Marine Division

Peter Leifland

Alfa Laval Group

© Alfa LavalSlide 2

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Marine Division by numbers- Order intake (OI) based on LTM September 30, 2018,

OI by Business units OI by industrySplit by type of orders

Capital sales

Service

Pumping systems

Boiler & Gas

systems

Separation & Heat

transfer

Marine

Offshore

Diesel

Order intake:

SEK Bn 16.5 (+39%*)Sales:

SEK Bn 13.0 (+16%*)

*) Compared with WY 2017, fixed rates

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Industries and Growth drivers Distribution of orders LTM September 2018

32%

Driver

Environ., Gas &

Energy, Marine Engine power Service

Share 8% 4% 23%

Energy needsLegislation and

fuel cost

Electrical power

needs

World trade

33%

Ship building

World trade &

Fleet capacity

Offshore

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Marine Division,totalOrders Received, LTM

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2011-01 2012-01 2013-01 2014-01 2015-01 2016-01 2017-01 2018-01

Alfa Laval Classic Aquisitions Environmental

349

1.555

766

330

458

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Alfa Laval on board- Product, system & application leadership, 17 product groups

Inert gas systems

Exhaust gas cleaning

Filtration

Ballast water treatment

Tank cleaning

Oily waste treatment

Oil treatment

Crankcase gas cleaning

Cooling and heating

Thermal fluid heatingSteam and heat generation

Waste heat recovery

Freshwater generationScrubber water cleaning

Gas combustion

Cargo pumping

Container ship Bulk carrier

Tanker Gas tanker

Fuel conditioning

16 30

Product launches LTM Product launches NTM

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Test & Training Centre

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• Feasibility studies

• Legislation experts

• Financing

Optimal fit for your vessel

and budget

Project execution you

can trust

Securing compliant and

reliable operation

• Easy reporting to authorities

• Compliance service package

• Sampling and testing service packages

• Crew trainings – offline and online

Total solutions in ballast water treatmentThe complete Alfa Laval PureBallast offering

• Project management

• Network of trained engineering- and installation partners

• Commissioning

• Various commissioning options

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International Marine Service

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Yard contracting - 1st October 2018, including all ships above 2,000 Dwt/Gt

Source: Clarkson Research Services Limited

Trend 2019

Tanker

LNG

Bulk carrier

Container

Cruise

714

0

1 000

2 000

3 000

4 000

5 000

6 000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Nu

mb

er

of

ve

sse

ls

FC No of ships contracted

Actual Contracted YTD

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FPSO awards

Source: EMA FPS Industry Report- Q1, 2018

YT

D S

EP

: 8

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0

200

400

600

800

1 000

1 200

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Ballast water treatment− Expected market development (MEUR), as communicated at CMD 2017

M€

New build

Retrofit

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0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2018 2019 2020 2021 2022 2023 2024 2025 2026

Ballast water treatment− Expected market development ( MEUR )

M€

New build

Retrofit

October, 2018

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Scrubbers- Expected market development (MEUR), as communicated at CMD 2017

KEUR

In September 2017

M€

0

100

200

300

400

500

600

700

800

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

New build

Retrofit

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SOx Scrubbers development - Uptake Accelerating In 2018

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

As Of 1st January 2018 As Of 29th October 2018

Orderbook

Fleet (Retro-fitPending)

Fleet (Fitted)

Clarksons Research Scrubber Count (No. Vessels)

Source: Clarksons Research. Figures exclude some orders still to be linked to individual vessels. Actual aggregate numbers will be higher.

Please contact Clarksons Research and/or visit World Fleet Register for the latest numbers.

Orders not yet

published/linked to

individual ships.

x 4 increase in count

confirmed since start year.

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SOx Scrubber comments

Total market of orders in 2018 higher than expected

Order backlog has an even split between newbuilds and retrofit.

Newbuild order backlog according to Clarkson now contains 16% scrubbers (#

ships) with higher numbers for tankers (26%), Containerships (26%) and lower

for bulkers (13%)

Higher percentage of scrubbers on ships with larger engines (above 12-14 MW)

Average shipset value higher than 1.0 MEUR due to larger engine sizes

Latest market reports 2018 show a trend to a possible higher market potential

2018-2026 than our 2017 guidance

Potential very much depends on the fuel price delta between 0.5% sulphur fuel

and HFO, availability of fuels, adoption rate per ship segment and assessment

of environmental impact of scrubbers

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SOx Scrubbers and the environment

Slide 17

Further distillation of HFO at the refineries will be costly and will

increase CO2 emissions due to higher energy consumption.

Combustion converts Sulphur into harmful SOx . The scrubbing

process converts SOx to harmless sulphate salts which are naturally

present in the oceans. Sulphur is thus not thrown into the water

Harmful particulate matters (unburned HFO, lube oil, soot, calcium,

nickel, vanadium = PM) are caught in the scrubber.

LNG combustion slips methane which is a 28 times more powerful

greenhouse gas than CO2

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In conclusion…- Marine Division

© Alfa Laval Slide 18

Yard contracting is forecasted to increase in 2019 and the years

thereafter.

Orders of Ballast water equipment and SOx Scrubbers are

developing above previous expectations. Ballast water equipment

potential 2018-2026 upgraded. Scrubber potential 2018-2026

possibly higher than 2017 guidance.

Innovation of our product and systems assortment is high and will

continue to have a top priority the coming years.