Financial updateFinancial update

Mr. Thomas ThuressonMr. Thomas ThuressonCFOCFOAlfa Laval GroupAlfa Laval Group

“The menu for today”“The menu for today”

� Headcount development

� Capital structure

� Amortisation of step-up

� Capital expenditure

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� Working capital

� Taxes

� Currency effects

� Order backlog

� Gross profit margin

8000

10000

12000

3,4253,425

9,5279,527

10,22410,224

3,0513,051

Employees Employees –– by regionby regionDevelopment Dec 2004 Development Dec 2004 –– Sep 2010Sep 2010

Excl acquisExcl acquis+ 26 % + 26 %

(Gross + 58%)(Gross + 58%)

Excl acquisExcl acquis+ 26 % + 26 %

(Gross + 58%)(Gross + 58%)

12,11912,119

4,3174,317

12,09512,095

4,8314,8313,1443,144 3,8533,853 4,3194,319

9,4299,429

11,39511,395 11,39011,390

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Dec 2006Dec 2006Dec 2004Dec 20040

2000

4000

6000

6,7866,7866,4626,462 7,0387,038

Asia, Middle East, Central & Eastern EuropeAsia, Middle East, Central & Eastern Europe

and Latin Americaand Latin America

North America, Western EuropeNorth America, Western Europe

and Oceaniaand Oceania

7,2297,229

Dec 2005Dec 2005 Dec 2007Dec 2007 Dec 2008Dec 2008 Dec 2009Dec 2009 Sep 2010Sep 2010

6,2746,274 7,5277,527 7,7717,771

Excl acquisExcl acquis-- 8 %8 %

(Gross +12 %)(Gross +12 %)

Excl acquisExcl acquis-- 8 %8 %

(Gross +12 %)(Gross +12 %)

Employees Employees Productivity developmentProductivity development

1500

2000

25002,2862,286

1,9581,958

1,7321,732

1,4861,4861,5731,573

2,1812,181

1,9931,993

2,2982,298

KSEKKSEK

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EBITA/employee end of yearEBITA/employee end of year

0

500

1000

508508298298178178

Sales/employee end of yearSales/employee end of year

LTM Q310LTM Q31020062006 20072007

174174

20052005

437437187187

2004200420032003

447447

2009200920082008

508508

EPS and dividendsEPS and dividends

“The Board of Directors intends “The Board of Directors intends to regularly proposeto regularly propose dividends dividends that reflects the performance, that reflects the performance, the financial position, the the financial position, the funding arrangements and funding arrangements and expected capital needs of the expected capital needs of the Alfa Laval Group. Alfa Laval Group.

Considering the cash Considering the cash 5

6

7

8

9

10SEKSEK % of Adj EPS% of Adj EPS

4040

6060

8080

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Considering the cash Considering the cash generating capacity of the generating capacity of the Group a dividend of 40 Group a dividend of 40 –– 50 % 50 % of net income, adjusted for of net income, adjusted for stepstep--up depreciations, up depreciations, calculated over a business calculated over a business cycle is targeted”cycle is targeted” 0

1

2

3

4

DividendDividend

EPSEPS

Adjusted EPS, (excl step up)Adjusted EPS, (excl step up)

20042004 20052005 2007200720032003

Dividend as % of adjusted EPSDividend as % of adjusted EPS

20062006 20092009

2020

4040

20082008

Group fundingGroup fundingSummary of credit facilities as per September 30, 2010Summary of credit facilities as per September 30, 2010

CommittedCommitted Utilised MaturityUtilised Maturity

MSEKMSEK MSEKMSEK YearYear

Senior Facility Senior Facility 4,7914,791 0 20120 2012

US Private Placement USD 110 millionUS Private Placement USD 110 million 741 741 741 2016741 2016

SHB biSHB bi--lateral loan EUR 25 270 270 2014lateral loan EUR 25 270 270 2014

EIB term loan 1,191 0 2017EIB term loan 1,191 0 2017

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EIB term loan 1,191 0 2017EIB term loan 1,191 0 2017

Sub total: 6,993 1,011Sub total: 6,993 1,011

Local facilities etc. Local facilities etc. -- 305305

Total :Total : 6,993 1,3166,993 1,316

Cash and deposits Cash and deposits -- + 1,706 + 1,706

In addition, uncommitted facilities are available In addition, uncommitted facilities are available

Capital StructureCapital StructureManagement's priorities as per the Board of DirectorsManagement's priorities as per the Board of Directors

1.1. Development of the Group organicallyDevelopment of the Group organically

2.2. Development of the Group through acquisitionsDevelopment of the Group through acquisitions

3.3.

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3.3. Regular competitive dividends to shareholdersRegular competitive dividends to shareholders

4.4. Repurchase of sharesRepurchase of shares

StepStep--up values up to 2014up values up to 2014Closing balance and depreciations according to plan, SEK millionClosing balance and depreciations according to plan, SEK million

Closing balanceClosing balance DepreciationsDepreciations

1800

2100

2400

2700

3000

250

300

350

400

www.alfalaval.comLBOLBO--relatedrelated Depreciations acc to planDepreciations acc to planAcquisitionsAcquisitions

0

300

600

900

1200

1500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0

50

100

150

200

500

600

700

800

900

2,5

3

3,5

4

4,5

Capital expenditureCapital expenditure

Percent of salesPercent of salesSEK millionsSEK millions

www.alfalaval.com

0

100

200

300

400

0

0,5

1

1,5

2

20032003 20042004 20052005 20062006

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

2008200820072007 20092009

Percent of salesPercent of sales

20102010 20112011

TaxesTaxesIn SEK million and as percent of profit before taxesIn SEK million and as percent of profit before taxes

In % of PBTIn % of PBT

1200

1400

1600

1800

2000

25

30

35

40

Taxes as percent of PBT going forward, 30 %!Taxes as percent of PBT going forward, 30 %!

SEK millionsSEK millions

www.alfalaval.comTaxes in SEK millionTaxes in SEK million As & of PBTAs & of PBT

0

200

400

600

800

1000

2004 2005 2006 2007 2008 2009 2010 FWD

0

5

10

15

20

Foreign exchangeForeign exchange

SEK millionSEK million

Translation effectTranslation effect

Transaction effectTransaction effect

TotalTotal

Estimated impact on adjusted EBITA from FX fluctuationsEstimated impact on adjusted EBITA from FX fluctuations

WY 10WY 10

-- 160160

+480+480

+320+320

WY 11WY 11

--100100

--240240

--340340

9M 109M 10

--7171

+395+395

+324+324

WY 12WY 12

--

--150150

--150150

www.alfalaval.com© Alfa Laval Slide 12

TotalTotal +320+320 --340340+324+324

Rates applied for open exposuresRates applied for open exposures

EUR / SEK 9:30EUR / SEK 9:30

EUR / USD 1:38EUR / USD 1:38

EUR / JPY 114EUR / JPY 114

USD / JPY 82USD / JPY 82

--150150

Order backlog developmentOrder backlog development

10 000

12 000

14 000

16 000

18 000

40

50

60

70

80

% of LTM% of LTM--salessalesSEK millionsSEK millions

www.alfalaval.com

0

2 000

4 000

6 000

8 000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

0

10

20

30

40

Order backlogOrder backlog % of LTM (last twelve months) sales% of LTM (last twelve months) sales

Order backlog as per Sept 30 Order backlog as per Sept 30

10000

12000

14000

16000

18000

13,19213,192

8,7668,766

15,87315,87315,314

8,3308,330For next year,For next year,

SEK 1.8 BnSEK 1.8 Bn

11,68911,689

SEK millionsSEK millions

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For delivery next year For delivery next year

0

2000

4000

6000

80007,3247,324

6,5676,256

For delivery later than next yearFor delivery later than next year

200920092008200820072007

SEK 1.8 BnSEK 1.8 Bn

less than inless than in

2009!2009!

For delivery during the rest of current yearFor delivery during the rest of current year

5,487

5,4805,480

5,937

20102010

Order backlog as per Sept 30 Order backlog as per Sept 30 For delivery after December 31For delivery after December 31

SEK millionsSEK millions

5000

6000

7000

8000

9000

10000

4,5764,576

9,3069,306

4,0994,099

9,0589,058

2,3272,327

6,6656,665

7,7057,705

3,6553,655 5,7515,751

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Other SegmentsOther Segments

0

1000

2000

3000

4000

5000

4,7304,7304,9594,9594,3384,338

Marine & DieselMarine & Diesel

2008200820062006 20072007

1,7331,733

1,8201,820

3,5533,553

20052005

4,0504,050

20102010

2,1552,155

3,5963,596

20092009

V

SalesSales2010 and 20112010 and 2011

BnSEK

LTM Q310 24.1

Change order backlog Q4, y-o-y + 0.4

Fx. Translation - 0.3

Acquisitions + 0.2

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V

Demand Q410 + 0.1

Full year 2010 appr 24.5

V

BnSEK

Full year 2010 appr 24.5

Change order backlog y-o-y - 1.8

Fx. Translation - 0.8

Acquisitions to date + 0.3

SalesSales2010 and 20112010 and 2011

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V

Subtotal: 22.2

Price + ?

Demand + ?

Further acquisitions + ?

Full year 2011:

In percent of salesIn percent of sales

41.741.7

38.038.0

40.640.6

39.139.1

Gross profit marginGross profit margin

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38.038.0

Q109Q109 Q309Q309 Q409Q409 Q110Q110 Q210Q210 Q310Q310Q307Q307 Q407Q407 Q108Q108 Q208Q208 Q308Q308 Q408Q408 Q209Q209

Gross profit marginGross profit marginEvolution 2009 Evolution 2009 –– 20112011

Gross profit marginGross profit margin

38.2%38.2%

FX.FX.+2.3%+2.3%

MixMix+0.9%+0.9%

FX. FX. --0.3%0.3%OtherOther FX. negFX. neg

≈≈1%1%Other neg.Other neg.

OtherOther--0.1%0.1% Mix Mix ≈≈

Mix Mix ≈≈

40%40%

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38.2%38.2%

WY 2009WY 2009 Q1Q1--Q3 2010Q3 2010 WY 2010WY 2010 WY 2011WY 2011

36%36%

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