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.