Alfa Laval business

update

Tom Erixon

Alfa Laval Group

© Alfa LavalSlide 2

www.alfalaval.com

Where are we…

Global Sales & Service

Operations

BD Marine

BU Separation & HEX

BU Boiler & Gas

BU Pumping Systems

President & CEO

Human Resources Communications

Finance, Legal & IT

BD Food & Water

BU High Speed Sep.

BU Decanters

BU Food Systems

BU Fluid Handling

BU Heat Transfer

BD Energy

BU Gasketed PHE

BU Brazed & Fusion

BU Welded HEX

BU Separation

Corporate Development

GS&S Clusters:

”Provides a platform to create synergies”

BU structure:

”Having all the functions in the BU is an enormous

value and speeds up decisions”

Fast organization and decision making:

”Significant less discussions trying to align different

interests”

New energy in the organization:

”Enthusiastic spirit in the whole organization”

More focus on product and customers:

“Stronger focus on winning the market”

www.alfalaval.com

Spending SEK 1.5 billion- Current rate annualized benefits

Leaner organization

”Greenhouse”

Manufacturing footprint

320 MSEK

40 MSEK

www.alfalaval.com

Yard contracting - 1st November 2017, including all ships above 2,000 Dwt/Gt

Source: Clarkson Research Services Limited

0

1 000

2 000

3 000

4 000

5 000

6 000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Nu

mb

er

of

ve

sse

ls

FC No of ships contracted

Actual Contracted YTD608

www.alfalaval.com

Oil price development

$ 120.00

$ 100.00

$ 80.00

$ 60.00

$ 40.00

$ 20.00

www.alfalaval.com

Macro trends

www.alfalaval.com

The business portfolio

Estimated

newness 2017

Products launched

2012 or later, as a

portion of total capital

equipment (OI) 2017

Order intake LTM September 2017 vs WY 2016

50%

0%

40%-10%

25%

0%

Brazed

E Sep.

Welded

Gasketed

PHE ● Energy Division

● Food & Water Division

● Marine Division

20%

Size according to OI LTM

Fluid Hand.

High

Speed

Decanters

Food

HT

Food

Sys.

PumpsMarine

Sep & HTBoilers

www.alfalaval.com

Strategic direction

Service = Product =Customer =

www.alfalaval.com

Measuring customer experience

QUOTE RESPONSE TIME

91%OFFERS MATCH NEEDS

98%NET PROMOTOR SCORE

64%

Act on dissatisfaction + Improve sales processes + Improve competence

www.alfalaval.com

Global Marine Service

Marine Service hubs in three regions:

Americas

EMEA

Asia

Handle cross border service requests

providing 24/7 availability with one e-mail

address and one phone number

www.alfalaval.com

Customer closeness

Mechanical cleaning of Heat Exchangers

Increase market coverage

Satisfy customer needs

Build loyal customers

Gasketed plate heat exchangers

www.alfalaval.com

New platform for gasketed

plate heat exchangers

Gasketed plate heat exchangers

www.alfalaval.com

New platform for gasketed

plate heat exchangers

Market introduction in November 2017

Industrial range covers 70% of total

gasketed product portfolio

Alfa Laval T25 first product released

includes 12 new patents

Improved attractiveness by features

delivering energy efficiency, reliability and

serviceability. New platform for gasketed

plate heat exchangers

High speed separators

Development of new platforms ongoing

Investment in new laboratory

Main focus on Food and Marine

Market launch stepwise from 2017

New high speed

separator platforms

www.alfalaval.com

High speed separators

www.alfalaval.com

New high speed

separator platforms

New platform launches in 2018, 2019 and

2020, including several new patents

Unique customer values; increased

separation performance and improved total

cost of ownership

Tripling the pace of innovation in 2018

compared to the last three years within

Food, Marine and Energy

www.alfalaval.com

The business portfolio

Estimated

newness 2017

Products launched

2012 or later, as a

portion of total capital

equipment (OI) 2017

Order intake LTM September 2017 vs WY 2016

50%

0%

40%-10%

25%

0%

Brazed

E Sep.

Welded

Gasketed

PHE ● Energy Division

● Food & Water Division

● Marine Division

20%

Size according to OI LTM

Fluid Hand.

High

Speed

Decanters

Food

HT

Food

Sys.

PumpsMarine

Sep & HTBoilers

Estimated

newness 2020

Products launched

2015 or later, as a

portion of total capital

equipment (OI) 2020

www.alfalaval.com

Digital fitness going forward

Online presence & salesOnline marketing, social media, alfalaval.com

and E-commerceA

Smart manufacturingDigitalization and automation within manufacturing

Connected products & serviceIoT and connectivity; installed base and monitoringB

C

www.alfalaval.com

Sustainability by nature

UN Sustainable Development Goals, launched in September 2015

Improving efficiency

Re-using resources

Reducing waste

Our financial targets

15%

EBITA

20%

ROCE

5%

Growth

www.alfalaval.com