Alfa Laval AB (publ) Interim report July 1 – September 30, 2007

A record quarter!

“The third quarter 2007 was a record quarter. Order intake, invoicing and operating margin all reached record levels.

Orders received exceeded our expectations and increased organically with 29 percent and reached SEK 7.1 billion. The Marine & Diesel segment had an outstanding order intake for deliveries in 2009/2010. For the near future we see lower investments in renewable fuels caused by increased price of feed-stock and higher investment costs. We do not expect to repeat the order intake level of SEK 7.1 billion in the near future.

The operating margin in the quarter reached 21.0 percent. The combination of very high capacity utilization, very favourable product mix and high internal efficiency contributed to the result. For the fourth quarter we expect operating margin to reach approximately the same level as in the third quarter.

The Board has reviewed the Group’s financial targets and decided to change the target for the operating margin (EBITA) to 15 percent over a business cycle, from 12-15 percent. The target for return on capital employed (ROCE) is changed to minimum 25 percent from minimum 20 percent.”
Lars Renström, President and CEO

Third quarter:
Order intake increased by 29.8 percent * to SEK 7,150 (5,648) million.
Net sales increased by 35.7 percent * to SEK 6,385 (4,810) million.
Adjusted EBITA was SEK 1,340 (761) million, including adverse foreign exchange effects of SEK 55 million.
Adjusted EBITA-margin was 21.0 (15.8) percent.
Result after financial items was SEK 1,252 (611) million.
Result after tax increased to SEK 922 (448) million.
Earnings per share increased to SEK 8.33 (3.91).
Cash flow from operating activities was SEK 976 (715) million.

Nine months:
Order intake increased by 25.5 percent * to SEK 20,977 (17,346) million.
Net sales increased by 32.6 percent * to SEK 17,629 (13,762) million.
Adjusted EBITA was SEK 3,305 (1,992) million, including adverse foreign exchange effects of SEK 210 million.
Adjusted EBITA-margin was 18.7 (14.5) percent.
Result after financial items was SEK 2,970 (1,624) million.
Result after tax increased to SEK 2,124 (1,236) million.
Earnings per share increased to SEK 18.87 (10.78).
Cash flow from operating activities was SEK 2,014 (1,624) million.

* excluding exchange rate variations

Outlook for the near future

"In many of the markets, geographical as well as customer segments that Alfa Laval serves, a continued very strong demand is expected."
(unchanged since the second quarter 2007 interim report published on July 19, 2007)