Alfa Laval AB (publ) Fourth quarter and full year 2018

Comment from Tom Erixon, President and CEO

”The business climate in the fourth quarter remained positive in most end markets, with order intake reaching SEK 11.6 billion, up 13 percent compared to the corresponding quarter in the previous year. Despite some volatility in oil prices, orders from the oil & gas sector climbed back to historically high levels in the quarter, supported by several large offshore orders.

2018 was the year when demand for our marine environmental solutions accelerated, bringing the order intake for Alfa Laval PureSOx and Alfa Laval PureBallast to SEK 5.6 billion. This, combined with the positive development in offshore oil and gas, brought the Marine Division’s annual order growth to 46 percent, despite yard contracting remaining flat compared to 2017.

The operating margin for the year ended at 16.5 percent and net income reached a record level, bringing the EPS to SEK 10.77. The operating margin in the fourth quarter was flat compared to last year despite continued good business conditions. Partly, the development is explained by negative foreign exchange effects. Partly, an uneven load compared to capacity, in certain areas of heat exchanger manufacturing, weighed on the Energy Division, as well as the group.

In all, 2018 was a strong year and we advanced our strategic agenda on many fronts. The investments in product development resulted in a substantial increase in product launches. The operational improvements of the Greenhouse businesses continued throughout the year and in the fourth quarter we signed an agreement to sell the major part of the remaining business. The Footprint restructuring of global manufacturing continued as planned, with both capital expenditure and operational costs affecting 2018.  Finally, at the end of the year, we invested in a start-up company, focusing on developing thermal energy storage solutions for the future.“

Summary: Fourth quarter

Order intake increased by 13 percent* to SEK 11,561 (9,780) million.
Net sales increased by 6 percent* to SEK 11,209 (10,112) million.
Adjusted EBITA**: SEK 1,787 (1,611) million.
Adjusted EBITA margin**: 15.9 (15.9) percent.
Result after financial items: SEK 1,470 (1,358) million.
Net income: SEK 1,297 (1,061) million.
Earnings per share: SEK 3.07 (2.52).
Cash flow from operating activities: SEK 1,490 (1,573) million.
Impact on adjusted EBITA of foreign exchange effects: SEK -90 (33) million.
Impact on result after financial items of comparison distortion items: SEK 14 (-) million.
 

Summary: Full year 2018

Order intake increased by 19 percent* to SEK 45,005 (36,628) million.
Net sales increased by 12 percent* to SEK 40,666 (35,314) million.
Adjusted EBITA**: SEK 6,718 (5,610) million.
Adjusted EBITA margin**: 16.5 (15.9) percent.
Result after financial items: SEK 5,896 (4,371) million.
Net income: SEK 4,537 (2,988) million.
Earnings per share: SEK 10.77 (7.09).
Cash flow from operating activities: SEK 4,883 (4,463) million.
Impact on adjusted EBITA of foreign exchange effects: SEK -85 (223) million.
Impact on result after financial items of comparison distortion items: SEK 151 (-) million.

* Excluding currency effects. ** Alternative performance measures.

Outlook for the first quarter
“We expect demand in the first quarter to be somewhat higher than in the fourth quarter.”
Earlier published outlook (October 25, 2018): “The demand in the fourth quarter is expected to be somewhat higher than in the third quarter.”

The Board of Directors will propose a dividend of SEK 5.00 (4.25) per share to the Annual General Meeting.

The fourth quarter and full year 2018 report has been reviewed by the company’s auditors, see page 25 for the review report.

This information is information that Alfa Laval AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at CET 7.30 on February 5, 2019.

For more information, please contact:

Peter Torstensson
Senior Vice President, Communications
Phone: +46 46 36 72 31
Mobile: +46 709 33 72 31
peter.torstensson@alfalaval.com

Gabriella Grotte,
Investor Relations Manager
Phone: +46 46 36 74 82,
Mobile: +46 709 78 74 82,
E-mail: gabriella.grotte@alfalaval.com 

Alfa Laval AB (publ)
PO Box 73
SE-221 00 Lund
Sweden

Corporate registration number: 556587-8054