JP Morgan Capital Goods Conference London – June 7, 2006 · Mr. Lars Renström President and CEO Alfa Laval Group - An introduction - Priorities - Financial targets and outlook

JP Morgan Capital Goods ConferenceJP Morgan Capital Goods ConferenceLondon London –– June 7, 2006June 7, 2006

Mr. Lars Mr. Lars RenstrRenströömmPresident and CEOPresident and CEOAlfa Laval GroupAlfa Laval Group

-- An introductionAn introduction-- PrioritiesPriorities-- Financial targets and outlookFinancial targets and outlook

Strong market Strong market positions and global positions and global presencepresence

© Alfa Laval Slide 3 www.alfalaval.com

Alfa Laval in a nutshell

• Sales (2005): SEK 16,500 million

• 20 production units• 70 service centres• Sales companies in 55 countries • Sales representation in further 45 countries

• Orders received (2005): SEK 18,500 million• Employees: 10,000


Key TechnologiesKey Technologies

Separation

Fluid handling

Heat transfer


No 1 globally in all three product groupsNo 1 globally in all three product groups

Heat transferHeat transfer48%48%

SeparationSeparation31%31%

Fluid handlingFluid handling14%14%

Heat transfer Separation Fluidhandling

Market share> 30%

Market share25–30%

Market share10%


Comfort & RefrigerationComfort & Refrigeration

MarineMarine

BreweryBreweryPharmacy / BiotechPharmacy / Biotech

Examples of endExamples of end--usersusers

Process IndustryProcess Industry


FoodFood EnvironmentEnvironment Oil & gasOil & gas

Examples of endExamples of end--usersusers

Bio fuelsBio fuels


Orders received frOrders received from energy and energy related industryom energy and energy related industry

Energy and energy related industryEnergy and energy related industry

approx. 40%


•• Offshore platformsOffshore platforms•• Onshore LNG gas receiving terminalOnshore LNG gas receiving terminal•• LNG transport carriersLNG transport carriers

Liquid Natural Gas (LNG)Liquid Natural Gas (LNG)

-- An overviewAn overview-- PrioritiesPriorities-- Financial targets and outlookFinancial targets and outlook



V

Priorities within existing strategyPriorities within existing strategy

Reinforced focus on profitabilityPresence in China, India and Russia Time to marketAftermarketAcquisitions


Focus on profitability

Compensation forCompensation for

increased increased

rawraw--material pricesmaterial prices

Price and profitabilityPrice and profitability

per product and customerper product and customer 10.0

11.0

12.0

13.0

2005

Margin development %

Q106

”Pricing power”


Geographical coverage Geographical coverage –– local presencelocal presence

Centr

Centr . & East 8 %

. & East 8 %

North America 15 %

North America 15 %

Asia 29 %Asia 29 %

L. America 5 %

L. America 5 %

Other 2 %

Other 2 %

Western EuropeWestern Europe30 %30 %

Nordic 10 %

Nordic 10 %

Orders received January – December 2005


Order intake 2005Order intake 2005

+25%+43%


Increased local presenceIncreased local presence

China

India

Russia


Direct labor hours in Asia

42%


New products New products -- the base for profitable growththe base for profitable growth

Research and Development approx. 3 percent of the turnoverResearch and Development approx. 3 percent of the turnover

One of the largest One of the largest gasketedgasketedplate heat exchangers in the plate heat exchangers in the worldworld

Main application:Main application:central coolingcentral cooling

T50 – an efficient giant


Increased focus on the aftermarketIncreased focus on the aftermarket

Order Order intakeintake 2005 2005

• Less sensitive• Increased turnover per customer• Closer relations with our customers


Acquired growthTwo wellTwo well--timed acquisitionstimed acquisitions

PackinoxPackinoxWorld leader in large welded plate heat World leader in large welded plate heat exchangers for the hydrocarbon industryexchangers for the hydrocarbon industry

CustomerCustomer Refineries and Refineries and segments:segments: PetrochemicalsPetrochemicalsAnnual sales:Annual sales: MSEK 500 MSEK 500 Profit margin:Profit margin: Above GroupAbove Group--averageaverage

TranterTranterVery strong brandVery strong brand--name among plate name among plate heat exchangerheat exchanger

CustomerCustomer HVAC, Process HVAC, Process segments:segments: Industry, MarineIndustry, MarineAnnual sales:Annual sales: MSEK 900 MSEK 900 Profit margin:Profit margin: Above GroupAbove Group--averageaverage

Add 9% profitable

growth

-- An overviewAn overview-- PrioritiesPriorities-- Financial targets and outlookFinancial targets and outlook



V

Financial TargetsFinancial Targets

Growth > 5%

EBITA-margin 10 - 13%

ROCE > 20%


-10

0

10

20

30

40

50

60

2 500

5 000

7 500

10 000

12 500

15 000

17 500

20 000% Q on Q % Q on Q vsvs last year excl FXlast year excl FX

Q20

3Q

203

Q30

3Q

303

Q40

3Q

403

Q10

4Q

104

Q20

4Q

204

Q30

4Q

304

Q40

4Q

404

Q10

5Q

105

Orders receivedSEK million R 12SEK million R 12

Q20

5Q

205

= rolling twelve months value

= % development compared with the same quarter the year before

Q30

5Q

305

Q40

5Q

405

Q10

6Q

106


0

100

200

300

400

500

600

700

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

SEK million and in percent of salesSEK million 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 *

Q203Q203 Q303Q303 Q403Q403 Q104Q104 Q204Q204 Q304Q304 Q404Q404 Q105Q105 Q205Q205 Q305Q305 Q405Q405 Q106Q106Q103Q103


Outlook for the near future after Q1Outlook for the near future after Q1

““In most of the markets, geographical In most of the markets, geographical as well as customer segments, thatas well as customer segments, thatAlfa Laval serves a continued very Alfa Laval serves a continued very strong demand is expected.strong demand is expected.””

Documents

JP Morgan Capital Goods Conference London – June 7, 2006 · Mr. Lars Renström President and CEO Alfa Laval Group - An introduction - Priorities - Financial targets and outlook