· continues on a low level, except for China. • Service was negatively impacted by lower activity levels in the oil and gas business. PROFITABILITY (EBIT) • Improved operating

www.alfalaval.com

www.alfalaval.com22/10/2020 | © Alfa Laval 2 |

Report for Q3 2020Tom Erixon

President and CEO

Alfa Laval Group

Change

picture

UPDATE PicturePicture

TBU

www.alfalaval.com

Key figures

22/10/2020 | © Alfa Laval 3 |

Q3 2020 Q3 2019 %-change %-▲,org*

Order intake 8,935 10,728 -17 -9

Net sales 9,728 12,056 -19 -13

Adjusted EBITA** 1,710 2,141 -20

Adjusted EBITA-margin (%) 17.6 17.8

YTD 2020 YTD 2019 %-change %-▲,org*

Order intake 30,561 32,966 -7 -4

Net sales 30,773 33,553 -8 -5

Adjusted EBITA*** 5,262 5,739 -8

Adjusted EBITA-margin (%) 17.1 17.1

*) Organic growth i.e. excluding currency effects and structural changes.

**) Positive currency effect SEK 10 million (85) ***) Positive currency effect SEK 160 million (275).

www.alfalaval.com

− Highlights and comments

Food & Water division

22/10/2020 | © Alfa Laval 4 |

MARKETS & ORDER INTAKE

• Overall demand increased somewhat compared to the

same quarter last year.

• All end markets developed better than expected,

however project business still slow.

• Service was stable in the quarter.

PROFITABILITY (EBIT)

• Strong operating profit due to good cost control,

factory productivity and improved cost of quality.

Q3 20 Q3 19 YoY %-

change

Q2 20

ORDERS 3,083 3,306 -6.7 3,396

SALES 3,291 3,763 -12.5 3,241

EBIT 638 607 533

EBIT (%) 19.4 16.1 16.4

0

200

400

600

800

1 000

1 500

2 000

2 500

3 000

3 500

4 000

Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220 Q320

Sales EBIT

www.alfalaval.com


Energy division

22/10/2020 | © Alfa Laval 5 |


• Energy transition drives demand in HVAC and

refrigeration.

• Overall investment activity in the hydrocarbon chain

continues on a low level, except for China.

• Service was negatively impacted by lower activity

levels in the oil and gas business.


• Improved operating margin as a result from good cost

control and positive mix.

Q3 20 Q3 19 YoY %-

change

Q2 20

ORDERS 2,716 3,355 -19.0 3,279

SALES 2,922 3,515 -16.9 2,979

EBIT 454 519 476

EBIT (%) 15.5 14.8 16.0

0

200

400

600

800

1 000

1 500

2 000

2 500

3 000

3 500

4 000


Sales EBIT

www.alfalaval.com


Marine division

22/10/2020 | © Alfa Laval 6 |


• Order intake continued on a low level, although 6

percent up sequentially.

• Expected recovery in ship contracting expected to

be delayed.

• Service onboard negatively affected, however

spare parts stable in the quarter.


• Operating margin negatively affected by lower

volume and mix, mainly driven by environmental

products.

Q3 20 Q3 19 YoY %-

change

Q2 20

ORDERS 3,136 4,006 -21.7 3,074

SALES 3,515 4,715 -25.5 4,235

EBIT 570 870 705

EBIT (%) 16.2 18.5 16.6

0

200

400

600

800

1 000

1 200

1 400

2 000

2 500

3 000

3 500

4 000

4 500

5 000

5 500


Sales EBIT

www.alfalaval.com

− Order intake Q3, share and development

Service, by division

22/10/2020 | © Alfa Laval 7 |

ENERGY FOOD & WATER MARINE

Q320: 26%

Absolute development

YoY


YoY


YoY

= -

Q320: 32% Q320: 33%

-

= Service share of total order intake

www.alfalaval.com

Orders received

22/10/2020 | © Alfa Laval 8 |

0

7 000

14 000

21 000

28 000

35 000

42 000

49 000

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000


SEK million SEK million R 12

-17

%

-6%

+3

5%

+1

2%

-13

%

= Order intake per quarter

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

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

www.alfalaval.com

− Development Q3 vs Q3 / YTD vs YTD, at fixed rates

Orders received by region

22/10/2020 | © Alfa Laval 9 |

17%;

North America

-6% / -14%

-11% / -11%

+30% / +16%

-7% / +4%

-28% / -19%

+10% / +5%

2%;

Africa & Oceania9%; Nordic

20%;

Western Europe

7%;

Central- & Eastern

Europe

41%; Asia

4%;

Latin America

-12% / +4%

vs Q3-19 / vs YTD 2019Share %: Jan – Sep 2020

www.alfalaval.com

− SEK million at prevailing rates

Top ten markets*

22/10/2020 | © Alfa Laval 10 |

0 1000 2000 3000 4000 5000 6000 7000 8000

France

Benelux

Japan

South East Asia

Mid Europe

Adriatic

Korea, South

Nordic

China

United States

*The order intake development of the 2019 top ten markets.= FY 2019

= LTM 2020

| www.alfalaval.com| © Alfa Laval

Report for Q3 2020 Jan Allde

CFO

Alfa Laval Group

www.alfalaval.com

− MSEK

Sales

22/10/2020 | © Alfa Laval 12 |

0

7 000

14 000

21 000

28 000

35 000

42 000

49 000

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

Q3 16 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

= Sales per quarter = Rolling 12-months value

= % development year on year+XX%

-19

%

+1

9%

+2

4%

-5%

-11

%

9,728

SEK million R 12SEK million

www.alfalaval.com

− In percent of sales

Adjusted gross margin

22/10/2020 | © Alfa Laval 13 |

30

35

40

45

Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220 Q320

36.135.636.637.0

Q3 2019 35.6

Mix/price - -

Load/volume =

PPV/metals +

FX +

Structure =

Q3 2020 36.1

www.alfalaval.com

− MSEK

S&A Expense development

22/10/2020 | © Alfa Laval 14 |

Q3 2020 Q3 2019 YTD 2020 YTD 2019

Sales costs 951 1,184 -19.7% 3,110 3,560 -12.6%

Admin costs 417 492 -15.2% 1,376 1,557 -11.6%

Total S&A costs 1,368 1,676 -18.4% 4,486 5,117 -12.3%

Excl. FX impacts and

acq./divestments

-12.9% -9.9%

www.alfalaval.com

− SEK millions and in percent of sales

Adjusted EBITA/margin*

22/10/2020 | © Alfa Laval 15 |

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

10,0

11,0

12,0

13,0

14,0

15,0

16,0

17,0

18,0

19,0

20,0

0

250

500

750

1 000

1 250

1 500

1 750

2 000

2 250

2 500

Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220 Q320

SEK million Percent of sales

17.617.8

17.1

16.0

www.alfalaval.com

− MSEK

Key figures

22/10/2020 | © Alfa Laval 16 |

Q3 2020 Q3 2019

Sales 9,728 12,056

Gross profit 3,298 4,038

Sales & Admin -1,368 -1,676

R&D -223 -267

Net other cost/income -279 -214

Operating income 1,438 1,882

Financial net -56 25

Profit before tax 1,382 1,907

Taxes -344 -460

EPS 2.46 3.43

www.alfalaval.com

− MSEK

Cash-flow statement

22/10/2020 | © Alfa Laval 17 |

Q3 2020 Q3 2019 YTD 2020 YTD 2019

EBITDA 1,903 2,364 5,999 6,613

Other non-cash items 71 127 74 -46

Working Capital -279 -811 278 -2,317

Taxes paid -439 -433 -1,292 -1,419

Cash flow from operating activities 1,256 1,247 5,059 2,831

Capital expenditures -377 -228 -776 -834

Disposals 87 -4 218 372

Acquisitions -10 - -18 -61

Cash flow from investing activities -300 -232 -576 -523

Financial net paid -94 -25 -467 183

Cash flow 862 990 4,016 2,491

Free cash flow* 785 994 3,816 2,180

*) Incl. cash flow from operating activities, capital expenditure and financial net paid.

www.alfalaval.com

0,5x

2,5x

1,6x

1,8x

1,3x

0,9x

0.6x1

0,2x1

0,0x

0,5x

1,0x

1,5x

2,0x

2,5x

3,0x

2013 2014 2015 2016 2017 2018 2019 Q3 2020

Cash flow and capital structure− Proven ability to deleverage post a sizeable acquisition

| © Alfa Laval22/10/2020 18 |

• Cash-flow from Operating activities of SEK 5.1

billion during Jan-Sept 2020

• Net debt position reduced from SEK 8.2 billion at

end of 2019 to SEK 4.3 billion at end of September

2020 (net debt excluding lease liabilities at SEK 1.9

billion).

• Leverage at level prior to acquisition of Frank Mohn

(Framo) in 2014

• Company target: In the long term, Net Debt /

EBITDA should not exceed 2.0x

Net Debt / EBITDA (excluding IFRS 16)

Source: Company filings

1) Excluding the effect of IFRS 16

www.alfalaval.com

− Estimated impact on adjusted EBITA from FX fluctuations, MSEK

Foreign exchange

22/10/2020 | © Alfa Laval 19 |

Q3 2020 FY 2020 FY 2021*

Transaction effect 125 405 250

Translation effect -115 -225 -

Total 10 180 250

Projected FX-transaction effect for 2020 communicated with Q2 report: SEK 440 million

Note: Excludes FX effects caused by revaluation of balance items in foreign currency.

*) Based on EUR/USD 1.179 and EUR/SEK 10.495

www.alfalaval.com

− SEK billion

Order backlog as per September 30

22/10/2020 | © Alfa Laval 20 |

0

5

10

15

20

25


20.7

7.7

13

.0

23.3

8.1

15

.2

book to bill0.86

= For delivery next year or later

= For delivery during the current year

0.89 1.12 0.93 0.92

www.alfalaval.com

− FY 2020, SEK billion

Sales

22/10/2020 | © Alfa Laval 21 |

YTD Sales 30.8

Backlog, for delivery current year +7.7

Subtotal 38.5

Price

“In-for-out”*

FX translation

Acquisitions

Full year 2020

*IFO in Q4 2019 excluding acquisitions/divestments wasSEK 4.8 bln.

For you to consider:

www.alfalaval.comwww.alfalaval.com22/10/2020 | © Alfa Laval 22 |

“We expect demand in the fourth quarter to be somewhat higher than in the third quarter.”

Outlook for the fourth quarter:

www.alfalaval.com

www.alfalaval.com

− Distribution of orders Q3 2020 (MSEK)

Activity split O&G, total

22/10/2020 | © Alfa Laval 24 |

Marine

Alfa Laval

Share of totalAlfa Laval

Energy

Drilling Processing &Transportation

PetrochemicalsRefinery

Grand total SEQ/YOY

873 (-/-)

588 (+/+)

=1,461*(+/-)

= 16.4%3.0% 3.3%3.2%6.9%

16

252

= 268

280

336

= 616

285

0

= 285

292

0

= 292

*) incl. aftermarket

(SEQ/YoY)

www.alfalaval.com

− Distribution of orders LTM, end of September

Marine Division’s industry split

22/10/2020 | © Alfa Laval 25 |

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

29%

4%26%

10%

31%

www.alfalaval.com

− Distribution of sales LTM end of September

Marine Division’s industry split

22/10/2020 | © Alfa Laval 26 |

Share

Driver

30%

Marine Offshore oil and gas

Engine power Service

3%

28%

World trade &

fleet capacity

Oil & gas demand

and prices

Electrical power

needs

World trade

Environment & Energy, Marine

32%

Legislation &

fuel cost

7%

www.alfalaval.com

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

Organic growth pace

22/10/2020 | © Alfa Laval 27 |

(30)

(20)

(10)

0

10

20

30

Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220 Q320

= Order intake growth

www.alfalaval.com

− Orders received excluding the “Marine Environmental”* business

Orders received

22/10/2020 | © Alfa Laval 28 |

0

7 000

14 000

21 000

28 000

35 000

42 000

49 000

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000


SEK million SEK million R 12

-17

%

+8

%

+1

3%

+8

%

-12

%

= Order intake per quarter

= Order intake per quarter “ Marine Environmental”

”

= Rolling twelve months value, excluding “Marine Environmental”

= % development by quarter, year on year, excluding “Marine Environmental”+XX%

*) Alfa Laval PureSOx and Alfa Laval PureBallast.

www.alfalaval.com

Cautionary statement

22/10/2020 | © Alfa Laval 29 |

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.

www.alfalaval.com

Documents

· continues on a low level, except for China. • Service was negatively impacted by lower activity levels in the oil and gas business. PROFITABILITY (EBIT) • Improved operating