© Alfa Laval Slide 2 www.alfalaval.com
Today’s programToday’s programCapital Market Day, September 16, 2003Capital Market Day, September 16, 2003
•• Summary of the interim report Q203Summary of the interim report Q203Sigge Haraldsson
•• The Alfa Laval growth strategyThe Alfa Laval growth strategySigge Haraldsson
•• A solid platform for profitable growth A solid platform for profitable growth -- Regions Regions Per-Erik Lindquist and Peter Leifland
•• A continued strengthening of our leading position A continued strengthening of our leading position –– R&D R&D Bjarne Sondergaard
•• Acquisitions Acquisitions –– strategy and focusstrategy and focusNils Olof Björk
•• Questions and AnswersQuestions and Answers
Summary of Summary of Interim report Q203Interim report Q203
MrMr.. Sigge HaraldssonSigge HaraldssonPresident and CEOPresident and CEOAlfa Laval GroupAlfa Laval Group
© Alfa Laval Slide 4 www.alfalaval.com
HighlightsHighlights
Order intake: Order intake: 3,554 MSEK3,554 MSEKNet sales: Net sales: 3,402 MSEK3,402 MSEK
Q203Q203
© Alfa Laval Slide 5 www.alfalaval.com
Q on Q vs. last year (excl FX)Q on Q vs. last year (excl FX)
-10
-8
-6
-4
-2
0
2
4
Q103 Q203 Jan-June 03
Orders receivedOrders received
-10
-8
-6
-4
-2
0
2
4
Q103 Q203 Jan-June 03
Net salesNet sales
© Alfa Laval Slide 6 www.alfalaval.com
HighlightsHighlights
Order intake: Order intake: 3,554 MSEK3,554 MSEKNet sales: Net sales: 3,402 MSEK3,402 MSEKAdjusted EBITA / margin: Adjusted EBITA / margin: 412 MSEK / 12.1 %412 MSEK / 12.1 %
Q203Q203
© Alfa Laval Slide 7 www.alfalaval.com
0
100
200
300
400
500
600
700
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
Q300Q300 Q400Q400 Q101Q101 Q201Q201 Q301Q301 Q401Q401 Q102Q102 Q202Q202 Q302Q302 Q402Q402 Q103Q103 Q203Q203
MSEK and in percent of salesMSEK 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 *Adjusted EBITA / margin *
© Alfa Laval Slide 8 www.alfalaval.com
HighlightsHighlights
Order intake: Order intake: 3,554 MSEK3,554 MSEKNet sales: Net sales: 3,402 MSEK3,402 MSEKAdjusted EBITA / margin: Adjusted EBITA / margin: 412 MSEK / 12.1 %412 MSEK / 12.1 %Profit before tax: Profit before tax: 214 MSEK214 MSEK
Q203Q203
© Alfa Laval Slide 9 www.alfalaval.com
HighlightsHighlights
Order intake: Order intake: 3,554 MSEK3,554 MSEKNet sales: Net sales: 3,402 MSEK3,402 MSEKAdjusted EBITA / margin: Adjusted EBITA / margin: 412 MSEK / 12.1 %412 MSEK / 12.1 %Profit before tax: Profit before tax: 214 MSEK214 MSEK
Adjusted EBITA / margin: Adjusted EBITA / margin: 734 MSEK / 11.5 %734 MSEK / 11.5 %
Q203Q203
H103H103
© Alfa Laval Slide 10 www.alfalaval.com
20032002
412445
Q2Q2
807
734
MSEKMSEK H1H1
Deviation - 33
FX. translation 28
FX. transaction 35
Deviation excl FX + 30
- 73
60
55
+ 42
Adjusted EBITA Adjusted EBITA
© Alfa Laval Slide 11 www.alfalaval.com
HighlightsHighlights
Order intake: Order intake: 3,554 MSEK3,554 MSEKNet sales: Net sales: 3,402 MSEK3,402 MSEKAdjusted EBITA / margin: Adjusted EBITA / margin: 412 MSEK / 12.1 %412 MSEK / 12.1 %Profit before tax: Profit before tax: 214 MSEK214 MSEK
Adjusted EBITA / margin: Adjusted EBITA / margin: 734 MSEK / 11.5 %734 MSEK / 11.5 %
Q203Q203
H103H103Profit before tax: Profit before tax: 355 MSEK 355 MSEK Cash flow from operating activities: Cash flow from operating activities: 650 MSEK 650 MSEK ROCE: ROCE: 20.9 %20.9 %
© Alfa Laval Slide 12 www.alfalaval.com
>850825
““Beyond ExpectationsBeyond Expectations””
Other ProjectsOther Projects
BOM & NPRBOM & NPR
Org. reOrg. re--designdesign
Shared ServicesShared Services
ManufacturingManufacturing””TargetTarget”” ””Current paceCurrent pace””
In the P&L, MSEK 725 In the P&L, MSEK 725
© Alfa Laval Slide 13 www.alfalaval.com
7500
8000
8500
9000
9500
Number of employeesNumber of employees
9,3999,399 9,1509,150Acquisitions Acquisitions + 166+ 166Closure Kenosha Closure Kenosha -- 124124Other reductions Other reductions -- 291291
30 June, 2002 30 June, 2003
© Alfa Laval Slide 14 www.alfalaval.com
AsbestosAsbestos--related lawsuits in the USrelated lawsuits in the USAlfa Laval Inc. was as of June 30, 2003 named coAlfa Laval Inc. was as of June 30, 2003 named co--defendant in a defendant in a total of 109 asbestostotal of 109 asbestos--related lawsuits with a total of approximately related lawsuits with a total of approximately 20 200 plaintiffs. The lawsuits filed in Mississippi account for20 200 plaintiffs. The lawsuits filed in Mississippi account forapproximately 99% of all plaintiffs.approximately 99% of all plaintiffs.
Developments between March 31 and June 30, 2003Developments between March 31 and June 30, 2003::-- 15 lawsuits have been resolved during the period, which gives a15 lawsuits have been resolved during the period, which gives a
grand total of 52 lawsuits that have been resolved;grand total of 52 lawsuits that have been resolved;
-- 27 additional lawsuits with a total of approximately 2 700 plai27 additional lawsuits with a total of approximately 2 700 plaintiffs.ntiffs.
Alfa Laval continues to believe:Alfa Laval continues to believe:-- that claims and defense costs against Alfa Laval Inc. will be cthat claims and defense costs against Alfa Laval Inc. will be coveredovered
by insurance policies;by insurance policies;-- that these lawsuits will not have a material adverse effect on that these lawsuits will not have a material adverse effect on thethe
company’s financial condition or result of operation.company’s financial condition or result of operation.
© Alfa Laval Slide 15 www.alfalaval.com
Orders Received by Segment
Comfort & RefrigerationComfort & Refrigeration
SanitarySanitary
Marine & DieselMarine & Diesel
Fluids & UtilityFluids & Utility
OEMOEM
Parts & ServiceParts & Service
Life ScienceLife Science
Process IndustryProcess Industry
Energy & EnvironmentEnergy & Environment
FoodFood
+
+
−
+
−
−
−
+
+
=
January – June 2003
© Alfa Laval Slide 16 www.alfalaval.com
Orders Received by RegionOrders Received by Region
Cen
trC
entr.
& E
ast
8 %
. & E
ast
8 %
North A
merica
18 %
North A
merica
18 %
Asia 24 %
Asia 24 %
L. America 4 %
L. America 4 %
Other 2 %
Other 2 %
Western EuropeWestern Europe31 %31 %
Nordic 13 %
Nordic 13 %
++
++++
---- --
--
January – June 2003
© Alfa Laval Slide 17 www.alfalaval.com
Outlook 2003Outlook 2003
“Order intake will show a limited increase “Order intake will show a limited increase during the year. Additional savings initiatives during the year. Additional savings initiatives will reduce the impact from foreign exchange will reduce the impact from foreign exchange exposures. Profit before tax will show a exposures. Profit before tax will show a major improvement.”major improvement.”
© Alfa Laval Slide 18 www.alfalaval.com
Today’s programToday’s programCapital Market Day, September 16, 2003Capital Market Day, September 16, 2003
Summary of the interim report Q203Summary of the interim report Q203Sigge Haraldsson
•• The Alfa Laval growth strategyThe Alfa Laval growth strategySigge Haraldsson
•• A solid platform for profitable growth A solid platform for profitable growth -- Regions Regions Per-Erik Lindquist and Peter Leifland
•• A continued strengthening of our leading position A continued strengthening of our leading position –– R&D R&D Bjarne Sondergaard
•• Acquisitions Acquisitions –– strategy and focusstrategy and focusNils Olof Björk
•• Questions and AnswersQuestions and Answers
The Alfa Laval The Alfa Laval growth strategygrowth strategy
MrMr.. Sigge HaraldssonSigge HaraldssonPresident and CEOPresident and CEOAlfa Laval GroupAlfa Laval Group
© Alfa Laval Slide 20 www.alfalaval.com
V
Our MissionOur Mission
To optimise the performance of our customers’ processes. Time and time again.
© Alfa Laval Slide 21 www.alfalaval.com
Accelerating growth: Accelerating growth: TThe six step Alfa Laval gearbox he six step Alfa Laval gearbox
1 3 5
2 4 6
© Alfa Laval Slide 22 www.alfalaval.com
The drivers behind Alfa Laval’s The drivers behind Alfa Laval’s growth strategygrowth strategy
1 3 5
2 4 6
1st gear: EExistingxisting range of productsproducts
2nd gear: MMarketarket--driven R&Ddriven R&D
3rd gear: Focus on customer segmentscustomer segments
4th gear: Strong commitment to Parts & ServiceParts & Service
5th gear: Exploitation of new market conceptsnew market concepts
6th gear: Ambition to add new core productsnew core products
© Alfa Laval Slide 23 www.alfalaval.com
666
3 51
2 4
1
2
53
4
55
2
1
6
3
4
5
6
What doesWhat does it all it all addadd up to?up to?ExistingExistingproductsproducts
CustomerCustomersegmentssegments
New marketNew marketconceptsconcepts
MarketMarket--drivendrivenR&DR&D
Parts & ServiceParts & Service New coreNew coreproductsproducts
All six gears should give us an annual average growth of 5% over a business cycle.
© Alfa Laval Slide 24 www.alfalaval.com
TThe six step gearboxhe six step gearbox processprocess
The 6The 6--G Sales PlanG Sales Plan
Sales Companies
Sales Companies
The 6The 6--G Market PlanG Market PlanDivisions &Divisions &
SegmentsSegments
The 6The 6--G Growth StrategyG Growth StrategyGroupGroup
© Alfa Laval Slide 25 www.alfalaval.com
Continued improvement Continued improvement 1 3 5
4 62
1
Compabloc Think Top valve
Brazed heat exchanger
Separation unit
© Alfa Laval Slide 26 www.alfalaval.com
AlfaCondAlfaCond1 3 5
4 622
• The world’s first tailor-made plate condenser.
• Efficient and compact.
VapourVapourCondensateCondensateCoolingCooling waterwater
© Alfa Laval Slide 27 www.alfalaval.com
Adding value:Adding value:
Market penetrationMarket penetration
• Sales through Sales Companies in 50 countries and through external sales channels;
• About 300 new sales channels added during 2002, most of them in Germany, Japan, India, Denmark, Italy and Russia.
1 3 5
4 62
3
© Alfa Laval Slide 28 www.alfalaval.com
Adding value:Adding value:
Complementary acquisitionsComplementary acquisitionsToftejorgToftejorg• Annual sales of about 210 MSEK.• Approx. 100 employees in R&D, manufacturing and sales.• Sales companies in Sweden, Norway, Germany, UK, France,
USA and Singapore. • Sales by geographical area; Europe 52%, USA/Americas 15%,
Asia 33%.
1 3 5
4 62
3
© Alfa Laval Slide 29 www.alfalaval.com
Nonstop Performance Nonstop Performance -- The house with well defined offers The house with well defined offers --
PerformancePerformance agreementsagreements
Genuine Genuine Spare Spare PartsParts Global NetworkGlobal Network LocalLocal ServiceService
Reconditioning& Repair Training Exchange
Parts/assembliesMaintenance
tools
Upgrading Audits &Consulting
Cleaning &chemicals Monitoring
1 3 5
4 62 4
© Alfa Laval Slide 30 www.alfalaval.com
Cleaning of crankcase gasesCleaning of crankcase gases1 3 5
4 62
5
• New innovative solution to separate fluids and solids from gases;
• Require manufacturers of diesel engines to clean also the crankcase gas that is ventilated from engines;
• Technical and commercial cooperation with Haldex.
© Alfa Laval Slide 31 www.alfalaval.com
Alfa Laval OctopusAlfa Laval Octopus1 3 5
4 62
5
The dewatering process represents 35% of the total cost of the waste water treatment;Case story - customer benefits: - Resources: - 70% man-hours- Polymer consumption: - 25%- Sludge volume: 3% to 5% dryness improvement- Energy saving: - 6%
© Alfa Laval Slide 32 www.alfalaval.com
Membrane separationAcquisition of DSS• Annual sales: 90 MSEK• Located in Nakskov and Copenhagen• 65 people in R&D, manufacturing and sales• Active in Food (1/3) & Life Science (2/3)• Active in DK, IT, UK, GE
1 3 5
4 62 6
© Alfa Laval Slide 33 www.alfalaval.com
Today’s programToday’s programCapital Market Day, September 16, 2003Capital Market Day, September 16, 2003
Introduction and the interim report Q203Introduction and the interim report Q203Sigge Haraldsson
The Alfa Laval growth strategyThe Alfa Laval growth strategySigge Haraldsson
•• A solid platform for profitable growth A solid platform for profitable growth –– Regions Regions Per-Erik Lindquist and Peter Leifland
•• A continued strengthening of our leading position A continued strengthening of our leading position –– R&D R&D Bjarne Sondergaard
•• Acquisitions Acquisitions –– strategy and focusstrategy and focusNils Olof Björk
•• Questions and AnswersQuestions and Answers
43
21
63
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