· 1 day ago · food/medical, tech industry etc refinery (14%) • welded hex ... • water...

www.alfalaval.com

www.alfalaval.com

Jan Allde

CFO

Alfa Laval Group

25/11/2020 | © Alfa Laval 2 |

− Alfa Laval’s growth from an industry perspective

www.alfalaval.com25/11/2020 | © Alfa Laval 3 |

Growth− SEK millions (rolling 12 months)

Orders received Sales

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201

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32

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5 000

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201

5 Q

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42

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12

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42

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12

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22

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3

CAGR 7%**

*) Measured over a business cycle

**) CAGR = average annual growth during strategy period 2017-2020

5%Growth*

CAGR 6%**


Energy Division - Capital Sales− By end-customer industries, M€ fixed rate

Share of capital sales OI 2020*

*) Year 2020 = LTM September 2020

**) SP = Strategy Period 2017 – 2020

HVAC & Refrigeration; 40%

Process Industries; 19%

Refinery; 14%

Power; 8%

Oil & Gas; 11%

Other energy; 8%

0

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400

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20

Refinery (14%)

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HVAC & Refrigeration (40%)

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Process Industries (19%)

Capital sales OI development L10Y* (M€)

400

300

200

100

CAGR SP** (10Y): 7% (3%) 4% (3%) 11% (2%)


Energy Division – Capital sales− Market drivers & outlook by end-customer industries

Industry (ies):

Key products:

Key market drivers &

sustainability trends:

Outlook mid-term:

HVAC & Refrigeration (40%)

• Gasketed plate HEX, brazed &

fusion bonded HEX

• Decarbonization & green deals

(district energy, heat pumps)

• Urbanization (district energy

Asia/MiddleEast)

• Reduction of GHG (shift to

natural refrigerants)

• Digitalization & 5G

Process Industry (19%)

• Gasketed plate HEX, welded

HEX, separator, decanter

• Energy efficiency,

decarbonization and other

environmental demands

• Economic growth, and

increased demand for

construction material

food/medical, tech industry etc

Refinery (14%)

• Welded HEX

• Reduction of carbon footprint

(renewables/HVO) and energy

efficiency

• Environmental demands (low-

sulphur fuels, Euro5, unleaded

fuels)

• China refinery transformation


Food & Water Division – Capital Sales− By end-customer industries, M€ fixed rate

Share of capital sales OI 2020* Capital sales OI development L10Y* (M€)

Dairy; 28%

Wastewater; 10%

Pharma & Biotech; 9%Prep. Food & Beverage;

19%

Edible Oil; 12%

Brewery; 8%

FWD Other; 2%

Protein; 6%

Ethanol, Starch & Sugar; 6%

0

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600 000 000

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20

Dairy (28%)

0

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Food & Beverage (53%)

600

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100

0

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Pharma & Biotech (9%)

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Wastewater (10%)

CAGR SP** (10Y): 6% (5%) 8% (3%) 11% (7%) 2% (4%)




Food & Water Division – Capital Sales− Market drivers & outlook by end-customer industries

Industry (ies):

Key products:

Key market drivers:

Outlook mid-term:

Sustainability:

Dairy (28%)

• Separators, HEX, fluid handl.

• Food safety and sanitary demands

• Health trends

• Youghurt and milk powder in

emerging markets

• Consolidation of dairy market

Wastewater (10%)

• Decanters, membranes, filter

presses

• Urbanization & population

• Renewing old infrastructure

• Environmental regulations

• Global water scarcity

Pharma & Biotech (9%)

• Separators, HEX, fluid handl., membranes

• Demographical changes

• Increased middle-class and living standards

• Pandemic, need for new drugs and securing

self sufficient national supply chains of pharma

products

• Capitalize on our product’s new energy efficient features

• Improve our customer’s production yield – Maximize use of raw material

• Water re-use

• An offering to capitalize on waste streams and utilization of bi-products

• Opportunities to grow into new markets are often in areas of sustainability


Marine Division – Capital Sales− By end-customer industries, M€ fixed rate

Share of capital sales OI 2020* Capital sales OI development L10Y* (M€)

Shipbuilding; 44%

Environmental Water; 24%

Environmental Emission; 11%

Offshore; 14%

Engine Power; 7%

-

100

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700

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Shipbuilding (44%)

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700

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Environmental Water (24%)

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700

20

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19

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20

Environmental Emission (11%)

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700

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Offshore(14%)

700

600

500

400

300

200

100

CAGR SP** (5Y): 8% (-7%) 71% (38%) 22% (1%) 52% (2%)



www.alfalaval.com

Shipbuilding (44%)

• Separator, gasketed plate HEX,

bolier systems pumping systems

• World trade growth

• Vessel supply orderbook

• Regulation

Environmental Water (24%)

• Ballast water treatment systems

• Regulation

• Industry sustainability agenda

Environmental Emission (11%)

• Exhaust gas cleaning systems, multi-

fuel Boilers

• Regulation

• Industry decarbonization agenda

• Fuel delta

25/11/2020 | © Alfa Laval 9 |

Marine Division – Capital Sales− Market drivers & outlook by end-customer industries

Industry (ies):

Key products:

Key market drivers:

Outlook mid-term:

Sustainability: • Stronger offer around PureSOx, PureNOx and PureBallast

• Improved waste heat recovery offer

• Development of offer regarding multi-fuels, gas, ammonia, methanol and biofuels


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Field Service & value-added services (15%)

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Repair & Reconditioning (18%)

Service OI 2020, split by scope*

Service business− By service scope, M€ fixed rate

Service OI scope development L10Y* (M€)

CAGR SP** (10Y): 2% (4%) 0% (6%) 7% (13%)



0

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Parts & Upgrades (67%)

Parts & upgrades; 67%

Repair & Re-conditioning;

18%

Field Service & value-added services; 15%

www.alfalaval.com25/11/2020 | © Alfa Laval

Service business− Market drivers & outlook by service scope

Industry (ies):

Key products:

Key market drivers:

Outlook mid-term:

Parts & Upgrades (67%)

• All

• Equipment uptime & reliability

• Capacity utilization

• CAPEX (Larger project)

• Fuel regulation (Marine)

Repair & Reconditioning (18%)

• Decanter, gasketed plate HEX,

welded HEX

• Equipment uptime & reliability

• Equipment lifecycle

Field Service (11%)

• Gasketed plate HEX, decanter,

fluid hand, separators, ballast

water treatment systems

• Availability & speed

• Competence & expertise

Value added services (4%)

• Decanter, separator, ballast

water treatment systems,

exhaust gas cleaning system

• Compliance (Marine)

• Asset management

11 |


Profitability− SEK millions (rolling 12 months)

Adj. EBITA & Margin (%)

14,0

14,5

15,0

15,5

16,0

16,5

17,0

17,5

18,0

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

2015 Q

3

2015 Q

4

2016 Q

1

2016 Q

2

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3

2016 Q

4

2017 Q

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2017 Q

2

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3

2017 Q

4

2018 Q

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4

2019 Q

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3

2019 Q

4

2020 Q

1

2020 Q

2

2020 Q

3

Adjusted EBITA Adjusted EBITA-margin

*) Measured over a business cycle

15%EBITA*

Service share (%) of sales

0%

5%

10%

15%

20%

25%

30%

35%

0

5 000

10 000

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2015 Q

3

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4

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1

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2020 Q

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3

Net sales Service sales of total sales


Quality cost development− Significant positive quality cost development through project selectivity

• Increased focus on product quality in

new organizational structure including

R&D, sourcing, etc.

• Claims experience used in new product

development

• Increased selectively on projects and

applications have reduced overall risk

• New technology / customer test centers

enabled “real life” tests pre-launch

• Industrialization of PureSOx

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

1,4%

1,6%

1,8%

Q4-16

Q1-17

Q2-17

Q3-17

Q4-17

Q1-18

Q2-18

Q3-18

Q4-18

Q1-19

Q2-19

Q3-19

Q4-19

Q1-20

Q2-20

Q3-20


Capital utilization− SEK millions (rolling 12 months)

ROCE (%) Net Debt*

0,0

0,5

1,0

1,5

2,0

2,5

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

2015 Q

3

2015 Q

4

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2020 Q

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2020 Q

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2020 Q

3

Net debt (excl. IFRS16) Net debt (excl. IFRS 16) / EBITDA

0%

5%

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15%

20%

25%

2015 Q

3

2015 Q

4

2016 Q

1

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2019 Q

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2019 Q

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2019 Q

3

2019 Q

4

2020 Q

1

2020 Q

2

2020 Q

3

Return on capital employed

*) Excluding lease liabilities from IFRS16 implementation

20%ROCE


Macro and Business portfolio outlook

Return to pre-crisis activity levels

Oil & Gas3%

Environmental Emission3%

Offshore4%

Service

Food & Water DivisionEnergy Division

Marine Division

Share of total order intake 2020*


M€ fixed rate


Guidance

• Capital Expenditure in relation to total revenues,

~ 2.5% in 2021-2022

• Step-up amortization of SEK ~ 730 million in 2021, SEK

~ 630 million in 2022

• FX impact on EBITA estimated to SEK 180 million in 2020,

SEK 250 million in 2021*

• R&D spend in relation to total revenues, 2.5%

• Taxes in the P&L, 26.0% of PBT

• Dividend pay-out ratio, 40 - 50% of adjusted EPS

*) 2020 = total of transaction and translation FX impact. 2021 = transaction FX impact only, based on EUR/USD 1.18 and EUR/SEK 10.5

Updated

Updated

Updated

www.alfalaval.com

· 1 day ago · food/medical, tech industry etc refinery (14%) • welded hex ... • water...

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