www.alfalaval.com © Alfa Laval Slide 0
www.alfalaval.com© Alfa Laval Slide 0
J.P. Morgan J.P. Morgan CazenoveCazenoveCapital Capital GoodsGoods CEO ConferenceCEO Conference
PennyhillPennyhill Park Hotel, June 10th, 2010Park Hotel, June 10th, 2010
Lars RenströmLars Renström
President and CEOPresident and CEO
Alfa Laval in Alfa Laval in briefbrief
• Sales: SEK 26.0 B
• Order intake: SEK 21.5 B
• Employees: 11,400
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• Sales companies in 55 countries, sales representation in another 45
• 28 major production units
• More than 70 service centres
A global reachA global reach
s
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• Asia, Central & Eastern Europe and Latin America made up 45 percent of order intake in 2009
With a no 1 market positionWith a no 1 market position-- for all three key technologiesfor all three key technologies
Heat Transfer Separation Fluid Handling
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Market share30%
Market share25-30%
Market share10-12%
Meeting needsMeeting needs in most industriesin most industries
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HeatingHeating CoolingCooling SeparationSeparation Fluid handlingFluid handling
Solutions to make a differenceSolutions to make a difference
Process Technology division Process Technology division
Offers unique solutions that help customers Offers unique solutions that help customers
optimize their processes. Our scope includes optimize their processes. Our scope includes
� Optimize production and use of energy
Reduce emissions and
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optimize their processes. Our scope includes optimize their processes. Our scope includes
everything from components to systems.everything from components to systems.� Reduce emissions and
water pollutions
� Safe food and pharmaceuticals
Our core areasOur core areas
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Energy FoodEnvironment
The way forwardThe way forward
• Focus on R&D
• Efforts to explore profitable growth through structural changes
• Focus on the aftermarket to best serve our installed base
• Acquisitions
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• Acquisitions
Focus on R&D Focus on R&D -- FindingFinding new new valuesvalues for for customerscustomers whichwhich drive drive demanddemand
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MSEK
+46%+46%
Focus on R&DFocus on R&D-- investmentsinvestments
SEK Mln800800
600600
• R&D is the way to profitable growth
• Continued focus on R&D to develop new products as well as improve
existing
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20052005 20062006 20072007 20082008 20092009
400400
200200
existing
• 35 - 40 new products every year
• More than 300 patents
Structural changes- an opportunity
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FoodEnergy Environment
Energy demand seen rising -especially in non-OECD countries
Quadrillion Btu
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Source IEA May 2009Non-OECD
OECD
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
Energy efficiencyEnergy efficiency
�cuts fuel costs
� increases competitiveness
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�reduces greenhouse gas emissions, pollution
�saves natural resources, which are limited
What is waste heat?What is waste heat?
1/3 1/3 wastewaste
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Sulphur burningSulphur burningacid plantacid plant
Around Around 65 MW 65 MW heat is heat is
evolvedevolved
2/32/3 steamsteam
Waste heat Waste heat –– an untapped potential!an untapped potential!
RenewableRenewable Energy Energy ConsumptionConsumption by by SourceSource
MoreMore Waste HeatWaste Heat
availableavailable from USfrom US
Industry Industry thanthan allall
renewablerenewable energyenergy
sourcessources combinedcombined!!
Qu
ad
rillio
nQ
uad
rillio
nB
tuB
tu
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SourceSource: US DOE / EIA : US DOE / EIA AnnualAnnual Energy Energy SurveySurvey 2006.2006.
sourcessources combinedcombined!!
Potential in the USPotential in the US
AvailableAvailableWaste heat (1)Waste heat (1)
HydroelectricHydroelectricPower (2)Power (2)
WoodWood BioFuelsBioFuels(3)(3)
Waste (4)Waste (4) GeothermalGeothermal WindWind Solar PVSolar PV
**Qu
ad
rillio
nQ
uad
rillio
n
By 2020:
� 900 million more people on the planet
� 700 million more people in urban areas
Increased Waste Water Treatment
EnvironmentEnvironment
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in urban areas
� 2,1 billion m3/yr fresh water gap
� Tighter legislation
TreatmentInvestments
Environment Environment -- driverdriver
Legislation
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FoodFood
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FoodFood
Urbanization and Urbanization and
Population Population growthgrowth
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Urbanization and Urbanization and
Living standardLiving standard
Food Food –– ourour offeringoffering
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Focus on the Focus on the aftermarketaftermarket
AftermarketAftermarketsalessales 28%28%
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Capital Capital salessales72 72 %%
1 800
2 000
2 200
2 400No of employeesNo of employees
Investments in the Investments in the aftermarketaftermarket
+35%+35%
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1 200
1 400
1 600
1 800
20052005 20062006 20072007 20082008 20092009 2010E2010E
Complementary acquisitionsComplementary acquisitions
Alfa Laval
� will continue to acquire companies that complement the existing business in terms of geographic presence, sales’
Products
Channels
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of geographic presence, sales’ channels or products
Presence
ContinuedContinued acquisitionsacquisitions
� Acquired 6 companies in 2009, adding
5% growth
� Target add 3-4 % sales growth/year
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1Q highlights1Q highlights
� Orders received dropped 13.1% to SEK 5,089 million.
� Net sales down 22.3% at SEK 5,381 million.
� Adjusted EBITA down 19% to SEK 1,012 million.
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� Adjusted EBITA margin increased to18.8%
- Positive currency effect SEK 95 million.
16 000
20 000
24 000
28 000
32 000
4 000
5 000
6 000
7 000
8 000
SEK millionSEK million
Orders receivedOrders received
SEK million R 12SEK million R 12
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0
4 000
8 000
12 000
16 000
0
1 000
2 000
3 000
4 000
= rolling twelve months value= rolling twelve months value
= order intake per quarter= order intake per quarterQ
10
9Q
10
9
Q2
06
Q2
06
Q3
06
Q3
06
Q4
06
Q4
06
Q1
07
Q1
07
Q2
07
Q2
07
Q3
07
Q3
07
Q4
07
Q4
07
Q1
08
Q1
08
Q2
08
Q2
08
+35%
+35%
+17%
+17%
+40%
+40%
+36%
+36%
+13%
+13%
+30%
+30%
0%
0%
+9%
+9%
+8%
+8%
= % development at constant rates by = % development at constant rates by quarterquarter, year on year, year on year
+xx%+xx%
--3%
3%
Q3
08
Q3
08
Q4
08
Q4
08
--15%
15%
--32%
32%
Q2
09
Q2
09
--37%
37%
Q1
06
Q1
06
+28%
+28%
Q3
09
Q3
09
--30%
30%
Q4
09
Q4
09
--12%
12%
--13%
13%
Q11
0Q
11
0
15,0
18,0
21,0
24,0
1 125
1 350
1 575
1 800
SEK millions and in percent of salesSEK millions and in percent of sales
Adjusted EBITA / margin *Adjusted EBITA / margin *
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0,0
3,0
6,0
9,0
12,0
0
225
450
675
900
* Adjusted EBITA * Adjusted EBITA –– ”Earnings before interests, taxes, amortization of goodwill and step up values and comparison distortion ”Earnings before interests, taxes, amortization of goodwill and step up values and comparison distortion items.”items.”
Q108Q108 Q109Q109 Q409Q409 Q110Q110Q107Q107 Q207Q207 Q307Q307 Q407Q407 Q208Q208 Q308Q308 Q408Q408 Q209Q209 Q309Q309
Orders received by customer segmentOrders received by customer segment
Industrial EquipmentIndustrial Equipment
Marine & DieselMarine & Diesel
OEMOEM
LifeLife ScienceScience
Process IndustryProcess Industry
Energy & EnvironmentEnergy & Environment
Sequential development 1Q versus 4Q, Sequential development 1Q versus 4Q, at constant rates at constant rates
-
-
-
+
+
+
=
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SanitarySanitary
FoodFood
Parts & Parts & Service Service
-
-+
+
HighlightsHighlights
�� Champ Champ –– U.S. supplier of cooling equipment. U.S. supplier of cooling equipment.
�� U.S. service provider for plate heat exchangers. U.S. service provider for plate heat exchangers.
�� AstepoAstepo –– Italian provider of aseptic products.Italian provider of aseptic products.
Acquisitions in 2010Acquisitions in 2010
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�� Si fang Si fang –– Chinese supplier of sanitary productsChinese supplier of sanitary products
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