Interim Report Q3 2006 - Alfa LavalInterim Report Q3 2006 Mr. Lars Renström President and CEO Alfa...

© Alfa Laval 1

Interim Report Q3 2006Interim Report Q3 2006

Mr. Lars RenstrMr. Lars RenströömmPresident and CEOPresident and CEOAlfa 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 figures

Orders received Orders received up 17% to SEK 5,648 millionup 17% to SEK 5,648 million

Net sales Net sales up 15% to SEK 4,810 millionup 15% to SEK 4,810 million

Adjusted EBITA Adjusted EBITA up 59% to SEK 760 millionup 59% to SEK 760 million(including reversal of provisions of SEK 40 million and(including reversal of provisions of SEK 40 million anda positive currency effect of SEK 7 million)a positive currency effect of SEK 7 million)

July July –– September 2006September 2006

January January –– September 2006September 2006

Orders received Orders received up 26% to SEK 17,346 millionup 26% to SEK 17,346 million

Net sales Net sales up 16% to SEK 13,762 millionup 16% to SEK 13,762 million

Adjusted EBITA Adjusted EBITA up 62% to SEK 1,992 millionup 62% to SEK 1,992 million(including reversal of provisions of SEK 40 million and(including reversal of provisions of SEK 40 million anda positive currency effect of SEK 56 million)a positive currency effect of SEK 56 million)

© Alfa Laval 2


0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

0

3 000

6 000

9 000

12 000

15 000

18 000

21 000

24 000SEK millionSEK million

Q30

3Q

303

Q40

3Q

403

Q10

4Q

104

Q20

4Q

204

Q30

4Q

304

Q40

4Q

404

Q10

5Q

105

Orders receivedSEK million R 12SEK million R 12

Q20

5Q

205

= rolling twelve months value

= order intake per quarter

Q30

5Q

305

Q40

5Q

405

Q10

6Q

106

Q20

6Q

206

Q30

6Q

306

+ 6

%+

6%

= % development at constant rates by quarter year on year

+16%

+16%

+22%

+22%

+20%

+20%

+15%

+15%

+ 5

%+

5%

+ 5

%+

5%

+ 9

%+

9%

+25%

+25%

+23%

+23%

+28%

+28%

+35%

+35%

+17%

+17%

+xx%


Order analysisOrder analysis

2005 2005 (SEK million)(SEK million)

Structural change, %Structural change, %Currency effects,%Currency effects,%Organic development, %Organic development, %Total, %Total, %2006 2006 (SEK million)(SEK million)

4,9184,918

July July –– Sep 06Sep 06

5,6485,648

+ 6+ 6-- 2 2 + 11+ 11+ 15+ 15

© Alfa Laval 3


0

100

200

300

400

500

600

700

800

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

SEK million and in percent of salesSEK million and in percent of sales

* Adjusted EBITA – ”Earnings before interests, taxes, amortization ofgoodwill and step up values and comparison distortion items.”

Adjusted EBITA / margin *Adjusted EBITA / margin *

Q303Q303 Q403Q403 Q104Q104 Q204Q204 Q304Q304 Q404Q404 Q105Q105 Q205Q205 Q305Q305 Q405Q405 Q106Q106 Q206Q206 Q306Q306

Reversal of provisions SEK 40 million




© Alfa Laval 4


Highlights

Order to liquid natural gas plant (LNG) in Qatar,Order to liquid natural gas plant (LNG) in Qatar,

SEK 75 million.SEK 75 million.-- Plate heat exchangers to be used in a LNGPlate heat exchangers to be used in a LNG--plant as part of plant as part of

the the RasGasRasGas project in Qatarproject in Qatar. . DeliveryDelivery in 2007.in 2007.



Highlights

Order to liquid natural gas plant (LNG) in Qatar,Order to liquid natural gas plant (LNG) in Qatar,

SEK 75 million.SEK 75 million.

Order to Russian oil company LUKOIL, Order to Russian oil company LUKOIL,

SEK 50 million.SEK 50 million.-- Spiral and welded heat exchangers to be used in Spiral and welded heat exchangers to be used in LUKOILLUKOIL’’ss

refinery in refinery in NizhnyNizhny NovgorodNovgorod. . DeliveryDelivery in 2007.in 2007.


© Alfa Laval 5





Orders received by Segment

Comfort & RefrigerationComfort & Refrigeration

SanitarySanitary

Marine & DieselMarine & Diesel

Fluids & UtilityFluids & UtilityOEMOEM

Parts & ServiceParts & Service

Life ScienceLife Science

Process IndustryProcess Industry

Energy & EnvironmentEnergy & Environment

FoodFood

July – September 2006, at constant rates and for comparable unitsat constant rates and for comparable units

++ +

++

+

+

=

−

−

© Alfa Laval 6



Continued good businessclimate in all sectors.The marine investmentscontinue to be on ahigh level.

Equipment Division, July – September 2006, at constant rates and for comparable unitsat constant rates and for comparable units


SanitarySanitary



++

+

+

−


Orders received by SegmentProcess Technology Division, July – September 2006, at constant rates and for comparable unitsat constant rates and for comparable units




FoodFood

+

+

=

−

Continued very strongContinued very strongactivity in energyactivity in energy--relatedrelatedindustries, especially inindustries, especially inthe US and Russia.the US and Russia.FoodFood--related industriesrelated industriesremained on a high level,remained on a high level,especially in vegetableespecially in vegetableoils and brewery.oils and brewery.

© Alfa Laval 7




SanitarySanitary



Parts & ServiceParts & Service




FoodFood

January – September 2006, at constant rates and for comparable unitsat constant rates and for comparable units

+

++

++

+

+

+

+

=


Environmental applications create growthEnvironmental applications create growth

Ballast water application for the Marine industryBallast water application for the Marine industry

•• Market driven by Market driven by legislation.legislation.

•• Estimated market Estimated market potential: in excess of potential: in excess of SEK 1 billion.SEK 1 billion.

•• Alfa Laval intends to Alfa Laval intends to take the leading take the leading position.position.

•• No additives, residuals No additives, residuals or toxic effects.or toxic effects.

•• Compact, automated Compact, automated and marine adapted.and marine adapted.

© Alfa Laval 8





Orders received by RegionOrders received by Region

CentralCentral& Eastern & Eastern EuropeEurope10 %10 %

NorthNorthAmericaAmerica18 %18 %

Asia 29 %Asia 29 %

L. America 5 %

L. America 5 %

Other 2 %

Other 2 %

Western EuropeWestern Europe27 %27 %

NordicNordic9 %9 %

+7+7

+4+4

July – September 2006, at constant ratesat constant rates

+37+37 +40+40

+18+18

+33+33

© Alfa Laval 9


Highlights AmericasHighlights Americas

North AmericaNorth AmericaTotal orders and base ordersin US very good.Very strong development inFuel ethanol in US.

Latin AmericaLatin AmericaThe The Equipment Division doing wellwith focus on Refrigeration and Sanitary.Argentina, Chile and Mexico showbest growth.


+37+37

+18+18


Highlights EuropeHighlights Europe

Western Europe incl. NordicWestern Europe incl. NordicStrong development in Adriatic,France and MidEurope.Best development in theEquipment Division andParts & Service.

Central and Eastern EuropeCentral and Eastern EuropeContinued very good investment climate.Strongest growth in Russia, Turkeyand the Czech Republic.Best development in Refrigerationand Parts and Service.


+7+7 +40+40

+33+33

© Alfa Laval 10


Highlights AsiaHighlights Asia

AsiaAsiaA solid quarter with best growthin China, India and Taiwan.Strongest development inComfort & Refrigeration andProcess IndustrySlow quarter for Marine followingan extraordinary quarter in 2005.

+4+4



Orders received by RegionOrders received by Region

CentralCentral& Eastern & Eastern EuropeEurope10 %10 %

NorthNorthAmericaAmerica17 %17 %

Asia 30 %Asia 30 %

L. America 4 %

L. America 4 %

Other 2 %

Other 2 %

Western EuropeWestern Europe28 %28 %

NordicNordic9 %9 %

+24+24

+23+23

January – September 2006, at constant ratesat constant rates

+40+40

+15+15

+56+56

+21+21

© Alfa Laval 11


Mr. Thomas Mr. Thomas ThuressonThuressonCFOCFOAlfa Laval GroupAlfa Laval Group



HighlightsHighlights

Order intake Order intake Net salesNet salesAdjusted EBITAAdjusted EBITAAdjusted EBITAAdjusted EBITA--marginmargin

5,6485,6484,8104,810

76076015.8%15.8%

SEK millionSEK million JulyJuly –– Sep 06Sep 06

© Alfa Laval 12


20062006

20052005

SEK millionSEK million

Deviation Deviation

Adjusted EBITA Adjusted EBITA

1,2311,231

+ 761+ 761

-- 4545-- 1111

+ 705+ 705

JanJan--Sep 06 Sep 06

Deviation excl FX Deviation excl FX FX. transactionFX. transactionFX. translation FX. translation

1,9921,992

+ 281+ 281

+ 11+ 11-- 1818

+ 274+ 274

Q3 06 Q3 06

479479760760


Gross profit marginGross profit margin

20

30

40

50In percent of salesIn percent of sales

Q303Q303 Q403Q403 Q104Q104

37.237.235.335.335.135.1

Q204Q204 Q304Q304 Q404Q404 Q105Q105 Q205Q205 Q305Q305 Q405Q405 Q106Q106

38.538.5

Q206Q206 Q306Q306

© Alfa Laval 13



Order intake Order intake Net salesNet salesAdjusted EBITAAdjusted EBITAAdjusted EBITAAdjusted EBITA--marginmarginProfit before taxProfit before tax


5,6485,6484,8104,810

76076015.8%15.8%

611611


Earnings per shareEarnings per share

EarningsEarnings per per shareshare

EarningsEarnings per per shareshareexclexcl. . stepstep--upup

3.913.91

4.454.45

2.542.54

2.992.99

10.7810.78

12.3412.34

Q3 2006Q3 2006 Q3 2005Q3 2005JanJan--SepSep

20062006JanJan--SepSep

20052005

5.195.19

6.526.52

© Alfa Laval 14



Order intake Order intake Net salesNet salesAdjusted EBITAAdjusted EBITAAdjusted EBITAAdjusted EBITA--marginmarginProfit before taxProfit before taxCash flow from operating activitiesCash flow from operating activitiesROCE ROCE

Excl. stepExcl. step--up and goodwill 77.3% up and goodwill 77.3%


5,6485,6484,8104,810

76076015.8%15.8%

6116111,6241,62429.929.9


Cash flows fromCash flows from-- operating activitiesoperating activities-- investing activitiesinvesting activities

Financial Financial netnet paidpaidDividendsDividends

TotalTotal

CashCash--flow statementflow 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 andrights), provisions andfinancial net paid. financial net paid.

MSEKMSEKJanJan--SepSep

20062006JanJan-- SepSep

20052005

1,6241,624--1,4111,411-- 5252-- 587587-- 426426

779779-- 572572-- 177177-- 557557-- 527527

1,3761,376 397397

© Alfa Laval 15


Foreign exchangeForeign exchange

SEK millionSEK million

Translation effectTranslation effectTransaction effectTransaction effect

TotalTotal

*Based on EUR/USD 1.27 and EUR/SEK 9.30*Based on EUR/USD 1.27 and EUR/SEK 9.30

Estimated impact on adjusted EBITA from Estimated impact on adjusted EBITA from FxFx. fluctuations. fluctuations

WY 07*WY 07*

00-- 2525-- 2525

JanJan--Sep Sep 20062006

+ 45+ 45+ 11+ 11+ 56+ 56

WY 06*WY 06*

+ 45+ 45+ 22+ 22+ 67+ 67

Q3 2006Q3 2006

-- 1111+ 18+ 18+ 7+ 7


Order backlog as per September 30SEK million

0

3000

6000

9000

12000

2004 2005 2006

3,6273,332 4,474

3,4841,883

7,365

For delivery in the current year

© Alfa Laval 16





Capital Markets Day

November 16, atNovember 16, atHilton Copenhagen AirportHilton Copenhagen Airport

Structural changes in Alfa LavalStructural changes in Alfa Laval’’s end s end marketsmarkets –– covering energy, technology covering energy, technology conversions and emerging marketsconversions and emerging markets

10.30 10.30 –– 16.30 and a traditional goose 16.30 and a traditional goose dinner in the eveningdinner in the evening……

© Alfa Laval 17


V

Financial TargetsFinancial Targets

Growth 5%

EBITA-margin 12 - 15%

ROCE > 20%


Outlook for the near futureOutlook for the near future

““In most of the markets, geographical as In most of the markets, geographical as well as customer segments, that Alfa Laval well as customer segments, that Alfa Laval serves, a continued very strong demand is serves, a continued very strong demand is expected.expected.””

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Interim Report Q3 2006 - Alfa LavalInterim Report Q3 2006 Mr. Lars Renström President and CEO Alfa...

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