Alfa Laval in brief – 2018 Report Annual Financial information Alfa Laval is a leading global provider of spe- Contents cialized products and engineered solutions. Alfa Laval uses a number of channels to provide information about the In addition, representatives of Group management meet with analysts, investors company’s operations and financial development. The website – and journalists on an ongoing basis to ensure that they have correct and The company’s equipment, systems and www.alfalaval.com/investors – is updated continuously with annual re- current information. Pursuant to the company’s agreement with Nasdaq services are dedicated to helping customers ports, quarterly reports, press releases and presentations. Annual reports Stockholm, information that could have an effect on the share price and are also sent to those shareholders who have notified the company that that is not yet publicly known is never disclosed in conjunction with these optimize the performance of their processes. they wish to receive a copy. Conference calls with analysts, investors and types of meetings or contacts. Alfa Laval employs a so-called silent period Time and time again. the media are arranged by Alfa Laval in conjunction with the publication of of three weeks prior to the publication of a quarterly report. The President Alfa Laval helps customers to heat, cool, Report Governance Corporate 3 ABOUT ALFA LAVAL 59 FINANCIAL STATEMENTS the company’s quarterly reports. A capital markets day is organized each and Chief Financial Officer do not meet or speak to representatives from year, during which representatives from the financial market are offered the financial market during this period. separate and transport products such as oil, Alfa Laval in brief 3 Board of Directors’ Report 60 more in-depth information regarding the company’s operations. water, chemicals, beverages, foodstuffs, 2018 in brief 5 Consolidated cash flows 74 Financial information during 2019 Shareholder information starch and pharmaceuticals. President’s comments 6 Comments to the consolidated cash-flows 75 Alfa Laval will publish quarterly reports on the following dates in 2019: Gabriella Grotte Alfa Laval’s worldwide organization works Vision, business concept, goals and strategy 8 Consolidated comprehensive income 76 Investor Relations Manager closely with customers in 100 countries to The share 12 Comments to the consolidated Year-end report 2018 February 5 help optimize their processes. First-quarter report April 24 Tel: +46 46 36 74 82 Key technologies 14 comprehensive income 77 Second-quarter report July 17 E-mail: [email protected] Heat transfer 15 Consolidated financial position 80 Third-quarter report October 24 More information on the Internet Annual Report 2018 Separation 16 Comments on the consolidated Alfa Laval’s website is continuously updated Fluid handling 17 financial position 82 with new information, including contact Development 18 Changes in consolidated equity 82 details for all countries. Analysts tracking Alfa Laval Division overview 20 Comments on changes Food & Water 22 in consolidated equity 83 Read more at www.alfalaval.com and ABG Sundal Collier Citi Investment Research Goldman Sachs International Morningstar Energy 26 Parent company cash flows 84 www.alfalaval.com/investors Anders Idborg Klas Bergelind Jonathan Hanks Denise Molina Marine 30 Parent company income 84 [email protected] [email protected] [email protected] [email protected] Tel: +46 8 5662 8674 Tel: +44 207 986 4018 Tel: +44 20 7051 0928 Tel: +31 20 797 0010 UN Sustainable Development Goals Parent company financial position 85 and Alfa Laval 34 ALPHAVALUE Commerzbank HSBC Nordea Changes in parent company equity 86 Luis Pereira Malte C. Schulz Jörg-André Finke Andreas Koski Operations 36 Notes to the financial statements 87 [email protected] [email protected] [email protected] [email protected] Service 38 Tel: +33 1 70 61 10 50 +44 20 747 59353 Tel: +49 211 910 3722 +46 10 15702 29 Accounting principles 87 Employees 40 Objectives, policies and processes Bank of America Merrill Lynch Credit Suisse JP Morgan Pareto Securities Alexander Virgo Max Yates Glen Liddy Anders Roslund for managing capital 96 [email protected] [email protected] [email protected] [email protected] Tel: +44 20 7996 1221 Tel: +44 20 7883 8501 Tel: +44 20 7155 6113 Tel: +46 8 402 52 88 Financial risks 97 Operational risks 101 Barclays Capital Danske Bank Kepler Cheuvreux SEB Lars Brorson Oscar Stjerngren Johan Eliason Fredrik Agardh SUSTAINABILITY Notes 106 [email protected] [email protected] [email protected] [email protected] 42 Auditor’s report 136 Tel: +44 20 3134 1156 Tel: +46 8 568 806 06 Tel: +46 8 723 51 77 Tel: +46 8 522 298 06 Sustainability and reporting 42 Ten-year overview 140 Carnegie DNB Markets Morgan Stanley Research UBS Johan Wettergren Christer Magnergård Robert J. Davies Sven Weier Definitions 142 [email protected] [email protected] [email protected] [email protected] Tel: +46 8 5886 87 43 Tel: +46 8 473 48 44 Tel: +44 20 7425 2057 Tel: +49 69 1369 8278 43 CORPORATE GOVERNANCE Financial information 143 Annual General Meeting 143 Introduction by the Chairman of the Board 44 Corporate Governance Report 2018 45 Annual General Meeting 2019 Board of Directors and auditors 52 The Annual General Meeting of Alfa Laval AB (publ) will be held on Wednesday, Shareholders must state their name, personal identity number and telephone President and Group management 54 April 24, 2019, at 4:00 p.m. at Scandic Star Lund, Glimmervägen 5, in Lund. number on the notice of participation. If participation is by proxy, a power of Board of Directors’ report on internal control 56 Light refreshments will be served after the Meeting. In accordance with the attorney or authorization must be submitted to the company prior to the Meeting. company’s Articles of Association, notice of the Annual General Meeting will Auditor’s statement on the be inserted as an announcement in the Swedish Official Gazette and on the Meeting program Corporate Governance Report 58 company’s website not more than six and not less than four weeks prior to 1:30 p.m. Bus departs from Scandic Star for Alfa Laval’s production unit the Meeting. An announcement that notification has been issued will be placed for heat exchangers in Lund in Dagens Nyheter. As a service to existing shareholders, information about 3:30 p.m. Registration starts the Annual General Meeting can also be sent to them by mail. The following 4:00 p.m. Start of Meeting information concerning the Meeting does not constitute legal notice. Tour of production facility in Lund UsingUsin the Notification of participation Prior to the Annual General Meeting, participants will have an opportunity to Shareholders who wish to participate in the Meeting and be entitled to vote view the production of plate heat exchangers at the plant in Lund. The tour world’sworld’s watts must be entered in the share register maintained by Euroclear AB not later than will begin with assembly at Scandic Star Lund, Glimmervägen 5 in Lund not Tuesday, April 16, 2019, and register their intention to participate, along with later than 1:30 p.m. Buses will be provided for transportation to the plant any assistants, not later than Tuesday, April 16, preferably before 12:00 and back to the Meeting venue. Registration for the tour must be made in moremore wisely noon. Shareholders whose shares are held in trust must temporarily re-register conjunction with registration for participation in the Annual General Meeting. 50,000,000,000 watts. their shares in their own names not later than April 16. Shareholders must Please note that the number of participants is limited. That’s the power needed for two billion light bulbs to bring light to our world. In comparison, it is also the total power that industries around request such registration from the trustee a few working days prior to the the world are saving thanks to Alfa Laval’s yearly installations of new heat exchangers. Talk about alternative energy use! These are the facts: today enormous amounts of energy are lost in industrial processes, mainly in the form of waste heat. But there is an deadline. Dividend easy way to address this. By using our high-technology heat exchangers, the energy efficiency of these processes can be increased by up to The Board of Directors and the President propose to the Annual General 50 per cent. This amounts to a reduced global requirement of 50 GW. As a bonus, emissions of carbon dioxide are reduced by about 150 million tons Notification of participation shall be made to: Meeting that a dividend of SEK 5.00 per share be paid. The proposed record every year – the same amount as 30 million cars emit into the atmosphere during a year. It is all about contributing to a cleaner environment. – Alfa Laval AB, Group Staff Legal, Box 73, SE-221 00 Lund, Sweden date for this dividend is Friday, April 26, 2019. If the Meeting approves the – E-mail: [email protected] proposal, the dividend is expected to be distributed on Thursday, May 2, Pure Performance. Energy. Environment. Marine. Mechanical engineering. Food. Sanitary. Chemical. You name the industry. Alfa Laval is – Website: www.alfalaval.com 2019. The record date and dividend payment date may be postponed due Laval Alfa helping all of them to refine their processes and purify their products. Time and time again. – Tel: +46 46 36 74 00 or +46 46 36 65 00 to the technical procedures required for executing the payment. 100001020-1-EN 1903 We are hard at work in more than 100 countries implementing our expertise, technical support and service.