Alfa Laval’s (STO:ALFA) Capital Markets Day, held today in Copenhagen,
Denmark, started with a presentation by Lars Renström, President and
CEO. Among other things, he talked about how the focus on the
aftermarket business has paid off, interesting areas for M&A going
forward and also the development for marine environmental products.
Service has been a focus area since 2013. The target has been to grow
Service in absolute terms and at the same time increase the share of
service hours. Looking at the development from 2013 up to now and
comparing it to the period 2008-2012, total service growth has gone from
a CAGR of 2.6 percent to 7.9 percent. At the same time growth in service
operations has gone from 5.3 percent to 9.5 percent. “It is clear that
our efforts to increase service operations to both brick wall our
installed base and capture growth, has paid off,” said Lars Renström.
“We also see continued good growth opportunities going forward, in both
the short and medium term“.
He also talked about the development of the marine
environmentally-related offering, including environmental products,
energy-saving products and products dealing with alternative fuels such
as natural gas. Total order intake has nearly tripled over the past five
years. At the same time the distribution has changed, with products for
alternative fuels such as gas showing substantial growth. This is an
area that “represents good growth opportunities.”
Finally, Lars Renström elaborated on the M&A focus going forward. Given
that it is desirable to balance the three divisions, acquisitions are
especially interesting to complement the Equipment Division. From a
geographical perspective, “we would be very pleased to find something in
the US, since we believe the US holds good prospects for the future and
we can still increase our market penetration,” Lars Renström said.
Thomas Thuresson, Executive Vice President and CFO, gave an update on
Alfa Laval’s R&D spend. While the development in absolute terms has
steadily increased, as a percentage of sales the trend has actually been
slightly downward even if the guidance has remained at 2.5 percent or
more. The development, he explained, is due to two main reasons:
“firstly a lower R&D spend in most of our acquisitions and secondly, it
reflects the activities initiated last fall, to further improve
efficiency in R&D.” Against that background “we now change our guidance
to 2.0-2.5 percent of sales.”
Talking about capital expenditure, the guidance was kept at 2.0 percent
of sales, or lower. “However, we have a couple of large projects that
started this fall, which will cause some increase to the level you have
seen in recent years”, he said. In addition to the regular capex level,
up to SEK 200 million will be spent per year in 2016 and 2017.
Turning to amortization of step up, the estimate is just below SEK 1.1
billion for 2016, meaning quarterly amortization of approximately SEK
270 million. Furthermore he gave an updated view on the expected FX
effects on the adjusted EBITA level. “The forecast has been updated and
the positive FX effects are expected to end up at SEK 510 million for
this year and at SEK 575 for 2016, Thomas Thuresson said.
About Alfa Laval
Alfa Laval is a leading global provider of specialized products and
engineering solutions based on its key technologies of heat transfer,
separation and fluid handling.
The company’s equipment, systems and services are dedicated to assisting
customers in optimizing the performance of their processes. The
solutions help them to heat, cool, separate and transport products in
industries that produce food and beverages, chemicals and
petrochemicals, pharmaceuticals, starch, sugar and ethanol.
Alfa Laval’s products are also used in power plants, aboard ships, in
the mechanical engineering industry, in the mining industry and for
wastewater treatment, as well as for comfort climate and refrigeration
applications. Alfa Laval’s worldwide organization works closely with
customers in nearly 100 countries to help them stay ahead in the global
Alfa Laval is listed on Nasdaq OMX, and, in 2014, posted annual sales of
about SEK 35.1 billion (approx. 3.85 billion Euros). The company has
about 18 000 employees.
This information was brought to you by Cision http://news.cision.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20151124005440/en/
Copyright Business Wire 2015