report for q2 2019 - alfa laval · q2 19 q2 18 yoy %-change q1 19 orders 3,144 4,685 -32.9 4,963...

| www.alfalaval.com| © Alfa Laval

Report for Q2 2019 Tom Erixon

President and CEO

Alfa Laval Group

17/07/2019 2

| www.alfalaval.com| © Alfa Laval17/07/2019 3

Key figures

Q2 2019 Q2 2018 %-change %-▲,org

Order intake 10,025 12,062 -17 -16

Net sales 11,339 10,475 8 7

Adjusted EBITA* 1,870 1,698 10

Adjusted EBITA-margin (%) 16.5 16.2

*) Positive currency effect SEK 95 million. **) Positive currency effect SEK 190 million.

1H 2019 1H 2018 %-change %-▲,org

Order intake 22,238 22,087 1 -1

Net sales 21,497 19,326 11 8

Adjusted EBITA** 3,598 3,195 13

Adjusted EBITA-margin (%) 16.7 16.5


Orders received

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

50 000

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219

SEK million SEK million R 12

-17%

+25%

+19%

-11%

+2%

= Order intake per quarter

= Order intake per quarter “large” = Rolling twelve months value

= % development by quarter, year on year+XX%


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

0,0

3,0

6,0

9,0

12,0

15,0

18,0

21,0

24,0

0

250

500

750

1 000

1 250

1 500

1 750

2 000

Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219

17/07/2019 5

Adjusted EBITA/margin*− SEK millions and in percent of sales

SEK million Percent of sales

16.516.215.815.6


Energy division− Highlights and comments

MARKETS & ORDER INTAKE

• Orders from the hydro carbon chain were overall

higher, driven by increased demand for equipment for

midstream oil & gas. Drilling oscillated at a low level

and refinery and petrochemicals declined overall, but

the base business showed continued growth.

• HVAC down from last year’s record level. Base

business however, remained on a high level, driven

by investments in data centers and energy

efficiency solutions.

PROFITABILITY (EBIT)

• Improved mainly due to higher volumes and a

better mix within capital sales.

Q2 19 Q2 18 YoY %-

change

Q1 19

ORDERS 3,566 3,401 +4.9 3,448

SALES 3,531 3,215 +9.8 2,807

EBIT 558 490 399

EBIT (%) 15.8 15.2 14.2

0

200

400

600

800

1 500

2 000

2 500

3 000

3 500

4 000

Q215

Q315

Q415

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Q318

Q418

Q119

Q219

Sales EBIT


Food & Water division− Highlights and comments


• Dairy and waste & water were both flat y-o-y.

Brewery showed good growth and edible oil, which

declined due to fewer larger orders, saw continued

growth in the underlying business.

• The project-driven business in Pharma & biotech

declined. Market sentiment is however still positive.

• Aftermarket grew, supported by good development

for service scopes in most end markets.


• An improved mix within capital sales and between

capital sales and service, could not compensate for a

decline in volume and higher costs, which weighed

on profitability in the quarter.

Q2 19 Q2 18 YoY %-

change

Q1 19

ORDERS 3,520 3,589 -1.9 3,480

SALES 3,335 3,390 -1.6 3,153

EBIT 473 507 524

EBIT (%) 14.2 15.0 16.6

0

200

400

600

800

1 500

2 000

2 500

3 000

3 500

4 000

Q215

Q315

Q415

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Q318

Q418

Q119

Q219

Sales EBIT


Marine division− Highlights and comments


• Pumping systems dropped due to fewer product and

chemical tankers being contracted. Offshore declined

amid fewer large orders, however the market

sentiment remains positive.

• Scrubbers were down as uncertainties on fuel price

delta led to lower market activity. The market also

prioritize fast delivery ahead of 2020.

• The rest of the business grew, including boilers and

PureBallast.

• Service showed a continued positive development.


• Strong volume growth contributed to an improved

profitability in the quarter, even as costs were up and

the fact that the sales growth also led to a negative

mix between capital sales and service.

Q2 19 Q2 18 YoY %-

change

Q1 19

ORDERS 3,144 4,685 -32.9 4,963

SALES 4,329 3,486 +24.2 3,932

EBIT 809 571 761

EBIT (%) 18.7 16.4 19.4

0

200

400

600

800

1 000

1 500

2 000

2 500

3 000

3 500

4 000

Q215

Q315

Q415

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Q318

Q418

Q119

Q219

Sales EBIT


Service, by division − Order intake Q2, share and development

ENERGY FOOD & WATER MARINE

Q219: 26%

Absolute

development

YoY

Absolute

development

YoY

Absolute

development

YoY

+ +

Q219: 31% Q219: 38%

+

= Service share of total order intake


Divisional sales and profitability

ENERGY FOOD & WATER MARINE

Q2 2019 2018 2019 2018 2019 2018

Sales 3,531 3,215 3,335 3,390 4,329 3,486

Op. profit 558 490 473 507 809 571

Op. margin, % 15.8 15.2 14.2 15.0 18.7 16.4


Orders received by region− April – June 2019 & development Q2 vs Q2 and 1H vs 1H, at constant rates

19%;

North America

-38% / -2%

-12% / +2%

+27% / +19%

-33% / -11%

-10% +8%

+29% / -13%

2%;

Africa & Oceania7%; Nordic

23%;

Western Europe

8%;

Central- & Eastern

Europe36%; Asia

5%;

Latin America

-10% / -25%

April - June vs Q2 2018/vs 1H 2018


Report for Q2 2019 Jan Allde

CFO

Alfa Laval Group


Sales− MSEK

0

10 000

20 000

30 000

40 000

50 000

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

= Sales per quarter = Rolling 12-months value

= % development year on year+XX%

+8%

+18%

-0.5

%

-12%

+21%

11,339

SEK million R 12SEK million


Gross profit margin− In percent of sales

30

35

40

45

Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219

35.9

35.436.436.2

Q2 2018 35.4

Mix/price =

Load/volume -

PPV/metals +

FX +

Structure =

Q2 2019 35.9


Key figures− April – June, SEK million

Q2 2019 Q2 2018

Sales 11,339 10,475

Gross profit 3,812 3,441

Sales & Admin -1,772 -1,647

R&D -272 -254

Net other cost/income 39 -86

Operating income 1,808 1,463

Financial net 24 36

Profit before tax 1,832 1,499

Taxes -420 -382

EPS 3.36 2.65


Cash-flow statement− SEK Million

Q2

2019

Q2

2018

1H

2019

1H

2018

Cash flow from- operating activities- investing activities

609203

1,377-240

1,584-291

2,043-350

Financial net paid 41 49 208 -8

Total 853 1,186 1,501 1,685

Pro Forma Free cash-flow* 479 1,109 1,188 1,608

*Incl. operating activities, capital expenditure and financial net paid.


Foreign exchange− Estimated impact on adjusted EBITA from FX fluctuations, in SEK Million

Q2 2019 1H 2019 FY 2019 FY 2020*

Transaction effect 45 65 225 220

Revaluation 5 25 - -

Translation effect 45 100 170 -

Total 95 190 395 220

Projected FX-effect for 2019 communicated with Q1 report: SEK 385 million

*) Based on EUR/USD 1.167 and EUR/SEK 10.555


Order backlog as per June 30− SEK billion

0

5

10

15

20

25

Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219

1.03

24.6

13.5

11.0

21.5

9.2

12.3

book to bill1.201.12 0.881.15

= For delivery this year

= For delivery after 2019


Sales− FY 2019, SEK billion

1H sales 21.5

Backlog, for delivery current year +13.5

Subtotal 35.0

Price

“In-for-out”*

FX translation

Acquisitions

Full year 2019

*IFO Q3-Q4 2018 was SEK 8.7 bln.

For you to consider:


Activity split O&G, total− Distribution of orders Q2 2019 (MSEK)

Marine

Alfa Laval

Share of totalAlfa Laval

Energy

Drilling Processing &Transportation

PetrochemicalsRefinery

Grand total SEQ/YOY

1,311 (+/+)

269 (-/-)

=1,580*(-/-)

= 15.8%1.9% 4.5%2.4%7.0%

75

112

= 187

540

157

= 697

238

0

= 238

458

0

= 458

*) incl. aftermarket

(SEQ/YoY)


Marine Division’s industry split− Distribution of orders LTM, end of June

Share

Driver

Marine Offshore oil and gas

Engine power Service

World trade &

fleet capacity

Oil & gas demand

and prices

Electrical

power needs

World trade

Environment & Energy, Marine

Legislation &

fuel cost

25%2%

23%

42%

8%


Marine Division’s industry split− Distribution of sales LTM end of June

Share

Driver

34%

Marine Offshore oil and gas

Engine power Service

3%

26%

World trade &

fleet capacity

Oil & gas demand

and prices

Electrical

power needs

World trade

Environment & Energy, Marine

27%

Legislation &

fuel cost

10%


Top ten markets*− SEK million at prevailing rates

0 1000 2000 3000 4000 5000 6000 7000 8000

India

Benelux

Mid Europe

South East Asia

Adriatic

Japan

South Korea

Nordic

China

United States

*The order intake development of the 2018 top ten markets.

= WY 2018

= Q2 LTM 2019


Organic growth pace− Compared with same quarter last year (%), excluding currency effects

-30

-20

-10

0

10

20

30

Q314Q414Q115Q215Q315Q415Q116Q216Q316Q416Q117Q217Q317Q417Q118Q218Q318Q418Q119Q219

= order intake growth


Cautionary statement

This presentation contains forward-looking statements that are based on the

current expectations of the management of Alfa Laval Group.

Although management believes that the expectations reflected in such forward-

looking statements are based on reasonable assumptions, no assurance can be

given that such expectations will prove to have been correct. Accordingly, results

could differ materially from those implied in the forward-looking statements as a

result of, among other factors, changes in economic, market and competitive

conditions, changes in the regulatory environment, other government actions

and fluctuations in exchange rates. Alfa Laval undertakes no obligation to

publicly update or revise these forward-looking statements, other than as

required by law or other regulations.

report for q2 2019 - alfa laval · q2 19 q2 18 yoy %-change q1 19 orders 3,144 4,685 -32.9 4,963...

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