Regulatory News:

“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.

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.

This information was brought to you by Cision http://news.cision.com

Alfa LavalPeter TorstenssonSenior Vice President, CommunicationsPhone: +46 46 36 72 31Mobile: +46 709 33 72 31peter.torstensson@alfalaval.comorGabriella GrotteInvestor Relations ManagerPhone: +46 46 36 74 82Mobile: +46 709 78 74 82gabriella.grotte@alfalaval.com

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