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2016-10-25

Alfa Laval: Alfa Laval AB (publ) Interim report July 1 - September 30, 2016

"Order intake for the third quarter was sequentially somewhat weaker.
The development originated from a low activity level within the
marine sector and generally longer decision processes for larger
investment projects among our customers. We estimate that the demand
during the fourth quarter will be unchanged to somewhat higher.

The adjusted EBITA margin in the quarter was sequentially unchanged at
15.6 percent. In order to secure the profitability going forward and
to strengthen our competitiveness we are today launching a programme.
The programme comprises cost savings in sales and admin - generated
by the new structure, a reduction of the number of manufacturing
entities and that certain entities that have not developed as
expected are lifted out of Alfa Laval's new operating structure. The
non-recurring cost is estimated to reach SEK 1.5 billion in total, of
which SEK 1.1 billion is charged to the third quarter. Of these some
SEK 600 million relate to write-offs for predominately step-up and
goodwill and is a non-cash item. The program is expected to generate
savings of SEK 300 million in sales and admin. Our on-going work with
cost savings in manufacturing, within procurement as well as
staffing, aimed at supporting the gross profit during a period of
lower capacity utilisation continues in parallel. The work with
implementing the new organisation is proceeding according to plan.
More information on the organisation as well as the strategic
direction will be given in connection with the Capital Markets Day on
November 22.

During the quarter the ballast water convention was ratified, which
means that parts of the global merchant fleet will install cleaning
systems during the next six years. The activity on the market is
high, and the effect on order intake is expected in 2017."

Tom Erixon, President and CEO

Summary: third quarter

Order intake decreased by 14 percent* to SEK 7,540 (8,686) million.
Net sales decreased by 12 percent* to SEK 8,581 (9,693) million.
Adjusted EBITA**: SEK 1,339 (1,675) million.
Adjusted EBITA margin**: 15.6 (17.3) percent.
Result after financial items: SEK 93 (1,336) million.
Net income: SEK -106 (988) million.
Earnings per share: SEK -0,27 (2.34).
Cash flow from operating activities: SEK 911 (1,369) million.
Impact on adjusted EBITA of foreign exchange effects: SEK 107 (40)
million.

Impact on result after financial items of comparison distortion items:
SEK -1,100 (-) million.

Summary: first nine months

Order intake decreased by 14 percent* to SEK 23,351 (27,676) million.
Net sales decreased by 9 percent* to SEK 25,730 (28,941) million.
Adjusted EBITA**: SEK 4,065 (5,060) million.
Adjusted EBITA margin**: 15.8 (17.5) percent.
Result after financial items: SEK 2,448 (4,054) million.
Net income: SEK 1,696 (2,926) million.
Earnings per share: SEK 4.00 (6.93).
Cash flow from operating activities: SEK 3,054 (3,975) million.
Impact on adjusted EBITA of foreign exchange effects: SEK 337 (370)
million.

Impact on result after financial items of comparison distortion items:
SEK -1,100 (-) million.

* Excluding currency effects.
** Alternative performance measures, defined on page 22.

Outlook for the fourth quarter:
"We expect that demand during the fourth quarter 2016 will be in line
with or somewhat higher than in the third quarter."

Earlier published outlook (July 18, 2016): "We expect that demand
during the third quarter 2016 will be in line with or somewhat lower
than in the second quarter."

The interim report has been reviewed by the company's auditors, see
page 23 for the review report.

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
gabriella.grotte@alfalaval.com
Alfa Laval AB (publ)
PO Box 73
SE-221 00 Lund
Sweden
Corporate registration number: 556587-8054

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 October 25, 2016.

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http://news.cision.com/alfa-laval/r/alfa-laval-ab--publ--interim-report-...
http://mb.cision.com/Main/905/2107623/579473.pdf

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