Alfa Laval AB, Sweden

COMPANY WATCH

Alfa Laval AB, Sweden

Andritz Group, Austria

Key Figures (SEK million) First quarter ended 31.3 2016 2015

Order Intake

7710

9844

Net Sales Of Which: Equipment Process Technology Marine & Diesel

8199

9071

Cost of Goods Sold

5429

6015

Gross Profit

2770

3056

Sales Costs

1089

1077

Administration Costs

339

367

R&D Costs

186

190

1070

1293

Operating Income Of Which: Equipment Process Technology Marine & Diesel Net Income

2392 2455 2771 3121 3036 3495

351 284 274 410 570 702 871

863



Key Figures (€ billion) First quarter ended 31.3 2016 2015

Sales Of Which: Hydro Pulp & Paper

1285.6 1404.3 367.9 407.9 457.6 480.5

EBITA Of Which: Hydro Pulp & Paper

83.9 73.4

Earnings before Interest and Taxes

74.2

61.5

Net Income

52.6

43.8

Order Intake Of Which: Hydro Pulp & Paper

1247.4

1430.6

Order Backlog Of Which: Hydro Pulp & Paper

7147.6

23.7 19.9 40.2 27.8

252.0 447.0 545.6 462.4 7785.6

3440.6 3857.1 2044.8 1920.3

COMMENT Alfa Laval AB has posted first quarter net sales for fiscal 2016 of SEK8.2 billion, down 9.6% on the prior year. The fall was 6.4% when adjusted for currency effects. Revenues were down in all three of the company’s segments, falling 2.6% in its Equipment division to SEK2.4 billion, 13.1% in the Marine & Diesel sector to SEK3.0 billion and 11.2% in the Process Technology unit to SEK2.8 billion. Order intake suffered even bigger falls, with the overall figure for the period down 21.7% on the 2015 comparator. Again, they were down in all three segments with falls of 7.6%, 10.5% and 39.8% in the Equipment (SEK2.4 billion), Process Technology (SEK2.9 billion) and Marine & Diesel (SEK2.4 billion) sectors, respectively. Alfa Laval did post a year-on-

June 2016

year gain of just under 1% in net income to SEK871 million. Tom Erixon, Alfa Laval’s president and CEO, said the results were in line with expectations as they reflected challenging market conditions. “Looking specifically at the end-market development, the low oil price continued to hamper the business sentiment in the oil and gas industries and the contracting level for ships was low,” he said. “Given the challenging conditions in some of our largest markets, we are constantly driving initiatives, including improved and more efficient sourcing as well as a balancing of resources in our supply chain to protect profitability. In addition we have initiated a review of the strategic direction for the Group,” Erixon added. n www.alfalaval.com

COMMENT Andritz Group boosted its profitability during the first quarter of fiscal 2016, despite drops in both sales and order intake compared with the year earlier. Group sales were down 8.5% on the 2015 comparator at €1.3 billion with all four of its business areas experiencing a downturn on the year prior. In the Hydro segment sales dropped by 9.8% to settle at €367.9 million, while Pulp & Paper sales slipped 4.8% to €457.6 million. Overall new orders were down 12.8% at €1.2 billion with performance very mixed across the company. The Pulp & Paper business area enjoyed an 18.0% increase in order intake to €545.6 million, while in contrast the Hydro sector saw a 43.6% decline to €252 million. Important orders for the

period in the Hydro segment included supplying five double-suction submersible motor pumps to Germany’s Ruhrkohle AG for water drainage in disused coal mines. Andritz’s EBITA in the first quarter of 2016 amounted to €83.9 million, 14.3% above the prior year due mainly to improved performance in the Hydro and Pulp & Paper sectors. Overall net income rose 20.1% on the year prior to reach €52.6 million. Andritz is anticipating its first quarter performance to be replicated throughout the remainder of fiscal 2016 with group sales forecast to decline slightly compared with 2015, while profitability is expected to remain at a solid level. n www.andritz.com

Pump Industry Analyst

7