4 2015 2,526 2,694 1,637
Equipment division
Slide 8
Industrial Equipment affected by
seasonality in Comfort while demand for
Refrigeration grew.
Sanitary saw mixed picture with growth in
prepared food while dairy-related orders
declined versus a very strong third quarter.
OEM saw positive effect from increased
demand from boiler and A/C equipment
manufacturers.
Industrial
Equipment
9%*
Sanitary
12%
OEM
5%
Service
6%
Year-on-year comparison
Sequential comparison
Highlights and sequential comments
*Share of Group total
+ -
+
=
+ =
+
=
www.alfalaval.com
Order Sales Backlog
Q4 2016 2,346 3,274 8,417
Q4 2015 3,807 4,010 11,715
Marine & Diesel division
Slide 9
M&D Equipment: higher demand for products going
into cruise ships. Diesel grew as did ballast water
treatment systems orders.
Marine & Offshore Systems: increased demand for
scrubbers and offshore systems compensated for a
negative effect from lower ship contracting.
M&O Pumping: demand growth for marine systems
while offshore orders declined.
Need for upgrades and higher service activity for
pumping systems boosted Service.
+ +
Year-on-year comparison
Sequential comparison
Highlights and sequential comments
Marine & Diesel
Equipment
7%*
Marine &
Offshore Systems
4%*
Service
12%*
*Share of Group total
Marine & Offshore
Pumping Systems
3%*
- +
-
+-
+
www.alfalaval.com
Order Sales Backlog
Q4 2016 3,604 3,756 6,758
Q4 2015 3,089 4,101 7,226
Process Technology division
Slide 10
Energy & Process grew across end markets,
boosted by large orders. Business did very well
throughout the hydrocarbon chain, driven by
efficiency and certain capacity-related investments
despite a generally cautious market sentiment.
Food & LS did very well, particularly in Brewery,
Food Solutions and Life Science.
Water & Waste unchanged as lower activity in North
America was compensated for by growth in Western
Europe.
Service
14%*
=
- =
- +
Year-on-year comparison
Sequential comparison
Highlights and sequential comments
Energy &
Process 15%*
Food & Life
Science 11%*
Water & Waste
Treatment 2%*
*Share of Group total
+
=
+
www.alfalaval.com
Orders received by customer segment
© Alfa Laval Slide 11
Industrial Equipment
OEM
Sanitary Equipment
EQD Service
-
=
+
=
Marine & Offshore Syst.
Marine & Diesel Eq.
Marine & Offshore
Pumping Systems
-
--
PTD Service
Food & Life Science
Water & Waste
Energy & Process
+
-
-
+
January – December 2016, at constant rates and like for like
Equipment division
Marine & Diesel division
Process Technology division
Year-on-year comparison
MDD Service -
www.alfalaval.com© Alfa Laval
Orders received by Region
Central
& Eastern
Europe 7%
North America 19%
Asia 31%
Latin
America
5%
Western Europe 27%
Nordic 9%
Year-on-year comparison
+37
-41
-3
+59
-17
+30
October – December 2016, development at constant rates
+14
+6
-9
+34=
+15
Sequential comparison
www.alfalaval.com© Alfa Laval Slide 13
Top 10 markets*
0 1 000 2 000 3 000 4 000 5 000 6 000
India
Benelux
Adriatic
Mid Europé
SEA
Japan
Nordic
South Korea
China
United States
SEK million at prevailing rates
= WY 2015
= WY 2016 *The development of the 2015 top ten markets.
www.alfalaval.com© Alfa Laval
Orders received by Region
Central
& Eastern
Europe 7%
North America 20%
Asia 33%
Latin
America
5%
Western Europe 24%
Nordic 9%
Year-on-year comparison
+21
-31
-6
+12
-18
+4
January – December 2016, development at constant rates
Report for Q4 2016
Mr. Thomas Thuresson
CFO
Alfa Laval Group
- Key figures
- Orders received and margins
- Development per segment
- Geographical development
- Financials
- Outlook
www.alfalaval.com© Alfa Laval Slide 16
Highlights
Order intake
Net sales
SEK millions October – December, 2016
8,709
9,904
www.alfalaval.com© Alfa Laval
Gross profit margin
30
35
40
45
In percent of sales
34.334.234.3
Q315
36.3
Q116 Q216 Q316 Q416Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q415
www.alfalaval.com© Alfa Laval Slide 18
Gross profit margin
Q4 2015 Q3 2016
Mix/price
Load/volume
PPV
FX
Structure
34.2
Q4 2016 versus Q4 2015 and versus Q3 2016
34.3
--
--
++
+++
=
35.7
34.3
---
--
+
++
=
Q4 2016 Q4 2016
www.alfalaval.com© Alfa Laval Slide 19
Highlights
Order intake
Net sales
Adjusted EBITA
Adjusted EBITA-margin
Non-recurring charge
Profit before tax
Earnings per share
Earnings per share, excl step-up
ROCE
ROE
SEK millions October – December, 2016
8,709
9,904
1,488
15.0%
- 400
877
1.46
2.01
15.3%
11.8%
www.alfalaval.com
Comparison distortion items-A program for reorganization, cost adjustments and improved competitiveness
with three individual initiatives
Reorganization
Manufacturing footprint etc
“Greenhouse”
- Write-off
Total:
Total non-recurring charges, SEK 1.5 billion
245
70
185
600
1,100
Charge Q3 2016
0
285
15
100
400
Charge Q4 2016
www.alfalaval.com
Comparison distortion items- Impact in the P&L and on number of employees, SEK M
COGS - 420 - 550 + 200
R & D
S & A - 380 - 450 + 300
Other - 700*
Total charges
Total: - 1,500 - 1,000 + 500
Savings expected to be reached to 75% by end 2017 and completely by end of 2018
*) Write-off of primarily goodwill and step-up values
Total savingsEmployee impact
www.alfalaval.com
Divisional performance
© Alfa Laval Slide 22
Equipment Process Technology Marine & Diesel
Q4 2016 2015 2016 2015 2016 2015
Orders 2,759 2,526 3,604 3,089 2,346 3,807
Backlog 1,695 1,637 6,758 7,226 8,417 11,715
Sales 2,874 2,694 3,756 4,101 3,274 4,010
Op. profit 402 325 463 640 425 778
Op margin (%) 14.0 12.1 12.3 15.6 13.0 19.4
- Price/mix (pos)
- Volume (pos)
- Cost (neg)
- Volume (neg)
- Price/mix (neg)
- Cost (neg)
- Volume (neg)
- 1-time charge for
certain deliveries
and changes in
supply chain (neg)
Comments on
operating profit:
www.alfalaval.com© Alfa Laval Slide 23
Cash flow from
- operating activities
- investing activities
Financial net paid
Dividend
Total
Cash-flow statement
Pro Forma Free cash-flow*
SEK millions
*Incl. operating activities, capital expenditure and financial net paid.
FY
2015
5,850
- 710
- 323
- 1,696
4,878
3,121
FY
2016
4,979
- 795
147
-1,800
2,531
4,548
Q4
2015
1,875
- 252
56
1,667
1,679
Q4
2016
1,925
- 451
129
1,603
1,799
www.alfalaval.com© Alfa Laval Slide 24
Foreign exchange
SEK million
Translation effect
Transaction effect
Total
*Based on EUR/USD 1.05 and EUR/SEK 9.50
FY 17*
75
200
275
FY 16
-132
610
478
Projected FX-effect for 2017 as communicated at CMD: SEK 275 million
Q4 16
-47
188
141
Estimated impact on adjusted EBITA from FX fluctuations
www.alfalaval.com© Alfa Laval Slide 25
Order backlog as per Dec. 31
SEK millions
For delivery in 2017
0
5 000
10 000
15 000
20 000
25 000
For delivery later than 2017
Q415 Q416Q412 Q413 Q414
16,870
12,9
28
3,9
42
20,578
4,9
88
15,5
90
book to bill
www.alfalaval.com
Sales
SEK (bln)
FY 2016 35.6
Backlog, like-for-like - 2.7
FX translation + 0.6
Acquisitions + ?
Subtotal 33.5
Change in “in-for-out” +/- ?
Price +/- ?
Full year 2017
Full year 2017
www.alfalaval.com
Board’s proposal to the AGM
© Alfa Laval Slide 27
Dividend
The board of directors proposes a
dividend of SEK 4.25 (4.25)
Report for Q4 2016
Mr. Tom Erixon
President and CEO
Alfa Laval Group
- Key figures
- Orders received and margins
- Development per segment
- Geographical development
- Financials
- Outlook
www.alfalaval.com© Alfa Laval Slide 29
Outlook for the first quarter
“We expect that demand during the
first quarter will be somewhat
lower than in the fourth quarter.”
www.alfalaval.com© Alfa Laval Slide 30
www.alfalaval.com
Activity split O&G, total- Distribution of orders Q4 (MSEK) 2016
2%
Process
Technology
Drilling Processing &Transportation
Petrochemicals
Grand total
4.3%
44
Refinery
3.0%5.3%
351 262 373
Marine &
Diesel
Share of total
Alfa Laval
132 113 0 0
= 176 = 464 = 262 = 373
1,030 (+)
245 (+)
=1,275*(+)
= 14.6%
Alfa Laval
*) including Service
www.alfalaval.com
Marine & Diesel industry split- Distribution of orders FY 2016
© Alfa Laval Slide 32
34%
Driver
Marine Offshore oil and gas
Diesel power Service
Share
8%
42%
World trade &
fleet capacity
Oil & gas demand
and prices
Electrical power
needs
World trade
Environment & Energy, Marine
12%
Legislation and
fuel cost
4%
www.alfalaval.com
Marine & Diesel industry split- Distribution of sales FY 2016
© Alfa Laval Slide 33
48%
Driver
Marine Offshore oil and gas
Diesel power Service
Share5%
31%
World trade &
fleet capacity
Oil & gas demand
and prices
Electrical power
needs
World trade
Environment & Energy, Marine
9%
Legislation and
fuel cost
7%
www.alfalaval.com© Alfa Laval
Highlights Asia
Year-on-year comparison
Sequential comparison
October – December 2016, at constant rates, sequential comments
Asia:
Region boosted by large orders and
Marine. Service showed a general
improvement.
India benefited from food and refinery
projects and Korea from a sequential
pickup in marine pumping systems.
China declined, mainly reflecting the low
ship contracting levels. At the same time
lower activity in vegetable oil affected
Process Tech and Equipment was
affected by non-repeat contract orders in
Sanitary. Service reported growth.
-41 +14
www.alfalaval.com© Alfa Laval
Highlights Europe
Year-on-year comparison
Sequential comparison
October – December 2016, at constant rates, sequential comments
Western Europe incl. Nordic:
Large projects, base business and
Service all grew.
All sub-regions reported growth except
for Nordic, which had a very strong third
quarter.
+37 +6
-17 -9
+30 +34
Central and Eastern Europe:
Large waste heat recovery order in
Turkey boosted development in the
region.
Russia affected by fewer large
projects.
www.alfalaval.com© Alfa Laval
Highlights Americas
Year-on-year comparison
Sequential comparison
-3 =
+59 +15
October – December 2016, at constant rates, sequential comments
North America:
Order levels sequentially flat for projects and
base business alike.
Latin America:
Order growth explained by Mexico where a
number of larger Brewery orders were booked
and where the Service business reported a good
development.
Argentina and Chile also contributed through a
good base business development in both EQD
and PTD. Brazil was sequentially flat, following a
gradual recovery over the past few quarters.
www.alfalaval.com
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 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.
© Alfa Laval Slide 37