Annual Report 2016
Cooling down global warming

Contents 
3 ABOUT ALFA LAVAL
Alfa Laval in brief 
3
2016 in brief 
5
Some historical milestones 
6
President’s comments 
7
Structural growth drivers 
10
Vision, business concept, goals and strategy 
12
The share 
16
Research and development 
18
Key technologies 
19
 
Heat transfer 
20
 
Separation 
22
 
Fluid handling 
24
Divisions 
26
 
Equipment Division 
28 
 
Process Technology Division 
30
 
Marine & Diesel Division 
32
 
Operations Division 
34
Service 
36
Employees 
38 
40 SUSTAINABILITY
Report 
40
45 CORPORATE GOVERNANCE 
Introduction by the Chairman of the Board 
46
Corporate Governance Report 2016 
47
Board of Directors and auditors 
54
President and Group management 
56
Board of Directors’ report on internal control 
58
Auditor’s statement on the  
Corporate Governance Report 
60
61 FINANCIAL STATEMENTS
Board of Directors’ Report 
62
Consolidated cash ﬂows 
74
 
Comments to the consolidated cash-ﬂows 
75
Consolidated comprehensive income 
76
 
 Comments to the consolidated  
comprehensive income 
77
Consolidated ﬁnancial position 
80
 
 Comments on the consolidated  
ﬁnancial position 
82
Changes in consolidated equity 
82
 
 Comments on changes  
in consolidated equity 
83
Parent company cash ﬂows 
84
Parent company income 
84
Parent company ﬁnancial position 
85
Changes in parent company equity 
86
Notes to the ﬁnancial statements 
87
 
Accounting principles 
87
 
 Objectives, policies and processes  
for managing capital 
96
 
Financial risks 
97
 
Operational risks 
101
 
Notes 
104
Auditor’s report 
135
Ten-year overview 
140
Deﬁnitions 
142
Financial information 
143
Annual General Meeting 
143
Carbon dioxide.
One of the most challenging menaces to our planet’s climate. Mainly caused by the extensive use of fossil fuels. Forecasts predict that 
energy demand will increase by some 30 percent during the next two decades. The encouraging news is that renewable energy production 
is also on the rise. And that investments in energy-efﬁcient equipment are accelerating.
 
Alfa Laval is a frontrunner in energy efﬁciency. Our fully welded heat exchangers are a case in point. They increase energy recovery in oil 
reﬁneries by one third. Our thousands of installations worldwide reduce global carbon dioxide emissions by some 12 million tons – every 
year! That is more than the combined yearly emissions from all cars and households in Sweden!
Pure Performance. Energy. Environment. Marine. Mechanical engineering. Food. Chemical. You name the industry. Alfa Laval is helping all 
of them to purify and reﬁne their processes and products. Time and time again.
 
We are hard at work in more than 100 countries implementing our expertise, technical support and service. Helping to create a cleaner 
environment and better living conditions for all mankind
Annual Report 2016
Cooling down global warming

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The goal is to grow an average of at least 5 percent 
annually measured over a business cycle. 
* Excluding exchange rate variations
The goal is to have an operating margin of 15 
percent measured over a business cycle.
The goal is to have a return on capital employed of 
at least 20 percent.
Alfa Laval is a leading, global provider of ﬁrst-rate products in the areas of heat transfer, separation and  
ﬂuid handling. On the strength of this offering, Alfa Laval helps to boost the productivity and competitiveness 
of customers in various industries worldwide. We identify the challenges facing them and deliver products 
and solutions that meet their needs – mainly in the areas of energy, the environment, transport and food.  
Business concept: “To optimize the performance of our customers’ processes, time and time again.” 
3   Alfa Laval in brief
Three key technologies suitable for most industries 
Operating in the areas of heat transfer, separation and fluid handling, Alfa Laval focuses on the development and manufacturing of heat exchangers, 
separators, pumps and valves – products that are required by a large number of industries across the globe. The company’s products play a pivotal 
role in everything from power production and oil extraction to food manufacturing and wastewater treatment – making Alfa Laval a key player in 
areas of crucial importance to society, such as energy optimization, environmental protection and safe food production.
More than 30 percent of 
the world market
25 to 30 percent of 
the world market
10 to 12 percent of 
the world market
Heat transfer 
Most industrial processes need some 
form of solution for heat transfer. 
Alfa Laval’s heat exchangers transfer 
heat or cooling from one liquid to 
another – for example – and are 
extremely important to the efficiency 
of the entire process. The company’s 
compact heat exchangers have the 
capability to recycle heat, optimize 
customers’ energy consumption, cut 
costs and reduce the negative 
impact on the environment. 
Separation 
Separators have been an important 
part of Alfa Laval’s operations since 
the company was founded in 1883. 
The technology is used to separate 
liquids from other liquids and solid 
particles from liquids or gases. In 
addition to separators, the offering 
includes decanter centrifuges, filters, 
strainers and membranes.
Fluid handling 
Alfa Laval offers pumps, valves, tank 
cleaning equipment and installation 
material for industries with stringent 
hygiene requirements, such as the 
food and pharmaceutical industries. 
The portfolio also includes pumping 
systems designed specifically for the 
marine industry and offshore market.
44 percent of  
invoicing in 2016 
19 percent of  
invoicing in 2016 
24 percent of  
invoicing in 2016 
Return on capital employed, %
Operating margin, % 
Invoicing growth, %*

Order intake in Alfa Laval’s top ten markets in 2016.
Equipment Division 
Fast-moving business comprising 
component sales to customers with 
recurring requirements and well-defined 
needs through various sales channels. 
Read more on pages 28–29. 
Process Technology Division 
Project-based business comprising 
customized solutions and systems sold 
directly to end customers or through 
contracting companies. Read more on 
pages 30–31. 
Marine & Diesel Division 
A broad offering of components, modules, 
systems and service for customers in the 
marine, offshore and diesel power markets. 
Read more about the division’s four segments 
and performance on pages 32–33. 
33 percent of  
Group order intake
39 percent of  
Group order intake 
28 percent of  
Group order intake 
Three sales divisions with a shared supply chain 
Alfa Laval reaches its customers through its three sales divisions: Equipment, Process Technology and Marine & Diesel. However, the supply chain for the three 
divisions is shared and forms a fourth division: Operations. This division is responsible for purchasing, production and logistics for all key technologies. 
During the year, a decision was made to change the Group’s organizational structure. As of January 1, 2017, the company was divided into three new sales divisions 
– Marine, Food & Water and Energy – while Operations continues to serve as the Group’s shared supply chain. The description below pertains to the structure in place in 2016.
Operations Division 
Responsible for the Group’s production-related procurement, manufacturing, distribution and logistics. This centralized, coordinated and global 
supply chain creates the necessary prerequisites to ensure reliable access to the company’s products worldwide. Read more on pages 34–35. 
Broad geographic  
presence 
Alfa Laval’s sales and aftermarket organization operates in more than 
100 countries – either directly or in collaboration with external partners. 
The production structure is also global, with 42 large facilities spread 
across Europe, Asia, the US and Latin America. At the same time, 
Alfa Laval has more than 100 service centers distributed worldwide 
to meet customer needs. In 2016, Service accounted for 33 percent 
of the Group’s total order intake. 
Continued focus  
on innovation 
Alfa Laval was born out of a brilliant invention – the separator – 
and innovation remains at the heart of everything we do. We are 
considered one of the most innovative companies in the sector and 
this reputation is accompanied by expectations of more. Accordingly, 
Alfa Laval continuously invests in research and development (R&D) 
to be able to continue providing the market with new and more 
efficient products. In 2016, the company invested SEK 822 million 
in R&D, corresponding to 2.3 percent of sales. 
Ten largest markets (SEK million)
0
1,000
2,000
3,000
4,000
5,000
6,000
France
Benelux
South Korea
South East Asia
Adriatic
Mid Europe
Japan
Nordic
China
United States

5
About Alfa Laval
2016 in brief
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
16
15
14
13*
12
SEK million
-12,000
-7,500
-3,000
1,500
6,000
16
15
14
13
12
SEK million
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
16
15
14
13
12 
0
5
10
15
20
25
SEK million
%
326
3,282
-9,847
5,140
4,184
30,339
4,934
30,202
4,914
36,660
5,891
37,098
32,060
6,811
5,553
Order intake
Free cash flow
Adjusted EBITA
Order intake amounted to SEK 32,060 million in 2016, 
down 14 percent. Excluding exchange rate variations, 
order intake decreased 13 percent. 
Alfa Laval generated a free cash flow of SEK 4,184 million 
(5,140) in 2016. 
Adjusted EBITA amounted to SEK 5,553 million, 
compared with SEK 6,811 million in 2015.
2016 in brief
Amounts in SEK million unless otherwise stated
+/- %6)
2016
2015
2014
2013*
2012
Order intake 
-14
32,060
37,098
36,660
30,202
30,339
Net sales 
-10
35,634
39,746
35,067
29,801
29,813
Adjusted EBITDA 1)
-17
6,196
7,478
6,456
5,360
5,381
Adjusted EBITA 2)
-18
5,553
6,811
5,891
4,914
4,934
Operating margin (adjusted EBITA 2)), % 
15.6
17.1
16.8
16.5
16.5
Proﬁt after ﬁnancial items
-39
3,325
5,444
4,117
4,172
4,529
Return on capital employed, %
15.3
21.6
20.5
26.4
27.4
Return on shareholders’ equity, % 
11.8
21.7
17.6
20.4
22.9
Earnings per share, SEK
-40
5.46
9.15
7.02
7.22
7.64
Dividend per share, SEK 
4.25 3) 
4.25  
4.00
3.75 
3.50 
Equity per share, SEK
10
48.34
43.92
41.01
38.53
34.46
Free cash ﬂow per share, SEK 4)
-19
9.97
12.25
-23.48
7.82
0.78
Equity ratio, % 
38.0
35.5
30.8
46.3
41.3
Net debt to EBITDA, times
1.81
1.56
2.46
0.49
0.80
Number of employees 5)
-3
16,941
17,417
17,753
16,262
16,419
* Restated to IFRS 11.
1) Adjusted EBITDA – Operating income before depreciation, amortization of goodwill and 
amortization of other surplus values, adjusted for items affecting comparability.
2) Adjusted EBITA – Operating income before amortization of goodwill and other surplus 
values, adjusted for items affecting comparability.
3) Board proposal to the Annual General Meeting.
4) Free cash flow is the sum of cash flow from operating and investing activities.
5) Number of employees at year-end.
6) Percentage change between 2015 and 2016.
– Order intake amounted to SEK 32.1 billion, compared to SEK 37.1 billion in 2015.
– Invoicing fell 10 percent to SEK 35.6 billion.
–  The adjusted EBITA margin, or operating margin, was 15.6 percent, compared 
with 17.1 percent in 2015.

6   History
1900s
In 1901, AB Separator is listed 
on the Stockholm Stock 
Exchange. The company 
has already started its 
globalization and by 1910 
established subsidiaries in 
the US, Canada, Austria, 
Denmark, France, Germany 
and Russia.
1970s
Alfa-Laval acquires a majority 
interest in the Danish 
company Lavrids Knudsen 
Maskinfabrik (LKM) and 
adds fluid handling to its 
technologies.
1880s
AB Separator. The trading 
firm of Gustaf de Laval and 
Oscar Lamm is incorporated 
under the name of AB 
Separator (1883). The Alfa 
patent is obtained from 
Clemens von Bechtolsheim 
(1889).
1960s
The company changes its 
name from AB Separator to 
Alfa-Laval AB. The name 
“Alfa” derives from the 
alpha discs and “Laval” 
from the founder of the 
company. Plans for a Fluid 
Handling division begin to 
materialize.
1950s
AB Separator changes from 
being a supplier of only 
components to also include 
complete industrial process 
systems in the offering.
2000s
Alfa Laval is acquired by 
Industri Kapital. In 2002, it 
returns to the Stockholm 
Stock Exchange. The main 
strategy is to create profitable 
growth, both organically 
and through acquisitions. 
The acquisition strategy 
focuses on companies that 
complement the business in 
terms of products, geography 
or new sales channels. Adding 
new sales channels gives 
an opportunity to work with 
a number of brands.
1990s
Alfa-Laval is acquired by 
Tetra Pak (1991). In 1993, 
Alfa Laval becomes an 
independent industry group 
within the Tetra Laval Group.
1930s
Alfa Laval introduces its first 
plate heat exchanger and 
adds heat transfer technology 
to its portfolio. Pontus Hytte, 
the son of the famous 
Swedish painter Carl Larsson, 
moves the development 
and manufacturing of heat 
exchangers to Lund.
1980s
To strengthen Alfa-Laval’s 
core business, the company 
makes a number of acqui- 
sitions: Pages in France and 
LKM in Germany; Tri-Clover 
and Sharples in the US; 
Reginox in Brazil; and 
Saunders Valves in the UK.
2010s
At this point, acquisitions 
are a key feature of creating 
value and an efficient and 
rapid way of building 
positions in the market. The 
target, at the time, is to add 
3–4 percent to annual sales. 
Alfa Laval acquires Aalborg 
Industries in 2011 and the 
Norwegian company Frank 
Mohn three years later, which 
further strengthens Alfa 
Laval’s presence in the marine 
and offshore markets.
Some historical
milestones

7
Innehåll
A successful year 
on several fronts 
despite challenging 
circumstances.
About Alfa Laval

8   President’s comments 
restructuring program, the organization’s 
continued work in the area helped to ensure 
a favorable cost trend. 
The procurement function’s ongoing 
efforts were further intensiﬁed, which yielded 
decisive results. In addition to the fact that 
global raw material prices remained low, the 
function was able to negotiate more favorable 
prices and terms in a large number of areas. 
At the same time, the company continued 
its efforts to improve the execution of larger 
projects within Process Technology. The 
long-term goal was to reduce the number 
of negative deviations when executing and 
delivering projects. This work produced results, 
particularly toward the end of the year. 
Finally, the company’s efforts to implement 
production capacity adjustments helped to 
offset the negative effects of lower volumes. 
All in all, the company’s increased share 
of the aftermarket and its efforts to cut 
costs helped to secure a gross margin of 
35.8 percent, roughly in line with 2015. 
In parallel with the company’s ongoing 
efforts to reduce its costs, a restructuring 
program was introduced in the autumn. This 
program is considered the single most impor-
tant initiative when it comes to adapting the 
Group to the prevailing market conditions. 
The program resulted in nonrecurring 
costs of SEK 1.5 billion, of which SEK 700 
million pertained to write-off of goodwill and 
other non-cash items. The aim of the program 
is to implement structural changes in order 
to cut the Group’s costs for administration 
and sales by SEK 300 million per year, with 
full effect from the third quarter of 2017. 
Manufacturing will also be concentrated to 
fewer units over a three-year period. This 
initiative is expected to generate an additional 
SEK 200 million in savings. Finally, we 
identiﬁed a number of acquired units that 
have not performed according to plan. 
These units were included in an initiative 
known as “Greenhouse,” under which the 
units were removed from the normal operating 
structure and placed into a separate unit. 
Considerable focus will be devoted to 
measures to improve the earnings of these 
units in 2017. 
Strategic review, conclusions and 
future direction 
After a long, successful period characterized 
by organizational and strategic continuity, 
we decided for several reasons that it was 
time for a review. Not only had the Group 
grown from SEK 15 billion to SEK 40 billion 
in annual sales over a 15-year period, its 
structure had also become increasingly 
complex as a result of a number of acquisi-
tions. Alfa Laval’s cost structure and ﬁnancial 
goals were also challenged by negative 
trends in several important end markets. 
Finally, there were questions regarding the 
Group’s organic growth during the period. 
The review and analysis resulted in a 
number of conclusions – both positive and 
negative. The company’s global presence, 
large installed base, technology leadership 
in several areas and skilled organization 
provide a strong foundation on which to 
continue building in the future. However, 
the analysis also identiﬁed a number of 
improvement areas: 
–  A complex organization resulted in slow 
processes and weak decision-making 
–  A weaker role for product management 
resulted in a slower pace in certain areas 
of product development 
–  A large focus on internal issues and too 
little focus on the customer and the 
customer’s situation. 
The analysis resulted in an extensive 
restructuring program. Implementation of 
the program began late in the year and will 
continue during 2017. The most important 
goal is to ensure the Group’s organic growth 
by adopting a more customer-centric 
approach. To provide support for this change, 
an organizational restructuring was carried 
out to create a more decentralized decision- 
making process. The new organization, which 
took effect on January 1, 2017, comprises 
12 product-based business units with 
extensive earnings responsibilities. The 
business units were organized into three 
divisions, with a focus on our most important 
customer segments: Marine, Energy and 
Food & Water. 
The work carried out during the autumn 
in order to implement this organizational 
restructuring and the necessary cost adjust - 
ments progressed quickly in the lead-up to 
the start date on January 1, 2017. The 
process moved quickly and smoothly thanks 
to the drive of the organization, the need to 
have everything in place by year-end, a 
consensus on what needed to be done and 
good cooperation with the trade unions. 
Market conditions and development 
In short, 2016 was a successful year on many 
fronts despite challenging circumstances in 
markets considered to be of major importance 
to Alfa Laval. The Equipment Division 
distinguished itself as having the strongest 
performance during the year. The division’s 
order intake was stable, mainly driven by 
the parts of the business exposed to the 
food industry. At the same time, the division’s 
long-term efforts to improve its cost-efﬁciency 
and the continued roll-out of an e-commerce 
platform helped to achieve results and the 
division was able to report an operating 
margin of 14.5 percent. 
The Process Technology Division was 
impacted by the weak trend in the oil sector, 
which was under continued pressure from 
a low oil price. The lack of oil extraction 
projects was offset to a certain extent, not 
least by a strong order intake in the fourth 
quarter, and our smaller projects and service 
business displayed a stable performance. 
Overall, order intake declined a few percent 
and proﬁtability was adversely impacted by 
changes in the mix. The division reported 
an operating margin of 10.1 percent, which is 
not satisfactory. 
The Marine & Diesel Division started the 
year with a relatively strong order book, 
resulting in invoicing of 84 percent compared 
with 2015. The challenge during the year 
was the division’s order intake. The capacity 
increases of recent years within the global 
merchant ﬂeet have resulted in extremely low 
freight rates and caused signiﬁcant ﬁnancial 
problems for ship owners and shipyards alike. 
The number of orders for new vessels in 
2016 was thus the lowest in more than 30 
years, with an estimated 580 vessels ordered 
compared with a ten-year average of 2,200 
vessels per year. Taking the market trend 
into consideration, the division nevertheless 
delivered an acceptable order intake, despite 
a 35-percent decline compared with 2015. 
At the same time, a favorable product mix 
and substantial aftermarket share enabled 
the division to achieve an operating margin 
of 17.1 percent – a strong result considering 
the circumstances. 
Short-term perspective – focus on costs 
With a major downturn noted in a number 
of Alfa Laval’s key markets, the company 
inevitably devoted considerable focus to 
costs in 2016. Combined with an extensive 
President’s comments

9
President’s comments 
Looking forward 
Despite challenging market conditions in 
2016 and 2017, the next few years look 
promising. Based on our aim of achieving 
a clearer focus on the customer, greater 
technological leadership and a more robust 
service business, measures are now being 
taken to further strengthen Alfa Laval’s 
competitiveness. 
There is a strong link between society’s 
growing interest in sustainability and our 
core business. Energy efﬁciency and process 
improvements that enable increased water 
recycling are two areas where we truly shine 
and which also have the potential to create 
long-term growth opportunities. Alfa Laval 
is a small – but important – part of the 
solution to a number of major challenges 
facing society. 
In the short term, we expect the most 
interesting developments in the area of 
sustainability to take place in the marine 
sector. In 2016, important decisions were 
made with respect to directives requiring 
the cleaning of ballast water and exhaust 
gas from ships. These directives will gradually 
open up a new market for new and existing 
vessels valued at approximately SEK 20 
billion per year over a number of years. 
Alfa Laval is at the forefront of both of these 
application areas and the opportunities for 
growth are substantial.
While our technological and product 
development initiatives are long term in 
nature, a number of important launches of 
new product families related to gasketed 
heat exchangers and high-speed separators 
will begin toward the end of 2017. This will 
pave the way for a more cohesive product 
offering, create the potential to further improve 
the energy efﬁciency of our customers’ appli- 
 cations and reduce our production costs. 
The service organization is central for 
our customers. Our installed base is enormous 
and a single product installation is often 
used in our customers’ processes for 20 to 
40 years. Accordingly, easy access to spare 
parts and close proximity to a service center 
and service engineers are necessary 
prerequisites for ensuring that the customer’s 
equipment can continue to operate. During 
the year, we continued to expand the service 
organization, which currently comprises 
over 2,000 employees and more than 100 
service centers worldwide. Although the 
service offering has been our central focus 
area for many years, we believe there are still 
signiﬁcant development opportunities and 
potential. We are now taking the next step on 
our journey toward a more customer-centric 
Alfa Laval, in which the relationship with the 
service organization will play a crucial role.
Last but not least, thank you 
2016 was my ﬁrst year as CEO of Alfa Laval 
and a more eventful year than I had imagined. 
We have adapted the organization to the 
prevailing challenges in the market, aimed 
to make smart investments in the future 
and initiated changes to allow us to leverage 
the strengths that come from a long industrial 
history and strong culture. I would like to 
thank our employees for the invaluable 
support I received during my ﬁrst year and 
the excellent work carried out during 2016.
Lund, February 2017
Tom Erixon
President and CEO
About Alfa Laval

10   Structural growth drivers
Structural  
changes create 
demand 
The world is changing and with change come new opportunities. Global trends in the area of the environment 
as well as in food, transport and energy, are creating new opportunities for growth. These structural changes 
include: the search for sustainable methods of energy production due to growing energy needs; a growing 
middle class creating a demand for processed foods; environmental legislation imposing increasingly 
stringent requirements with respect to emissions to air and water; and international trade creating a need for 
marine transport solutions. This is good news for Alfa Laval, whose operations focus on exactly these areas.

11
Structural growth drivers
Energy
Environment
Food
World trade
The world’s energy needs are continuing to intensify 
– at a faster rate in some areas of the world than others. 
There are two ways to handle this challenge: increase 
the total energy production and make greater use of 
technologies that enable more efficient use or recycling 
of the energy generated.  
Alfa Laval
Alfa Laval’s offering encompasses products and solutions for oil and 
gas exploration, power production, renewable fuels, refinement 
and much more. With its compact heat exchangers at the heart 
of its solutions, the company’s products also play an important 
role in the efforts to make the world’s industrial processes more 
energy efficient.
Human impact on the environment is coming under 
greater scrutiny, resulting in new, increasingly stringent 
laws. In parallel with this, a sustainability mindset has 
also evolved and is encouraging companies to voluntarily 
take steps that contribute to environmental improvements.
Alfa Laval
Alfa Laval has a wide range of products for managing various 
environmental problems, such as cleaning of crankcase gas 
from trucks or dewatering of sludge in wastewater treatment 
plants. The company’s heat exchangers are also highly energy 
efficient, which in itself is a gain for the environment since they 
help to reduce both energy consumption and CO2 emissions.
A growing number of people are joining the middle class, 
urbanization is continuing at an undiminished rate and 
women now account for a higher percentage of the 
workforce. This is contributing to growing demand for 
ready-made food and the development of more efficient 
supply chains with the capacity to reduce waste. 
Alfa Laval
Alfa Laval’s history began in 1883 with the development of a 
separator for separating cream from milk. Since then, the company’s 
offering for hygienic applications in the food industry has been 
expanded to include heat exchangers, pumps and valves. These 
products meet the strictest hygiene requirements and can help to 
optimize the use of raw materials. Alfa Laval can also help to reduce 
waste by offering cooling solutions for transport and storage.
International trade helps to connect a world where raw 
materials are extracted in one country and processed in 
another, after which the end products are transported to 
customers across the globe. Shipping is the most 
efficient – and at the same time economical – transport 
solution, which is why approximately 90 percent of 
commercial tonnage is now shipped by sea.
Alfa Laval
Alfa Laval has delivered equipment for the marine industry for 
more than 80 years – starting in the engine room with separators 
for cleaning fuel and growing to include everything from heat 
exchangers for generating freshwater to pumping systems for 
efficient loading and unloading. The company also offers a 
number of solutions that reduce the impact on the environment, 
such as systems for treating ballast water or lowering the 
sulphur content in ships’ exhaust gas.
About Alfa Laval

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Invoicing fell 10.1 percent* in 2016. Of this, 10.4 percent 
was attributable to an organic decline, while acquisitions 
added 0.3 percent. 
* Excluding exchange rate variations 
The operating margin for 2016 was 15.6 percent, 
compared with 17.1 percent for full-year 2015. 
The return on capital employed for 2016 was 15.3 
percent.
Vision, business concept, goals 
and strategy
Financial goals
Alfa Laval is governed with the aim of realizing 
its business concept, while at the same time 
meeting the ﬁnancial goals established with 
regard to growth, proﬁtability and return. 
By achieving or exceeding these goals, Alfa 
Laval creates the necessary scope for its 
continued development as well as generating 
increased value for its shareholders, both 
in the form of an annual dividend and by 
boosting the value of the company. 
Growth 
Alfa Laval’s growth target was 
revised during the year. The new 
goal is to achieve average annual growth 
of at least 5 percent over a business cycle. 
This goal was deemed realistic given the 
prevailing business situation and Alfa Laval’s 
performance in recent years.
Proﬁtability 
Alfa Laval is to achieve an operating 
margin – adjusted EBITA – of 15 
percent measured over a business cycle. 
This goal was established based on historical 
margins, while also taking the company’s 
growth ambitions into consideration. 
Capital utilization 
The goal is to have a return on 
capital employed of at least 20 
percent, a realistic ambition based on a 
combination of organic and acquired growth. 
Financial benchmark values 
In addition to the Group’s financial goals, the 
Board has established benchmark values 
for three key financial ratios, which further 
specify the framework and goals for the 
operation of the company. 
Net debt in relation to EBITDA 
In the long term, net debt in rela-
tion to EBITDA, meaning operating 
profit before depreciation and amortization 
of step-up values, is not to be more than 2. 
Although the ratio may exceed the goal in 
connection with major acquisitions, this 
should be viewed as a temporary situation, 
since the company’s cash flow is expected 
to offset this effect. 
Investments 
The benchmark value states that 
2 percent of sales should go to 
investments. Given the investments and 
capacity expansion carried out in recent 
years, this investment level is deemed suf-
ficient to create the scope for replacement 
investments and an expansion of capacity 
that matches the organic growth of the 
Group’s core products. 
Cash ﬂow from operating activities 
Cash flow from operating activities 
is to amount to 10 percent of 
sales, including investments in fixed assets. 
This value is lower than the goal for the 
operating margin, since organic growth 
normally requires an increase in working 
capital. In addition, taxes are paid in an 
amount corresponding to approximately 
28 percent of earnings before tax.
Vision and drivers
To “help create better everyday conditions for people” 
by offering efﬁcient and environmentally responsible 
products and solutions in the areas of heat transfer, 
separation and ﬂuid handling. 
Goals and benchmark values
5%
15%
20%
2x
2%
10%
Business concept 
The vision is at the core of the company’s efforts to realize 
its business concept: “To optimize the performance of our 
customers’ processes, time and time again.” This is 
achieved by helping customers to become more produc-
tive and competitive through the delivery of high-quality 
products and solutions in the three key technologies. 
12   Vision, business concept, goals and strategy
Growth, %
Profitability, %
Return on capital employed, %

13
0
4
8
12
16
20
16
15
14
13
12
0
1
2
3
16
15
14
13
12
0
1
2
3
16
15
14
13
12
Net debt/EBITDA at year-end 2016 was 1.81.
Investments in 2016 amounted to 1.7 percent.
* In percent of sales
In 2016, cash flow from operating activities amounted 
to 12.2 percent**.
* As a percentage of sales
** Including investments in fixed assets
Sustainability goals 
In addition to its ﬁnancial goals, Alfa Laval also has a number of non-ﬁnancial target parameters. 
These reﬂect the company’s ambitions in the areas of the environment, health and safety. 
Among other areas, these key ratios encompass: a reduction in water consumption, increased 
energy efﬁciency, a reduction in the use of restricted “gray list” chemicals and a reduction in 
greenhouse gas emissions from freight transportation and travel. For more information about 
these goals and the company’s various sustainability initiatives, visit:  
www.alfalaval.com/about-us/sustainability 
Vision, business concept, goals and strategy
Net debt/EBITDA 
Investments, %*
Cash flow from operating activities, %*
About Alfa Laval

Products
Alfa Laval’s product offering in its 
three key technologies – heat 
transfer, separation and ﬂuid handling – serve 
as the foundation for achieving the company’s 
goal for proﬁtable growth. The high efﬁciency 
of these products is – and is expected to 
remain – an important criterion for customers 
who want to improve their competitiveness 
and reduce their environmental impact. Every 
year, the company invests between 2 and 
2.5 percent of its sales in R&D in order to 
ensure that Alfa Laval’s product offering 
remains a step ahead. These investments 
result not only in brand new offerings, but 
also improved and even more efﬁcient 
versions of existing products. Identifying new 
areas of application for existing products 
and key technologies is another important 
strategic approach. At the same time, the 
product offering is also continuously being 
strengthened and expanded through 
acquisitions. These involve supple mentary 
products in the three key areas as well  
as products that are new to the  
company and complement  
the offering in application  
areas where Alfa Laval is  
already represented. 
Market presence 
Having a local presence is 
extremely important for Alfa Laval. 
This includes everything from production 
and new sales to the aftermarket. Accordingly, 
the company continuously makes decisions 
regarding the selective expansion and/or 
strengthening of its presence in certain 
geographic areas. Expansion should primarily 
occur organically – either in terms of breadth 
by entering new geographic areas or in 
terms of depth by further expanding the 
presence in countries and regions where 
Alfa Laval is already established. Acquisitions 
can be used as a secondary means of 
expansion – providing an efficient way of 
quickly strengthening the local presence. 
Another way to expand is to add new sales 
channels. 
Proﬁtability and return 
A number of basic questions must 
be answered in order to ensure 
proﬁtability and a favorable return. One such 
question, concerning procurement and 
production, is where Alfa Laval should conduct 
its production operations, which products 
it should produce itself and which products 
should be purchased from suppliers. Another 
question, pertaining to logistics, is how Alfa 
Laval can meet its customers’ requirements 
in terms of service level, while at the same 
time ensuring an efﬁcient allocation of capital. 
The third question pertains to the business 
models to be applied in the company’s 
divisions and the breadth that Alfa Laval 
should have in its offering. 
Strategy
To achieve its vision, implement its business concept and attain its growth, proﬁtability and capital utilization 
goals, Alfa Laval has established various strategic priorities that include detailed Group-wide key initiatives. 
These strategic priorities encompass products, market presence and the continuous improvement work being 
performed in all areas of the company.
Example of product strategy: 
The product center in Asia was established in 
2010 to enable Alfa Laval to successfully leverage 
the potential identified in the region by developing 
products specifically for local needs. This resulted 
in i-Range – a line of products featuring Alfa 
Laval’s trademark quality but with limited 
functionality. Six product groups are currently 
represented at the product center. Since 2010, 
the local organization has demonstrated its 
ability to identify specific needs in the market. 
By supporting the sales organization during 
product launches and by being close to the local 
production, the organization has contributed to 
Alfa Laval’s success in the region. 
Example of market presence strategy: 
Alfa Laval continuously expands its service 
network while at the same time establishing 
new sales offices in markets deemed to offer 
growth potential. One such area is Northwest 
Africa, including Ghana and Nigeria – the latter 
of which has the largest economy on the 
continent. Alfa Laval established a sales office 
in the region in autumn 2014. Since then, 
employees have been added to address such 
industries as the food and oil and gas sectors as 
well as the all-important aftermarket business. 
In 2016, Alfa Laval’s presence in the region was 
supplemented with a service center in Angola. 
Example of proﬁtability strategy: 
In 2015, a decision was made to establish a new 
distribution center. The next step was to select 
the location – a decision that came down to three 
countries. After conducting a study, it was 
determined that the best option would be to 
invest in building a new facility at the existing 
center in Kolding, Denmark. The location was 
deemed to offer the best solution since it provided 
close proximity to the manufacturing unit in 
Kolding as well as the Nordic market, where 
customers require quick reactions and short lead 
times. The transportation options at the Kolding 
site were also more competitive compared with 
the other two alternatives. The new center is 
expected to be completed in early 2017. 
14   Vision, business concept, goals and strategy

15
Vision, business concept, goals and strategy
* Refers to sales for the year preceding the acquisition or divestment.
** Sales for 2012.
*** Expected sales for 2013 on the acquisition date.
**** Expected sales for 2015 on the acquisition date.
Acquisitions 
Between 2012 and 2016, Alfa Laval acquired eight companies with combined sales of SEK 5,140 million, 
corresponding to average annual growth of SEK 1,028 million.
2012
ACQUISITIONS 
REASON 
SALES, SEK MILLION*
Additional 8.5 percent of the share capital in Alfa Laval India. (Total holding 97.5 percent) 
Geography 
Did not affect sales
Vortex Systems, USA
Product 
100
Ashbrook Simon-Hartley, USA
Product 
500
Gamajet Cleaning Systems, USA
Product/geography 
75
Air Cooled Exchangers, LLC, USA
Product/geography 
350**
DIVESTMENTS 
REASON 
SALES, SEK MILLION*
–
–
–
2013
ACQUISITIONS 
REASON 
SALES, SEK MILLION*
Gas combustion unit
Product 
40***
Niagara Blower Company
Product 
425
DIVESTMENTS 
REASON 
SALES, SEK MILLION*
–
–
–
2014
ACQUISITIONS 
REASON 
SALES, SEK MILLION*
Frank Mohn AS
Product 
3,600
DIVESTMENTS 
REASON 
SALES, SEK MILLION*
–
–
–
2015
ACQUISITIONS 
REASON 
SALES, SEK MILLION*
Service Multibrand
Channel 
50****
DIVESTMENTS 
REASON 
SALES, SEK MILLION*
–
–
–
2015
ACQUISITIONS 
REASON 
SALES, SEK MILLION*
–
– 
–
DIVESTMENTS 
REASON 
SALES, SEK MILLION*
–
–
–
About Alfa Laval

02 03 04 05 06 07 08 09
11 12
15
16
14
13
10
0
50
100
150
200
250
0
30,000
60,000
90,000
120,000
150,000
dec
nov
oct
sep
aug
jul
jun
may
apr
mar
feb
jan
120
130
140
150
160
170
180
190
200
Increased turnover but varied price trend
The price trend for the Alfa Laval share 
varied considerable during 2016, ending the 
year at SEK 150.8 (155.0), down a total of 
3 percent. Including the dividend of SEK 4.25 
per share, the total return for the Alfa Laval 
share was marginally positive but amounted 
to only 0.03 percent. 
The highest share price during the year 
was SEK 154.4, quoted on December 27 
and 28. The lowest share price of the year 
was SEK 121.3, quoted on May 3. Alfa 
Laval’s market capitalization at year-end 
was SEK 63.3 billion (65.3). 
OMX Stockholm Industrials, the sector 
index for industrial shares in which Alfa Laval 
is listed, rose 18 percent in 2016, while the 
Stockholm Stock Exchange as a whole rose 
6 percent. The Alfa Laval share is listed on 
Nasdaq Stockholm and is included in the 
large cap segment in Stockholm and the 
Nordic region. The share is also included in 
a number of other indexes in Sweden and 
abroad, including the OMXN40 Index, which 
comprises 40 companies with the largest 
market capitalization and most-traded shares 
in the Nordic region, as well as the OMXS30 
Index, which includes 30 companies with 
the most-traded shares in Stockholm. 
Strong long-term return 
Since Alfa Laval was relisted on the Stockholm 
Stock Exchange on May 17, 2002, the 
company’s share, including reinvested 
dividends, has generated a yield of 791 
percent. Measured over the full listing period, 
this corresponds to an average annual 
effective yield of 15.1 percent, compared with 
an average annual effective yield of 8.1 
percent for the Stockholm Stock Exchange 
(SIX Return Index) during the same period. 
Share turnover 
Alfa Laval’s share is not traded exclusively on 
Nasdaq OMX Stockholm, but also on BATS, 
Turquoise and the London Stock Exchange, 
to name a few of the major alternative 
marketplaces. In 2016, the Stockholm Stock 
Exchange accounted for 35.0 percent (40.0) 
of all trade in the share and BATS for nearly 
as much at 34.8 percent (39.1). The liquidity 
of the Alfa Laval share is favorable and 
improved during 2016, when the number of 
shares traded increased to 1,092.9 million 
(988), corresponding to a combined value of 
SEK 147 billion (153), including all alternative 
marketplaces. This corresponds to a share 
turnover rate of 2.6 (2.4) times the total 
number of shares outstanding. In 2016, 
the average of transactions completed in 
Alfa Laval shares also increased to 8,268 
(7,742) per trading day. 
Dividend policy 
The Board of Directors’ goal is to regularly 
propose a dividend that reﬂects the Group’s 
performance, ﬁnancial status, and current 
and expected capital requirements. Taking 
into account the Group’s cash-generating 
capacity, the goal is to pay a dividend of 
between 40 and 50 percent of adjusted 
earnings per share over a business cycle. 
For 2016, the Board has proposed that the 
Annual General Meeting approve a dividend 
of SEK 4.25 (4.25). The proposed dividend 
corresponds to 50.1 percent (38.6) of earnings 
per share, adjusted for surplus value. 
Share capital 
The par value at year-end was SEK 2.84 
(2.84) per share. All shares carry equal voting 
rights and equal right to the company’s 
assets. Alfa Laval has no options outstanding 
that could create a dilution effect for share - 
holders. The total number of shares during 
the year was unchanged at 419,456,315. 
Shareholders 
At year-end 2016, Alfa Laval had 35,840 
(37,097) shareholders, corresponding to a 
decrease of 1,257 shareholders (decrease: 
3,408). The ten largest shareholders controlled 
54.0 percent (57.4) of the shares at year-end 
2016. The single largest shareholder was 
Tetra Laval B.V., which increased its holding 
to 29.1 percent during the year through a 
purchase of shares from another major 
shareholder, FAM AB. Accordingly, FAM AB’s 
holding decreased by an equal proportion, 
3 percentage points, to 3.0 percent. In 
addition, SPP Fonder AB is now included 
among the ten largest shareholders in the 
company, while the First Swedish National 
Pension Fund, whose holding at year-end 
2015 amounted to 2.0 percent, is no 
longer on the list. 
16   The share
Price trend, January 2 – December 30, 2016
Total return, May 17, 2002 – December 30, 2016
Alfa Laval
Alfa Laval
OMX Stockholm Index
SIX Return
SX Industrials index
Source: SIX / Fidessa
Source: SIX
SEK
SEK
Number of  
shares (000s)
Total share turnover per month 
(incl. trading on alternative 
marketplaces and OTC trading)

17
2016
2015
2014
2013
2012
Share price at year-end, SEK 
 150.80 
 155.00  
 148.30  
 165.00  
 135.30 
Highest paid, SEK
 154.40  
 176.90  
 187.00  
 167.00  
 146.50 
Lowest paid, SEK 
 121.30  
 126.10  
 138.70  
 133.00  
 110.40 
Shareholders’ equity, SEK 
48.34
 43.92  
 41.01  
 38.53  
 34.46 
Earnings per share 
5.46
 9.15  
 7.02 
 7.22 
 7.64 
Dividend, SEK
4.251)
4.25
4.00
 3.75  
 3.50 
Free cash ﬂow, SEK 2)
9.97
 12.25  
-23.48 
 7.82 
 0.78 
Price change during the year, %
-3
5
-10 
 22 
 4 
Dividend as % of EPS, %
77.8
 46.0  
57.0  
51.9  
 45.8 
Direct return, % 3)
2.8
 2.7  
 2.7 
 2.3 
 2.6 
Share price/shareholders’ 
equity, multiple 
3.1
 3.5  
 3.6 
 4.3  
 3.9 
P/E ratio 4)
 28 
 17 
 21 
 23 
 18 
No. of shareholders
35,840
 37,097  
 40,505  
 36,212  
 34,629 
No. of share-
holders
No. of share-
holders, %
No. of 
shares
Holding, 
%
1 – 500
 24,909  
 69.5  
 3,968,781  
1.0
501 – 1,000
 4,719  
 13.2 
 3,912,974  
0.9
1,001 – 5,000
 4,454  
 12.4 
 10,335,018  
2.5
5,001 – 10,000
 669  
 1.9 
 5,001,807  
1.2
10,001 – 20,000
 375  
 1.0 
 5,589,972  
1.3
20,001 – 50,000
 312  
 0.9 
 10,208,699  
2.4
50,001 –
 402  
 1.1  380,439,064  
90.7
Total number of  
shareholders
 35,840  
 419,456,315  
 
 
No. of shares
 
Capital/voting 
rights, %
Change in 
holding in 2016, 
percentage points
Tetra Laval BV
 122,037,736  
29.1%
3.0
Alecta
 30,109,962  
7.2%
0.9
Swedbank Robur Funds 
 22,750,646  
5.4%
-1.1
AMF Insurance and Funds
 21,795,454  
5.2%
+/- 0
Foundation Asset Managment
 12,550,000  
3.0%
-3
Fourth Swedish Pension 
Insurance Fund
 6,551,772 
1.6%
0.3
Folksam
 3,033,424  
0.7%
+/- 0
SEB Investment Management
 2,845,295  
0.7%
-0.8
SPP Funds
 2,629,962  
0.6%
+/- 0
Nordea Investment Funds
 2,240,493  
0.5%
-1.3
Total ten largest  
shareholders
 226,544,744  
54.0%
No. of shares  
Holding, %
Financial companies
 104 258 015  
 24.8  
Other financial companies 
 12 957 335  
 3.1  
Social insurance funds 
 7 992 054  
 1.9  
Government 
 414 274  
 0.1  
Municipal sector
 38 906  
 0.0  
Trade organizations
 4 739 921 
 1.1  
Other Swedish legal entities 
 8 457 626  
 2.0  
Shareholders domiciled abroad  
(legal entities and individuals) 
 255 813 626  
 61 
Swedish individuals
 22 889 319  
 5.5  
Uncategorized legal entities
 1 895 239  
 0.5  
0
1
2
3
4
5
16
15
14
13
12
0
20
40
60
0
25
50
75
100
16
15
14
13
12
SEK
%
%
1
2
3
4
5
6
Ownership distribution by size at December 30, 2016
Data per share
Ownership categories at December 30, 2016
Ten largest shareholders at December 30, 2016*
3.50
50.1
38.6
46.7
45.8
41.7
3.75
4.00
4.25
4.25
Dividend
Sweden
USA
UK
Other
Percentage of adjusted EPS
Source: Euroclear
Source: Fidessa
*Board proposal to the Annual General Meeting.
**Adjusted for step up amortization net of taxes.
Excluding Tetra Laval (Netherlands) 29.1%.
1 Nasdaq OMX 
35%
2 BATS 
35%
3 Turquoise 
10%
4 London Stock Exchange 
7%
5 BOAT 
6%
6 Other 
7%
1) Board proposal to the Annual General Meeting.
2)  Free cash ﬂow is the sum of cash ﬂow from operating and investing activities.
3)  Measured as the proposed dividend in relation to closing price on the last trading day.
4) Closing price on the last trading day in relation to earnings per share.
Source: Euroclear
Source: Euroclear
Source: Euroclear
*  The table is adjusted for custodian banks. Were they to be included, they would represent 
a total holding of 11.09 percent.
Source: SIX / Nasdaq Stockholm
The share
Dividend and percentage of adjusted 
EPS**
Geographic distribution of the free 
float, % of capital and voting rights
Share turnover on various 
marketplaces
About Alfa Laval

18   Research and development
Research and development
Alfa Laval LKH Prime and Alfa Laval LKH Prime UltraPure 
The Alfa Laval LKH Prime Pump sets a new standard in self-priming pump 
technology. Based on the market-leading Alfa Laval LKH pump range, it is 
a versatile, efficient self-priming pump that uses a combination of air-screw 
technology and advanced design to meet the most stringent standards 
and hygiene requirements in the food, dairy, beverage, hygiene product 
and home care industries. Its superior efficiency results in reduced energy 
consumption. Together with the fact that it is based on the market-leading 
LKH pump range, this delivers a low cost of ownership and increased 
uptime. The pump is also available in the UltraPure model, which is 
designed to meet the needs of customers in the pharmaceutical industry.
Alfa Laval has always been characterized by 
a focus on continuous development. Since 
1883, the company has developed numerous 
new products and worked steadily to 
implement these in a growing number of 
applications and industries. However, Alfa 
Laval’s deﬁnition of innovation goes beyond 
this: “People creating and implementing 
new ideas that create value.” 
Inspiration is all around us – customers 
who express new needs, new legislation, 
experimenting with new manufacturing 
materials, other companies, new market 
trends and new production technologies, 
to name only a few examples. It does not 
necessarily need to result in new products 
or even upgraded versions of existing 
ones. It can just as well be about ﬁnding 
new ways to do business, new production 
methods or new features that can change 
the overall customer experience, such as 
the addition of service packages. Alfa 
Laval’s fundamental belief is that everything 
can be developed and improved, and all 
initiatives are carried out with the aim of 
staying a step ahead of the competition 
and remaining the customer’s ﬁrst choice 
for new equipment, spare parts and service.
Strict requirements in the R&D process
Alfa Laval conducts R&D at some 20 product 
centers and has more than 500 dedicated 
employees who help to ensure that the 
company’s offering remains on the cutting 
edge. Every year, between 2 and 2.5 percent 
of the company’s sales are invested in R&D, 
resulting in the launch of some 35 to 40 new 
products. It all starts with an idea – or rather, 
several ideas contributed not only by the 
R&D organization itself but also by the 
sales and aftermarket organizations, whose 
frequent customer contact provides useful 
insight into emerging needs and trends. 
What follows next is a clearly deﬁned process, 
with ongoing reconciliation and analysis, 
which explains why only a few of the original 
ideas make it all the way through to launch. 
In other words, the difﬁcult part is not ﬁnding 
inspiration, but rather assessing the potential 
of these new ideas, creating strong 
products and launching them effectively.
The organization uses various indicators 
to gauge its results. One such indicator is the 
percentage of sales attributable to products 
launched within the past ﬁve years; another 
is the amount of time it takes to recover 
the total project cost and generate the same 
amount as a gross margin. R&D is crucial 
and it is vital that the company take a strict 
approach and only allow projects with the 
very best potential to go all the way.
Patents protect the company’s business
Investments in R&D are not free, which is 
why it is important to ensure that the revenue 
generated by a new invention remains within 
the company. Alfa Laval’s patent department 
is responsible for protecting and defending 
the company’s technologies and business. 
Every year, the company adds between 35 
and 70 new patent applications, ensuring 
that the percentage of the company’s 
portfolio that is patent protected increases 
continuously. At year-end 2016, Alfa Laval 
had more than 2,500 patents in its portfolio. 
This is an important part of the company’s 
work to ensure proﬁtable growth.
In a competitive world with continuously changing customer preferences, investments in research and development 
(R&D) are crucial to success. The ability to respond to new demands and changing needs by offering new product 
designs and an updated offering is what ultimately enables companies to boost their competitiveness, capture 
market shares and improve their proﬁtability.
Products launched during the year

Three technologies with  
world-leading positions
19
Key technologies
Alfa Laval’s operations are based on three key technologies – heat transfer, 
separation and ﬂuid handling – which play a crucial role in a number of 
industrial processes. In 2016, heat transfer products accounted for 44 percent 
of sales, separation products for 19 percent and ﬂuid handling products for 
24 percent. Alfa Laval commands a world-leading position in all three areas. 
About Alfa Laval

Heat transfer
Heat transfer
In most processes, some form of heat transfer 
solution is required for heating, cooling, ventilation, 
evaporation or condensation. All of this can be 
achieved efficiently using heat exchangers. This 
opens the door to a wide range of industries 
– from food production and petrochemical 
operations to creating a comfortable indoor 
climate, to name only a few examples.
Efﬁcient energy use
Heat exchangers transfer heat or cooling, often 
from one liquid to another. The main product in 
Alfa Laval’s offering – the compact plate heat 
Coolest  
attraction  
in Paris
Every year, nearly ten million people visit the Louvre in Paris to marvel 
at iconic works of art such as the Mona Lisa and Venus de Milo. What 
they don’t see is the elaborate cooling system that ensures these 
priceless masterpieces can be enjoyed in comfort.
exchanger – is more efficient than alternative 
technologies, allowing it to play a crucial role in 
boosting the overall efficiency of the customer’s 
manufacturing process. Energy efficiency reduces 
not only costs but also the impact on the 
environment. Plate heat exchangers are made up 
of a series of plates assembled closely to each 
other. Between these plates run two channels 
containing media at different temperatures – often 
liquids. These flow on either side of the thin 
plates and in opposite directions to each other, 
resulting in a transfer of heating or cooling.
A broad offering
There are different types of plate heat exchangers 
– gasketed, brazed and welded – each designed 
to withstand different pressure and temperature 
levels. Alfa Laval’s offering also includes air heat 
exchangers, spiral heat exchangers, shell-and-
tube heat exchangers, thermal fluid systems and 
boilers, to name only a few examples. With the 
industry’s broadest product portfolio, Alfa Laval 
offers efficient, compact products – that are 
easy to service and maintain – for nearly all 
industries worldwide.
20   Key technologies

44%
21
 Kelvion (Germany)
 HISAKA (Japan)
 SPX FLOW/APV (USA)
 SWEP (USA)
 KANGRIM (Korea)
 SAACKE (Germany)
 MIURA (Japan)
 HEATMASTER (Netherlands)
 OSAKA (Japan)
 
Industrial Equipment
 
OEM
 
Sanitary 
 
Marine & Diesel Equipment
 
Marine & Offshore Systems
 
 Marine & Offshore Pumping Systems
 
Food & Life Science
 
Water & Waste Treatment
 
Energy & Process
Market segments
Competitors
Market position
Sales
More than 30 percent  
of the world market
Share of  
Group sales
1
With one of the world’s greatest art 
collections, the Louvre’s air conditioning 
is far from its main attraction. But this 
iconic building in the heart of the French 
capital is cooled by one of the world’s 
largest district cooling systems. In fact, 
the 52 km underground network, which 
snakes beneath the city’s historic center, 
serves over 500 buildings. In addition to the 
Louvre, this also includes other famous 
landmarks such as the Paris Opera, the 
Forum de Halles, the Banque de France, 
the Galleries Lafayette and the Ritz Hotel.
The basic concept behind the district 
cooling system is that one central source 
supplies multiple buildings. This offers a 
number of advantages over individual air 
conditioning systems, particularly for a city 
like Paris, where many of the buildings 
have significant historical and architec-
tural value that prohibits the installation 
of air-conditioning units. Having one central 
source also frees up space, which is 
another significant benefit. Furthermore, 
the district cooling system reduces energy 
consumption and environmental impact. 
It is estimated that a typical building using 
the system creates 20 percent lower CO2 
emissions and 30 percent less refrigerant 
leakage compared with an individual air 
conditioning system.
Each building is served by a fully 
auto mated delivery substation, which is 
connected to a network of six district 
cooling plants. All six plants are located 
underground, and three of them use water 
taken directly from the River Seine. The other 
three use a cooling tower for refrigeration 
and are used only during the summer 
when demand peaks. It is estimated that 
using river water saves some 500,000 
cubic meters of drinking water every year.
The river water is pumped into the 
station and filtered to remove foreign 
objects before passing through a heat 
exchanger in the cooling liquid circuit. 
The cooling liquid then passes through a 
refrigeration unit containing a condenser 
and evaporator, which chills the water in 
the air-conditioning circuit. The water is 
then pumped away to the individual clients.
Initially, Climespace – the company 
behind the system – used different heat 
exchangers in each substation, but it was 
soon realized that it would be more efficient 
to use one supplier. And so the company 
signed a three-year contract with Alfa Laval 
to supply plate heat exchangers for 100 
substations. Shortly afterwards, the partner - 
ship expanded when Climespace decided 
to find a supplier that could develop a 
standardized concept and offer complete 
substation units rather than just heat 
exchangers. Together with French system 
builders BBS, Alfa Laval has been able to 
offer a total concept from the supply of new 
equipment to installation and maintenance.
“Over the years, Alfa Laval has become 
a true partner and has contributed, thanks 
to its expertise and technology, to the 
performance of the Climespace energy 
network, which is the first district cooling 
system in Europe and one of the biggest 
in the world,” says Jean Levezac, Head 
of Cluster Connections/Substations at 
Climespace Engineering.
Museums:
– The Louvre
– Musée d’Orsay
– Musée du quai Branly
– Musée Grévin
– Salle Pleyel
– Cité de la Musique
– La Philharmonie
Palaces:
– Péninsula
– Le Meurice
– Le Bristol
– Le Ritz
– Plazza Athénée
– Le Georges V
Corporate head ofﬁces:
– AXA
– BNP
– Natixis
– Gecina
Shopping centers:
– Beaugrenelle
– Galeries Lafayette
Government buildings:
– Ministry of Defense
– National Assembly
Key technologies
Paris’s district cooling system is one of the largest of its kind in the world and services over 500 buildings including:
About Alfa Laval

Separation
Separation
Separators have been included in the company’s 
offering since the start in 1883 and remain a 
central part of its operations today. With a high 
degree of precision and reliability, Alfa Laval’s 
products are used to separate liquids, solid 
particles and gases from one another in a 
number of industries.
High-speed separators and decanter centrifuges
Alfa Laval’s separation products are dominated by 
high-speed separators and decanter centrifuges. 
Separators have high rotation speeds, are 
generally mounted vertically and can separate 
small particles from liquids and gases. 
China’s 
brown gold
Decanter centrifuges are normally mounted 
horizontally, operate at lower speeds and are 
used to separate larger particles from liquids. 
They are used, for example, in the dewatering 
of sludge in wastewater treatment plants. Other 
separation products include membrane filters, 
which are the established solution for separating 
very small particles, and belt filter presses, which 
are used for mechanical dewatering, mainly of 
municipal wastewater.
Key role in a number of processes
Separators and decanter centrifuges play a crucial 
role in numerous industrial processes, such as:
Used in Chinese cuisine for more than 2,000 years, soy sauce is still made 
today according to a time-honored process. But in the space of just four 
years, many leading soy sauce producers in China have started to scrap 
traditional methods and switch to modern equipment from Alfa Laval. 
The result has been more efﬁcient production and improved product quality.
–  food, pharmaceutical, bioengineering, 
chemical and petrochemical processes
–  extraction and production of crude oil, and 
treatment and recovery of drilling mud
–  handling and treatment of fuel and lubricants 
aboard vessels and at diesel/gas power plants
–  dewatering of sludge and treatment of process 
water in private and municipal facilities
22   Key technologies

19%
23
Separators
 GEA (Germany)
 MITSUBISHI KAKOKI KAISHA (Japan)
 PIERALISI (Italy)
 SPX FLOW/Seital (USA)
Decanters
 GEA (Germany)
  
  GUINARD/ANDRITZ  
(France, Austria)
 Flottweg (Germany)
 PIERALISI (Italy)
 
Industrial Equipment
 
OEM
 
Sanitary 
 
Marine & Diesel Equipment
 
Marine & Offshore Systems
 
 Marine & Offshore Pumping Systems
 
Food & Life Science
 
Water & Waste Treatment
 
Energy & Process
1
The mild scent of soy sauce hangs in the 
air outside Guangdong Meiweixian 
Flavouring Foods’ factory in the southern 
Chinese city of Zhongshan, reminding 
the visitor that this is the soy sauce 
capital of the world.
The liquid seasoning is made from a 
fermented paste of boiled soybeans, 
wheat, brine and molds. It was originally 
invented in China sometime around the 
5th century BC, and is used in place of 
salt in East and Southeast Asian cuisines, 
both for cooking and as a condiment. It 
is also increasingly seen on dining tables 
in the Western world.
China is the world’s leading soy sauce 
producing country with an annual produc-
tion volume of approximately 5 million 
tons – more than half of the world’s total 
production. While many other industries 
in China have been modernized through 
the introduction of advanced equipment, 
soy sauce pro duction remains very tradi  - 
tional and labor-intensive. For example, 
after fermentation – which can take up to 
six months – the sauce needs to be 
filtered, but the filtration process is still 
carried out by hand, which can pose 
food hygiene problems.
A few years ago, Alfa Laval realized that 
its high-speed separators, sterilizers and 
evaporators – which are used extensively 
for wine, tea, coffee, juice and dairy pro- 
duction – could also modernize the soy 
industry. As with these other foodstuffs, 
there was potential for soy sauce to be 
made in a more cost-efficient way, and 
for product quality to be improved.
A team from Alfa Laval in Shanghai 
contacted leading soy sauce producers 
to spread the word about the benefits of 
introducing high-speed separators to soy 
sauce production. There was initially some 
resistance, as the soy sauce industry is 
highly traditional. Also, the technology had 
not been tested commercially for soy sauce 
applications, and Alfa Laval – despite being 
a world leader in the food and beverage 
industry – was largely unknown in the 
Chinese soy sauce business. So field tests 
were carried out with small separators at 
a number of potential customers’ sites. 
These tests showed that Alfa Laval 
separators offer significant savings in 
manpower. With traditional soy sauce 
production, between three and five people 
are needed per machine; with Alfa Laval 
separators, one worker can supervise up to 
four machines. The Alfa Laval equipment 
also takes less space in the factory, 
reduces the processing time, and is easier 
to clean than existing equipment. And 
then there are considerable quality benefits 
since Alfa Laval’s separators meet stringent 
food hygiene standards, unlike the existing 
equipment used, which is often not 
designed specifically for food use.
One early challenge Alfa Laval had to 
overcome in adapting its technology to 
soy sauce production was finding the 
right material for its equipment. Normally, 
stainless steel is used to manufacture the 
high-speed separators for wine, tea and 
juice, but it would not work for soy sauce 
since the separators and sterilizers would 
corrode in just a few months.
Soy sauce is a very special product. The 
low pH value – about 4.5 to 5.5 – combined 
with high temperatures and a high salt 
content – 18 to 22 percent – make the 
working conditions for the machines very 
tough. So material specialists at an Alfa 
Laval center in Sweden tested different 
varieties of soy sauce supplied by Chinese 
manufacturers with many different materials. 
Today, the AlfaVap evaporators for soy 
sauce feature titanium plates, while the 
separators are made with specially 
developed anti-corrosion materials.
Meiweixian became an Alfa Laval 
customer in August 2012, when it took 
delivery of the first high-speed separator at 
its factory in Zhongshan, and followed this 
up a year later with an order for AlfaVap.
“Our products are regarded as high- 
quality, and that is why we need to have 
a high standard of equipment in our factory,” 
says the head of production technology 
at Meiweixian. “We are still testing, but we 
believe that the separator can substantially 
improve our products, especially within the 
filtration area. Traditional filtration with 
sediment tanks leaves a lot of sludge.”
Word has spread quickly about the 
benefits offered by Alfa Laval equipment. 
By June 2013, seven of the top ten soy 
sauce producers in China were using Alfa 
Laval technology. Besides Meiweixian, 
current customers include Foshan Haitian, 
Lee Kum Kee, Yantai Shinho, Nestlé Maggi, 
Heinz Foodstar, Hengshun, and Pearl River 
Bridge. In just four years, Alfa Laval’s soy 
sauce equipment business grew 
substantially.
The experience of the Chinese soy sauce 
industry and its switch to modern solutions 
shows that even with processes that have 
been tweaked and refined for many centuries, 
there is always room for improvement.
25 to 30 percent  
of the world market
Share of  
Group sales
Key technologies
23
Market segments
Competitors
Market position
Sales
About Alfa Laval

Fluid handling
24   Key technologies
Environmental 
rescue beneath 
the waves 
While sunken shipwrecks might evoke thoughts of gold bullion, 
drama and mystery, the reality is that what lies on the seabed is 
more likely to be an environmental threat than a treasure trove. 
Fluid handling
The transportation and regulation of fluids in an 
efficient and safe manner is crucial to many 
industries. Alfa Laval focuses on fluid handling 
products, such as pumps and valves, for industries 
with stringent hygiene requirements and on 
pumping systems for the marine industry and 
the offshore market.
Efﬁcient and precise
The company’s pumps, valves and installation 
material are used in production processes with strict 
hygiene requirements, such as the production 
of beverages, dairy products, food and pharma-
ceuticals. Pumps drive the flow of liquids while 
valves are used to guide the flow by opening and 
closing. For hygienic applications, Alfa Laval 
mainly offers centrifugal, liquid ring and rotary 
lobe pumps. The most common types of valves 
include control valves, constant-pressure valves, 
butterfly valves and diaphragm valves. The 
offering also includes hygienic tank equipment 
ranging from mixers to cleaning equipment. 
Mixers can be used to mix both high and low- 
viscosity fluids, such as milk, wine, juice, yoghurt, 
desserts and fruit drinks.
For the marine sector, Alfa Laval offers sub - 
merged, hydraulic pumping systems for product 
and chemical tankers. These systems enable 
safe and flexible load handling, which results in 
less time in port and fewer journeys without 
commercial loads. For the offshore industry, 
the offering includes pumping systems for 
collecting sea water, water injection in drill holes 
and fire extinguishing, which contribute to safe 
and efficient operation.

24%
25
Key technologies
The fuel oil aboard Second World War wrecks 
lying off the Norwegian coast poses a major 
hazard to local marine life, but a specialized 
pumping system from Framo has been 
developed to safely and remotely remove 
these toxic substances.
Norwegian coastal authorities have 
classified 30 shipwrecks, of German, UK 
and Norwegian origin that have been 
buried since 1940–1945, the period of 
the nation’s wartime occupation. 
Constructed and operated during an 
era of coal-based fuel oils, the metal of 
the vessels’ structures may corrode and 
oil and fuel leak out as the years pass. 
International coastal agencies, national 
coastal authorities and marine ecologists 
have long sought solutions to this growing 
toxic threat.
There is, however, no simple fix to this 
widespread problem. Norway’s waters are 
deep – and rugged, and cold. In the past, 
divers had the painstakingly slow, risky and 
costly task of offloading these vessels. 
But today the exposure risk for divers, both 
to the frigid water and to the leaking toxins 
near the wreck, is judged to be too high, 
while regulations anyway limit air dives to 
30–50 meters. There is also the threat of 
undetonated explosives in the vessels’ cargo.
Framo’s Remote Offloading of Sunken 
vessels (ROLS) system, which entered 
development in the 1990s, finally offers a 
safer and more cost-effective solution, with 
no need for divers. A slim, maneuverable 
remote operated vehicle is navigated down 
to the wreck, where it drills through the 
side of the vessel and empties the tanks 
of the hazardous fuel oil and cargo. The 
waste is then disposed of onshore 
according to regulations.
The company, with its extensive marine 
experience, and globally trusted brand of 
submersible pumps, has successfully 
carried out 16 operations for the Norwegian 
Coastal Authority and others. There have 
been five additional successful operations 
conducted with the latest generation ROLS 
XO system, following its debut in 2012.
As a result of a serious incident in 1977, 
Norway has the world’s strictest regulations 
on oil spill contingency and is considered 
a world leader in oil spill prevention and 
response. The Norwegian Oil Spill Control 
Association (Nosca), of which Framo is a 
member, brings together the private sector, 
R&D institutions and government pollution 
control authorities to develop equipment 
and contingency planning for oil spill 
emergencies.
In June 2015, the sunken Second World 
War vessel Eric Giese was emptied of oil. 
It was the last of four vessels in the Narvik/ 
Lofoten area to be made safe under Framo’s 
contract with the Norwegian coastal 
administration. 
“Our new ROLS XO has proven to be a 
unique tool for recovering oil from sunken 
vessels,” says Terje Ljones, Sales Manager, 
Oil Recovery Systems at Framo. “We can 
never completely safeguard ourselves from 
oil spills, but with our innovative solutions 
and continuous refining of our products, 
Framo has proven to be prepared for any 
challenge.”
 GEA (Germany)
  SPX FLOW/APV/Waukesha 
Cherry-Burrell (USA)
 Fristam (Germany)
 Hamworthy/WÄRTSILÄ (Finland)
 SULZER (Switzerland)
 
Industrial Equipment
 
OEM
 
Sanitary 
 
Marine & Diesel Equipment
 
Marine & Offshore Systems
 
Marine & Offshore Pumping Systems
 
Food & Life Science
 
Water & Waste Treatment
 
Energy & Process
10 to 12 percent  
of the world market
Share of  
Group sales
1
Market segments
Competitors
Market position
Sales
About Alfa Laval

26   Divisions
Customer focus
Realizing Alfa Laval’s business concept – “to optimize the performance of our customers’ processes, time and time 
again” – requires a structure that provides in-depth understanding and knowledge of customers’ purchasing behavior, 
needs and processes. It was on this foundation that Alfa Laval’s three sales divisions – Equipment, Process 
Technology and Marine & Diesel – were established. The company’s sales divisions are supported by the 
Operations Division, the Group’s shared supply chain with responsibility for production-related procurement, 
manufacturing, logistics and distribution.

27
Divisions
Equipment
Process Technology
Marine & Diesel
Operations
Share of Group’s order intake
Share of Group’s order intake
Share of Group’s order intake
Aftermarket’s share of the division 
Aftermarket’s share of the division 
Aftermarket’s share of the division 
Read more on pages  28–29
Read more on pages  30–31
Read more on pages  32–33
Distribution/Logistics
Manufacturing
Procurement
Segments:
– Energy & Process
– Water & Waste Treatment
– Food & Life Science
– Service
Segments:
– Marine & Diesel Equipment
– Marine & Offshore Systems
–  Marine & Offshore  
Pumping Systems
– Service
Operations is the Group’s shared supply chain and its task is to deliver the orders 
secured by the three sales divisions. In other words, the division is a centralized unit 
with responsibility for production-related procurement, manufacturing and distribution. 
It is crucial that Alfa Laval delivers the right product with the right quality and the right 
documentation at the right time. This means that Operations plays a pivotal role in 
ensuring that the Group is able to keep its promise to its customers and fulfil its 
business concept. Read more on pages 34–35.
Business model
Equipment focuses on component sales to 
customers with a well-defined and regularly 
recurring need for Alfa Laval’s products.
Sales
Sales are primarily conducted through system builders and 
contracting companies as well as dealers, agents and distributors, 
a network that is continuously expanded since it is vital to have 
a local presence close to the customer and be able to quickly offer 
what they need. This focus on availability through multiple channels 
– both geographic and industry-specific – is indispensable when 
it comes to component-based sales. It also explains the company’s 
strategy to gradually expand its e-commerce business.
Segments:
– Sanitary
– Industrial Equipment
– OEM
– Service
Business model
Process Technology’s target group includes 
customers that require customized solutions in the 
areas of heat transfer, separation or fluid handling 
in order to enhance the efficiency of their processes 
and boost their capacity. Since in-depth knowledge 
about customers’ industrial processes is a critical 
success factor, Alfa Laval focuses on specific 
industries and application areas.
Sales
Sales are mainly conducted through the Group’s own sales 
organization and external contracting companies and are 
made directly to customers. The division combines expertise 
in its key technologies with solid knowledge about customer 
processes, and offers package solutions that cover everything 
from individual products to systems, complete solutions and 
efficient customer service.
Business model
The division offers products, solutions and systems 
in the areas of energy, the environment and 
safety for customers in the marine industry, the 
offshore sector and land-based diesel power.
Sales
Sales are conducted by the Group’s own sales organization and 
are made directly to ship owners, shipyards, manufacturers of 
diesel engines and offshore customers. The offering includes 
various main product groups comprising components, modules, 
adapted systems, boilers, separators, heat exchangers, pumping 
systems, inert gas systems, freshwater generators, exhaust gas 
cleaning systems, heat recovery systems and ballast water 
treatment systems.
33%
39%
28%
18%
38%
44%
About Alfa Laval

28   Innehåll
0
2,000
4,000
6,000
8,000
10,000
12,000
16
15
14
13
12
0
2,000
4,000
6,000
8,000
10,000
12,000
16
15
14
13
12
0
1,000
2,000
3,000
4,000
9,476
9,701
9,462
9,471
9,787
9,867
10,500
10 532
10,472
10,639
Equipment Division 
Signiﬁcant events in 2016 
–  The Equipment Division experienced continued 
stable growth in a number of strategically 
important areas – such as products for food 
manufacturing and cold chains – although the 
order volume for the division as a whole 
remained largely unchanged. 
–  The Anytime e-commerce platform was gradually 
made available to a growing number of customers 
worldwide. Signiﬁcant growth was noted in 
Western Europe and the US, where the platform 
has been established for a number of years, 
and at year-end, e-commerce accounted for as 
much as 50 percent of the transactions carried 
out. At the same time, the platform was also 
rolled out in a number of countries in Latin 
America and Central and Eastern Europe. The 
geographic expansion will continue in 2017. 
–  Investments in logistics for cold chains increased 
during the year, which had a positive impact on 
The Equipment Division’s business comprises fast-moving, repetitive component sales to customers characterized 
by a well-deﬁned and regularly recurring need for Alfa Laval’s products. In most cases, sales are conducted through 
system builders and contracting companies as well as dealers, agents and distributors – direct sales to end- 
customers are limited. The Equipment Division continuously increases its number of sales channels, since it is 
strategically important that its products are readily available worldwide. Given this focus, it is natural that the 
division also strives to continuously develop and strengthen its e-commerce offering.
demand for parts of the Industrial Equipment 
product range. However, investments in data 
centers – and thus the need for data center 
cooling – declined compared with earlier years. 
–  Sanitary continued to deliver favorable results 
during the year, with a positive performance in the 
areas of food, dairy products, pharmaceuticals 
and personal care products. 
–  OEM experienced favorable demand for brazed 
heat exchangers from suppliers of air conditioning 
units, boilers and heat pumps. However, demand 
for heat exchangers for the cooling of vehicle 
engines in the mining industry was weaker than 
in the preceding year. 
–  Service ended the year at an unchanged level, 
with growth for the aftermarket in the Sanitary 
segment and slight decline in Industrial Equipment 
due to weaker demand from customers in the 
manufacturing industry. 
Susanne Pahlén Åklundh
President, Equipment Division
Sales and operating proﬁt
Order intake
Sales
* Restated to IFRS 11.
* Restated to IFRS 11.
Operating profit
SEK MILLION
SEK MILLION
SEK MILLION
1
2
3
4
5
6
7
1 Sweden 
6%
2 Other EU 
33%
3 Other Europe  
6%
4 North America 
22%
5 Latin America  
3%
6 Asia 
28%
7 Other 
2%

29
Industrial Equipment
Sanitary
OEM
Service
Order intake
Order intake
Order intake
Order intake
Share of division’s order intake
Share of division’s order intake
Share of division’s order intake
Share of division’s order intake
Change in order intake*
Change in order intake*
Change in order intake*
Change in order intake*
Operations
OEM specializes in delivering products, such as brazed  
heat exchangers, to customers that integrate them into  
their end products. Customers include manufacturers of air 
conditioning systems, air compressors, heat pumps, air 
dryers and gas boilers.
Forces driving demand
Changes in consumption habits as a result of 
urbanization in growing economies, the develop - 
ment of new medicines, a higher standard of 
living, demographic changes, the need for energy- 
efficient solutions, expanded food production and 
a higher percentage of women in the workforce.
Divisions
Operations
Sales comprise heat exchangers for district heating and cooling, 
air conditioning of plants, offices and shopping malls, and 
cooling and freezing solutions for the food, beverage and 
pharmaceutical industries, as well as supermarkets. In addition, 
the segment’s customers are active in the manufacturing 
industries to which Alfa Laval sells heat exchangers and 
separators for temperature regulation and/or cleaning of 
liquids to enable their reuse, thus lowering operating costs 
and protecting the environment.
Forces driving demand
Activity levels in the construction industry, energy 
price trends, the need for energy-efficient solutions, 
the shift toward demand for more environmen-
tally friendly cooling media, environ mental 
legislation, industry capacity utilization, commodity 
and energy price trends, increased environ-
mental focus and expansion of power supply.
Operations
Alfa Laval’s products are used to produce liquid and 
viscous foods, pharmaceuticals and hygiene products. 
Customers are active in the beverage, dairy, food and 
biotechnology industries, all of which have stringent 
requirements in terms of hygiene and safety.
Forces driving demand
Increased focus on the environment, the need 
for energy-efficient solutions, government 
subsidies and energy price trends.
Operations
Customers are active in all of the division’s segments, 
with the exception of OEM. The aftermarket is a priority 
area and the overall strategy is to further develop and 
expand the spare parts and service operations. Read 
more on pages 36–37.
Forces driving demand
The industrial capacity utilization rate and 
growth in the installed base.
*At constant rates.
29%
37%
16%
18%
2016
2016
2016
2016
2015
2015
2015
2015
2014
2014
2014
2014
=
=
=
=
-
=
=
=
-
+
=
=
About Alfa Laval

30   Innehåll
0
3,000
6,000
9,000
12,000
15,000
16
15
14
13*
12
0
3,000
6,000
9,000
12,000
15,000
16
15
14
13*
12
0
1,000
2,000
3,000
4,000
12,812
14,081
13,813
13,935
14,410
14,271
14,511
12,784
12,795
12,383
Process Technology Division
This division serves customers that require customized solutions to enhance the efﬁciency of their processes or 
boost their capacity. Sales are mainly conducted through the Group’s own sales companies as well as contracting 
companies, and are made directly to customers. Alfa Laval combines expertise in its key technologies with solid 
knowledge about customer processes, and offers package solutions that cover everything from individual 
products to systems, complete solutions and efﬁcient customer service.
Svante Karlsson
President, Process Technology Division
Signiﬁcant events in 2016 
The year was characterized by a weak oil and gas 
sector, where a cautious attitude toward investments 
resulted in fewer larger projects. However, the area 
of the business with a downstream focus recovered 
slightly, which had a positive impact on demand 
for heat exchangers. The division’s initiatives related 
to industrial waste also generated positive results.
–  Energy & Process was impacted by the weak 
trend in the oil and gas sector. The entire hydro - 
carbon supply chain was characterized by a 
wait-and-see approach to capacity investments 
in the wake of a low oil price. However, demand 
remained stable in the area of the business 
focused on inorganic materials, metals and 
paper, and the order intake from the power 
sector was also stable. 
–  Food & Life Science reported a lower order intake 
compared with the preceding year due to large 
nonrecurring orders. Life Science saw a marginally 
positive trend and a favorable activity level was 
also noted among breweries with respect to both 
craft breweries and major capacity investments. 
The order intake for gasketed heat exchangers 
was successful and industrial solutions for the 
food industry represented another strong area. 
–  Water & Waste Treatment reported a positive 
development, not least in the important US and 
Asian markets. Alfa Laval’s locally produced 
decanter centrifuges, specially manufactured 
for the Chinese market, contributed to the 
positive trend. 
–  Despite a decline in areas of the hydrocarbon 
supply chain, Service grew thanks to a strong 
performance in Food and Waste Water. Proactive 
initiatives aimed at increasing the share of service 
in the aftermarket business continued to yield 
results. Further support came from the addition 
of new service centers. 
Sales and operating proﬁt
Order intake
Sales
* Restated to IFRS 11.
* Restated to IFRS 11.
Operating profit
SEK MILLION
SEK MILLION
SEK MILLION
1
2
3
4
5
6
7
1 Sweden 
1%
2 Other EU 
24%
3 Other Europe 
8%
4 North America  
26%
5 Latin America 
9%
6 Asia 
29%
7 Other 
3%

31
Energy & Process
Water & Waste Treatment
Food & Life Science
Service
Forces driving demand
Global market prices for raw materials, such as oil, 
sugar, ethanol, corn, gas and steel. Energy prices, 
environmental legislation, the need for energy-efficient 
solutions, the need for productivity enhancements, 
demand for fuel and technological shifts. A growing 
need for energy in developing countries, aspirations 
of national energy independence and the expansion 
of energy production to include renewable fuels are 
some of the factors driving demand. 
Forces driving demand
Demographic changes, population growth, higher 
standard of living, changes in consumption patterns, 
a growing percentage of women in the workforce, 
increased focus on healthy food, subsidies and raw 
material price trends. 
Share of division’s order intake
Share of division’s order intake
Share of division’s order intake
Share of division’s order intake
Change in order intake*
Change in order intake*
Change in order intake*
Change in order intake*
Divisions
Order intake
Order intake
Order intake
Order intake
Operations
Alfa Laval’s products, modules and systems play a 
major role in oil and gas extraction as well as power 
production. They can also be used in the manufacturing 
of petrochemical products, plastics, polymers, metals, 
minerals, biofuels, pharmaceuticals, starch, paper, 
sugar and much more. 
Operations
Alfa Laval offers products that can help customers 
fulfill increasingly strict legislation and environmental 
requirements. For example, the company supplies 
decanter centrifuges for the dewatering of sludge in 
municipal treatment plants across the world. 
Forces driving demand
New rules and regulations, increased need for 
freshwater due to a growing population and 
increased urbanization.
Operations
Alfa Laval supplies process solutions for the beverage 
and food industries, as well as the life science sector. 
The Group’s solutions are for example used in the 
production of beer, wine, juice, fruit concentrates, 
pharmaceuticals, food ingredients, milk proteins, 
sugar, semi-processed foods, vegetable/olive oil, 
and meat and fish proteins. 
*At constant rates.
Operations
Customers are active in all of the division’s segments. 
The aftermarket is a priority area and the overall 
strategy is to develop and expand the spare parts and 
service business, which offers customer value, brings 
customers closer to Alfa Laval and is less sensitive to 
variations in the business cycle. By creating continuous 
customer contacts, the division facilitates new sales. 
Read more on pages 36–37. 
Forces driving demand
The general activity level in various industries, the 
need to upgrade older equipment, an increased need 
for efficiency, and the need for service and spare 
parts to prevent unplanned stoppages and minimize 
the time necessary for planned stoppages.
32%
5%
25%
38%
2016
2016
2016
2016
2015
2015
2015
2015
2014
2014
2014
2014
=
-
-
+
-
+
+
-
-
+
-
+
About Alfa Laval

32   Innehåll
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16
15
14
13*
12
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
16
15
14
13*
12
0
1,000
2,000
3,000
4,000
7,525
6,557
6,526
6,796
10,870
12,522
14,735
12,318
13,831
9,038
Marine & Diesel Division
Peter Leiﬂand
President, Marine & Diesel Division
The division has a wide and varied range of products in the areas of energy, the environment and safety for customers 
in the marine industry, manufacturers of diesel engines and offshore customers. Sales are conducted through the 
Group’s own sales organization directly to customers. The offering includes components, modules and adapted 
systems, such as boilers, separators, heat exchangers, pumping systems, freshwater generators, exhaust gas cleaning 
systems, heat recovery systems and ballast water treatment systems. The division also has a well-developed 
aftermarket organization.
Signiﬁcant events in 2016 
–  The general contracting for the new building of 
ships was at a very low level in 2016, affecting 
Alfa Laval’s order intake throughout the year. 
The development for tankers and cruise ships, 
however, gave some support to demand for 
Alfa Laval’s products and systems.  
–  Despite the generally negative sentiment, there 
was also positive news as 2016 turned out to be 
the year of clarity for environmental legislation. 
The IMO’s ratiﬁcation of the ballast water con - 
vention and its decision to ﬁx the 0.5 global cap 
on sulphur emissions for the year 2020 resulted 
in increased market activity toward the very end 
of the year. These are two interesting areas that 
hold potential for Alfa Laval going forward.   
–  The offshore market remained at a very low level 
as the low oil price meant capex investments 
remained on hold. At the same time, the diesel 
power market saw a signiﬁcant pick-up which 
beneﬁted Alfa Laval.
–  Alfa Laval has been a supplier to the marine market 
for decades and we will continue to develop 
equipment and systems to support the needs 
of the shipping industry. In 2017, Alfa Laval will 
invest in expanding the test facilities for the 
development of high speed separators – a key 
product for the marine market.  
Sales and operating proﬁt
Order intake
Sales
* Restated to IFRS 11.
* Restated to IFRS 11.
Operating profit
SEK MILLION
SEK MILLION
SEK MILLION
1
2
3
4
5
6
7
1 Sweden 
0%
2 Other EU 
32%
3 Other Europe  
10%
4 North America 
9%
5 Latin America 
2%
6 Asia 
45%
7 Other 
2%

33
Marine & Diesel Equipment
Marine & Offshore Systems
Marine & Offshore Pumping Systems
Service
Share of division’s order intake
Share of division’s order intake
Share of division’s order intake
Share of division’s order intake
Change in order intake*
Change in order intake*
Change in order intake*
Change in order intake*
2016
2016
2016
2016
2015
2015
2015
2015
2014
2014
2014
2014
+
+
+
*
-
-
=
*
-
-
-
-
Divisions
Order intake
Order intake
Order intake
Order intake
*At constant rates.
Operations
The segment supplies shipowners, shipyards and manu-
facturers of diesel engines with a wide range of products 
in the areas of energy, the environment and power. The 
product portfolio includes separators, heat exchangers, 
freshwater generators, tank cleaning equipment, ballast 
water treatment systems and much more. 
Forces driving demand
Marine: Global transport requirements, consolidation 
in the shipbuilding industry, government initiatives 
to support local shipyards, environmental legislation 
and a focus on energy efficiency. 
Diesel: The need for electricity in remote locations, 
global energy demand and the need for power 
reserves, for example, for nuclear power plants 
and wind farms.
Operations
Has a wide offering for the division’s customers comprising 
spare parts, service, repairs, upgrades and replacement 
products. The network is well developed and ready to 
help customers whenever and wherever they need 
assistance. Read more on pages 36–37. 
Forces driving demand
Increased trade and capacity utilization in the 
global shipping fleet. 
Operations
Supplies customers in the marine industry and offshore 
sector with a number of components, modules and 
adapted systems aimed at optimizing their processes, 
saving energy and reducing emissions. The offering 
includes boilers, inert gas systems, exhaust gas cleaning 
systems and thermal fluid systems. 
Forces driving demand
Global transport requirements, governmental 
initiatives to support local shipyards, environmental 
legislation, increased focus on energy efficiency, 
safety regulations for transporting flammable 
cargoes, investments in offshore oil and gas 
exploration, and offshore drilling technology 
improvements.
Operations
Supplies customers in the marine industry and offshore 
sector with pumping systems. For the marine industry, the 
segment offers submerged pumping systems for optimizing 
loading and unloading on chemical and product tankers. 
In offshore oil and gas, it offers pumping systems that 
contribute to safe and efficient operation. This offering 
includes pumping systems for fire-extinguishing equipment. 
Forces driving demand
Global transportation needs, for example, for refined 
oil products and chemicals, a growing need among 
shipowners for solutions that optimize loading and 
unloading, the expansion of floating production, 
storage and offloading (FPSO), the trend of refineries 
located closer to the source, the expansion of shale 
gas in the US and a general increase in the need 
for fossil fuels. The need for safety solutions for 
the offshore market. 
*  The segment was formed in 
2014 and lacks comparable 
numbers.
22%
18%
16%
44%
About Alfa Laval

1
2
3
4
Distribution 2016
1 Air 
6%
2 Railway 
0.5%
3  Sea 
23.5%
4   Road 
70%
34   Divisions
A shared supply chain
With responsibilities ranging from procurement 
of raw materials to delivery of end products, 
Operations faces numerous challenges every 
day. Continuously reviewing the supplier base 
to ensure that they not only offer favorable 
prices but also guarantee quality and reliable 
deliveries as well as meeting sustainability 
requirements with respect to the environ-
ment, health, safety and ethics. Ensuring 
that Alfa Laval’s production operations run 
smoothly, with a focus on quality, efﬁciency, 
cost, capacity utilization and delivery 
reliability. Continuously working to reduce 
the company’s environmental impact and 
offer a safe, accident-free workplace. 
Altogether numerous continuously 
changing variables, which makes it crucial 
that the division is able to adapt quickly.
Development a top priority
To ensure an optimized supply chain, a 
preventive approach is critical. It was for this 
Alfa Laval has a Group-wide supply organization known as the Operations Division, which produces and delivers the orders 
generated by the three sales divisions – Equipment, Process Technology and Marine & Diesel. Operations is responsible for the 
Group’s production-related procurement, manufacturing and distribution and for ensuring that the right product is delivered 
with the right quality, at the right location, along with the right documentation and with a short lead time. The division is thus an 
important cog in the Alfa Laval machine and plays a vital role in helping the company meet its commitment to its customers.
reason that the division established a unit 
tasked with handling the various challenges 
that arise. This unit focuses on three main 
areas: supply chain, technology and production 
development. The unit evaluates, initiates 
and manages changes, from purchasing 
and production to distribution and logistics. 
This includes reﬁning procurement processes, 
developing and testing of new, cost-efﬁcient 
production technologies and optimizing the 
ﬂow of materials and information. Numerous 
projects are carried out over the course of 
a year, ranging from small minor, rapid 
adjustments to major structural changes 
– all to create stable manufacturing processes, 
which in turn ensure the timely delivery of 
competitive, high-quality products.
Procurement
Procurement of raw materials involves much 
more than only price comparisons. It is about 
continuously improving the entire procurement 
process, where price is only one of many 
factors. The goal is to ensure that Alfa Laval 
gets the absolute best value for every krona 
it spends on procurement. This is why it is so 
important that the procurement organization 
becomes involved early – already during the 
design and development of new products.
In addition to price, the company must 
ensure that the freight costs are reasonable, 
that the supplier is able to guarantee short 
lead times, that the products delivered are 
of the right quality and that the supplier 
complies with Alfa Laval’s business principles 
with respect to the environment, health, safety 
and ethics. These four factors prompted 
the development of a platform for supplier 
audits, based on a global standard that 
enables uniform and comparable audits.
An efﬁcient, well-conceived procurement 
process is necessary given that direct 
materials account for such a large portion 
of the cost of goods sold – a full 70 percent. 
Procurement
Manufacturing
Distribution/Logistics
  USA (2)
  Sweden (2)
  Denmark (1)
  China (1)
  Singapore (2)
  Japan (1)
  India (1)
  Netherlands (1)
  Norway (1)
  Korea (2)
  China (3)
  Japan (1)
  UK (1)
  France (5)
  Germany (1)
  Italy (2)
  Poland (1)
  USA (8)
  Brazil (2)
  Sweden (4)
  Norway (3)
  Denmark (3)
  Finland (1)
  Russia (1)
  India (4)
Alfa Laval’s production includes 42 major manufacturing units:    
Production units
Distribution centers

35
1
2
3
4
1 North and Latin America 
7%
2 Asia 
22%
3 Central and Eastern Europe 
3%
4 Western Europe 
68%
Signiﬁcant events in 2016
–  During the year, we continued our efforts 
to strengthen our competitiveness and 
delivery capacity in order to better satisfy 
our customers’ needs. 
–  Our procurement organization continued 
to perform well, delivering good results 
when it came to ensuring a reliable supply 
of materials and components. 
–  We invested in new capacity and productivity- 
enhancing equipment for the manufacturing 
of brazed heat exchangers, boilers, gasketed 
heat exchangers and valves. 
–  We continued our ongoing efforts to implement 
improvements in the areas of health, safety, 
quality, shorter lead times and lower costs 
by an improved employee commitment 
and a focus on Lean Six Sigma and our 
production systems.
Göran Mathiasson
President, Operations Division
Divisions
In other words, it has a major impact on the 
company’s proﬁtability. The direct materials 
purchased by Alfa Laval include a large 
portion of metals, such as stainless steel, 
copper, aluminum and titanium. In addition 
to metals, the company purchases materials 
in ﬁve other product categories, including cast 
metal and forged iron, electrical equipment 
and instruments, gaskets and fasteners.
Manufacturing
Thanks to its Group-wide production, Alfa 
Laval has created a structure that generates 
economies of scale and has a stabilizing 
effect on the company’s factory load. The 
structure is based on technology, product 
size and production technology. Brazed 
heat exchangers, for example, are 
produced in Ronneby (Sweden), Alonte (Italy) 
and Jiangyin (China), small and medium-sized 
separators are produced in Krakow (Poland) 
and Pune (India) and large separators are 
produced in Eskilstuna (Sweden). This means 
that all requirements for large separators 
are handled by the same plant, regardless 
of whether the separator is intended for a 
dairy or an application in the processing 
industry. Since Alfa Laval is exposed to a 
large number of industries in different phases 
of the economic cycle, this consolidation 
enables the individual production unit to 
meet the total demand from several end 
markets rather than just one, which creates 
the conditions for a more consistent load. 
The structure is also global, with 42 major 
manufacturing units worldwide. The structure 
is the result of both practical and cost 
considerations. There are advantages to 
having production operations in low-cost 
regions as well as being able to respond to 
local demand with local production.
Distribution
Logistics and distribution include everything 
from order handling and inventory manage-
ment to stock picking, delivery and invoicing. 
These operations are managed at centers 
located in Sweden, Denmark, Norway, the 
Netherlands, the US, Singapore, India, Japan 
and China. The centers process millions of 
orders every year, comprising several 
million components and spare parts. They 
are also responsible for Alfa Laval’s overall 
transport needs, which is an efﬁcient and 
cost-effective solution. Their work also 
includes an environmental perspective since 
the organization looks for environmentally 
sound transport solutions as part of the 
Group’s sustainability efforts. The Group 
has made a deliberate choice to transport 
as little as possible by air in order to reduce 
its CO2 emissions from freight. However, it 
is sometimes difﬁcult for the organization 
to inﬂuence the mode of transport used. 
The customer may have an urgent need 
and air transport may be the only possible 
solution. In 2016, 6 percent of the Group’s 
products were shipped by air, 70 percent 
by road and 23.5 percent by sea.
 
Investments by geographic market, %
 
Purchases by geographic market, %
Geographic distribution of direct labor 
hours in production, %
1
1
2
2
3
3
4
4
5
5
1 North America 
4%
2 Latin America 
2%
3  Western Europe 
26%
4 Central and Eastern Europe 
3%
5 Asia 
65%
1 North America 
9%
2 Latin America 
1%
3  Western Europe 
63%
4 Central and Eastern Europe 
7%
5 Asia 
20%
About Alfa Laval

36   Service
Alfa Laval throughout the life cycle
Alfa Laval’s service offering is tailored to meet 
the needs of the individual customer, which 
vary depending on the industry, application 
and region in question. The portfolio includes 
everything from spare parts, basic maintenance 
and cleaning to upgrades, inspections, online 
monitoring, round-the-clock technical support, 
monitoring of spare parts consumption and 
complete maintenance plans. Signing a 
service agreement with Alfa Laval allows 
companies to maximize their operating time 
and achieve the best possible performance, 
which helps to keep costs down over time. 
Adopting a lifelong approach rather than 
only focusing on the initial investment cost 
ultimately pays off. And do you know the 
best part? Alfa Laval takes care of the 
practical details and lets the customer 
focus on their core operations.
Assistance close at hand
If an unexpected event still takes place, 
Alfa Laval is always close at hand – an 
important criterion for many customers. 
With service operations in more than 100 
countries in the form of service centers, 
local ﬁeld service engineers, service partners 
and/or regional spare parts distribution 
centers, Alfa Laval offers the best coverage 
in the sector. Many customers actually 
consider a company’s aftermarket offering 
to be the most crucial factor when choosing 
new equipment. Alfa Laval’s network grows 
every year, further strengthening its local 
support and guaranteeing immediate 
assistance as well as quick deliveries of 
spare parts when needed. In 2016, new 
service centers opened, for example, in 
Angola, Iran and the US. 
Companies aiming to improve their performance and boost their efﬁciency need to focus on quality, high productivity 
and strict cost control. Investing in equipment from Alfa Laval is a good start. We are there, ready to help – even 
after the initial investment – from start-up through operation, offering monitoring, maintenance, reconditioning, 
spare parts and upgrades. Combining equipment with spare parts and service from Alfa Laval creates a foundation 
for successful development.
A growing installed base
Over the years, Alfa Laval has built up a 
large installed base of products, generating 
a growing need for spare parts and service 
as the products age. A database containing 
details about the installed base provides a 
useful tool when it comes to ensuring that 
sales of spare parts and service are growing 
in absolute terms. The Group also aims to 
increase the share of sales attributable to 
service. To achieve an accurate overview 
of the Group’s performance, internal key 
performance indicators are used to measure 
customer coverage as well as the share of 
the installed base covered by the company’s 
aftermarket offering.
Changed mix in Service
Traditionally, spare parts have accounted 
for a much larger share of the Group’s 
aftermarket sales than service. However, 
this has changed somewhat in recent years 
and service now accounts for a growing 
share. The explanation is partly structural 
– a result of the acquisition of Aalborg 
Industries and Frank Mohn AS, both of 
which had a larger service share – but it is 
also the result of activities carried out for 
the speciﬁc purpose of increasing the 
service share. Today, the distribution for 
the Group is approximately 70 percent 
spare parts and 30 percent service.
Service – so much more than the 
aftermarket
The traditional concept of the aftermarket 
is simply too narrow to fully reﬂect the 
Service segment’s activities and offering. 
Naturally, spare parts and service play a key 
role, with favorable proﬁtability and limited 
sensitivity to economic trends, which has a 
stabilizing effect on invoicing and earnings. 
But the Service organization is also the area 
of Alfa Laval with the most frequent customer 
contact. This means that it can gather infor-
mation about potential future requirements or 
signs of new trends, which can be passed on 
internally to the company’s R&D units. Service 
personnel are also important ambassadors 
who can help tip the scales when customers 
are planning their next investment projects after 
assessing the overall Alfa Laval experience. 
In other words, the Service organization is 
there to help keep customers satisﬁed over 
the life cycle of the investment. 
Potential
As previously mentioned, customer demand 
for spare parts and service varies depending 
on the type of industry in which the product is 
used, the type of application, how much and 
how often the product is used, geographic 
location and the type of technology involved. 
Some customers conduct seasonal operations 
where machinery is only used for a few months 
of the year; others operate processing plants 
that run around the clock. Some products are 
used at the heart of demanding and strenuous 
industrial processes; others are used in gentler 
applications where their function is limited to 
cooling or heating water. There are as many 
different types of needs as there are customers. 
This is why Alfa Laval’s customized offering 
is so important since it allows the company 
to offer customers what they need and want, 
when they want it – no more and no less.

37
Service
0
2,000
4,000
6,000
8,000
10,000
12,000
16
15
14
13
12
8,023
8,144
9,469
10,592
10,573
1
1
1
1
2
2
2
3
3
4
4
5
6
7
Long-term potential – Value of the aftermarket relative to new sales
Order intake, SEK million
Service centers  
Installed base
Decanters x 1.5
Pumps and valves x 1–2.5
Separators x 4
Plate heat exchangers x 1–7
Large and mature installed base that  
needs to be maintained and renewed.
A combination of fast-growing markets  
and established niche applications.
Installed base that is growing rapidly.
3
About Alfa Laval

Employees
Alfa Laval aims to provide its employees with the right conditions to tackle all 
of the challenges constantly faced by the Group. A secure and safe workplace 
is a basic requirement.  Ensuring that the workplace is free from discrimination, 
with career paths open to all employees, is equally important. Finally, the 
prioritization of professional development is crucial. But it goes even further 
than this. Alfa Laval is fully dedicated to attracting, developing and retaining 
the best employees, regardless of gender and nationality, in order to create a 
dynamic work environment. In a stimulating environment, employees have an 
opportunity to grow and develop, which in its turn is a prerequisite for Alfa 
Laval’s continued development.
For more information about Alfa Laval’s 
efforts in the area of health and safety, 
download the company’s GRI report 
from the sustainability section of our 
website: www.alfalaval.com.
i f
i
b
Alf
L
38   Employees

39
10,000
12,000
14,000
16,000
18,000
16
15
14
13
12
0.0
0.5
1.0
1.5
2.0
2.5
16
15
14
13
12
16,060
1.86
16,238
1.84
17,109
2.05
17,486
17,305
2.27
2.06
Employees
Returning home safely from work – 
every day
The company has a vision of a workplace 
that is free from accidents and work-related 
illnesses. All employees should be able to 
return home safely from work – every day. 
Therefore, the work environment must be 
designed to minimize the risk of accidents 
and the employees must have the right 
attitude in order to help prevent as many 
health and safety challenges as possible.
The company’s work in the area of health 
and safety is carried out on an ongoing 
basis and supported by an occupational 
health and safety (OHS) program, developed 
to incorporate safety issues and consider-
ations into the company’s daily procedures. 
This means that the program covers not only 
Alfa Laval’s employees but also visitors, 
contractors and suppliers – i.e. people 
visiting the company’s facilities for any reason. 
The OHS program includes a council that 
is responsible for establishing guidelines, 
global priority areas and action plans. This 
means that the council not only determines 
the direction of the work, but also provides 
tools to support the realization of the 
company’s vision. The council is led by 
Alfa Laval’s Senior Vice President of Human 
Resources and its members include the 
President of the Operations Division and 
Senior Vice President of Corporate Social 
Responsibility. All of Alfa Laval’s facilities are 
expected to comply with local legislation and 
regulations in the area and to establish an 
organization with responsibility for ensuring 
that all mandatory OHS requirements are met.
Training and personal development
Alfa Laval applies the 70-20-10 model 
when it comes to employee training and 
development. 10 percent of what an 
individual learns is to come from formal 
training programs, either online or in a 
classroom setting. 20 percent is to come 
from various types of developmental 
relationships, meaning what the individual 
learns from managers, more experienced 
colleagues or mentors. 70 percent is to 
come from the challenges faced during the 
course of the individual’s day-to-day work. 
The company’s formal training program 
includes a broad range of courses, some of 
which are offered locally and others as part 
of a central program. The training portal on 
Alfa Laval’s intranet serves as a hub for this 
program. In 2016, the program included 
700 courses, 450 of which were Inter-
net-based – a ﬁgure that indicates a sharp 
increase in e-learning compared with 
previous years. These courses can either be 
held in a real-time group setting or as 
independent study programs that allow the 
participants to determine the location and 
pace of the program. The selection of courses 
is managed by the HR organization, which 
ensures that the range is continuously updated 
based on the needs of both the employees 
and the company. The program is very popular 
and some 8,400 employees participated in 
the courses offered through the portal during 
the year. In total, approximately 12,500 
training sessions were held during the year.
Diversity promotes growth
Alfa Laval is an international company with 
a global presence. At year-end 2016, 89 
(98) nationalities were represented within the 
Group. The proportion of female employees 
in the company was 19.3 percent (19.1) 
and the proportion of women in the group 
of managers reporting directly to Group 
management was 16.2 percent (18.2). A 
total of 26 nationalities were also repre-
sented in this management group.
There are several reasons why Alfa Laval 
strives after diversity. Firstly, it is desirable 
to achieve a composition of employees that 
reﬂects the geographic markets where the 
company operates. Secondly, diversity tends 
to promote creativity and innovative thinking. 
Bringing together individuals who are different 
– people who think differently and contribute 
different perspectives and approaches, who 
are of different genders, nationalities and 
ages, and who bring different experience 
– lays the groundwork for a creative and 
ﬂexible work environment. And this is 
precisely what a company focusing on 
innovation needs. For this to be possible, 
we must treat everyone equally, meaning 
that all employees must feel that they have 
career paths open to them. This is why Alfa 
Laval has used an open internal recruitment 
process – all available positions are published 
on the company’s intranet and all employees 
are welcome to apply. This open internal 
recruitment process and the company’s 
focus on individual performance create an 
inclusive environment with equal opportu-
nities for professional development. This 
process is also positive from a personal 
perspective, since it gives the individual 
employee signiﬁcantly more career options 
than can be offered locally. Open internal 
recruitment encourages mobility within the 
Group, allows the company to retain 
employees who may otherwise look for 
new challenges outside the Group and is 
an important incentive when the company 
hires new employees.
The company also conducts other initiatives 
to ensure diversity. For example, efforts are 
being made to expand the recruitment base 
for female management positions by employing 
a larger portion of female university students 
immediately after they ﬁnish their studies. 
Another initiative is focused on increasing the 
number of Level 4 managers from under - 
represented countries. For Alfa Laval, an 
inclusive workplace and stimulating work 
environment are crucial to the company’s 
ability to achieve its goals and maximize 
the individual’s potential in the organization.
Average number of employees 
Sales per employee, SEK million 
Employees per region
1
2
3
4
5
6
7
1 Sweden 
12%
2 Other EU  
31%
3 Other Europe  
9%
4 North America 
11%
5 Latin America 
3%
6 Asia 
33%
7 Other 
1%
About Alfa Laval

40   Sustainability report
Optimizing our customers’ processes 
– a sustainability matter
Ensuring access to safe food, reducing waste in food production and cutting emissions on land and in the world’s 
oceans will be important steps to achieving the UN Sustainable Development Goals by 2030.  Increased energy 
efﬁciency will be important to meet the climate agreement ratiﬁed in 2016. At the same time, water shortage in many 
countries of the world is becoming increasingly obvious.  Alfa Laval supplies products and solutions that can contribute 
to improvements in these sustainability areas for customers in the marine, energy, water and food industries.
Alfa Laval’s focus in 2016 was on establishing an organization with the ability to reach customers in a faster 
and more efﬁcient way. Equally important was to continue to deliver products and solutions that optimize our 
customers’ processes. 
Our sustainability work included the preparation of a new environmental strategy towards 2020, with 2015 as 
the base year. The strategy included new goals with respect to energy, greenhouse gas emissions, water, chemicals 
and waste, which include the entire value chain.  We will therefore work together with our suppliers and other partners 
while at the same time focusing on reaching continuous improvements at our own facilities. We will also focus on 
opportunities to further leverage the positive effects that our products and solutions can generate for our customers. 
Furthermore, we continued to implement our business principles at our suppliers’ facilities while our internal 
focus was on health, safety and anti-corruption. 
Tom Erixon
President and CEO

41
Sustainability report
S
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C
I
A
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B
U
S
I
N
E
S
S
 I
N
T
E
G
R
I
T
Y
E
N
V
I
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O
N
M
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A
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P
A
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C
Y
Alfa Laval’s 
business 
principles
Sustainability report 2016
As part of its sustainability efforts, Alfa Laval 
regularly listens to various stakeholders and 
continuously reviews the scope and focus of 
its work. Accordingly, it is important to have 
a clear structure in place and clear processes 
for identifying, prioritizing and managing risks 
and opportunities. We know it is impossible 
for the organization to manage all of the 
risks in our operating environment at the 
same time, which is why we continuously 
weigh up the severity of the risks in question 
and our ability to exert an inﬂuence and create 
meaningful change. In other words, we have 
chosen to focus on the areas where we 
believe we have the best chance to make 
a real difference. 
Division of responsibility 
Main responsibility rests with the line 
organization 
The line organization is responsible for 
integrating the business principles into the 
ongoing work throughout Alfa Laval’s value 
chain and its managers are responsible for 
ensuring the line organization’s compliance 
with Group policies and all applicable laws, 
rules and regulations. 
Overall strategies and follow-up take 
place through management structures 
The implementation process is led by various 
councils, which are responsible for establishing 
overall strategies and reviewing the work of 
the line organization. These councils are 
Our business principles – an important foundation
Alfa Laval’s four business principles, which focus on continuously improving Alfa Laval’s social, environmental and 
ethical efforts as well as the company’s transparency – form the foundation for the company’s sustainability work. 
The business principles incorporate the “Protect, Respect and Remedy” framework introduced in the UN Guiding 
Principles on Business and Human Rights as well as the OECD Guidelines for Multinational Enterprises. We are also 
signatories to the UN Global Compact.
Division of responsibility, clear priorities and follow-up  
are crucial to achieving continuous improvements
chaired by representatives of Group manage- 
ment and comprise various managers from 
the relevant divisions. 
Commercial Ethics Council 
The management groups of the sales 
organizations bear the main responsibility 
for risk assessments and risk reduction 
measures with respect to our business 
contacts. They are supported and guided 
by the Commercial Ethics Council (CEC), 
which is led by the CEO and includes three 
additional members of Group manage-
ment. Since human rights violations are 
frequently at the root of international trade 
embargoes, export control is a key focus 
area. The CEC is responsible for ensuring 
that all relevant embargoes are respected 
and implemented throughout the sales 
channels used for Alfa Laval’s products and 
solutions. The CEC also handles commercial 
dilemmas originating from conﬂicts and 
human rights violations that do not result in 
ofﬁcial trade embargoes. Other areas related 
to business integrity, such as anti-corruption, 
are also addressed by the CEC. Furthermore, 
the CEC is responsible for implementing risk 
assessments and risk reduction processes. 
Environmental Council 
The Environmental Council makes decisions 
regarding the company’s environmental 
strategy, establishes Group-wide environmental 
goals and monitors the work to minimize the 
ENVIRONMENT
Optimizing the use of 
natural resources is our 
business
TRANSPARENCY
Our commitment  
to open dialogue  
builds trust
BUSINESS INTEGRITY
High ethical standards 
guide our conduct
SOCIAL
Respect for human 
rights is fundamental
– Health and Safety Council
– Group Crisis Management
–  Group Crisis Management
– CSR Coordinators
– Environmental Council
– Commercial Ethics Council
Sustainability

42   Sustainability report
company’s environmental impact throughout 
the value chain. The council is led by the 
President of the Operations Division and 
includes the Senior Vice President of Human 
Resources and managers from the organiza-
tions in the company deemed to have the 
most signiﬁcant environmental impact. 
Health and Safety Council 
The Health and Safety Council sets policies 
and prioritizes Group-wide initiatives with a 
focus on health and safety. The council is 
Priorities and  
results for 2016
Social: 
The social business principle has the broadest 
scope of all the business principles and is 
based on the UN Guiding Principles and 
the OECD Guidelines. Our risk assessment 
evaluates such considerations as the possi-
bility of human rights violations in our supply 
chain and company. 
Our ongoing priorities were as follows: 
–  Improving the working conditions of 
high-risk suppliers. 
–  Reducing the frequency of workplace 
accidents in our factories and also the 
percentage of serious accidents. 
Suppliers and the supply chain  
– our work in 2016 
For more than a year, we have worked to 
ensure that our suppliers understand and 
uphold our business principles. The process 
begins with a review of our suppliers, their 
manufacturing processes and geographic 
location. During the course of this work, we 
found that the main risks arise in countries 
with ineffective enforcement of national 
employment legislation and international 
human rights standards. Some of our suppliers’ 
manufacturing processes are also inherently 
associated with health, safety or environmental 
risks due to the nature of the work itself (for 
example, metal polishing and foundry work). 
We review how well our high-risk suppliers 
comply with our business principles and 
work together to prepare an improvement 
plan, which is then followed up. Suppliers 
with serious breaches are given between one 
and six months to implement improvements. 
If no progress has been achieved by the end 
of the period, the supplier may be phased out. 
In 2016, we learned that there are two crucial 
elements when it comes to ensuring that the 
process actually results in improvements 
– namely the understanding among suppliers 
and our organization’s ability to assume 
responsibility and focus on follow-up. 
Supplier understanding essential for 
improvement 
Alfa Laval conducts various initiatives to 
increase the level of understanding in the 
countries with the highest risks. Approxi-
mately 100 suppliers in China and India took 
part in these initiatives in 2016. The suppliers 
who participated made faster progress 
after their reviews and also showed a better 
under standing of the fact that these improve - 
ments would also be good for their business. 
At Alfa Laval, all employees in the 
procurement organization receive training 
in the company’s business principles and 
all procurement managers are required to 
undergo mandatory anti-corruption training. 
More effective follow-up 
During 2016, we worked to achieve a more 
effective process for handling suppliers who 
do not live up to our business principles. 
This is to be accomplished through a more 
cohesive decision-making process. 
Health and safety – our work in 2016 
During 2016, we rolled out a project known 
as 3PR (three prioritized safety risks) at all of 
our facilities. Until now, our work on health 
and safety has focused on work environment, 
tools and training. 
The aim of the new project is to help 
our employees understand how important 
their behavior and attitude toward risk are 
when it comes to reducing the number of 
accidents. By focusing on the three most 
important risks at each facility, our employees 
can prioritize the behaviors that need to 
change in order to cut back on accidents. 
chaired by the Senior Vice President of 
Human Resources and also includes senior 
managers from the organizations exposed to 
the highest risks in terms of health and safety, 
such as the Operations Division and Service. 
Group Crisis Management 
Customer safety is a prime concern, which 
is why all product-related safety issues are 
automatically referred to the Group Crisis 
Management organization. This ensures 
that a thorough root cause analysis is 
performed and appropriate corrective actions 
are implemented, including product recalls 
if necessary. The organization is also 
convened to handle incoming warnings 
from our whistleblower system. 
Review: Board and management 
Once per year, the Board and Group manage- 
ment perform separate reviews of the Group’s 
progress, as well as the goals and priorities 
established to achieve the objectives 
stipulated in the business principles.
Within our service organization, we added 
a new resource in the area of health, safety 
and the environment and began rolling out 
the 3PR project. During the year, we also 
worked to raise safety awareness at service 
centers and among our ﬁeld engineers. 
Business integrity: 
This principle is based on the expectation 
that the company is to comply with the laws 
in effect in the countries where we operate. 
The principle covers conﬂicts of interest, 
political contributions, anti-bribery and 
anti-corruption (ABAC), fair competition 
and corporate governance. At the overall 
company level, the CEC is responsible for 
implementing risk assessments and risk 
reduction processes, while the line managers 
are responsible for ensuring compliance with 
Group policies and all applicable laws, rules 
and regulations. The line managers receive 
risk assessment training in this area and are 
continuously reminded of their responsibilities 
through an annual debrieﬁng. Internal audits 
are conducted regularly and are intended 
to ensure that appropriate processes are in 
place and functioning properly. There is also 
a whistleblower system that enables all 
stakeholders to report potential breaches 
anonymously. 
Anti-corruption processes – our work in 2016 
We aim to continuously improve and review 
our anti-corruption processes. In recent years, 
our main focus has been on risk analysis 
and training – and the same applied in 2016. 
We have now provided training for most of  
the employees involved in sales and 
procurement. During 2017, we will take the 
next step, which will involve the introduction 
of mandatory training for all white-collar 
employees in the company.

43
Sustainability report
Environment: 
For Alfa Laval, it is important that both its 
production and service operations continuously 
improve energy efﬁciency and reduce 
water consumption. But equally important 
– and with an inﬁnitely greater potential for 
savings – is the company’s capacity to 
provide products, service and solutions 
that can limit customers’ resource 
consumption, thereby helping them to 
achieve their sustainability goals. 
Alfa Laval’s most recent environmental 
strategy extended until the end of 2015 and 
we are pleased to report that we achieved 
our goals with respect to energy, CO2 
emissions and water. As we worked toward 
these goals, we also encountered new 
challenges and these formed the basis for 
the new environmental strategy for 2016 to 
2020, with 2015 as the base year. Our new 
goals are as follows: 
Energy: 
reduce energy consumption by 10 percent. 
By conducting energy audits at our largest 
facilities, we will be able to map out our energy 
consumption and potential areas for improve - 
ment. We will then implement projects to 
reduce our energy consumption in the areas 
with the greatest potential for savings. 
CO2: 
reduce emissions by 15 percent. 
We will focus on minimizing CO2 emissions 
from transportation since these account for 
40 percent of the company’s emissions. 
This will be achieved by improving planning 
throughout the supply chain. 
Water: 
reduce consumption by 10 percent. 
Since Alfa Laval does not use large quantities 
of water in its production, we will focus our 
initiatives on countries with water scarcity in 
order to achieve our water consumption goal. 
Chemicals: 
no use of prohibited chemicals and 
50-percent reduction in the use of 
potentially harmful substances. 
We will continue our systematic work to 
control the use of chemicals. 
Waste: 
recycle at least 85 percent of waste. 
During this period, we will also focus on 
waste and ensure that at least 85 percent 
of the waste from our facilities is recycled. 
In 2016, a new reporting system was 
introduced with the aim of achieving higher 
quality data , which in turn will enable better 
follow-up of our goals. 
Alfa Laval believes that the greatest 
environmental gains can be achieved in the 
customers’ operations. Our products and 
solutions can help customers to become 
more energy efﬁcient. They can also help to 
reduce water consumption, boost productivity, 
optimize the use of input goods and ensure 
compliance with prevailing environmental 
legislation. For this reason, our new 
environmental strategy focuses not only on 
our own environmental goals but on the 
entire value chain, including how our 
products help our customers to achieve 
their environmental goals. 
Transparency:
Alfa Laval aims to build trust through open 
dialogue with our stakeholders. This is 
particularly true of the dialogue the company 
engages in with various parties concerning 
its progress and challenges in the area of 
sustainability. When it comes to transparency, 
our focus is on achieving an open dialogue 
with our customers concerning opportunities 
related to sustainability. 
Dialogue concerning business principles 
– status 2016 
Over the past few years, we have received a 
growing number of questions from customers 
regarding our compliance in various areas. 
Most of these questions concern our efforts 
to minimize risks in the supply chain and 
combat corruption. 
In 2016, Alfa Laval was named 
“preferred supplier” by IMPA, the marine 
industry’s association for responsible supply 
chain management. 
Our focus going forward is to strengthen 
our cooperation with our customers in the 
area of sustainability, focusing on optimizing 
resources in their production processes 
since this creates a business opportunity 
for Alfa Laval.  
 
For more information about Alfa Laval’s sustain-
ability efforts, visit our website, where both a 
progress report and GRI report are available. 
www.alfalaval.com/about-us/sustainability/ 
Environmental strategy throughout the value chain
New products:
–  New products – lower 
impact than old
–  No substances of 
concern
Focus on improve-
ments related to:
–  Energy
– CO2 emissions
– Chemicals
– Waste
– Water
– Certification
Demands on 
suppliers focusing on:
– Chemicals 
– EMS
– Audits
Transportation:
–  Lowering CO2 
emissions from 
transportation
Impact of the 
offering on:
– Energy
– CO2 emissions
– Water usage
– Resource efficiency
Focus on improve-
ments related to:
– Energy
– Chemicals
– Water
– EMS
R&D
Sourcing
Sell
Make
Deliver
Service
Sustainability

UN Sustainable Development Goal 14:  
Life Below Water
44   Sustainability report
Applicable target: 
By 2020, sustainably manage and protect marine 
and coastal ecosystems to avoid significant 
adverse impacts, including by strengthening their 
resilience, and take action for their restoration in 
order to achieve healthy and productive oceans.
An example of how Alfa Laval can support  
the UN Sustainable Development Goals
Ballast water and foreign organisms 
Stability is a must when it comes to ensuring a ship’s 
safe voyage. That is why seawater is pumped 
on-board into special ballast tanks located at the 
bottom of the ship. The tanks are filled as the ship 
is unloaded and emptied as the ship is loaded. The 
water in the tanks contains organisms that are 
transported aboard the vessel away from their natural 
environment to areas where they have no natural 
enemies, allowing them to multiply, drive out domestic 
species and cause significant damage to local 
ecosystems. The transport of organisms represents 
a threat to the world’s oceans and lakes. 
This problem has grown as international trade 
has increased, which is why the UN International 
Maritime Organization (IMO) has worked to introduce 
a convention in the area. This convention was 
ratified in 2016 and it requires that ballast water be 
treated before it is released. 
In partnership with Wallenius Water, Alfa Laval 
developed and launched a system known as Alfa 
Laval PureBallast in 2006. The system uses UV light 
to eliminate foreign organisms, thereby helping the 
marine sector to meet the requirements of the 
convention – without using chemicals, with low 
energy consumption and in all types of water.
Alfa Laval supports the UN Sustainable Development Goals. In addition, our offering includes products 
and solutions that can reduce human impact on the environment and directly contribute to the 
improvements needed to achieve a number of these goals. This is described in greater detail in our 
annual Business Principles Progress Report, available at www.alfalaval.com. We selected the following 
example to illustrate how our products can contribute to a sustainable marine environment, thereby 
helping to achieve UN Sustainable Development Goal 14: “Life Below Water.” 
The IMO Ballast Water Management 
Convention was ratified in September 
2016. As of September 2017, when the 
convention comes into effect, all newly 
built ships will be required to have an 
on-board ballast water treatment system, 
while existing vessels will be given until 
their next scheduled drydocking date.
Ballast Water Management 
Convention
 
Alfa Laval PureBallast

45
Innehåll
Contents – Corporate Governance Report
Introduction by the Chairman of the Board 
46 
Corporate Governance Report 2016 
47
 
Share and ownership structure  
48
 
Annual General Meeting  
48
 
Annual General Meeting  
 
for the 2015 ﬁscal year 
50
 
Nominating Committee  
50
 
Board of Directors  
51
 
Committees 
52
 
The company’s auditors 
53
 
Remuneration to auditors 
53
Board of Directors and auditors 
54
President and Group management 
56
 
Areas of responsibility 
57
 
Group management meetings in 2016 
57
 
Remuneration to senior executives 
57
 
Operational control 
57
Board of Directors’ report on internal control 
58
 
Control environment  
58
 
Risk assessment  
58
 
Control structures 
59
 
Information and communication 
59
 
Follow-up 
59
Auditor’s statement on the  
Corporate Governance Report 
60
Corporate governance

46   Corporate Governance Report
Introduction by the Chairman  
of the Board 
Alfa Laval and its corporate governance 
Alfa Laval is a world leader in heat transfer, separation and ﬂuid handling. 
With clear growth and proﬁtability goals in place, it is crucial that the 
company continue to strengthen its leading positions. This can be 
achieved through the launch of new, even more efﬁcient products, 
by establishing a strong local presence or through a broad offering 
of spare parts and service. Our customers associate the Alfa Laval 
brand with quality. But this attention to quality must be evident not 
only in the products and solutions we deliver, but also in how we act 
during our daily operations. The Board of Directors, management 
and all employees are expected to comply with applicable laws and 
regulations as well as with the company’s business principles related 
to the environment, ethics, transparency and social responsibility. In 
this section, we will describe how the company is governed, the 
distribution of responsibility between the Board, the President and 
Group management, and the control structures that are in place. 
By doing so, we want to show that our work and management of 
the company are based on the best interests of the owners and 
would stand up to the scrutiny of a review. 
The year in brief 
In conjunction with the change of CEO in the spring, a review was 
initiated which marked the start of an extensive strategic overhaul. 
One of the questions we asked ourselves was whether Alfa Laval 
was optimally positioned and organized in order to respond to and 
leverage the developments under way in our operating environment. 
The answer came in the form of a number of new initiatives, including 
a change to the structure that had been in place at Alfa Laval for 15 years. 
By breaking down and changing the company’s segment and divisional 
structure, we will be able to further enhance the rate and clarity of the 
company’s interactions with customers. And by further concentrating 
our exposure to markets and applications, we will be able to more 
efﬁciently allocate resources to areas with clear growth opportunities.
However, some things have not changed. Separation, heat transfer 
and ﬂuid handling are the backbone of Alfa Laval’s operations and 
will remain so in the future. 
In parallel with our ongoing efforts to adapt our production resources, 
our strategy work resulted in a restructuring program comprising staff 
reductions in the sales and administration organizations, a review of 
the manufacturing structure and the reassignment of certain product 
groups to a separate non-divisional structure. Some of these initiatives 
will be fully implemented in the near future; others will take a little 
more time. But we are convinced that following these changes, 
Alfa Laval will be well equipped for the future. 
Lund, February 2017
Anders Narvinger
Chairman of the Board

Alfa Laval – the company
The registered name of the company is Alfa 
Laval AB (publ) and the registered office of the 
Board of Directors shall be in Lund Municipality 
in Sweden. The company’s share capital shall 
amount to not less than SEK 745,000,000 and 
not more than SEK 2,980,000,000. The number 
of shares shall be not less than 298,000,000 
and not more than 1,192,000,000. The fiscal 
year is the calendar year. The objective of the 
company’s operations is to, directly or through 
subsidiaries and joint venture companies in 
and outside Sweden, develop, manufacture 
and sell equipment and installations, primarily 
in the areas of separation, heat transfer and 
fluid handling, and to administer fixed and 
movable property, and other related operations. 
The Articles of Association do not include any 
limitations regarding the number of votes a 
shareholder can cast at a General Meeting. 
Nor does it include any specific rules regarding 
the appointment and dismissal of Board members 
or changes in the Articles of Association. The 
currently prevailing Articles of Association were 
adopted at the Annual General Meeting on 
April 20, 2009 and are available in their entirety 
on www.alfalaval.com
Alfa Laval is a leading, global provider of specialized products and engineered solutions in the areas of heat transfer, 
separation and ﬂuid handling. Across the globe, there is a signiﬁcant need for heat transfer and ﬂuid control and 
Alfa Laval’s products can thus be used in numerous industries and applications, ranging from power production and 
wastewater management to heat recovery and food production. Thanks to this broad exposure, Alfa Laval currently 
plays a leading role in areas considered to be important to society, such as energy optimization, environmental 
protection and food production. Alfa Laval’s products and solutions are sold in more than 100 countries and its 
sales amounted to SEK 35.6 billion in 2016.
Alfa Laval is to offer efﬁcient and environ-
mentally responsible products and solutions 
while working to achieve its established goals 
with regard to growth, proﬁtability and return. 
By achieving or even exceeding these goals, 
Alfa Laval creates the necessary scope for 
its continued development in line with the 
company’s strategic priorities. A favorable 
result also generates value for the Group’s 
shareholders in the form of an annual 
dividend and by boosting the value of the 
company. For more information about Alfa 
Laval’s ﬁnancial goals, refer to page 12. 
Equally as important as achieving goals and 
fulﬁlling the Group’s business concept are 
the conduct of the company and its 
employees along the way. Alfa Laval is to 
act in a manner that is sustainable from a 
long-term perspective, taking its share-
holders, employees, customers, suppliers 
and other stakeholders into consideration. 
The framework for the company’s corporate 
governance is based on various laws and 
regulations, such as the Swedish Companies 
Act, the Swedish Annual Accounts Act, the 
rules of the stock exchange and the 
Swedish Corporate Governance Code (the 
“Code”). These laws and regulations are 
supplemented by the company’s business 
principles regarding the environment, human 
rights, ethics and transparency. The company 
also has internal regulations, such as 
governing documents containing guidelines 
and instructions as well as procedures for 
control and risk management. The work of 
the Board and the President is governed 
by formal work plans. 
Alfa Laval’s Corporate Governance Report 
for 2016 aims to describe these guidelines, 
the division of responsibility within the 
company and the interaction between the 
Annual General Meeting, the Board of 
Directors and the President. The report has 
been reviewed by the company’s auditors. 
Corporate Governance Report 2016
47
Corporate Governance Report
Corporate governance

Share and ownership structure
At December 31, 2016, Alfa Laval had 
419,456,315 shares outstanding, allocated 
among 35,840 shareholders according to 
Euroclear Sweden’s shareholders’ register. 
Alfa Laval has only one class of shares and 
each share corresponds to one vote. Tetra 
Laval was the largest owner, with 29.1 percent 
of the shares in Alfa Laval at year-end, and 
the only owner with a stake larger than 10 
percent. The second largest owner was Alecta 
with 7.2 percent, followed by Swedbank 
Robur with a holding of 5.4 percent. Legal 
entities accounted for slightly more than 94 
percent of holdings, while individuals accounted 
for the remainder. From a geographic per - 
spective, the following countries represented 
a total of 93.6 percent of the shareholdings: 
Sweden, the Netherlands, the US, the UK 
and Luxembourg. For more information 
about Alfa Laval’s share, share performance 
and ownership structure, refer to the Share 
section on pages 16–17.
Annual General Meeting 
The Annual General Meeting is the company’s 
highest decision-making body in which all 
shareholders are entitled to participate and 
each share entitles its holder to one vote. 
The majority of motions addressed at the 
Annual General Meeting are decided by a 
simple majority. However, certain points 
require a qualiﬁed majority, for example, 
amendments to the company’s Articles of 
Association or resolutions to buy back shares. 
The Annual General Meeting is to be held 
annually within six months of the close of 
the ﬁscal year in either Lund or Stockholm. 
Normally, the Annual General Meeting takes 
place in late April or early May in Lund. The 
date and location are announced not later 
than in conjunction with the publication of 
the interim report for the third quarter. To be 
entitled to participate and vote in the Annual 
General Meeting, shareholders must be 
registered in the shareholders’ register 
maintained by Euroclear Sweden AB. Any 
shareholder who is unable to attend in person 
may participate through a proxy with a power 
of attorney. Shareholders with nominee- 
registered shares must have the shares 
temporarily registered under their own name. 
The Annual General Meeting is held in Swedish 
and all documentation is available in Swedish 
and English. Alfa Laval endeavors to ensure 
that all Board members participate, as well as, 
in so far as it is possible, all members of 
Group management. The company’s auditors 
are always present.
Source: Euroclear
No. of shares  
Holding, %
Financial companies
 104 258 015  
 24.8 
Other financial companies 
 12 957 335  
 3.1  
Social insurance funds 
 7 992 054  
 1.9  
Government 
 414 274  
 0.1  
Municipal sector
 38 906  
 0.0  
Trade organizations
 4 739 921  
 1.1  
Other Swedish legal entities 
 8 457 626  
 2.0  
Shareholders domiciled abroad (legal entities and individuals) 
 255 813 626  
 61  
Swedish individuals
 22 889 319  
 5.5  
Uncategorized legal entities
 1 895 239  
 0.5  
Dividend and percentage of adjusted EPS**
Ownership categories at December 30, 2016
3,50
3,75
4,00
4,25
4,25
Dividend
Percentage of adjusted EPS
*Board proposal to the Annual General Meeting.
**Adjusted for step up amortization net of taxes.
48   Corporate Governance Report
0
1
2
3
4
5
16
15
14
13
12
0
20
40
60
SEK
%
3.50
50.1
38.6
46.7
45.8
41.7
3.75
4.00
4.25
4.25*

Corporate Governance Report
49
President and CEO
Divisions
Regions
Group Management
Staff functions
Reports
HR
Communication
Finance, Legal and IT
Corporate Development
Goals
Strategies
Policy documents
Business principles
Corporate governance
Audit
Internal Audit 
Audit Committee 
Remuneration  
Committee
Annual General Meeting 
Board of Directors
Nominating Committee
Source: Euroclear
 
No. of shares
 
Capital/voting rights, %
Change in holding in 
2016, percentage points
Tetra Laval BV
 122,037,736  
29.1%
3.0
Alecta
 30,109,962  
7.2%
0.9
Swedbank Robur Funds 
 22,750,646  
5.4%
-1.1
AMF Insurance and Funds
 21,795,454  
5.2%
+/- 0
Foundation Asset Managment
 12,550,000  
3.0%
-3
Fourth Swedish Pension Insurance Fund
 6,551,772  
1.6%
0.3
Folksam
 3,033,424  
0.7%
+/- 0
SEB Investment Management
 2,845,295  
0.7%
-0.8
SPP Funds
 2,629,962  
0.6%
+/- 0
Nordea Investment Funds
 2,240,493  
0.5%
-1.3
Total ten largest shareholders
 226,544,744 
54.0%
Ten largest shareholders at December 30, 2016*
0
10,000
20,000
30,000
40,000
50,000
16
15
14
13
12
Total number of shareholders
34,629
36,212
40,505
37,097
35,840
*  The table is adjusted for custodian banks. Were they to be included, they would represent a total holding of 11.09 percent.
Corporate governance

50   Corporate Governance Report
Annual General Meeting for the 2015 
ﬁscal year
The Annual General Meeting for the 2015 
ﬁscal year was held at Sparbanken Skåne 
Arena in Lund on April 25, 2016. The Annual 
General Meeting was attended by 433 people, 
including shareholders, proxies, assistants, 
guests and ofﬁcials. The total number of 
votes represented corresponded to 66.66 
percent of the total number of votes in the 
company. Chairman of the Board Anders 
Narvinger was elected as the Meeting 
Chairman. The minutes from the Annual 
General Meeting, and all other information 
related to the Meeting, are available at 
www.alfalaval.com/investors/corporate- 
governance/. The resolutions passed at 
the Meeting included the following: 
–  A resolution was passed to adopt the 
income statement and balance sheet 
and discharge the Board of Directors and 
President from liability. 
–  A resolution was passed in accordance 
with the Board’s motion that a dividend 
of SEK 4.25 per share be paid. 
–  A resolution was passed that the number 
of Board members is to amount to eight, 
with no deputies. 
–  A resolution was passed to re-elect Board 
members Gunilla Berg, Arne Frank, Anders 
Narvinger, Finn Rausing, Jörn Rausing, 
Ulla Litzén, Ulf Wiinberg and Margareth 
Øvrum. Lars Renström, who retired from 
his role as President of the company in 
March 2016, declined re-election. In 
addition, a resolution was passed in favor 
of the Nominating Committee’s motion 
for auditors, resulting in the re-election of 
Authorized Public Accountant Håkan 
Olsson Reising and new election of 
Authorized Public Accountant Joakim 
Thilstedt. In addition, auditors David Olow 
and Duane Swanson were re-elected as 
deputy auditors. 
–  A resolution was passed that fees paid to 
non-executive directors on the Board would 
amount to SEK 5,105,000. In addition, 
fees are payable for work on the Board’s 
committees. 
–  A resolution was passed accepting the 
Board’s motion for remuneration principles 
for senior executives. These principles 
comprise ﬁxed remuneration and short-term 
and long-term programs for variable 
remuneration. 
Nominating Committee 
Work of the Nominating Committee 
The Nominating Committee, which comprises 
representatives of the largest shareholders, 
is responsible for preparing and submitting 
motions regarding candidates for Board 
members and, if applicable, auditors. The 
supporting documentation utilized for the 
Committee’s work includes the annual 
evaluation of the work of the Board, which 
is initiated by the Chairman of the Board. 
Other key factors to be considered, against 
the background of the company’s strategy, 
include the type of competence required. 
The Nominating Committee can call upon 
the assistance of external resources in its 
search for suitable candidates and can also 
conduct interviews with individual Board 
members. The Nominating Committee is 
also responsible for submitting motions in 
respect of remuneration to members of the 
Board and its committees. 
Composition 
The composition of the Nominating 
Committee is determined in accordance 
with the process approved by the Annual 
General Meeting. The Chairman of the Board 
contacts representatives of the largest share - 
holders at the end of the third quarter and 
requests that they each appoint one member. 
The Nominating Committee may decide 
whether or not to include the Chairman of the 
Board or other Board members. The com- 
position is then announced in a press release, 
in the third-quarter interim report and on 
Alfa Laval’s website. Ahead of the 2017 
Annual General Meeting, the composition of 
the Nominating Committee was announced 
on October 14, 2016. It was also included 
in Alfa Laval’s third-quarter interim report, 
which was published on October 25. 
Ahead of the Annual General Meeting for 
the 2016 fiscal year 
The Nominating Committee for the Annual 
General Meeting for the 2016 ﬁscal year 
comprised the following individuals: Jörn 
Rausing (Tetra Laval), Jan Andersson 
(Swedbank Robur Funds), Ramsay Brufer 
(Alecta), Lars-Åke Bokenberger (AMF) and 
Magnus Fernström (Foundation Asset 
Management). The holdings of the Nominating 
Committee represented 51.6 percent of 
the number of shares outstanding at 
September 30, 2016. 
The Chairman of the Board Anders 
Narvinger was elected as member and 
secretary, and Jörn Rausing was elected 
as Chairman. Due to Jörn Rausing’s position 
as a Board member, his role as Chairman 
is a deviation from the Code. The reason 
for this deviation is that the Nominating 
Committee deemed Jörn Rausing to be 
The Annual General Meeting of Alfa Laval AB (publ) 
will be held on Wednesday, April 26, 2017 at 4:00 
p.m. at Sparbanken Skåne Arena, Klostergården’s 
sports area, Stattenavägen, in Lund. Light 
refreshments will be served after the Meeting. 
In accordance with the company’s Articles of 
Association, notice of the Annual General Meeting 
will be inserted as an announcement in the 
Swedish Official Gazette and on the company’s 
website not more than six and not less than four 
weeks prior to the Meeting. An announcement 
that the notification has been issued will be placed 
in Dagens Nyheter. As a service to existing 
shareholders, information about the Annual 
General Meeting can be sent to them by mail.
Name
Representing
Shareholding in Alfa Laval, %*
Jörn Rausing 
Tetra Laval
29.09
Jan Andersson
Swedbank Robur Funds 
7.23
Ramsay Brufer
Alecta
7.18
Lars-Åke Bokenberger
AMF Insurance and Funds
5.09
Magnus Fernström
Foundation Asset Manegement
2.99
* As of September 30, 2016.
Composition of the Nominating Committee for the Annual General Meeting
Annual General Meeting for the  
2016 fiscal year

51
Corporate Governance Report
particularly well suited to lead the work of 
the Committee and obtain the best possible 
results for the company’s owners.
Work of the Nominating Committee 
ahead of the Annual General Meeting 
The Nominating Committee held three 
meetings ahead of the Annual General 
Meeting for the 2016 ﬁscal year and con - 
ducted a number of discussions by phone 
and e-mail. The focus of the Committee’s 
meetings included an assessment of the 
composition of the Board, based on the 
evaluation of the work of the Board carried 
out by the Chairman of the Board, as well 
as the potential future competence 
requirements of the Board. 
Proposals to the Nominating Committee 
Shareholders wishing to submit proposals 
to the Nominating Committee prior to the 
Annual General Meeting may contact Alfa 
Laval’s Board Chairman Anders Narvinger, 
or one of the owner representatives. 
Contact may also take place directly via 
e-mail at valberedningen@alfalaval.com. 
Board of Directors 
Work and responsibilities 
The Board administers the company on 
behalf of the shareholders and thus bears 
the ultimate responsibility for the organiza-
tion and administration of the company. 
The work and responsibilities of the Board 
are governed by the Swedish Companies 
Act, the Swedish Board Representation 
(Private Sector Employees) Act, the Articles 
of Association, the Board’s own formal 
work plan, Nasdaq’s Rule Book for Issuers 
and the Code. The Board establishes and 
evaluates Alfa Laval’s overall long-term 
objectives and strategies, which includes 
establishing business and ﬁnancial plans, 
reviewing and approving ﬁnancial statements, 
adopting guidelines, making decisions on 
issues relating to acquisitions and divestments, 
and deciding on major investments and 
signiﬁcant changes to Alfa Laval’s organiza-
tion and operations. The Board is responsible 
for ensuring that processes are in place for 
monitoring compliance with relevant laws 
and rules. The Board also establishes the 
instructions for the President with respect 
to the Group’s daily operations and approves 
the President’s commitments outside the 
company. Through the Audit Committee, 
the Board procures auditing services, 
maintains ongoing contact with the company’s 
auditors and works to ensure that a sound 
internal control function and formalized 
procedures are in place to enable monitoring 
and assessment of the company’s ﬁnancial 
situation. The Board also appoints the 
President and, through the Remuneration 
Committee, determines salaries and remunera-
tion for the President and senior executives. 
Composition 
The Board of Directors is to comprise a 
minimum of four and maximum of ten 
members, with a maximum of four deputy 
members. At present, the Board comprises 
eight members and no deputies. The mem - 
bers are elected annually for the period until 
the conclusion of the next Annual General 
Meeting and are to dedicate the requisite 
time and diligence to the assignment as 
well as have the necessary knowledge to 
best look after the interests of the company 
and its owners. In addition, the trade-union 
organizations appoint three employee 
representatives and three deputy employee 
representatives. Salaried employees in the 
company are invited to Board meetings as 
presenters and experts. The company’s 
Chief Financial Ofﬁcer participates in all 
meetings, as does its Chief Legal Counsel, 
who serves as Board Secretary. 
Independence of Board members 
All members of the Alfa Laval Board elected 
by the Annual General Meeting are considered 
independent of the company. All members 
are also considered independent of the 
company’s major shareholders, except Finn 
Rausing and Jörn Rausing, who cannot be 
considered independent due to their relation 
to Tetra Laval, which owned 29.1 percent of 
the shares in the company as of December 
31, 2016. 
The Board’s formal work plan 
The work of the Board is governed by a 
formal work plan that is determined annually 
at the statutory meeting. This formal work 
plan describes the Board’s work assign-
ments and the division of responsibility 
between the Board, the committees and 
the President. It also deﬁnes the role of the 
Chairman of the Board and includes 
separate instructions for the company’s 
President regarding the ﬁnancial reporting 
to be submitted to the Board to enable 
ongoing assessment of the ﬁnancial position. 
Work of the Board in 2016 
The Board held nine meetings in 2016, 
eight of which were scheduled meetings. 
Three meetings were held by phone, while 
the other meetings were held in Lund and 
Stockholm in Sweden and Aalborg in 
Denmark. The company’s President 
prepares an agenda for each meeting in 
consultation with the Chairman of the Board. 
Normal agenda items include earnings 
results, order trends, investments and 
acquisitions. In addition, considerable time 
Board training
Each year, a combined training course and field 
trip takes place at one of Alfa Laval’s facilities. 
In 2016, the trip had as its destination Alfa 
Laval’s facilities in Aalborg, Denmark. 
Shareholders wishing to submit proposals to 
the Nominating Committee prior to the Annual 
General Meeting may contact Alfa Laval’s Board 
Chairman Anders Narvinger, or one of the owner 
representatives. Contact may also be made directly 
by e-mail at valberedningen@alfalaval.com 
Proposals to the Nominating Committee
Corporate governance

52   Corporate Governance Report
was devoted to the strategic review carried 
out during the year.
Board training 
All new Board members receive an extensive 
introduction program. In addition, each year, 
a combined training course and ﬁeld trip 
takes place at one of Alfa Laval’s facilities. 
In 2016, the destination for the trip was 
Alfa Laval’s unit in Aalborg, Denmark.
Evaluation of the Board’s work 
The Chairman of the Board ensures that 
an annual evaluation is conducted of the 
work of the Board. The evaluation focuses 
on work methods and work climate as well 
as access to and the need for particular 
Board competence in order to lay the 
foundation for a well-functioning Board. 
External resources are brought in at regular 
intervals to evaluate the work of the Board. 
Regardless of whether it is conducted 
internally or externally, the evaluation forms 
a foundation for the Nominating Committee’s 
work related to the nomination of Board 
members and proposed remuneration levels. 
In 2016, the evaluation was conducted by 
the Chairman of Board, who held individual 
one to two-hour discussions with all Board 
members. The evaluation followed a clear 
structure based on standard models. The 
results were reported to the Board and the 
Nominating Committee. 
Responsibilities of the Chairman  
of the Board 
The Chairman of the Board directs the work 
of the Board in a manner that ensures it 
complies with prevailing laws and regulations, 
the Code and the Board’s formal work 
plan. The Chairman must ensure that the 
work is well organized and conducted 
efﬁciently, and that the Board fulﬁlls its tasks. 
In dialogue with the company’s President, 
the Chairman monitors operational develop-
ments and is responsible for ensuring that 
the other members continuously receive all 
information necessary for the work of the 
Board to be performed in the most effective 
manner. The Chairman is responsible for 
ensuring that new Board members receive 
an introduction to the company and any 
other training agreed on by the Chairman 
and the individual member within six months 
from the member’s election. In addition to 
being responsible for evaluating the Board’s 
work, the Chairman also participates in 
evaluation and development matters with 
respect to the Group’s senior executives. 
The Chairman ensures that the Board’s 
decisions are executed and represents the 
company in ownership issues. 
Remuneration of the Board 
Remuneration to the Board is determined 
by the Annual General Meeting based on 
the motions submitted by the Nominating 
Committee. The Chairman and members 
of the Audit Committee and Remuneration 
Committee receive supplementary 
remuneration. No Board member is entitled 
to pension payments from the company.
Committees 
Alfa Laval’s Articles of Association stipulate 
that there must be a Remuneration 
Committee and an Audit Committee that 
report to the Board. Committee members 
are appointed from among the Board 
members for a period of one year. 
Audit Committee 
Areas of responsibility 
The Audit Committee ensures compliance 
with the principles for ﬁnancial reporting 
and internal control. The Committee 
formulates guidelines for the company’s 
ﬁnancial reporting and follow-up, and has 
the right to determine the focus of the 
internal audit. The Committee examines 
the procedures for reporting and ﬁnancial 
controls, as well as the work, qualiﬁcations 
and independence of the external auditors. 
For further information regarding the 
responsibilities of the Audit Committee, 
refer to “The Board of Directors’ report on 
internal control” on page 58. 
Members and meetings in 2016 
Members are appointed annually at the 
Board’s statutory meeting. In 2016, the 
Committee comprised Finn Rausing (Chair-
man), Gunilla Berg and Ulla Litzén, with the 
company’s Chief Legal Counsel serving as 
secretary. Four meetings were held during 
the year, one of which was conducted by 
phone. The company’s Chief Financial 
Ofﬁcer, the Head of the Internal Audit 
Function and the company’s auditors were 
also present at the meetings. The meetings 
addressed the following items: review of 
the procedures for corporate governance, 
review and follow-up of the results of the 
current annual feedback from approximately 
200 managers regarding governance, 
updates regarding new IFRS develop-
ments, amendments to the Code, a review 
of Group provisions and allocations, a 
Board of Directors
Name
Present
Remuneration
Appointed by the Annual General Meeting 
Anders Narvinger
   9
1,500,000
Gunilla Berg
9
515,000
Arne Frank
8
515,000
Margareth Øvrum 
9
515,000
Ulla Litzén
9
515,000
Finn Rausing
9
515,000
Jörn Rausing
8
515,000
Lars Renström *
2
Ulf Wiinberg
8
515,000
Total
5,105,000
Employee representatives 
Henrik Nielsen
9
Susanna Norrby **
3
Susanne Jonsson ***
2
Bror García Lantz
9
Leif Norkvist
1
Christer Olofsson
3
Number of meetings 
9
Remuneration of Board members and attendance at Board meetings
** Stepped down in October 2016. 
*** Took up position in October 2016. 
  Chairman
* Resigned in conjunction with the 2016 Annual General Meeting.

53
Corporate Governance Report
Remuneration Committee
Audit Committee
Name
Present
Remuneration
Present
Remuneration
Anders Narvinger
   4
50,000
Gunilla Berg
 
4
100,000
Arne Frank
4
50,000
Margareth Øvrum
Ulla Litzén
4
100,000
Finn Rausing
   4
150,000
Jörn Rausing
4
50,000
Lars Renström *
Ulf Wiinberg
Total
150,000
350,000
Number of meetings 
4
4
review of Group surplus values, transfer 
pricing and IT security. 
Remuneration Committee 
Areas of responsibility 
The Remuneration Committee is involved 
in recruitment, appointments, and matters 
pertaining to other conditions of employ-
ment relating to the President and Group 
management. The Committee is responsible 
for preparing the guidelines for remuneration 
to senior executives to be resolved on by the 
Annual General Meeting and for submitting 
motions to the Board of Directors regarding 
salary and employment terms for the 
President. In addition, the Committee 
addresses matters regarding salary and 
employment terms for senior executives 
who report directly to the President. 
Members and meetings in 2016 
The Remuneration Committee is appointed 
annually at the Board’s statutory meeting. 
In 2016, the Committee comprised Anders 
Narvinger (Chairman), Jörn Rausing and 
Arne Frank. The Committee held four 
meetings during the year. Phone meetings 
were also held to address ongoing issues. 
Minutes are taken at all meetings and the 
contents are distributed to the Board 
members, except in certain cases when the 
minutes are noted directly in the corre-
sponding Board minutes. During the year, 
the Remuneration Committee participated in 
the assessment of candidates for managerial 
positions in the new organizational structure. 
The meetings of the Committee also included 
a review and follow-up of the guidelines for 
remuneration to senior executives, other 
Group guidelines and international issues 
pertaining to this area as well as personnel 
Remuneration and attendance at Committee Meetings
issues related to the integration of acquired 
companies. The Committee also reviewed 
the Group’s management development 
program and terms of employment for Group 
management as well as addressing the 
Group’s incentive program.
The company’s auditors 
The auditors comprise a supervisory body 
appointed by the Annual General Meeting. 
The auditors’ assignment includes the 
following: auditing the accounting and 
ﬁnancial statements of individual companies, 
evaluating the accounting policies applied, 
assessing the administration of company 
management, reviewing the interim report 
for the third quarter and evaluating the 
overall presentation in the Annual Report. 
The results of the audit – the Audit Report 
– are communicated to shareholders in the 
Annual Report and at the Annual General 
Meeting. In addition, the auditors present a 
statement regarding the discharge from 
liability of the Board of Directors, a statement 
regarding the adoption of the income 
statement and balance sheet by the Annual 
General Meeting and a statement regarding 
the Corporate Governance Report. The 
Group must have a minimum of one and 
maximum of two auditors, with not more 
than two deputy auditors. An authorized 
public accountant or registered auditing 
ﬁrm is to be appointed as the company’s 
auditor and, where applicable, as deputy 
auditor. At the Annual General Meeting on 
April 25, 2016, authorized public account-
ants Håkan Olsson Reising and Joakim 
Thilstedt were elected as the company’s 
auditors. David Olow and Duane Swanson 
were elected as deputy auditors. According 
to Alfa Laval’s assessment, none of these 
auditors has any relationship to Alfa Laval, 
or any company related to Alfa Laval, that 
could affect their independent status. In 
2016, the entire Board received reports from 
the company’s external auditors on two 
occasions. On one occasion, this occurred 
without the presence of the President or 
other members of Group management. 
The Audit Committee received separate 
reports on four occasions. 
Remuneration to auditors 
Refer to Note 7 on page 109.
  Chairman
* Resigned in conjunction with the 2016 Annual General Meeting.
Corporate governance

54   Corporate Governance Report
Board of Directors and auditors
Appointed by the Annual General Meeting
Employee representatives
Stepped down in October 2016.
Took up position in October 2016.
Anders Narvinger
Chairman since 2003.
Born: 1948
Formerly President of Teknikföretagen 
and formerly President and CEO of ABB 
Sweden.
Education: BSc. Eng. from the Faculty 
of Engineering at Lund University, BSc. 
Econ from Uppsala University.
Chairman of the Board: ÅF AB, Coor 
Service Management AB and Capio AB. 
Independent of the company and major 
shareholders.
Number of shares in Alfa Laval: 
40,000* (40,000**)
Henrik Nielsen
Employee representative since 2015.
Born: 1968
Employed by Alfa Laval since 1994.
Employee representative for the Swedish 
Metal Workers’ Union (IF Metall). 
Number of shares in Alfa Laval:  
–
Susanne Jonsson
Employee representative since 2016.
Born: 1965
Employed by Alfa Laval since 2008. 
Employee representative for the 
Swedish Confederation of Professional 
Associations (SACO). 
Number of shares in Alfa Laval:  
–
Susanna Norrby
Employee representative since 2003.
Born: 1967
Employed by Alfa Laval since 1992. 
Employee representative for the 
Swedish Confederation of Professional 
Associations (SACO). 
Number of shares in Alfa Laval: 
5,000* (5,000**)
Gunilla Berg
Board member since 2004.
Born: 1960
CFO of the PostNord Group.
Former positions include Executive Vice 
President and CFO of the SAS Group 
and Executive Vice President and CFO 
of the KF Group.
Education: BSc. Econ from the 
Stockholm School of Economics. 
Board member: Atlas Copco AB. 
Independent of the company and major 
shareholders.
Number of shares in Alfa Laval: 
3,400* (3,400**)
Ulf Wiinberg
Board member since 2013.
Born: 1958
Formerly CEO of H. Lundbeck A/S, as well 
as director of Wyeth Pharmaceuticals, 
EMEA/Canada & BioPharma, and a 
number of other senior positions in Wyeth.
Chairman of the Board: Avillion LLP, 
Hansa Medical AB, Trialbee AB and 
Sigrid Therapeutics.
Board member: UCB Pharma and 
Agenus Inc.
Independent of the company and major 
shareholders.
Number of shares in Alfa Laval: 
20,000* (20,000**)
Margareth Øvrum
Board member since 2015.
Born: 1958
Executive Vice President and member 
of Group management at Statoil ASA. 
Previously held senior positions in a 
number of areas in Statoil’s Norwegian 
operations, including technology, projects, 
production, maintenance, health, safety, 
environment and purchasing.
Education: Master’s degree in Technical 
Physics from the Norwegian University 
of Science and Technology in Trondheim.
Board member: Atlas Copco and FMC 
Corporation.
Independent of the company and major 
shareholders.
Number of shares in Alfa Laval:  
–
Bror García Lantz
Employee representative since 2012.
Born: 1965
Employed by Alfa Laval since 1990. 
Employee representative for the 
Swedish Union of Clerical and Technical 
Employees in Industry (Unionen). 
Number of shares in Alfa Laval:  
100* (–)**

55
Corporate Governance Report
 
Deputy employee representatives
Auditors
Deputy auditors
Leif Norkvist
Deputy member since 2009.
Born: 1961
Employed by Alfa Laval since 1993. 
Deputy employee representative for the 
Swedish Metal Workers’ Union (IF Metall).
Stefan Sandell
Deputy member since 2005.
Born: 1971
Employed by Alfa Laval since 1989. 
Deputy employee representative for the 
Swedish Organization for Managers (Ledarna).
Christer Olofsson
Deputy member since 2015.
Born: 1972
Employed by Alfa Laval since 1998. 
Deputy employee representative for the 
Swedish Metal Workers’ Union (IF Metall). 
Took up position on June 3, 2015.
Håkan Olsson Reising
Authorized Public Accountant, KPMG.
Born: 1961
Company auditor since 2015.
Joakim Thilstedt
Authorized Public Accountant, KPMG.
Born: 1967
Company auditor since 2016.
David Olow
Authorized Public Accountant, KPMG.
Born: 1963
Deputy auditor for Alfa Laval since 2014.
Duane Swanson
Authorized Public Accountant, KPMG.
Born: 1959
Deputy auditor for Alfa Laval since 2014.
* Holdings as of December 31, 2016.
** Holdings as of December 31, 2015.
Ulla Litzén
Board member since 2006.
Born: 1956
Former positions include President of W 
Capital Management and various senior 
positions at Investor.
Education: BSc. Econ from the Stockholm 
School of Economics, MBA from the 
Massachusetts Institute of Technology.
Board member: among others, 
Boliden AB, Electrolux AB, Husqvarna 
AB, NCC AB and Ratos AB.
Independent of the company and major 
shareholders.
Number of shares in Alfa Laval: 
29,000* (29,000**)
Finn Rausing
Board member since 2000.
Born: 1955
Education: B.L., MBA from INSEAD.
Board member: Tetra Laval Group, 
DeLaval Holding AB, EQT AB and 
Swede Ship Marine AB.
Independent of the company.
Number of shares in Alfa Laval:  
–
Arne Frank
Board member since 2010.
Born: 1958
President and CEO of AAK AB.
Education: BSc. Eng. in industrial 
economics from Linköping Institute of 
Technology.
Chairman of the Board: Inwido AB. 
Independent of the company and major 
shareholders.
Number of shares in Alfa Laval: 
46,000* (16,000**)
Jörn Rausing
Board member since 2000.
Born: 1960
Head of Mergers and Acquisitions 
(M&A) in the Tetra Laval Group.
Education: BSc. Econ.
Board member: Tetra Laval Group, 
Ocado PLC and DeLaval Holding AB.
Independent of the company.
Number of shares in Alfa Laval:  
–
Lars Renström
Board member since 2005.
Born: 1951
President and CEO of Alfa Laval from 
October 1, 2004 until February 29, 2016.
Former positions include President and 
CEO of Seco Tools AB, Division Manager 
at Ericsson AB and Atlas Copco AB.
Education: Eng., BSc. Econ.
Chairman of the Board: ASSA ABLOY AB.
Board member: Tetra Laval Group.
Number of shares in Alfa Laval: 
40,400* (40,400**).
Resigned in conjunction with the 2016  
Annual General Meeting.
Corporate governance

56   Corporate Governance Report
President and Group management
* Holdings as of December 31, 2016.
** Holdings as of December 31, 2015.
Tom Erixon
President and CEO.
Born: 1960
CEO since March 1, 2016. 
Former positions include President and 
CEO of OVAKO AB and President of 
Sandvik Coromant.
Board member: Boliden AB, Chinsay.
Education: MA Law from the University 
of Lund in Sweden and MBA Business 
Administration from IESE in Spain.
Number of shares in Alfa Laval: 
34,900 + 4,300 through endowment 
insurance.*
Joakim Vilson
Executive Vice President in charge 
of the Central and Eastern Europe, 
Latin America, Middle East and 
Africa regions.
Born: 1965
Employed by Alfa Laval since 1990. 
Regional manager since January 1, 2013.
Former positions include head of the 
Mid Europe Region and the Process 
Industry segment.
Education: BSc. Eng.
Number of shares in Alfa Laval: 
6,520* (6,520**)
Peter Torstensson
Senior Vice President, Corporate 
Communications.
Born: 1955
Employed by Alfa Laval since 1999. 
Senior Vice President, Corporate 
Communications since 1999. Former 
positions include President of 
Borstahusen Informationsdesign.
Number of shares in Alfa Laval: 
66,000* (66,000**)
Thomas Thuresson
Chief Financial Officer.
Born: 1957
Employed by Alfa Laval since 1988. 
Chief Financial Officer since 1995.
Former positions include Controller of 
the Flow business area and Group 
Controller of the Alfa Laval Group. 
Board member: JM AB.
Education: BSc. Econ., IMD (BPSE).
Number of shares in Alfa Laval: 
130,095* (130,170**)
Nish Patel
Executive Vice President in charge 
of the Western Europe and North 
America regions.
Born: 1962
Employed by Alfa Laval since 1984. 
Regional manager since 2011. Prior to this, 
he served as head of India and the UK.
Education: BSc. Eng.
Number of shares in Alfa Laval: 
47,552* (47,552**)
Göran Mathiasson
President, Operations Division.
Born: 1953
Employed by Alfa Laval since 1979. 
President of the Operations Division 
since April 2003. Previously in charge of 
Alfa Laval Manu facturing and Thermal 
Technology, including research and 
development, production development, 
system development and purchasing. 
Board member: Heatex AB.
Education: BSc. Eng.
Number of shares in Alfa Laval: 
6,588* (6,588**)
Svante Karlsson 
President, Process Technology 
Division.
Born:1955
Employed by Alfa Laval since 1984. 
Former positions include President of 
the Equipment Division, head of the 
Thermal business area and President of 
Marine & Power.
Education: BSc. Econ.
Number of shares in Alfa Laval: 
60,344* (60,344**)
Peter Leifland
President, Marine & Diesel Division.
Born: 1954
Employed by Alfa Laval since 1985. 
President of the Marine & Diesel Division 
since 2011. Former positions include 
regional manager in charge of the 
Western Europe and North America 
Region 2004–2011, the Asia and Latin 
America Region 2001–2004 and the 
Eastern Europe and Latin America 
Region 1999–2001.
Education: B.L., lic.spec. IMD (PED).
Number of shares in Alfa Laval: 
430,000* (430,000**)

57
Corporate Governance Report
Areas of responsibility
The President directs the daily operations and is responsible for 
ensuring that the Board has access to the necessary information 
and supporting documentation for its decision-making purposes. 
The President is also responsible for ensuring that the company’s 
accounting complies with applicable laws and provisions, and that 
the ethical guidelines included in Alfa Laval’s business principles are 
reflected in the conduct of the company. The President has the 
support of the Group management, to which responsibilities and 
authority are delegated. The members of Group management 
include three regional managers, four divisional managers and the 
heads of HR, Communication and Finance/Legal/IT.
Group management meetings in 2016 
Group management held six meetings in 2016 during which minutes 
were taken as well as some 15 Group management meetings 
focusing exclusively on the strategic review carried out during the 
year. In addition, quarterly reviews were performed to discuss the 
business developments in the divisions and regions. These reviews 
addressed the business climate, earnings, earnings projections for 
the next 12 months and specific issues affecting the respective 
business areas. Separate strategy meetings were also held to 
address, among other areas, management’s proposals concerning 
the future direction with regard to organic growth and growth 
through acquisitions. In 2016, the review concentrated on risks and 
opportunities in individual segments, products, application areas 
and geographic regions as well as the consequences on the supply 
chain based on the strategic review conducted during the year 
Remuneration to senior executives, pensions and severance 
pay/termination of employment 
The remuneration principles for the President and other members of 
Group management are determined by the Annual General Meeting. 
For additional information, refer to pages 107–108. 
Operational control
President and CEO
CSR
HR
Corporate development
Communications
Finance, Legal & IT
Operations
Equipment
Process Technology
Marine & Diesel
Western Europe and North America
Central and Eastern Europe, Latin America, Middle East and Africa
Asia and Oceania
Alfa Laval’s business control model comprises 
a matrix in which the Group’s divisions and 
segments are presented vertically, intersecting 
with the Group’s geographic regions, which 
are presented horizontally. The Operations 
Division, which is responsible for production- 
related procurement, production, logistics 
and distribution, serves as a shared supply 
chain for the sales divisions.
Retired on June 30. Joakim Vilson held the position 
for the remainder of the year.
Susanne Pahlén Åklundh
President, Equipment Division.
Born: 1960
Employed by Alfa Laval since 1983. 
President of the Equipment Division 
since 2009. Previously responsible for 
the Mid Europe and Nordic regions and 
the Process Industry segment. 
Board member: Trelleborg AB.
Education: BSc. Eng.
Number of shares in Alfa Laval: 
 10,000* (8,000**)
Ray Field
Executive Vice President in charge 
of the Asia, India and Oceania 
regions.
Born: 1954
Employed by Alfa Laval since 1985. 
Regional manager since September 1, 
2004. Prior to this, he served as 
President of Alfa Laval China for more 
than ten years.
Education: BSc. Eng.
Number of shares in Alfa Laval:  
54,588* (54,588**)
Peter Bailliere
Senior Vice President, Human 
Resources.
Born: 1963
Employed by Alfa Laval since 2007.
Senior Vice President, Human Resources 
since July 1, 2007. Previously Head of 
Group Human Resources at at Volvo Cars.
Education: Master of Sociology, 
Bachelor in Fiscal Law.
Number of shares in Alfa Laval: 
–
Corporate governance

58   Corporate Governance Report
Board of Directors’ report  
on internal control
Control environment 
The control environment includes the internal 
governance instruments adopted by the 
Board for the company’s daily operations. 
These control instruments comprise policy 
documents, which are continuously assessed, 
reviewed and updated. The documents 
include, for example, the Board’s formal work 
plan, the President’s instructions, reporting 
instructions, the company’s ﬁnance policy, 
business principles, investment policy and 
communication policy. 
The Board has overriding responsibility for 
ﬁnancial reporting, among other things, and 
must therefore assess the performance 
and earnings of the operations through a 
package of reports including results, fore- 
casts and analyses of key indicators. The 
Board also reviews the company’s interim 
reports and year-end report and is to meet 
with the external auditors at least once a 
year without the presence of the President 
or other members of Group management. 
The Board’s Audit Committee is tasked 
with ensuring compliance with the principles 
for ﬁnancial reporting and internal control. 
It follows up the effectiveness of the internal 
control system and reviews the ﬁnancial 
procedures to ensure that the information 
can be traced back to underlying ﬁnancial 
systems and that it is in line with legislation 
and relevant standards. It examines procedures 
for reporting and ﬁnancial controls as well as 
addressing the company’s ﬁnancial reports. 
It also monitors, evaluates and discusses 
signiﬁcant issues in the areas of accounting 
and ﬁnancial reporting. The Committee 
evaluates and manages information pertaining 
to disputes and potential improprieties, and 
assists management with identifying and 
evaluating mainly ﬁnancial and similar risks 
that are relevant to the operations in order 
to ensure that the focus is on managing 
The Board is responsible for the internal control of the company, with the aim of safeguarding the company’s assets 
and thus the interests of the shareholders. Through sound internal control, the Board ensures the reliability of Alfa 
Laval’s reporting and its compliance with legislation, regulations, applicable accounting policies and the company’s 
business principles. All communication and ﬁnancial reporting is to be correct, relevant, objective and transparent.
these risks. The Audit Committee has the 
right to determine the focus of the internal 
audit and is responsible for ensuring the 
efﬁciency of the function by assessing its 
activities, resources and structure. The 
Committee is also responsible for reviewing 
the results and recommendations of the 
internal audit to ensure that they are handled 
in an appropriate manner. It is also responsible 
for reviewing the internal audit plan every 
six months to ensure that it addresses the 
relevant risk areas and for ensuring that 
there is suitable coordination between the 
internal and external audit. The Audit 
Committee reviews the work, qualiﬁcations 
and independence of the external auditors, 
and the results of this review are reported 
to the Nominating Committee on an annual 
basis. The Committee supports the 
Nominating Committee in its work to nominate 
accountants and conducts an annual 
review of the proposed scope of the audit. 
Reports are provided to the Board 
regarding internal meetings as well as 
meetings with the internal auditors, the 
external auditors and various specialists in 
Group management and its support functions. 
The President is subject to instructions 
issued by the Board and is responsible for 
ensuring an effective control environment. 
The President is also responsible for the 
ongoing control work and for ensuring that 
the company’s accounting complies with 
legislation and that the management of 
assets is adequately performed. 
Group management is responsible for 
managing and maintaining the internal control 
systems required to manage signiﬁcant 
risks in the company’s operating activities. 
Management is also responsible for clearly 
ensuring that all employees understand the 
requirements for and the individual’s role in 
maintaining sound internal control. 
The internal auditors review and implement 
improvements to the internal control function, 
conduct internal audits – which are reported 
to the Audit Committee – and propose plans 
for the coming six to eight months. The 
internal auditors also issue reports from 
individual audits to the appropriate members 
of Group management. Procedures are in 
place for performing regular reviews of the 
agreed actions to guarantee that speciﬁc 
actions are taken following the internal 
audit. These are based on an agreed 
schedule set with the party responsible for 
the individual activities. The Internal Audit 
Function comprises two internal auditors, 
internal specialist resources and external 
auditors. Internal audits encompass a broad 
spectrum of functions and issues determined 
by the Board. The areas audited include: 
compliance with the systems, guidelines, 
policies and processes established for the 
Group’s business operations; the existence 
of systems to ensure that ﬁnancial transactions 
are carried out, archived and reported in an 
accurate and lawful manner; and opportunities 
to improve management control, the 
company’s proﬁtability and the organization, 
which may be identiﬁed during audits. In 
2016, 35 internal audits were performed. 
Risk assessment 
Within the framework of the company’s 
operating activities and review functions, 
procedures are in place for risk assessments 
pertaining to the ﬁnancial reporting. These 
procedures aim to identify and evaluate the 
risks that may affect internal control. The 
procedures encompass risk assessments 
in conjunction with strategic planning and 
acquisition activities as well as processes for 
identifying amendments to the accounting 
policies to ensure that they are accurately 
reﬂected in the ﬁnancial reporting.

59
Corporate Governance Report
Control structures 
Control structures are in place in all areas 
of the organization in order to prevent, 
identify and adjust errors or deviations. 
They manage the risks that the Board and 
management consider to be signiﬁcant to 
the business, internal control and ﬁnancial 
reporting. These structures comprise both an 
organization with clearly deﬁned roles that 
enables an effective and – from an internal 
control perspective – appropriate division 
of responsibility, and speciﬁc control 
activities that enable the identiﬁcation and 
timely prevention of risks becoming a reality. 
Control activities also include clearly deﬁned 
decision-making processes and a policy 
for decision-making with respect to, for 
example, investments, agreements, 
acquisitions and divestments, earnings 
analyses and other forms of analytical 
reviews, reconciliations, inventory-taking 
and automatic controls in the IT systems. 
Information and communication 
The company’s regulations, guidelines and 
manuals are communicated through several 
internal channels and the efﬁciency of this 
communication is monitored on an ongoing 
basis. There are formal and informal informa-
tion channels that enable employees to 
communicate important information to relevant 
recipients and ultimately, if necessary, to the 
Board of Directors. Clear guidelines have also 
been established for external communica-
tions, the aim of which is to provide the 
most accurate overview possible while at 
the same time ensuring that all obligations 
with regard to information are met. 
Follow-up 
The internal control process is mainly followed 
up by two bodies: the Audit Committee 
and the Internal Audit Function. The Audit 
Committee establishes the principles that 
apply for the company with respect to 
accounting and ﬁnancial reporting, and 
monitors compliance with these regulations. 
The Committee meets with the external 
auditors to obtain information about the 
focus and scope of the audit and to discuss 
results and coordination of the external and 
internal audits. In addition, the Committee 
establishes the direction, scope and time 
schedules for the work of the internal audit 
team, whose audits are reported to the Audit 
Committee and continuously to Group 
management so that any necessary 
measures may be taken. The scope of the 
internal audit includes, among other factors, 
operational efﬁciency, compliance with 
regulations and guidelines, and the quality 
of ﬁnancial reporting from the subsidiaries. 
An annual feedback function is also in place, 
which is geared toward the company’s 
senior executives. This feedback function is 
designed to ensure that Alfa Laval’s internal 
instructions and rules are fully implemented. 
All managers who report directly to a member 
of Group management are expected to 
review the guidelines and rules that apply 
to their respective areas. They must sign 
and submit documents conﬁrming their 
understanding of the signiﬁcance of these 
guidelines and compliance with these 
guidelines in their area of responsibility. If 
there are any deviations compared with the 
instructions, they must specify what actions 
they intend to take to ensure compliance. 
This process also aims to increase 
transparency and thus facilitate assessments 
by the external and internal auditors. 
Lund, February 2017 
Board of Directors
Corporate governance

60   Corporate Governance Report
Auditor’s statement on the  
Corporate Governance Report
Assignment and responsibilities 
We have audited the Corporate Governance 
Report for the year 2016 on pages 46–59. 
The Board of Directors is responsible for 
the Corporate Governance Report and for 
ensuring that it has been prepared in 
accordance with the Swedish Annual 
Accounts Act. Our responsibility is to express 
an opinion on the Corporate Governance 
Report based on our audit.
To the annual meeting of the shareholders of Alfa Laval AB (publ), corporate registration number 556587-8054
Focus and scope of the audit 
We conducted our audit in accordance with 
FAR’s auditing standard RevU 16: The 
Auditor’s Examination of the Corporate 
Governance Report. This standard requires 
that we have planned and performed the 
audit to obtain reasonable assurance that 
the Corporate Governance Report is free 
of material misstatements. An audit includes 
examining, on a test basis, evidence 
supporting the information included in the 
Corporate Governance Report. We believe 
that our audit procedures provide a reasonable 
basis for our opinion set out below. 
Opinion 
In our opinion, a Corporate Governance 
Report has been prepared and is consistent 
with the annual accounts and consolidated 
ﬁnancial statements.
 
 
Lund, March 3, 2017
 
Håkan Olsson Reising  
 
Joakim Thilstedt
 
Authorized Public Accountant 
 
Authorized Public Accountant

61
Financial statements
Financial statements
Board of Directors’ Report
62
Consolidated cash ﬂows
74
Comments to the consolidated cash-ﬂows
75
Consolidated comprehensive income
76
Comments to the consolidated 
comprehensive income
77
Consolidated ﬁnancial position
80
Comments on the consolidated 
ﬁnancial position
82
Changes in consolidated equity
82
Comments on changes 
in consolidated equity
83
Parent company cash ﬂows
84
Parent company income
84
Parent company ﬁnancial position
85
Changes in parent company equity
86
Notes to the ﬁnancial statements
87
Accounting principles
87
Objectives, policies and processes 
for managing capital
96
Financial risks
97
Operational risks
101
Notes
104
Auditor’s report
135
Ten-year overview
140
Deﬁnitions
142

62   Financial statements
Board of Directors’ Report
The Board of Directors and the President of Alfa Laval AB (publ) hereby submit their annual report for the year of 
operation January 1, 2016 to December 31, 2016.
The information in this annual report is 
such information that Alfa Laval AB (publ) 
must publish in accordance with the 
Securities Market Act. The information was 
made public by publishing the annual 
report on Alfa Laval’s website on March 
28, 2017 at 10.00 CET and by sending the 
printed annual report to the shareholders in 
week 14, 2017 starting at April 5, 2017. 
Alfa Laval AB is a public limited liability 
company. The seat of the Board is in Lund 
and the company is registered in Sweden 
under corporate registration number 
556587-8054. The visiting address of the 
head ofﬁce is Rudeboksvägen 1 in Lund 
and the postal address is Box 73, 221 00 
Lund, Sweden. Alfa Laval’s website is: 
www.alfalaval.com.
Financial statements
The following parts of the annual report are 
financial statements: the Board of Directors’ 
Report, the ten-year overview, the consolidated 
cash flows, the consolidated comprehensive 
income, the consolidated financial position, 
the changes in consolidated equity, the 
parent company cash flows, the parent 
company income, the parent company 
financial position, the changes in parent 
company equity and the notes. All of these 
have been audited by the auditors.
The Corporate Governance Report, 
which also has been audited, is to be 
found on page 45.
 
Ownership and legal structure
Alfa Laval AB (publ) is the parent company 
of the Alfa Laval Group.
The company had 35,840 (37,097) share-
holders on December 31, 2016. The largest 
owner is Tetra Laval B.V., the Netherlands 
who owns 29.1 (26.1) percent. Next to the 
largest owner there are nine institutional in-
vestors with ownership in the range of 7.2 to 
0.6 percent. These ten largest shareholders 
owned 54.7 (57.4) percent of the shares.
Operations
The Alfa Laval Group is engaged in the 
development, production and sales of 
products and systems based on three 
main technologies: separation/filtration, 
heat transfer and fluid handling. 
Alfa Laval’s business is divided into three 
business divisions ”Equipment”, ”Process 
Technology” and “Marine & Diesel” that sell 
to external customers and one division 
“Operations & Other” covering procure-
ment, production and logistics as well as 
corporate overhead and non-core busi-
nesses. These four divisions constitute Alfa 
Laval’s four operating segments.
The three business divisions (operating 
segments) are in turn split into a number of 
customer segments. The customers to the 
Equipment division purchase products 
whereas the customers to the Process 
Technology division purchase solutions for 
processing applications. The customers to 
the Marine & Diesel division purchase 
products and solutions for marine and off-
shore applications and for diesel power 
plants. The Equipment division consists of 
four customer segments: Industrial Equip-
ment, OEM (Original Equipment Manufac-
turers), Sanitary Equipment and the after-
market segment Service. The Process 
Technology division consists of four cus-
tomer segments: Energy & Process, Food 
& Life Science, Water & Waste Treatment 
and the aftermarket segment Service. The 
Marine & Diesel division consists of four 
customer segments: Marine & Diesel 
Equipment, Marine & Offshore Systems, 
Marine & Offshore Pumping Systems and 
the aftermarket segment Service.
Material factors of risk and uncertainty
The main factors of risk and uncertainty 
facing the Group concern the price 
development of metals, fluctuations in 
major currencies and the business cycle. 
For additional information, see the sections 
on financial and operational risks and the 
section on critical accounting principles, 
the section on key sources of estimation 
uncertainty and the section on judgements 
under accounting principles.
Acquisition of businesses
The full information on the acquisitions is 
found in Note 16. Below follows a shorter 
summary of each acquisition during 2016.
On May 21, 2016 Alfa Laval has acquired 
an additional 8.33 percent of the shares in 
the subsidiary Chang San Engineering Co 
Ltd in South Korea for SEK 33 million, 
which has increased the holding from 75 
percent to 83.33 percent. On July 15, 
2016 Alfa Laval has acquired the remaining 
4.67 percent of the shares in Frank Mohn 
do Brasil Ltda for SEK 4 million, which 
makes it a 100 percent owned subsidiary. 
The shareholding in these two companies 
was part of the acquisition of Frank Mohn 
AS in 2014. 
On October 5, 2016 a selective reduction 
of the share capital in the Indian subsidiary 
Alfa Laval (India) Ltd was ﬁnalised, upon which 
the non-controlling interests corresponding 
to 1.8 percent of the shareholding were 
bought out for SEK 174 million. Thereafter 
the company is a fully owned subsidiary.
Divestment of businesses
On June 15, 2016 Alfa Laval has sold all 
shares in the joint venture Halaas og Mohn 
AS in Norway for SEK 1 million. The 
shareholding in the company accompanied 
the acquisition of Frank Mohn AS in 2014. 
On August 24, 2016 Alfa Laval has sold 
all shares in LHE (Qingdao) Heat Exchanger 
Co. Ltd. in China for SEK 12 million.
Sale of real estate
During 2016 a few minor properties in 
different countries have been sold for  
SEK 33 (9) million with a realised result of 
SEK 20 (-7) million, which has been 
reported in other operating income and 
costs respectively.
The empty property in Spijkenisse in the 
Netherlands is to be sold and a small prop-
erty in France is empty and has been for 
sale for several years. They are not expected 
to be sold within the next year. 
A property in Lima in Peru and the empty 
property in Groningen in the Netherlands 
are for sale and are expected to be sold 
within the next year and are therefore still 
classiﬁed as current assets held for sale 
with SEK 2 (9) million. The fair value of the 
properties for sale exceeds the book value 
by approximately SEK 90 (94) million.

63
Financial statements
Financial statements
0
2,000
4,000
6,000
8,000
10,000
12,000
Q416
Q316
Q216
Q116
Q415
Q315
Q215
Q115
Q414
Q314
Q214
Q114
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
+5%
+18%
+26%
+22%
+19%
-7%
-15%
-11%
-19%
-9%
-14%
-11%
Orders received
 
 
SEK millions
quarter
SEK millions
12 months
Order intake per quarter
Orders received rolling 12 months value
% change by quarter compared to corresponding period last year, at constant rates
Order bridge
Consolidated
SEK millions, unless otherwise stated
2016
2015
Order intake last year
37,098
36,660
Structural change 1)
0.3%
6.8%
Organic development 2)
-13.7%
-11.6%
Currency effects
-0.2%
6.0%
Total
-13.6%
1.2%
Order intake current year
32,060
37,098
Orders received from the aftermarket Service3) constituted 33.0 (28.6) percent of the 
Group’s total orders received for 2016. Excluding currency effects, the order intake for 
Service increased by 0.1 percent during 2016 compared to last year. The corresponding 
organic development was a decrease by 0.5 percent.
1)  Acquired businesses are: 
K-Bar Parts LLC (renamed to Alfa Laval Kathabar Inc) in the U.S. at July 31, 2015 
and an aftermarket company specialized in separation technology at July 3, 2015. 
2)  Organic development relates to change excluding acquisition of businesses.
3)  Parts & Service.
Orders received amounted to SEK 32,060 (37,098) million during 2016.

64   Financial statements
0
4,000
8,000
12,000
16,000
20,000
24,000
2016
2015
2014
0
10
20
30
40
50
60
70
80
Order Backlog December 31 
SEK millions
%
17,250
15,590
5,043
4,988
22,293
20,578
12,928
3,942
16,870
For delivery during next year
For delivery later than next year
Order backlog's part of last 12 months' invoicing 
(proforma for Frank Mohn)
Sales bridge
Consolidated
SEK millions, unless otherwise stated
2016
2015
Net sales last year
39,746
35,067
Structural change
0.3%
8.1%
Organic development
-10.4%
-1.2%
Currency effects
-0.2%
6.4%
Total
-10.3%
13.3%
Net sales current year
35,634
39,746
Large orders
Division
Order
received 
in
Delivery 
date
Order 
amount
Totalt per segment
Customer segment
2016
2015
Scope of supply
SEK millions
Process Technology
Energy & Process
Alfa Laval compact heat exchangers to a refinery in Russia. 
Q1
2016/2017
60
 
Alfa Laval OLMI heat exchangers to a petrochemical plant in the Middle East. 
Q4
2017
125
 
Various pieces of equipment to a power plant in the Middle East.
Q4
2017
50
 
Alfa Laval OLMI heat exchangers to a power plant in the Middle East. 
Q4
2017
100
 
Compact heat exchangers to a natural gas plant in the Middle East.
Q4
2017/2018
150
485
1,040
Food Technology & Life Science
Equipment to a vegetable oil plant in Russia.
Q2
2017
55
55
395
Water & Waste Treatment
Decanters to a waste water treatment plant in the U.S.
Q2
2017
50
50
 –
Service
Upgrade of compact heat exchangers to a nuclear power plant in France. 
Q4
2017
55
55
 –
Marine & Diesel
Marine & Diesel Equipment
 
 
Waste heat recovery systems for diesel power plants that will be built in Asia.
Q4
2017
65
65
 –
Marine & Offshore Systems
 
 
 
 –
90
Marine & Offshore Pumping Systems
 
 
 
 –
775
Equipment
Industrial Equipment
–
100
Total
710
2,400
The order backlog at December 31, 2016 
was SEK 16,870 (20,578) million. Excluding 
currency effects and adjusted for acquisitions 
of businesses the order backlog was 17.7 
percent smaller than the order backlog at 
the end of 2015.
Net invoicing relating to Service constituted 29.6 (26.6) percent of the Group’s total net 
invoicing for 2016. Excluding currency effects, the net invoicing for parts and service 
decreased by 0.1 percent during 2016 compared to last year. The corresponding organic 
development was a decrease by 0.7 percent.
Net sales
Net sales amounted to SEK 35,634 (39,746) million during 2016.
Large orders
Large orders are orders with a value over EUR 5 million. The volume of large orders is an important indicator of the demand situation and 
is therefore monitored separately within Alfa Laval. A large volume of large orders normally also means a good load in the factories. During 
2016 Alfa Laval has received the following large orders:

65
Financial statements
Financial statements
Marine & Offshore Systems 5%
Marine & Offshore Pumping Systems 5%
Industrial Equipment 10%
Sanitary 12%
OEM 5%
Service 6%
Service 12%
Marine & Diesel Equipment 6%
Energy & Process 12%
Water & Waste Treatment 2%
Service 15%
Food & Life Science 10%
Orders received by customer segment 
Equipment
Process Technology
Marine & Diesel
Orders received by customer segment 2016
Marine & Offshore Systems 6%
Marine & Offshore Pumping Systems 13%
Industrial Equipment 9%
Sanitary 10%
OEM 5%
Service 5%
Service 11%
Marine & Diesel Equipment 7%
Energy & Process 11%
Water & Waste Treatment 2%
Service 12%
Food & Life Science 9%
Orders received by customer segment 2015
increase
decrease 
unchanged (+/- 3 %)
Compared to previous year, at constant rates adjusted for acquisition of businesses.
* New customer segment, no comparison figures exist.
Demand for products for engine manufacturers 
recovered, while order intake from heat pump 
customers was lower due to seasonality.
Order intake was up in the second quarter 
2016 compared to the ﬁrst, reﬂecting a posi-
tive development across all capital sales 
segments as well as Service. All major 
markets contributed to the outcome. The 
Sanitary segment had a good development 
driven by strong demand from customers 
within all sectors. In Industrial Equipment 
volumes were up as seasonality impacted 
certain end markets such as the one for 
comfort heating and cooling. All market 
units, however, grew. Products aimed at 
refrigeration and the manufacturing industry 
had generally a good demand. The OEM 
segment also reported a positive develop-
ment on the back of seasonality as products 
aimed at being ﬁtted into HVAC and refriger-
ation units did well, supported by a positive 
reception to product launches. 
Overall order intake was on about the same 
level in the third quarter as in the second 
quarter. While the vacation period in Western 
Europe hampered activity in that region, 
order intake saw a positive development 
across major markets in Asia Paciﬁc. The 
Sanitary segment declined somewhat 
compared to the previous quarter as the 
big number of larger orders in the second 
quarter, mainly to customers in dairy and 
personal care, where not repeated. Under-
lying, however, the segment experienced a 
continued positive trend. In Industrial 
Equipment volumes were ﬂat. Demand for 
HVAC grew compared to the previous quarter 
due to a number of larger orders, while re-
frigeration declined due to the non-repeat 
of larger orders in the second quarter. The 
overall refrigeration market, however, was 
good with a higher overall activity level than 
a year ago. The OEM segment reported a 
limited growth, mainly lifted by demand among 
customers manufacturing engines. Service 
declined somewhat, negatively inﬂuenced 
by the vacation period in Western Europe. 
Overall order intake was on about the 
same level in the fourth quarter as in the 
third. While several end markets reported 
growth, it was offset by seasonality for parts 
of Industrial Equipment’s business. Demand 
for spare parts and services remained on 
the same level as in the previous quarter. 
The Sanitary segment was ﬂat compared 
to the previous quarter. Demand from cus-
tomers working with prepared food was 
higher, whereas order intake related to the 
dairy sector came down from the high levels 
seen in the previous quarter. In Industrial 
EQUIPMENT DIVISION
The Equipment division consists of four 
customer segments: Industrial Equipment, 
OEM (Original Equipment Manufacturers), 
Sanitary Equipment and the aftermarket 
segment Service.
Order intake 
(all comments are excluding currency effects)
Taking a quarterly view the development 
for Equipment division during 2016 has 
been as follows:
Order intake was down somewhat in the 
ﬁrst quarter of 2016 compared to the fourth 
quarter of 2015, as Sanitary was negatively 
impacted by non-repeats and Industrial 
Equipment by slow comfort demand in some 
key markets. OEM and Service were both 
unchanged. The Sanitary segment was 
slower as larger dairy and personal care orders 
taken in the U.S. in the fourth quarter were 
not repeated. The main explanatory factor 
for the decline in Industrial Equipment was 
the drop in order intake in comfort, due to 
weak demand in some key markets such 
as Russia. At the same time order intake 
for refrigeration products was good, with 
increased demand for plate heat exchanger 
products in particular. The OEM segment 
saw an overall almost ﬂat development. 
Operating segments
The development of the order intake for the divisions and their customer segments 
appears in the following charts.

66   Financial statements
Equipment division
Consolidated
SEK millions
2016
2015
Orders received
10,639
10,472
Order backlog*
1,695
1,637
Net sales
10,532
10,500
Operating income**
1,527
1,321
Operating margin
14.5%
12.6%
Depreciation and amortisation
179
218
Investments
61
61
Assets*
5,957
6,339
Liabilities*
1,249
973
Number of employees*
2,508
2,552
* At the end of the period. ** In management accounts.
Change excluding currency effects
Consolidated
Order intake
Net sales
%
Structural 
change
Organic 
development
Total
Structural  
change
Organic  
development
Total
2016/2015
 –
1.7
1.7
–
0.4
0.4
2015/2014
–
-1.8
-1.8
–
-0.6
-0.6
Equipment volumes were lower compared 
to the previous quarter, mainly due to sea-
sonality in the Comfort market unit. The 
overall refrigeration market continues to be 
good and demand was higher than in the 
third quarter. The OEM segment reported 
a positive development, mainly lifted by in-
creased demand from customers manu-
facturing boilers and A/C equipment.
Operating income 
(excluding comparison distortion items)
The increase in operating income for 2016 
compared to last year is mainly explained 
by positive price/mix effects and positive 
currency effects. 
PROCESS TECHNOLOGY DIVISION
Process Technology division consists of four 
customer segments: Energy & Process, 
Food & Life Science, Water & Waste Treat - 
ment and the aftermarket segment Service.
Order intake 
(all comments are excluding currency effects)
Taking a quarterly view the development 
for Process Technology division during 2016 
has been as follows:
The division’s order intake was unchanged 
in the ﬁrst quarter compared to the fourth 
quarter last year. Geographically, Western 
Europe was unchanged and Asia as well 
as North America saw a slight contraction, 
while Central & Eastern Europe delivered 
strong growth. The previous quarter was 
affected by oil and gas cancellations in Brazil, 
which impacts the comparison. Excluding 
these, overall order intake declined, affected 
by fewer large orders. The base business* 
was stable across the capital sales segments 
and the service business showed signiﬁcant 
growth. Energy & Process, the segment 
affected by oil and gas cancellations in the 
fourth quarter, reported modest growth. 
Excluding the cancellations the segment 
reported a decline compared to the previous 
quarter. The base business was however 
unchanged. Both drilling and processing 
continued recent quarters’ development, 
of oscillating around a very low level, amid 
continued market uncertainty. Reﬁnery, 
however, had a strong development, with 
several larger orders booked. Petrochemicals 
showed a decline compared to the previous 
quarter, due to a very large non-repeat. 
Food & Life Science had a decline, in its 
entirety related to a non-repeat of a very 
large brewery order in the fourth quarter. 
Brewery was consequently down and so 
was Protein and Food Solutions, whereas 
Vegetable Oil and Life Science & Renewable 
showed strong growth. The base business 
was unchanged. Order intake in the Water 
& Waste Treatment segment showed a 
decline compared to the previous quarter, 
primarily driven by Europe and Asia. The 
important North American market was 
however unchanged. The Service segment 
showed signiﬁcant growth, driven by several 
larger orders, with a particularly strong devel-
opment noted up- and mid-stream. Demand 
in Water & Waste Treatment as well as Food 
& Life Science was also good.  
The division’s order intake in the second 
quarter was unchanged versus the previous 
quarter. Order intake in Energy & Process 
was unchanged from the ﬁrst quarter. The 
business exposed to the hydrocarbon chain 
showed a continued decline – reﬂected in 
drilling, processing & transportation and 
petrochemicals. The market has still not 
provided the stability needed for larger ca-
pacity investments to be decided. However, 
the base business saw a positive develop-
ment. The reﬁnery business was unchanged. 
An overall strong development was noted 
for market unit Inorganics, Metals and Paper. 
Food & Life Science delivered an unchanged 
order intake, both in total and for the market 
units Protein and Food Solutions. Brewery 
and Vegetable Oil however showed strong 
growth, partly from capacity investments in 
China and Russia. In the latter case, a large 
order for vegetable oil equipment in Russia 
was announced in June. The order intake 
for life science and natural resources appli-
cations declined. Order intake in the Water 
& Waste Treatment segment showed strong 
growth compared to the previous quarter, 
primarily driven by developments in the U.S. 
and Western Europe. While larger orders 
had a particularly strong development in 
these regions, added support came from the 
large order for a U.S. waste water treatment 
plant, announced in May. The Service seg-
ment showed a limited contraction. Energy 
& Process declined due to the non-repeat 
of a larger order in the ﬁrst quarter. Demand 
in Water & Waste Treatment was strong, while 
it was unchanged in Food & Life Science. 
The division’s order intake declined in 
the third quarter versus the previous quar-
ter. The contraction is partly explained by 
the non-repeat of large orders in Water & 
Waste Treatment and Food & Life Science. 
The base business showed a very limited 
decline. Order intake in Energy & Process 
declined somewhat from the second quarter. 
The business exposed to the up- and mid-
stream part of the hydrocarbon chain grew, 
while the parts tied to downstream activities, 
such as reﬁneries and petrochemicals, 
showed a decline. While the oil & gas-related 
base business showed good growth, capacity 
investments were still limited in the market, 
reﬂecting a hesitancy to invest. Market unit 
* Base business and base orders refer to orders with an order value of less than EUR 0.5 million.

67
Financial statements
Financial statements
Power did very well in the quarter, whereas 
market unit Inorganics, Metals & Paper 
declined. Food & Life Science reported an 
unchanged order level, despite the non-repeat 
of a large order. Vegetable oil did very well and 
growth was also recorded in Food Solutions. 
Order intake in the Water & Waste Treatment 
segment declined compared to the previous 
quarter. Most of the drop is explained by 
the non-repeat of a large U.S. wastewater 
order. The base business showed strong 
growth, particularly in Asia. The Service 
segment showed a decline, partly explained 
by the non-repeat of a larger service order 
in the Energy & Process segment in Mexico 
in the second quarter. Asia and North 
America were both stable, whereas Eastern 
as well as Western Europe contracted. The 
service-related share of the total order intake 
continued to grow.
The division reported very strong growth 
in the fourth quarter compared to the pre-
vious quarter, mainly driven by large orders. 
The development was generally positive 
among the capital sales segments with 
Energy & Process contributing the most. 
Geographically, a positive development was 
reported by largely all regions. Energy & 
Process reported growth in order intake 
across all end-market industries. The busi-
ness exposed to the hydrocarbon chain did 
very well in all parts of the chain. The positive 
development was driven by customers 
carrying out certain capacity and efﬁciency-
related investments. This was reﬂected in 
the large orders booked in the quarter, even 
as the overall market sentiment continued 
to be cautious. The base business also re-
ported growth. Food & Life Science did 
very well in the quarter, particularly in the 
market units Brewery, Food Solutions and 
Life Science. Protein also developed favour-
ably, while Vegetable oil contracted, reﬂecting 
fewer capacity related investments in the 
market. Large projects explained most of 
the segment’s positive development, but the 
base business also showed a positive trend. 
Order intake in the Water & Waste Treatment 
segment was unchanged in the fourth quarter 
compared to the third, as a strong Western 
European market compensated for a lower 
activity in the North American market. The 
base business was stable. The Service 
segment remained on the same level as in 
the third quarter. Order intake increased in 
Water & Waste Treatment applications as well 
as Energy & Process, while a certain con-
traction was noted in the Food & Life Science 
area. The service share of total order intake 
on the aftermarket continued to expand. 
Operating income 
(excluding comparison distortion items)
The decrease in operating income during 
2016 compared to last year is mainly 
explained by lower sales volume and lower 
margin. The lower margin is explained by 
negative price/mix, a weak outcome in a 
number of projects and under absorption 
in the project department. 
MARINE & DIESEL DIVISION
The Marine & Diesel division consists of 
four customer segments: Marine & Diesel 
Equipment, Marine & Offshore Systems, 
Marine & Offshore Pumping Systems and 
the aftermarket segment Service.
Order intake 
(all comments are excluding currency effects)
Taking a quarterly view the development for 
Marine & Diesel division during 2016 has 
been as follows:
Order intake for the Marine & Diesel division 
decreased in the ﬁrst quarter 2016 com-
pared to the fourth quarter 2015, the main 
explanatory factor being lower demand for 
pumping systems. The Marine & Diesel 
Equipment segment also saw lower demand 
compared to the previous quarter, as both 
equipment going into new ships and equip-
ment for diesel power plants declined. The 
demand for environmental solutions also 
dropped due to lower order intake for 
PureBallast during the quarter. The Marine 
& Offshore Systems segment recorded 
higher order intake for systems for new ships 
due to a favourable vessel mix leading to 
higher demand for boilers. Orders for exhaust 
gas systems also increased, whereas the 
demand for offshore systems declined as 
investments in the oil and gas sector remained 
on a low level. Marine & Offshore Pumping 
Systems, which saw a substantial upswing 
in demand in the previous quarter due to a 
pre-buying effect, had as expected a con-
siderably lower level of orders for marine 
pumping systems in the ﬁrst quarter. In ad-
dition, orders for pumping systems for the 
offshore sector decreased due to non-repeat 
of two large offshore orders booked in the 
fourth quarter. Service reported a lower order 
intake than in the previous quarter due to 
lower activity for repair sales.  
Order intake for the Marine & Diesel division 
was largely unchanged in the second 
quarter compared to the ﬁrst quarter. In-
creased demand for environmental products 
and marine pumping systems almost fully 
compensated for the effects from a lower 
contracting of new vessels at the yards. 
The Marine & Diesel Equipment segment 
saw lower demand from the previous quarter, 
as the demand for traditional equipment 
going into new ships declined. The demand 
for environmental solutions, however, increased 
Process Technology division
Consolidated
SEK millions
2016
2015
Orders received
12,383
12,795
Order backlog*
6,758
7,226
Net sales
12,784
14,511
Operating income**
1,289
1,899
Operating margin
10.1%
13.1%
Depreciation and amortisation
360
366
Investments
108
156
Assets*
10,966
10,832
Liabilities*
4,227
3,812
Number of employees*
5,092
5,242
* At the end of the period. ** In management accounts.
Change excluding currency effects
Consolidated
Order intake
Net sales
%
Structural 
change
Organic  
development
Total
Structural  
change
Organic  
development
Total
2016/2015
0.7
-2.9
-2.2
0.7
-11.9
-11.2
2015/2014
-0.0
-17.2
-17.2
0.1
-6.4
-6.3

68   Financial statements
due to higher order intake for PureBallast 
during the second quarter. Equipment for 
diesel power plants recorded higher order 
intake as well. The Marine & Offshore 
Systems segment reported lower order in-
take for systems for new ships as well for 
offshore applications. The decline was partly 
offset by higher demand for exhaust gas 
cleaning systems. Marine & Offshore 
Pumping Systems saw higher demand 
for marine as well as offshore applications. 
The general market for chemical tankers 
and product tankers remain attractive and 
resulted in increased order intake for marine 
pumping systems. Service had a lower order 
intake than in the previous quarter, mainly 
due to a lower demand for boiler repairs.  
Order intake for the Marine & Diesel division 
was lower in the third quarter compared 
to the second, mainly as a result of lower 
ship contracting earlier in the year affecting 
demand in both the Offshore Systems and 
Offshore Pumping Systems segments. The 
Marine & Offshore Systems segment re-
corded lower order intake for systems for 
new ships as well for exhaust gas cleaning 
systems, the latter by nature a lumpy project 
business. Systems and equipment for off-
shore applications increased from the second 
quarter, however from a very low level. The 
Marine & Offshore Pumping Systems 
segment saw lower demand for marine 
pumping systems, whereas order intake 
for offshore applications increased. The 
Marine & Diesel Equipment segment was 
the only segment to report growth compared 
to the previous quarter, thanks to demand 
for equipment going into cruise ships. While 
the ballast water convention was ratiﬁed 
late in the quarter, leading to increased 
activity, this has not yet resulted in orders. 
Order intake for equipment to diesel power 
plants grew. Order intake for Service was 
unchanged from the previous quarter.  
Order intake increased in the fourth 
quarter compared to the third, as the uptick 
in cruise ship contracting earlier in the year 
generated demand for Alfa Laval’s traditional 
offering and as demand for pumping systems 
grew from the third quarter’s very low level. 
The Marine & Diesel Equipment segment 
beneﬁtted from a positive ship mix as demand 
increased for equipment going into new 
cruise ships. Further support came from an 
increase in demand for equipment going 
into land-based diesel power plants. The 
Marine & Offshore Systems segment also 
reported an increase in order intake com-
pared to the third quarter as a decline in 
demand for systems going into new ships 
was more than offset by higher demand for 
exhaust gas cleaning as well as offshore 
systems. The order intake for Marine & 
Offshore Pumping Systems grew com-
pared to the previous quarter, as demand 
for marine pumping systems came back after 
a weak third quarter. Demand for solutions 
for offshore applications, however, declined. 
Service reported good growth in order intake 
due to upgrading orders and higher service 
activity for offshore pumping systems.
Operating income 
(excluding comparison distortion items)
The decrease in operating income during 
2016 compared to last year is mainly 
explained by lower sales volume, onetime 
costs related to a number of specific product 
deliveries and changes in the supply chain.
OPERATIONS & OTHER
Operations & Other is covering procurement, 
production and logistics as well as corporate 
overhead and non-core businesses.
The lower operating income during 2016 
compared to last year is mainly explained by 
higher group-wide and project related costs.
Marine & Diesel division
Consolidated
SEK millions
2016
2015
Orders received
9,038
13,831
Order backlog*
8,417
11,715
Net sales
12,318
14,735
Operating income**
2,111
2,999
Operating margin
17.1%
20.4%
Depreciation and amortisation
745
806
Investments
77
131
Assets*
23,166
22,905
Liabilities*
5,179
4,966
Number of employees*
2,962
3,176
* At the end of the period. ** In management accounts.
Change excluding currency effects
Consolidated
Order intake
Net sales
%
Structural 
change
Organic 
development
Total
Structural 
change
Organic  
development
Total
2016/2015
0.3
-35.3
-35.0
0.2
-16.7
-16.5
2015/2014
20.6
-13.7
6.9
23.6
7.7
31.3
Operations & Other
Consolidated
SEK millions
2016
2015
Orders received
0
0
Order backlog*
0
0
Net sales
0
0
Operating income**
-471
-438
Depreciation and amortisation
423
371
Investments
371
326
Assets*
6,601
5,797
Liabilities*
2,432
2,359
Number of employees*
6,379
6,447
* At the end of the period. ** In management accounts.

69
Financial statements
Financial statements
Information about geographical areas
All comments are reflecting the quarterly 
development during the year and are 
excluding currency effects. 
Western Europe including Nordic
Order intake declined in the ﬁrst quarter 
compared with the fourth, affected by fewer 
large contracts. Meanwhile, the base business* 
remained at the level seen in the previous 
quarter. Sanitary developed well, while Marine 
& Diesel Equipment, Marine & Offshore 
Systems and Water & Waste Treatment 
declined. From a regional perspective Mid 
Europe developed positively, while regions 
Nordic and Iberica declined due to fewer 
large contracts.
Order intake increased in the second 
quarter compared to the ﬁrst, driven by a 
good development across most countries 
and regions. Both the base business and 
larger projects developed positively. Segments 
to do particularly well were Industrial Equip-
ment – due to seasonality, Sanitary, Marine 
& Diesel Equipment, Marine & Offshore 
Systems, Water & Waste Treatment and 
Food & Life Science. Demand for Service was 
on the same level as in the previous quarter. 
Order intake decreased in the third 
quarter compared with the second, mainly 
affected by a decline in the base business 
in the Equipment division, brought on by 
the vacation period in parts of Western 
Europe. Marine & Diesel Equipment and 
Energy & Process developed well, while the 
rest of the segments declined. The Service 
business declined slightly, negatively affected 
by ship owners extending the intervals be-
tween the service occasions. Mid Europe, 
Iberica and the Adriatic region all declined, 
while growth was recorded in Nordic, the 
United Kingdom, Benelux and France.
Order intake increased in the fourth 
quarter compared with the third for large 
projects as well as the base business. 
Demand for spare parts and services was 
also positive across the region. Among the 
segments, Sanitary, Marine & Diesel Equip-
ment, Marine Offshore Systems, Energy & 
Process and Water & Waste Treatment had 
a positive development. All sub-regions re-
ported growth, except Nordic which had a 
strong third quarter.
Central and Eastern Europe
The region reported order intake growth in 
the ﬁrst quarter compared to the previous 
quarter, driven by larger orders for oil and 
gas in Russia and Croatia and also by all 
three divisions having a strong development 
in Turkey. In Russia, the positive development 
for oil and gas compensated for an otherwise 
continued low business activity across all 
three divisions.
The region reported a good second 
quarter with strong growth compared to 
the previous quarter. Equipment and the 
Process Technology divisions both did 
well, supported by most countries in the 
region. The main driver was Russia, which 
reported a solid quarter following a strong 
performance for both the base business and 
larger orders. The positive development was 
broad-based, with added support from 
the large vegetable oil order which was 
announced in June.
The region reported an unchanged order 
intake in the third quarter compared to the 
second. Poland and Turkey both declined, 
while Russia and countries in the Central- 
and South Eastern Europe regions reported 
growth. Russia did very well in the quarter, 
boosted by an improved activity in the 
Comfort, Power and Reﬁnery market units, 
as well as continued overall strong perfor-
mance in Service.
The region reported a growing order in-
take in the fourth quarter compared to the 
third. The main reason was a sizeable order 
for waste heat recovery systems in Turkey. 
The base business had a strong develop-
ment, mainly driven by Sanitary and Service, 
which both did well across the region. 
Russia, which did well throughout the year, 
saw a decline compared to the previous 
quarter as there were fewer larger projects 
booked in the quarter.
North America
Order intake was unchanged in the ﬁrst 
quarter compared to the fourth, with a 
positive development for larger orders, whereas 
the base business declined. Industrial Equip-
ment, OEM and Food & Life Science did 
particularly well in the quarter, while Sanitary 
and Energy & Process declined due to non-
repeats. Overall Service developed positively.
Order intake increased in the second 
quarter compared with the ﬁrst, thanks to 
larger projects while the base business re-
mained unchanged. Growth was recorded in 
Sanitary, Marine & Diesel Equipment, Marine 
& Offshore Systems, Energy & Process 
and Water & Waste Treatment. Demand for 
Service remained on the same level as in 
the previous quarter. 
North America reported a decline in order 
intake in the third quarter compared to 
the second, affected by a drop in the U.S., 
which saw fewer large contracts. The base 
business, however, continued to grow in 
the region. Water & Waste declined, as a 
large order taken in the previous quarter 
was not repeated. Industrial Equipment 
and Energy & Process also declined, while 
OEM, Sanitary, Marine & Diesel Equipment 
and Food & Life Science all did well. The 
Service business remained ﬂat. 
Order intake in North America was un-
changed in the fourth quarter compared 
to the third, for large projects as well as the 
base business. The Service segment reported 
growth. Overall, in the region, Industrial 
Equipment, OEM and Food & Life Science 
all had a positive development. 
Latin America
Order intake increased signiﬁcantly in the 
ﬁrst quarter compared to the previous 
quarter. The main driver was Brazil that re-
ported large cancellations in the previous 
quarter. There was also a positive impact 
from the base business, which had a strong 
development throughout the region. Brazil 
also had a positive development for Service. 
The region reported a drop in order intake 
in the second quarter compared to the 
previous quarter. This was mainly explained 
by Brazil, which had a large non-repeat order 
in the ﬁrst quarter. Mexico, on the other hand, 
reported a strong quarter, supported by 
good growth in the Equipment division and 
for Service in Process Technology.
The region declined somewhat in the 
third quarter, negatively impacted by con-
tinued low demand in Brazil and the non-
repeat of a larger service project in Mexico 
during the second quarter. Other areas in 
the region grew and especially Argentina, 
which reported a solid development in all 
divisions and with a number of larger orders 
in the food and mining sectors. 
Order intake grew in the fourth quarter 
compared to the third, boosted by a very 
positive development in Mexico, where 
some larger brewery projects were booked 
and where the Service business also reported 
a good development. Argentina and Chile 
contributed to the region’s growth through 
a good base business development in both 
the Equipment and Process Technology di-
vision. Brazil remained ﬂat compared to the 
previous quarter, following the gradual re-
covery seen over the past few quarters. 
* Base business and base orders refer to orders with an order value of less than EUR 0.5 million.

70   Financial statements
Information about geographical areas
-18%
+4%
+21%
-31%
+12%
-6%
1
2
3
4
5
6
7
+26%
-7%
-18%
+3%
-17%
-21%
1
2
3
4
5
6
7
Orders received 2016
Orders received 2015
1 Nordic 
9%
2 Western Europe 
24%
3 Central & Eastern Europe 
7%
4 Asia 
33%
5 Latin America 
5%
6 North America 
20%
7 Other 
2%
Asia
Order intake was weaker during the ﬁrst 
quarter compared to the previous quarter, 
due to a substantially lower demand for 
marine pumping systems as well as a gen-
erally slower project business in the region. 
The segments in the Marine & Diesel division 
showed a mixed performance. The Marine 
& Offshore Systems segment was unchanged, 
with a weaker demand in Korea and a very 
strong demand in China. Marine & Diesel 
Equipment declined following slower con-
tracting during the second half of last year. 
The Marine & Offshore Pumping Systems 
segment declined substantially, as the pre-
buying effect noted in the fourth quarter, as 
expected was not repeated. The Process 
Technology division declined as a large 
petrochemical order booked in the fourth 
quarter was not repeated. The project 
business climate was in general slower with 
decisions being deferred by the customers. 
The exception was Food Technology, which 
saw strong growth in vegetable oil and life 
science-related applications. Service had a 
positive development in the quarter. The 
Equipment division declined somewhat, 
reﬂecting a decline in Industrial Equipment, 
with the exception of the comfort market, 
which beneﬁted from stronger demand for 
data centre cooling. The Sanitary segment, 
however, enjoyed a positive development, 
the main driver being the food market, re-
ﬂecting the increased focus on food across 
Asia and particularly in China. China in total 
declined compared to the previous quarter, 
reﬂecting lower demand for marine pumping 
systems. Excluding pumping systems, China 
reported strong growth. 
Lower second quarter demand from 
shipbuilding and in the Process Technology 
business explained a limited decline in order 
intake for the region as a whole compared 
to the ﬁrst quarter. Service grew, lifted by 
good demand in Process Technology, which 
= Compared to 2015 after adjustment for exchange rate fluctuations
= Compared to 2014 after adjustment for exchange rate fluctuations
1 Nordic 
9%
2 Western Europe 
20%
3 Central & Eastern Europe 
5%
4 Asia 
42%
5 Latin America 
4%
6 North America 
18%
7 Other 
2%

71
Financial statements
Financial statements
beneﬁtted from pent-up demand in the energy 
area as well as a good development in 
Food & Life Science. The Marine & Diesel 
division reported an overall decline, as the 
downturn in new shipbuilding orders con-
tinued to affect the South Korean market. 
Demand for pumping systems, however, 
grew. Order intake declined in the Process 
Technology division, mainly due to non-
repeats of larger orders in the Food Tech-
nology segment. Energy & Process, how-
ever, had a good development with strong 
growth for market unit Petrochemicals and 
for inorganic chemicals applications, thanks 
to a number of larger orders in China, Taiwan, 
Thailand and India. The best performance 
in the second quarter was reported by the 
Equipment division, which beneﬁtted from 
a strong base business, particularly within 
the Sanitary segment. The segment was 
boosted by good demand from the food 
and pharma industries in China, Korea and 
South East Asia. Added support came from 
India, which reported a good development in 
the personal care business. When explaining 
the regional decline from a country perspec-
tive, the picture was mixed. South Korea 
declined, affected by the downturn in new 
shipbuilding orders, while China showed good 
growth, supported by increased demand 
for pumping systems for product and 
chemical tankers.
Order intake declined in the third quarter 
compared to the second, negatively affected 
by the drop for ship contracting. The effect 
was particularly pronounced for pumping 
systems. Process Technology reported a 
decline driven foremost by the Energy & 
Process segment, whereas Food Technology 
and in particular vegetable oil had good order 
intake in the quarter. The Equipment division 
had a good quarter thanks to strong demand 
for products used for comfort applications. 
OEM also did well, while the Sanitary segment 
was unchanged compared to the previous 
quarter. Service showed a minor decline, 
mainly explained by the marine sector where 
there was less demand for upgrades. From 
a country perspective, China reported growth, 
coming from good demand in both Process 
Technology and Equipment. South Korea 
and Japan were both pressured by lower 
marine demand, whereas countries in 
Southeast Asia grew, driven by reﬁnery and 
inorganic application orders. Order intake 
in India was on the same level as in the 
second quarter.
Order intake grew in the fourth quarter 
compared to the previous quarter, mainly 
explained by large orders in the Process 
Technology division and order growth in 
the Marine & Diesel division compared to 
the very low level reported in the previous 
quarter. The Equipment division showed a 
decline in order intake in the quarter as the 
comfort business in Industrial Equipment 
came down from the strong levels recorded 
in the third quarter. Service showed a general 
improvement in the quarter, mainly driven 
by the marine business. From a country 
perspective India and South Korea reported 
the strongest development compared to 
the third quarter. Japan also did well, with 
growth across all divisions and particularly 
so in Marine & Diesel. India beneﬁtted from 
a number of projects in the food and reﬁnery 
sectors. The positive development in South 
Korea was mainly explained by marine 
pumping systems, which improved from a 
weak third quarter. China reported a decline 
in order intake compared to the previous 
quarter. The Equipment division in China 
reported a lower order intake, due to a 
decline in Sanitary. Process Technology 
also showed a decline in China, explained 
by a slower base business, while larger orders 
were unchanged.   
Guidelines for remunerations  
to executive ofﬁcers
The guidelines for remunerations to executive 
officers are established by the Annual General 
Meeting, see further description in Note 6.
The Annual General Meeting 2016 decided 
to implement step six of a cash based long 
term incentive programme for maximum 85 
senior managers in the Group including the 
Chief Executive Ofﬁcer and the persons 
deﬁned as executive ofﬁcers. The Board of 
Directors will propose the Annual General 
Meeting 2017 to implement step seven of the 
cash-based long term incentive programme 
for the period January 1, 2017 – December 
31, 2019 for maximum 70 senior managers 
in the Group including the Chief Executive 
Ofﬁcer and the persons deﬁned as executive 
ofﬁcers. No other changes of these guide-
lines are proposed by the Board of Directors.
Research and development
As the result of an intensive and consistent 
commitment over many years to research 
and development, Alfa Laval has achieved 
a world-leading position within the areas of 
separation and heat transfer. The product 
development within fluid handling has resulted 
in a strong market position for a number of 
products. In order to strengthen the Group’s 
position and to support the organic growth, 
by identifying new applications for existing 
products as well as developing new products, 
research and development is always an 
activity of high priority. Research and 
development is conducted at approximately 
twenty facilities around the world.
The costs for research and development 
have amounted to SEK 822 (756) million, 
corresponding to 2.3 (1.9) percent of net 
sales. Excluding currency effects and ac-
quisition of businesses, the costs for research 
and development have increased by 8.3 
percent compared to last year. The increase 
is partly explained by a low level during 
2015, but mainly by a deliberate effort to 
achieve faster development and renewal of 
the product range. 
Personnel
The parent company does not have any 
employees.
The Group has on average had 17,305 
(17,486) employees. At the end of December 
2016 the Group had 16,941 (17,417) em-
ployees. The employee turnover rate for 
2016 is 9.5 (8.6) percent and mainly relates 
to employees within service and repair 
workshops, module production units and 
central management & administration.
Alfa Laval has the ambition to develop the 
employees on all levels within the Group. 
The largest part of the competence develop-
ment takes place in the daily work when our 
employees continuously get more demanding 
tasks as well as get the opportunity to par-
ticipate in different projects together with 
more experienced colleagues. Local training 
and development efforts in the different 
factories and sales companies around the 
world are equally important, for instance 
ALPS (Alfa Laval Production System) that 
is based on the well-known concepts of 
Lean and Six Sigma, while the more com-
prehensive group-wide training programmes 
and development projects are performed 
within the Alfa Laval Academy framework. 
Examples of these training programmes 
are Challenger (for young talents with inter-
national leadership potential), Impact (for 
women in the middle of the career), Project 
Management, Product trainings, Information 
Security (mandatory training via E-learning) 
and Pure Leadership (for middle manage-
ment). During 2016 we carried through the 
up till now most extensive leadership devel-
opment programme, called “Drive”, for our 
124 top international executives. It consisted 
of ﬁve modules, with both virtual and live 
seminars. Focus was on development of the 
personal leadership where the importance 
of being an “authentic” leader was empha-
sised as well as an extensive concentration 
on leading change. The latter is a skill that 
is high on the agenda considering the large

72   Financial statements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dec 31, 2016
Dec 31, 2015
0
500
1,000
1,500
2,000
2,500
2011
2012
2013
2014
2015
2016
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
2015
2016
4,950
1,498
1,874
8,052
567
5,349
1,487
1,787
8,202
564
28
360
307
303
344
390
321
1,954
1,856
1,835
2,050
2,273
2,059
5,305
3,020
760
5,549
2,018
17,486
665
169
5,212
2,972
763
5,672
1,931
17,305
589
166
Employees
Average number of employees – by region
Employees – by category
Employees – Productivity development
Nordic
North America
Western Europe
Latin America
Central & Eastern Europe
Other
Asia
Manufacturing, logistics & procurement
Central Sales & Marketing
Management & Administration
Local Sales & Service
R&D
Acquired during  the year
Adjusted EBITA/average number of employees
Net sales/average number of employees
Number
Number
 SEK 
thousands
The whole period 2011-2013 has been 
affected by the strengthening of the Swedish 
krona. The outcome for 2011 and 2012 has 
been affected by the acquisition of Aalborg 
Industries and the Euro crisis. Aalborg 
Industries has a lower turnover per employee 
than Alfa Laval. The outcome for 2015 has 
been affected by the weakening of the Swedish 
krona and the acquisition of Frank Mohn. 
The outcome for 2016 has been affected by 
the receding demand, mitigated by the 
continued weakening of the Swedish krona.
The productivity by employee has 
developed as follows: 
The distribution of the number of employees 
by region is:
The distribution of the number of employees 
by personnel category at year end is:

73
Financial statements
Financial statements
changes that have been or will be imple-
mented in the Group during 2016–2017. 
Alfa Laval is working to achieve equal 
career opportunities independent of for in-
stance gender or ethnic origin. The latter is 
not the least important in an international 
company. Likewise the number of female 
managers shall increase in order to better 
reﬂect the females’ part of the total number 
of employees. To facilitate this, a mentor 
programme has started for women with 
capacity to become future leaders.
The distribution of employees per country 
and per municipality in Sweden and between 
males and females can be found in Note 5 
in the notes to the ﬁnancial statements. 
The speciﬁcation of salaries, wages, remu-
nerations, social costs and pension costs 
are provided in Note 6 in the notes to the 
ﬁnancial statements.
Ethics and social responsibility
Two of Alfa Laval’s four business principles are: 
”Respect for human rights is fundamental” 
and ”High ethical standards guide our 
conduct”. This means that Alfa Laval respects 
human rights and the very different social 
cultures in which the company works and 
supplies its products and services and that 
Alfa Laval conducts its business with honesty, 
integrity and respect for others.
Globalisation gives Alfa Laval new business 
opportunities for increased sales as well as 
lower costs for manufacturing the products. 
But when part of the supply chain is moved 
to countries with lower costs the company 
is often confronted with ethical questions 
in a more obvious manner. Health, security 
and working conditions for the employees 
at the company’s suppliers are some of 
Alfa Laval’s main topics. When Alfa Laval 
procures products from quickly growing 
economies like China and India it is important 
for the company to secure that the cost 
reduction opportunities are not at the ex-
pense of those performing the work in each 
country. Alfa Laval regards it as an obligation 
to make sure that its suppliers develop 
quickly if the work, health and security 
conditions are not acceptable.
Alfa Laval has developed an internal 
training programme to give sales people 
and purchase departments knowledge on 
legal business practice.
Environment
One of Alfa Laval’s four business principles 
is: ”Optimizing the use of natural resources 
in the most efficient manner is our business.” 
The company’s products make a significant 
contribution to reducing the environmental 
impact of industrial processes and are used 
to produce renewable energy. 
Since 2004 the Group runs a project to 
improve the internal environmental manage-
ment systems. Today all sites (except recent 
acquisitions) have an environmental manage-
ment system in place. At the end of 2016 
29 (29) production sites with ISO 14001 certi-
ﬁcation accounted for about 94 (92) percent 
of the delivery value. The goal is to have a 
certiﬁcation level of at least 95 percent.
The subsidiary, Alfa Laval Corporate AB, 
is involved in operational activities that are 
subject to an obligation to report and com-
pulsory licensing according to Swedish en-
vironmental legislation. The permits mainly 
relate to the manufacturing of heat exchangers 
in Lund and Ronneby and the manufacturing 
of separators in Tumba and Eskilstuna. The 
external environment is affected through 
limited discharges into the air and water, 
through waste and noise.
The foreign manufacturing sites within the 
Alfa Laval Group are engaged in operational 
activities with a similar effect on the external 
environment. To what extent this activity is 
subject to an obligation to report and/or 
compulsory licensing according to local 
environmental legislation varies from country 
to country. Alfa Laval has an overall intention 
to operate well within the limits that are set 
by local legislation.
Asbestos-related lawsuits
The Alfa Laval Group was as of December 
31, 2016, named as a co-defendant in a 
total of 824 asbestos-related lawsuits with 
a total of approximately 824 plaintiffs. Alfa 
Laval strongly believes the claims against 
the Group are without merit and intends to 
vigorously contest each lawsuit. 
Based on current information and Alfa 
Laval’s understanding of these lawsuits, 
Alfa Laval continues to believe that these 
lawsuits will not have a material adverse 
effect on the Group’s ﬁnancial condition or 
results of operation.
Result for the parent company
The parent company’s result after financial 
items was SEK 66 (1,051) million, out of 
which dividends from subsidiaries were 
SEK 76 (1,070) million, net interests SEK 1 
(0) million, realised and unrealised exchange 
rate gains and losses SEK 7 (-8) million, costs 
related to the listing SEK -4 (-4) million, fees 
to the Board SEK -7 (-7) million, costs for 
annual report and annual general meeting 
SEK -2 (-2) million and other operating 
costs the remaining SEK -5 (2) million. 
Change of tax allocation reserve has been 
made with SEK -264 (156) million. Group 
contributions amount to SEK 2,002 (59) 
million. Tax on this year’s result amount to 
SEK -381 (-46) million. Net income for the 
year was SEK 1,423 (1,220) million.
Unrestricted equity for the parent 
company
The unrestricted equity of Alfa Laval AB 
(publ) was SEK 9,197 (9,557) million.
Proposed disposition of earnings
The Board of Directors propose a dividend 
of SEK 4.25 (4.25) per share corresponding 
to SEK 1,783 (1,783) million and that the 
remaining income available for distribution 
in Alfa Laval AB (publ) of SEK 7,414 (7,774) 
million be carried forward, see Note 37. 
The Board of Directors are of the opinion 
that the proposed dividend is in line with 
the requirements that the type and size of 
operations, the associated risks, the capital 
needs, liquidity and ﬁnancial position put 
on the company.
Disclosure on share related information 
Paragraph 2a in chapter 6 of the Swedish 
Annual Accounts Act requires listed 
companies to disclose certain information 
relating to the company’s shares in the Board 
of Directors’ Report. This information is found 
in the following paragraphs, in the “Changes 
in consolidated equity” and in Note 6.
Outlook for the ﬁrst quarter 
In the fourth quarter and full year 2017 report 
issued on January 31, 2017 the President and 
Chief Executive Officer Tom Erixon stated:
“We expect that demand during the first 
quarter 2017 will be somewhat lower than 
in the fourth quarter.”
Earlier published outlook (October 25, 2016): 
“We expect that demand during the fourth quarter 
2016 will be in line with or somewhat higher than 
in the third quarter.” 
Date for the next ﬁnancial reports 
during 2017 
Alfa Laval will publish interim reports during 
2017 at the following dates:
Interim report for  
the first quarter  
April 26
Interim report for  
the second quarter 
July 17
Interim report for  
the third quarter  
October 25

74   Financial statements
Consolidated cash flows
Consolidated cash flows
 
 
 
SEK millions
Note
2016
2015
Operating activities
 
Operating income
2,989
5,717
Adjustment for depreciation, amortisation and write down
2,334
1,761
Adjustment for other non-cash items
16
-231
5,339
7,247
Taxes paid
-1,161
-1,577
4,178
5,670
Changes in working capital:
 
      Increase(-)/decrease(+) of receivables
592
426
      Increase(-)/decrease(+) of inventories
32
347
      Increase(+)/decrease(-) of liabilities
-424
-438
      Increase(+)/decrease(-) of provisions
601
-155
Increase(-)/decrease(+) in working capital
801
180
 
4,979
5,850
Investing activities
 
Investments in fixed assets (Capex)
-617
-674
Divestment of fixed assets
39
25
Acquisition of businesses
16
-230
-73
Divestment of businesses
13
12
-795
-710
Financing activities
 
Received interests and dividends
163
124
Paid interests
-243
-316
Realised financial exchange gains
316
157
Realised financial exchange losses
-89
-288
Dividends to owners of the parent
-1,783
-1,678
Dividends to non-controlling interests
-17
-18
Increase(-) of financial assets
0
-311
Decrease(+) of financial assets
8
0
Increase of loans
1,860
3,400
Amortisation of loans
-3,781
-6,299
-3,566
-5,229
 
Cash flow for the year
618
-89
Cash and cash equivalents at the beginning of the year
1,876
2,013
Translation difference in cash and cash equivalents
125
-48
Cash and cash equivalents at the end of the year
25
2,619
1,876
 
Free cash flow per share (SEK) *
9.97
12.25
Capex in relation to net sales
1.7%
1.7%
Average number of shares
 
419,456,315
419,456,315
*  Free cash ﬂow is the sum of cash ﬂows from operating and investing activities.

75
Financial statements
Financial statements
Comments to the consolidated cash-flows
For further comments on certain individual 
lines in the cash-flow statement, reference 
is made to Notes 16 and 25.
Cash ﬂows from operating activities
The decrease in cash flows from operating 
activities in 2016 is explained by lower 
operating income before depreciation and 
amortisation, mitigated by a larger decrease 
in working capital and lower tax payments.
Cash and cash equivalents
The item cash and cash equivalents is mainly 
relating to bank deposits and liquid deposits.
Cash ﬂow
Cash flow from operating and investing 
activities amounted to SEK 4,184 (5,140) 
million during 2016. Out of this, acquisitions 
of businesses were SEK -230 (-73) million 
whereas divestments generated cash of 
SEK 52 (37) million.
Adjustment for other non-cash items
Other non-cash items are mainly referring to 
realised gains and losses in connection with 
sale of assets. These have to be eliminated 
since the cash impact of divestments of fixed 
assets and businesses are reported separately 
under cash flow from investing activities. 
Working capital
Working capital decreased by SEK 801 (180) 
million during 2016. 
Investments
Investments in property, plant and equipment 
amounted to SEK 617 (674) million during 
2016. The investments made for the 
individual product groups are as follows:
Heat exchangers
Investments have been made in machines 
for increased capacity and manufacturing of 
new products and in productivity enhancing 
equipment in Alonte in Italy, Ronneby in 
Sweden and Jiang Yin in China for brazed 
heat exchangers. Investments have been 
made in Jiang Yin in China and in Lund in 
Sweden in equipment to widen the product 
range and increase the productivity for 
gasketed heat exchangers. Larger investments 
have also been made to rationalize the 
manufacturing of boilers in Qingdao in China.
High speed separators
Continued modernisation of machining 
equipment for separators has been made 
in Krakow in Poland. Investments have 
been made in new test equipment in Jiang 
Yin in China.
Fluid handling products
During 2016 major investments in productivity 
and capacity increasing equipment have 
been made relating to fluid handling products 
in Kolding in Denmark, in Kunshan in China 
and in Eastbourne in England.
 
Depreciations
Depreciation, excluding allocated step-up 
values, amounted to SEK 643 (667) million 
during the year.
Acquisitions and disposals
For a further analysis of the impact on the 
cash flow by acquisitions and disposals, 
see Note 16.
Free cash ﬂow per share
The free cash flow per share is SEK 9.97 
(12.25).

76   Financial statements
Consolidated comprehensive income
Consolidated comprehensive income
SEK millions
Note
2016
2015
Net sales
1, 2, 3, 4
35,634
39,746
Cost of goods sold
9
-24,581
-26,707
Gross profit
 
11,053
13,039
Sales costs
5, 6, 9
-4,328
-4,107
Administration costs
5, 6, 7, 9
-1,649
-1,813
Research and development costs
9
-822
-756
Other operating income
8
613
495
Other operating costs
8, 9
-1,893
-1,149
Share of result in joint ventures
33
15
8
Operating income
 
2,989
5,717
Dividends and changes in fair value
10
47
33
Interest income and financial exchange rate gains
11
645
404
Interest expense and financial exchange rate losses
11
-356
-710
Result after financial items
 
3,325
5,444
Tax on this year's result
15
-960
-1,541
Other taxes
15
-53
-42
Net income for the year
 
2,312
3,861
Other comprehensive income:
 
Items that will subsequently be reclassified to net income
 
Cash flow hedges
245
-195
Market valuation of external shares
0
2
Translation difference
1,882
-1,056
Deferred tax on other comprehensive income
15
-143
20
Sum
 
1,984
-1,229
Items that will subsequently not be reclassified to net income
 
Revaluations of defined benefit obligations
-505
332
Deferred tax on other comprehensive income
15
67
-47
Sum
 
-438
285
Comprehensive income for the year
 
3,858
2,917
Net income attributable to:
 
Owners of the parent
2,289
3,839
Non-controlling interests
23
22
Earnings per share (SEK)
5.46
9.15
Average number of shares
 
419,456,315
419,456,315
Comprehensive income attributable to:
 
Owners of the parent
3,815
2,903
Non-controlling interests
 
43
14

77
Financial statements
Financial statements
Comments to the consolidated  
comprehensive income
The gross margin has increased by 0.2 
percentage units between 2015 and 2016.  
The increase is explained by a favourable mix 
between capital sales and service, positive 
procurement variations and by currency 
effects, largely related to a stronger USD.
Sales and administration expenses 
amounted to SEK 5,977 (5,920) million. 
Excluding currency effects and acquisition 
of businesses, sales and administration ex-
penses were 1.2 percent higher than last year.
The costs for research and development 
have amounted to SEK 822 (756) million, 
corresponding to 2.3 (1.9) percent of net 
sales. Excluding currency effects and ac-
quisition of businesses, the costs for re-
search and development have increased 
by 8.3 percent compared to last year. The 
increase is partly explained by a low level 
during 2015, but mainly by a deliberate effort 
to achieve faster development and renewal 
of the product range. 
The net income attributable to the owners 
of the parent, excluding depreciation of 
step-up values and the corresponding tax, 
is SEK 8.48 (11.02) per share.
Compared with last year Alfa Laval has been 
affected during 2016 by exchange rate dif-
ferences, both through translation differences 
and through the net exposure when trading 
in foreign currencies. The effect on adjusted 
EBITA has been calculated to totally about 
SEK 478 (450) million for 2016 compared 
with last year. The effect of the exchange 
rate variations has been limited through ex-
change rate hedging and through the distri-
bution of the company’s ﬁnancial debts in 
relation to its net assets in different currencies.
For comments on the individual lines in the consolidated comprehensive income state-
ment, reference is made to Notes 1 to 15 and Note 28. For comments on the operating 
segments, see Note 1.
As a basis for comments on the various main items of the consolidated comprehensive in-
come statement, please ﬁnd a comparison between the last two years:
Income analysis
Consolidated
SEK millions
2016
2015
Net sales
35,634
39,746
Adjusted gross profit *
12,744
14,133
- adjusted gross margin (%) *
35.8
35.6
Expenses **
-6,548
-6,655
- in % of net sales
18.4
16.7
Adjusted EBITDA *
6,196
7,478
- adjusted EBITDA margin (%) *
17.4
18.8
Depreciation
-643
-667
Adjusted EBITA *
5,553
6,811
- adjusted EBITA margin (%) *
15.6
17.1
Amortisation of step-up values
-1,064
-1,094
Comparison distortion items:
 
Write down of goodwill and step-up values
-627
 –
Restructuring
-873
–
Operating income
2,989
5,717
* Alternative performance measures, defined on page 142. **  Excluding comparison distortion items.

78   Financial statements
0
2,000
4,000
6,000
8,000
10,000
12,000
Q416
Q316
Q216
Q116
Q415
Q315
Q215
Q115
Q414
Q314
Q214
Q114
30
32
34
36
38
40
42
Net sales & adjusted gross margin
 
 
SEK millions
%
Net sales
Adjusted gross margin in %
Adjusted EBITA
SEK millions
%
Adjusted EBITA
Adjusted EBITA margin in %
0
400
800
1,200
1,600
2,000
Q416
Q316
Q216
Q116
Q415
Q315
Q215
Q115
Q414
Q314
Q214
Q114
4
8
12
16
20
24
 
In order to illustrate the quarterly development, the last 12 quarters are shown below for 
four of the parameters in the income analysis:
The operating income has been affected by 
comparison distortion items of SEK -1,500 (-) 
million, which are specified below. In the 
consolidated comprehensive income 
statement these are reported gross as a 
part of each concerned line. 
Group Management has started three 
initiatives for restructuring and implementa-
tion of a new organisation. The three initia-
tives concern:
1 – Cost adaptations and a new organisation
The initiative includes the consequences of 
establishing a new more efficient organisa-
tional structure at the same time as it 
contains adaptations to the current 
demand situation.
2 –  Restructuring of the manufacturing 
structure
This initiative includes a stepwise implemen-
tation of measures to achieve an even more 
competitive manufacturing structure. The 
initiative comprises re-locations and closures 
of entities during a period of about three years.
3 – “Greenhouse”
The initiative means that three product 
groups that have had an unsatisfactory 
development will be operated separately 
from the new organisation in order to in an 
even more focused manner give the best 
preconditions for a better development.
The costs for the initiatives are of a non-
recurring nature and have amounted to 
SEK 1,500 million for 2016. The cost con-
tains among others a write down of above 
all allocated step-up values and goodwill with 
about SEK 700 million, which has burdened 
cost of goods sold. The remaining part of 
the cost of SEK 800 million concerns mainly 
lay off of about 1,000 employees and in 
addition certain costs for write down of assets 
and provisions for lease agreements, which 
has burdened other operating costs. 
The measures during 2016 are estimated 
to give savings related to cost of goods sold 
of approximately SEK 200 million and to 
operating costs, excluding cost of goods 
sold, of about SEK 300 million and are ex-
pected to be implemented to approximately 
75 percent by the end of 2017 and to be 
implemented in full by the end of 2018.
Consolidated ﬁnancial net and taxes
The financial net has amounted to SEK -76 
(-177) million, excluding realised and unrealised 
exchange rate losses and gains. The main 
elements of costs were interest on the debt 
to the banking syndicate of SEK -8 (-15) 
million, interest on the bilateral term loans 
of SEK -56 (-77) million, interest on the private 
placement of SEK -3 (-9) million, interest 
on the commercial papers of SEK -0 (-1) 
million, interest on the corporate bonds of 
SEK -80 (-83) million and a net of dividends 
and other interest income and interest 
costs of SEK 71 (8) million. 
The net of realised and unrealised ex-
change rate differences has amounted to 
SEK 412 (-96) million.
The tax on the result after ﬁnancial items 
was SEK -1,013 (-1,583) million in 2016. 
The effective tax has been affected by the 
write down of goodwill of SEK -533 million, 
where no corresponding deferred tax has 
been released. The tax cost for 2016 has 
been affected by non-recurring items of about 
SEK 132 million concerning adjustments of 
deferred taxes relating to step-up values, 
due to reduced company taxes in certain 
countries and thereby decreased deferred 
tax liabilities.

79
Financial statements
Financial statements
Fair value changes in cash flow hedges
Consolidated
SEK millions 
2016
2015
Opening balance
-693
-498
Booked into other comprehensive income during the year
263
-23
Reversed from other comprehensive income due to inefficiency:
 
   booked against cost of goods sold
-5
-15
Reversed from other comprehensive income:
 
   booked against cost of goods sold
-17
-166
   booked against interest income/interest costs
4
9
Closing balance
-448
-693
 
Change reported against other comprehensive income
245
-195
The Group has not had any cash flow hedges that have affected the initially recognised carrying amount of non-financial assets. 
Accumulated translation differences *
Consolidated
SEK millions
Year
Main explanation to translation differences
Change
Accumulated
Pre-tax effect on 
change by hedging 
measures
Formation of the Group
2000
The EUR was appreciated by 6 %, which 
affected the EUR based acquisition loans
-94
-94
-312
2001
The USD was appreciated by 10.7 %
97
3
-105
2002
The USD was depreciated by 16.7 %
-190
-187
165
2003
The USD was depreciated by 17.5 %
-38
-225
195
2004
The USD was depreciated by 9.0 %
-103
-328
-19
2005
The USD was appreciated by 20.3 % 
and the EUR was appreciated by 4.8 %
264
-64
-65
2006
The USD was depreciated by 13.5 % 
and the EUR was depreciated by 4.0 %
-269
-333
56
2007
The USD was depreciated by 5.7 %
whereas the EUR was appreciated by 4.7 %
224
-109
13
2008
The USD was appreciated by 20.5 %
and the EUR was appreciated by 16.2 %
850
744
-468
2009
The USD was depreciated by 7.5 %
and the EUR was depreciated by 6.0 %
-392
352
220
2010
The USD was depreciated by 5.7 %
and the EUR was depreciated by 12.9 %
-554
-202
99
2011
The USD was appreciated by 1.4 %
whereas the EUR was depreciated by 0.8 %
-254
-456
34
2012
The USD was depreciated by 5.8 %
and the EUR was depreciated by 3.6 %
-798
-1,254
214
2013
The USD was appreciated by 0.3 %
and the EUR was appreciated by 4.1 %
39
-1,215
-83
2014
The USD was appreciated by 20.5 %
and the EUR was appreciated by 6.3 %
439
-776
-1,033
2015
The USD was appreciated by 6.6 %
whereas the EUR was depreciated by 4.0 %
-1,056
-1,832
301
2016
The USD was appreciated by 8.6 %
and the EUR was appreciated by 4.6 %
1,882
50
-643
* Reported against other comprehensive income. Prior to 2009 these translation differences were reported against equity.
Cash ﬂow hedges in other comprehensive income are explained by the following components:

80   Financial statements
Consolidated financial position
Consolidated financial position
ASSETS
SEK millions
Note
2016
2015
Non-current assets
 
Intangible assets
16, 17
 
Patents and unpatented know-how
2,142
2,467
Trademarks
3,766
4,048
Licenses, renting rights and similar rights
38
41
Goodwill
20,436
19,498
26,382
26,054
Property, plant and equipment
16, 18
 
Real estate
2,450
2,447
Machinery and other technical installations
1,629
1,578
Equipment, tools and installations
580
604
Construction in progress and advances to suppliers 
concerning property, plant and equipment
281
144
4,940
4,773
Other non-current assets
 
Other long-term securities
13, 14, 19
25
28
Pension assets
26
3
4
Derivative assets
13, 14
16
7
Deferred tax assets
15
2,056
1,765
2,100
1,804
 
Total non-current assets
33,422
32,631
 
Current assets
 
Inventories
20
7,831
7,405
 
Assets held for sale
 
Real estate
18
2
9
 
Current receivables
 
Accounts receivable
13, 21
5,830
5,796
Current tax assets
739
1,164
Other receivables
13, 22
1,339
1,558
Prepaid costs and accrued income
13, 23
368
279
Derivative assets
13, 14
153
158
8,429
8,955
Current deposits
 
Other current deposits
13, 24
1,075
1,021
 
Cash and cash equivalents
13, 25
2,619
1,876
 
Total current assets
19,956
19,266
 
TOTAL ASSETS
 
53,378
51,897

81
Financial statements
Financial statements
Consolidated financial position, continued
EQUITY AND LIABILITIES
SEK millions
Note
2016
2015
Equity
 
Attributable to owners of the parent
 
Share capital
1,117
1,117
Other contributed capital
2,770
2,770
Other reserves
-1,742
-3,268
Retained earnings
18,014
17,683
20,159
18,302
 
Attributable to non-controlling interests
12
117
121
 
 
Total equity
20,276
18,423
 
Non-current liabilities
 
Liabilities to credit institutions etc
13, 28
12,169
12,484
Provisions for pensions and similar commitments
26
2,425
1,931
Provision for deferred tax
15
2,722
2,925
Other provisions
27
599
418
Derivative liabilities
13, 14
37
103
 
Total non-current liabilities
17,952
17,861
 
Current liabilities
 
Liabilities to credit institutions etc
13, 28
1,078
2,019
Advances from customers
2,721
3,136
Accounts payable
13
2,490
2,492
Notes payable
13
178
172
Current tax liabilities
1,256
1,214
Other liabilities
13, 29
2,352
1,973
Other provisions
27
2,365
1,798
Accrued costs and prepaid income
13, 30
2,433
2,237
Derivative liabilities
13, 14
277
572
 
Total current liabilities
15,150
15,613
 
Total liabilities
33,102
33,474
 
TOTAL EQUITY AND LIABILITIES
 
53,378
51,897

82   Financial statements
Changes in consolidated equity
Comments on the consolidated 
financial position
For comments on the individual lines in the 
statement on financial position, reference is 
made to Notes 12 to 34. For comments on 
the operating segments, see Note 1.
Capital employed
The average capital employed including 
goodwill and step-up values amounted to 
SEK 30,663 (31,512) million during the year.
Return on capital employed
The return on average capital employed 
including goodwill and step-up values 
amounted to 15.3 (21.6) percent during 
the year.
Capital turnover rate
The capital turnover rate calculated on the 
average capital employed including 
goodwill and step-up values amounted to 
1.2 (1.3) times for the year.
Return on equity
Net income in relation to the average equity 
was 11.8 (21.7) percent during the year. 
Solidity
The solidity, that is the equity in relation to 
total assets, was 38.0 (35.5) percent at the 
end of the year.
Changes in consolidated equity
Attributable to:
Owners of the parent
Non-controlling interests
Total
Other reserves
 
 
SEK millions
Share
capital
Other
contributed
capital
Cash flow 
hedges
Market valua-
tion of external 
shares
Translation 
differences
Revaluations
Retained
earnings
Subtotal
Translation 
differences
Retained
earnings
Subtotal
 
 
As of December 31, 2014
1,117
2,770
-393
0
-677
-1,262
15,522
17,077
3
122
125
17,202
2015
 
 
Comprehensive income
 
 
Net income
 –
 –
 –
 –
 –
 –
3,839
3,839
 –
22
22
3,861
Other comprehensive income
 –
 –
-152
1
-1,070
285
 –
-936
-8
 –
-8
-944
Comprehensive income
 –
 –
-152
1
-1,070
285
3,839
2,903
-8
22
14
2,917
Transactions with shareholders
 
 
Dividends to owners of the parent
 –
 –
 –
 –
 –
 –
-1,678
-1,678
–
–
–
-1,678
Dividends to non-controlling interests
 –
 –
 –
 –
 –
 –
 –
–
–
-18
-18
-18
As of December 31, 2015
1,117
2,770
-545
1
-1,747
-977
17,683
18,302
-5
126
121
18,423
2016
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 –
 –
 –
 –
 –
 –
2,289
2,289
 –
23
23
2,312
Other comprehensive income
 –
 –
191
0
1,773
-438
 –
1,526
20
 –
20
1,546
Comprehensive income
 –
 –
191
0
1,773
-438
2,289
3,815
20
23
43
3,858
Transactions with shareholders
 
 
 
 
 
 
 
 
 
 
 
 
Decrease of non-controlling interests
 –
 –
 –
 –
 –
 –
-175
-175
 –
-30
-30
-205
Dividends to owners of the parent
 –
 –
 –
 –
 –
 –
-1,783
-1,783
 –
 –
–
-1,783
Dividends to non-controlling interests
 –
 –
 –
 –
 –
 –
 –
–
 –
-17
-17
-17
As of December 31, 2016
1,117
2,770
-354
1
26
-1,415
18,014
20,159
15
102
117
20,276
Net debt
The net debt was SEK 9,619 (11,688) million 
at the end of the year.
Net debt to EBITDA
Net debt in relation to EBITDA was 1.81 
(1.56) times at the end of December.  
Debt ratio
The debt ratio, that is the net debt in relation 
to equity, was 0.47 (0.63) times at the end 
of December.

83
Financial statements
Financial statements
Specification of changes in number of shares and share capital
 
 
Year
Event
Date
Change in number 
of shares
Total  number of 
shares
Change in share 
capital SEK millions
Total  share capital 
SEK millions
2000
Company formation
March 27, 2000
10,000,000
10,000,000
0.1
0.1
 
New issue of shares
August 24, 2000
27,496,325
37,496,325
0.3
0.4
2002
Bonus issue of shares
May 3, 2002
37,496,325
74,992,650
0.4
1
Bonus issue of shares
May 16, 2002
–
–
749
750
New issue of shares
May 16, 2002
3,712,310
78,704,960
37
787
 
New issue of shares
May 17, 2002
32,967,033
111,671,993
330
1,117
2008
Cancellation of repurchased shares
May 27, 2008
-4,323,639
107,348,354
-43
Bonus issue of shares
May 27, 2008
 –
107,348,354
43
1,117
 
Split 4:1
June 10, 2008
322,045,062
429,393,416
 –
1,117
2009
Cancellation of repurchased shares
July 9, 2009
-7,353,950
422,039,466
-19
 
Bonus issue of shares
July 9, 2009
 –
422,039,466
19
1,117
2011
Cancellation of repurchased shares
May 16, 2011
-2,583,151
419,456,315
-7
 
Bonus issue of shares
May 16, 2011
 –
419,456,315
7
1,117
Comments on changes in 
consolidated equity
The articles of association of Alfa Laval AB 
(publ) state that the share capital should be 
between SEK 745,000,000 and 2,980,000,000 
and that the number of shares should be 
between 298,000,000 and 1,192,000,000. 
At January 1, 2016 the share capital of 
SEK 1,116,719,930 was divided into 
419,456,315 shares. Since then no changes 
have been made. 
The company has only issued one type of 
shares and all these have equal rights. There 
are no restrictions in law or in the articles of 
association in the negotiability of the shares. 
The only shareholder holding more than 
10 percent of the shares is Tetra Laval B.V., 
the Netherlands who owns 29.1 (26.1) per-
cent. The employees of the company do 
not own any shares in the company through 
company pension trusts. 
No restrictions exist in how many votes 
that each shareholder can represent at a 
general meeting of shareholders. The com-
pany has no knowledge of any agreements 
between shareholders that would limit the 
negotiability of their shares. 
The articles of association stipulate that 
members of the Board are elected at the 
Annual General Meeting. Election or 
discharge of members of the Board is 
otherwise regulated by the provisions in 
the Swedish Companies Act and the 
Swedish Corporate Governance Code. 
According to the Companies Act changes 
in the articles of association are decided at 
general meetings of shareholders. 
The senior credit facility with the banking 
syndicate, the corporate bonds and the bi-
lateral term loans with Swedish Export Credit 
and the European Investment Bank contain 
conditions that give the lenders the oppor-
tunity to terminate the loans and declare 
them due and payable if there is a change 
of control of the company through an ac-
quisition of more than 30 percent of the total 
number of shares. 
The possibilities to distribute unappropriated 
proﬁts from foreign subsidiaries are limited 
in certain countries due to currency regula-
tions and other legislation.

84   Financial statements
Parent company cash flows and income
Parent company cash flows
 
 
SEK millions
2016
2015
Cash flow from operating activities
 
Operating income
-18
-11
 
Taxes paid
-61
-139
-79
-150
Changes in working capital:
 
      Increase(-)/decrease(+) of receivables
1,717
827
      Increase(+)/decrease(-) of liabilities
9
-17
Increase(-)/decrease(+) in working capital
1,726
810
 
 
1,647
660
Cash flow from investing activities
 
Investment in subsidiaries
 –
–
 –
–
Cash flow from financing activities
 
Received interests
1
1
Paid interests
–
-1
Received dividends from subsidiaries
76
1,070
Paid dividends
-1,783
-1,678
Received group contribution
1,348
1,061
Paid group contribution
-1,289
-114
Amortisation of loans
–
-999
-1,647
-660
 
Cash flow for the year
 –
–
Cash and cash equivalents at the beginning of the year
–
–
Cash and cash equivalents at the end of the year
–
–
Parent company income *
 
 
 
SEK millions
Note
2016
2015
Administration costs
-13
-13
Other operating income
0
2
Other operating costs
-5
0
Operating income
 
-18
-11
Dividends from subsidiaries
76
1,070
Interest income and similar result items
11
10
7
Interest expenses and similar result items
11
-2
-15
Result after financial items
 
66
1,051
Change of tax allocation reserve
-264
156
Group contributions
2,002
59
Result before tax
 
1,804
1,266
Tax on this year's result
-381
-46
Net income for the year
 
1,423
1,220
* The parent company income statement also constitutes its comprehensive income statement.

85
Financial statements
Financial statements
Parent company financial position
Parent company financial position
 
 
 
SEK millions
Note
2016
2015
ASSETS
 
Non-current assets
 
Financial non-current assets
 
Shares in group companies
19
4,669
4,669
Current assets
 
Current receivables
 
Receivables on group companies
8,548
9,581
Current tax assets
 –
140
Other receivables
6
3
8,554
9,724
Cash and cash equivalents
–
–
Total current assets
8,554
9,724
TOTAL ASSETS
 
13,223
14,393
EQUITY AND LIABILITIES
 
Equity
 
Restricted equity
 
Share capital
1,117
1,117
Statutory reserve
1,270
1,270
2,387
2,387
Unrestricted equity
 
Profit brought forward
7,774
8,337
Net income for the year
1,423
1,220
9,197
9,557
 
 
Total equity
11,584
11,944
 
Untaxed reserves
 
Tax allocation reserve, taxation 2011
 –
313
Tax allocation reserve, taxation 2012
140
140
Tax allocation reserve, taxation 2014
320
320
Tax allocation reserve, taxation 2015
304
304
Tax allocation reserve, taxation 2016
68
68
Tax allocation reserve, taxation 2017
577
 –
1,409
1,145
Current liabilities
 
Liabilities to group companies
50
1,304
Accounts payable
0
0
Current tax liabilities
180
 –
230
1,304
TOTAL EQUITY AND LIABILITIES
 
13,223
14,393

86   Financial statements
Changes in parent company equity
Changes in parent company equity
 
 
SEK millions
Share capital
Statutory reserve
Unrestricted  equity
Total
As of December 31, 2014
1,117
1,270
10,015
12,402
2015
Comprehensive income
Net income
 –
–
1,220
1,220
–
–
1,220
1,220
Transactions with shareholders
Dividends
–
–
-1,678
-1,678
As of December 31, 2015
1,117
1,270
9,557
11,944
2016
 
 
 
 
Comprehensive income
 
 
 
 
Net income
 –
–
1,423
1,423
–
–
1,423
1,423
Transactions with shareholders
 
 
 
 
Dividends
–
–
-1,783
-1,783
As of December 31, 2016
1,117
1,270
9,197
11,584
The share capital of SEK 1,116,719,930 (1,116,719,930) is divided among 419,456,315 (419,456,315) shares.

87
Financial statements
Financial statements
Notes to the financial statements 
Accounting principles
The accounting principles mentioned below 
are only the ones that are relevant for the 
parent company and the consolidated group.
Basis of preparation
The consolidated financial statements have 
been prepared on a historical cost basis, 
except for certain financial instruments 
including derivatives that are valued at fair 
value. The statements are presented in 
SEK millions, unless otherwise stated.
Statement of compliance
As from January 1, 2005 Alfa Laval applies 
International Financial Reporting Standards 
(IFRS) as adopted by the European Union. 
Furthermore recommendation RFR 1 
“Supplementary accounting principles for 
consolidated groups” from the Council for 
Financial Reporting in Sweden is applied.
The accounting and valuation principles 
of the parent company comply with the 
Swedish Annual Accounts Act and the 
recommendation RFR 2 “Accounting for 
legal entities” issued by the Council for 
Financial Reporting in Sweden.
Changed/implemented accounting 
principles
The company has chosen to only comment 
the changed accounting principles that are 
relevant for the company’s financial reporting.
During 2016 the Guidelines on Alternative 
Performance Measures issued by ESMA 
(European Securities and Markets Authority) 
has been implemented.
During 2016 also the changes in the 
Swedish Annual Accounts Act have been 
implemented. These mean that:
–  contingent liabilities are no longer reported 
both as memorandum items and in the 
notes but only in the notes, 
–  events after the closing date are no longer 
presented in the Board of Directors’ Report 
but instead in the notes and
–  the proposed disposition of earnings is 
presented both in the Board of Directors’ 
Report and in the notes.
During 2015 the amendment to IAS 19 
“Employee Benefits” was implemented. 
The amendment related to how employee 
contributions to defined benefit plans shall 
be reported. The reporting depends on if 
the size of the employee contribution is 
independent of the service period or not.
The standard was to be applied retroactively 
in accordance with IAS 8.
Critical accounting principles
IFRS 3 “Business Combinations” means that 
goodwill and intangible assets with indefinite 
useful life are not amortised. They are instead 
tested for impairment both annually and when 
there is an indication. The effect of IFRS 3 
can be considerable for the Group if the 
profitability within the Group or parts of the 
Group goes down in the future, since this 
could trigger a substantial impairment write 
down of the goodwill according to IAS 36 
Impairment of Assets. Such a write down 
will affect net income and thereby the 
financial position of the Group. The reported 
goodwill is SEK 20,436 (19,498) million at 
the end of the year. No intangible assets with 
indefinite useful life other than goodwill exist.
The Group has deﬁned beneﬁt plans, which 
are reported according to IAS 19 “Employee 
Beneﬁts”. This means that the plan assets are 
valued at fair value and that the present value 
of the beneﬁt obligations in the deﬁned beneﬁt 
plans is decided through yearly actuarial 
calculations made by independent actuaries. 
If the value of the plan assets start to decrease 
at the same time as the actuarial assump-
tions increase the beneﬁt obligations the 
combined effect could result in a substan-
tial deﬁcit. The monetary magnitude comes 
from the fact that the deﬁcit is the difference 
between two large numbers. The risk for this 
happening has increased due to the imple-
mentation of the new IAS 19. The effect on 
proﬁt and loss however only affects other 
comprehensive income and not net income. 
The risk has been limited since many of 
these deﬁned beneﬁt schemes are closed 
for new participants and replaced by deﬁned 
contribution schemes. 
The Group’s reporting of provisions ac-
cording to IAS 37 means that SEK 2,964 
(2,216) million is reported as other provisions. 
This constitutes 5.6 (4.3) percent of the Group’s 
assets and is important for the assessment 
of the Group’s ﬁnancial position, not the least 
since provisions normally are based on 
judgements of probability and estimates of 
costs and risks. If the accounting principles 
for provision would be changed sometime 
in the future, this could have a substantial 
impact on the Group’s ﬁnancial position.
IAS 39 “Financial Instruments: Recognition 
and Measurement” has a considerable effect 
on the Groups comprehensive income and 
equity and may have a substantial effect on 
net income if the used derivatives turns out 
not to be effective.
Key sources of estimation uncertainty
The key source of estimation uncertainty is 
related to the impairment test of goodwill, 
since the testing is based on certain 
assumptions concerning future cash-flows. 
See the section on critical accounting 
principles above for further details.
Judgements
In applying the accounting policies Manage-
ment has made various judgements, apart 
from those involving estimations, that can 
significantly affect the amounts recognised 
in the financial statements. These judgements 
mainly relate to:
–  classification of financial instruments;
–  probability in connection with business risks;
–  determination of percentage of completion 
in work in progress;
–  recoverability of accounts receivable;
–  obsolescence in inventory; and
–  whether a lease entered into with an 
external lessor is a financial lease or an 
operational lease.  
Associates
The Group does not own shares in any 
material companies that fulfil the definition 
of an associate in IAS 28 ”Investments in 
Associates”, that is where the ownership is 
between 20 and 50 percent.
Borrowing costs
Borrowing costs are accounted for according 
to IAS 23 “Borrowing Costs”, which means 
that the borrowing costs are charged to the 
profit and loss in the period to which they relate. 
Transaction costs that arise in connection 
with raising a loan are capitalised and amor-
tised over the maturity of the loan according 
to IAS 39 “Financial Instruments: Recognition 
and Measurement”. The capitalised amount 
is reported net against the raised loan.
Business combinations - consolidation 
principles 
The consolidated financial statements have 
been prepared according to IFRS 3 “Business 
Combinations” and IFRS 10 “Consolidated 
financial statements”.
An entity shall be consolidated if a decisive 
inﬂuence is present. Control (decisive inﬂuence) 
is present when Alfa Laval has:

88   Financial statements
–  power over the investee, which is described 
as having rights to direct the activities that 
significantly affect the investee’s returns;
–  exposure or rights to variable returns 
from the involvement in the investee; and
–  the ability to use its power over the investee 
to affect the amount of the investor’s returns. 
A decisive influence does not need to arise 
purely through ownership of shares (voting 
rights). An investor can have a decisive 
influence over another entity without holding 
the majority of the shares. An entity must 
be consolidated until the day the control 
ceases, even if the control is present only 
during a limited period.
The consolidated ﬁnancial statements 
include the parent company Alfa Laval AB 
(publ) and the subsidiaries in which it has a 
decisive inﬂuence.
The statement on consolidated ﬁnancial 
position has been prepared in accordance 
with the purchase method, which means that 
the book value of shares in the subsidiaries 
is eliminated from the reported equity in the 
subsidiaries at the time of their acquisition. 
This means that the equity in the subsidiaries 
at the time of acquisition is not included in 
the consolidated equity. 
The difference between the purchase price 
paid and the net assets of the acquired 
companies is allocated to the step-up values 
related to each type of asset, with any re-
mainder accounted for as goodwill.
During the ﬁrst 12 months after the ac-
quisition the value of the goodwill is often 
preliminary. The reason to this is that expe-
rience has shown that there is some un-
certainty linked to the different components 
of the purchase price allocation concerning: 
–  primarily the calculation of the allocation 
to different intangible step-up values, that 
are dependent on different judgemental 
questions and estimations;
–  the calculation of tangible step-up values, 
that are dependent on external market 
valuations, which can extend in time before 
they can be finalised;
–  adjustments of the purchase price contingent 
on contractual terms, that are dependent 
on the final size of the operating capital at 
the acquisition date, once this has been 
audited and the outcome has been 
approved by the parties; and
–  the final value of the acquired equity, 
which is also dependent on the audit of 
the acquired closing balance sheet. 
Since the goodwill is a residual that emerges 
once all other parameters in the purchase 
price allocation have been established, it 
will be preliminary and open for changes 
until all other values are final.
At acquisitions where there is a goodwill it 
should be stated what the goodwill is relating 
to. Since goodwill by deﬁnition is a residual 
this is not always that easy. Generally speaking 
the goodwill is usually relating to estimated 
synergies in procurement, logistics and 
corporate overheads. It can also be claimed 
that the goodwill is relating to the acquired 
entity’s ability to over time recreate its intan-
gible assets. Since the value of the intangible 
assets at the time of acquisition only can 
be calculated on the assets that exist then, 
no value can be attached to the patents 
etc. that the operations manage to create 
in the future partially as a replacement for 
the current ones and these are therefore 
referred to goodwill. 
Goodwill and intangible assets with in-
deﬁnite useful life are not amortised. These 
assets are instead tested for impairment both 
annually and when there is an indication. 
The impairment test is made according to 
IAS 36 Impairment on assets.
Transaction costs are reported in net in-
come. If the value of an additional purchase 
price is changed the change is reported in net 
income. In business combinations achieved 
in stages the goodwill is calculated and valued 
when the acquirer obtains control over a 
business. If the acquirer previously has re-
ported an equity interest in the company the 
accumulated change in value of the holding 
is recognised in net income at the acquisition 
date. Changes in holdings in subsidiaries, 
where the majority owner does not lose its 
decisive inﬂuence, are reported in equity. 
This means that these transactions no longer 
will generate goodwill or lead to any gains or 
losses. In addition the transaction will result 
in a transfer between owners of the parent 
and non-controlling interests in equity. If the 
non-controlling interest’s share of reported 
losses is higher than its reported share of 
the equity, a negative non-controlling interest 
is reported.
Comparison distortion items
Items that do not have any link to the normal 
operations of the Group or that are of a non- 
recurring nature are classified as comparison 
distortion items. In the consolidated 
comprehensive income statement these 
are reported gross as a part of the most 
concerned lines, but are specified separately 
in Note 8. To report these together with other 
items in the consolidated comprehensive 
income statement without this separate 
reporting in a note would have given a 
comparison distortion effect that would have 
made it difficult to judge the development 
of the ordinary operations from an outside 
viewer. Comparison distortion items affecting 
operating income are reported as a part of 
operating income, while comparison distortion 
items affecting the result after financial items 
are reported as a part of the financial net. 
Comprehensive income
Alfa Laval has chosen to report the items in 
other comprehensive income as a part of one 
statement over comprehensive income 
instead of reporting the result down to net 
income for the year in one statement and the 
result below this down to comprehensive 
income in a separate statement. 
Other comprehensive income is referring 
to items that are not transactions with 
shareholders and relates to for instance cash 
ﬂow hedges, market valuation of external 
shares, translation differences and revaluations 
and deferred tax related to these.
Disclosures of interest in other entities
Information about interests in subsidiaries, 
associates, joint arrangements and 
unconsolidated structured entities must be 
disclosed in accordance with IFRS 12 
“Disclosures of interest in other entities”. The 
purpose with these disclosures is to enable 
the users of the financial reports to understand:
–  the composition of the group;
–  the effect of the interests on the financial 
statements; and
–  any risks with the current interests.
Substantial qualitative and quantitative 
disclosures must be made of each interest. 
The disclosure requirements include the 
following:
–  Financial information regarding subsidiaries 
with a considerable part of non-controlling 
interests.
–  Disclosures on the judgments and estimation 
that have been made in judging whether 
an entity shall be consolidated or not and 
if an associate shall be accounted for or 
whether a joint arrangement is considered 
to be joint operation or a joint venture.
–  Financial disclosures on interests in material 
associates and joint arrangements.
–  Disclosures on the risks and rewards that 
are associated with unconsolidated 
structured entities and what the effect 
would be if the risks changed.

89
Financial statements
Financial statements
Disclosures relating to the  
company’s shares
Paragraph 2a in chapter 6 of the Swedish 
Annual Accounts Act requires listed 
companies to disclose certain information 
relating to the company’s shares in the 
Board of Directors’ Report. This information 
is found at the end of the Board of Directors’ 
Report, in the “Changes in consolidated 
equity” and in Note 6.
Employee beneﬁts
Employee benefits are reported according 
to IAS 19 “Employee Benefits”.
The present value of the beneﬁt obligations 
in the deﬁned beneﬁt plans is decided 
through yearly actuarial calculations made 
by independent actuaries. The plan assets 
are valued at fair value. The net plan asset 
or liability is arrived at in the following way. 
+ 
 the present value of the defined benefit 
obligation at December 31
- 
 the fair value of the plan assets at 
December 31
= 
 a net liability if positive / a net asset if 
negative
If the calculation per plan gives a negative 
amount, thus resulting in an asset, the 
amount to be recognised as an asset for 
this particular plan is the lower of the two 
following figures:
–  The above net negative amount.
–  The present value of any economic 
benefits available in the form of refunds 
from the plan or reductions in future 
contributions to the plan. This is referred 
to as the asset ceiling.
The items that relate to the vesting of defined 
benefit pensions and gains and losses that 
arise when settling a pension liability and the 
financial net concerning the defined benefit 
plan are reported in the income statement 
above net income. Past service costs are 
recognised in the income statement already 
when the plan is amended or curtailed.
Actuarial gains and losses are accounted 
for currently in other comprehensive income. 
Changes in the obligations that relate to 
changes in actuarial assumptions are ac-
counted for in other comprehensive income. 
None of these actuarial items will ever be 
reported in operating income, but will instead 
remain in other comprehensive income.
The return on plan assets is calculated 
with the same interest rate as the discount 
rate. The difference between the actual re-
turn on plan assets and the interest income 
in the previous sentence is reported in 
other comprehensive income.
The plan assets are speciﬁed on different 
types of assets.
Sensitivity analysis must be made concern-
ing reasonable changes in all assumptions 
made when calculating the pension liability. 
The difference between short and long 
term remunerations focuses on when the 
commitment is expected to be settled rather 
than the link to the employee’s vesting of 
the commitment.
Termination beneﬁts are accounted for at 
the earliest of the following – the time when 
the beneﬁt offer cannot be withdrawn, alter-
natively in accordance with IAS 37 as a part 
of for instance restructuring the operations.
For Swedish entities the actuarial calcu-
lations also include future payments of special 
salary tax. The Swedish tax on returns from 
pension funds is reported currently as a cost 
in the proﬁt and loss and are not included in 
the actuarial calculation for deﬁned beneﬁt 
pension plans. 
The discount rate used to calculate the 
obligations is determined based on the market 
yields in each country at the closing date 
on high quality corporate bonds with a term 
that is consistent with the estimated term 
of the obligations. In countries that lack a 
deep market in such bonds the country’s 
government bonds are used instead.
The costs for deﬁned contribution plans 
are reported in Note 6.  
The Swedish ITP plan is a multi-employer 
plan insured by Alecta. It is a deﬁned beneﬁt 
plan, but since the plan assets and liabilities 
cannot be allocated on each employer it is 
reported as a deﬁned contribution plan ac-
cording to item 30 in IAS 19. The construc-
tion of the plan does not enable Alecta to 
provide each employer with its share of the 
assets and liabilities or the information to be 
disclosed. The cost for the plan is reported 
together with the costs for other deﬁned 
contribution plans in Note 6. Alecta reported 
a collective consolidation level at December 
31, 2016 of 149 (153) percent. The collective 
consolidation level is deﬁned as the fair value 
of Alecta’s plan assets in percent of the in-
sured pension commitments calculated 
according to Alecta’s actuarial assumptions, 
which are not in accordance with IAS 19. 
Such a surplus can be distributed among 
the employers or the beneﬁciaries, but there 
is no agreement concerning this that enables 
the company to report a receivable on Alecta. 
Events after the closing date
Events after the closing date are reported 
according to IAS 10 and the Swedish Annual 
Accounts Act in the notes.
Fair value measurement
IFRS 13 “Fair Value Measurement” describes 
how a fair value is established when such 
value is to be or may be used in accordance 
with each IFRS standard. In accordance with 
IFRS a fair value is defined as the price that 
would be received to sell an asset or paid 
to transfer a liability in an orderly transaction 
between market participants at the 
measurement date (i.e. an exit price). 
The standard presents elucidations on the 
fair value concept including the following areas:
–  Concepts such as “highest and best use” 
and ”valuation premise” are described. 
These are only applicable on non-financial 
assets.
–  Market participants are assumed to act 
in a way that maximizes the value for all 
involved parties in situations where there 
is no guidance concerning the calculation 
of fair value in individual IFRS standards.
–  The effect of so called block discounts 
(large position in relation to the market) 
may never be included in the calculation 
of fair value.
–  Deciding fair value when the market activity 
is falling.
 
Disclosures must be made to explain what 
valuation models that are used and what 
information that is used in these models 
and which effects the valuation has caused 
in the result.
Financial instruments
The reporting of financial instruments is 
governed by the following four accounting 
and financial reporting standards:
–  IAS 39 Financial Instruments: 
Recognition and Measurement;
–  IAS 32 Financial Instruments: 
Presentation; 
–  IFRS 7 Financial Instruments: 
Disclosures; and
–  IFRS 13 Fair Value Measurement.
IAS 39 means that financial derivatives, 
holdings of bonds and external shares are 
adjusted to fair value. IFRS 7 contains 
expanded disclosure requirements related 
to the significance of financial instruments 
for the company’s financial position and

90   Financial statements
performance and the nature and extent of 
risks arising from financial instruments.
IFRS 13 describes how a fair value is 
established when such value is to be or may 
be used in accordance with each IFRS 
standard. Disclosures must be made to 
explain what valuation models that are used 
and what information that is used in these 
models and which effects the valuation has 
caused in the result.
Both IAS 39 and IFRS 7 formally contain 
a considerable amount of information that 
should be presented. According to IFRS 7.B3 
the company however should decide how 
much detail it provides in order not to over-
burden the ﬁnancial statements with ex-
cessive details.  
Financial assets are classiﬁed into four 
different portfolios: 
–  Financial assets at fair value through 
profit or loss; 
–  Held to maturity investments; 
–  Loans and receivables; and 
–  Available for sale financial assets. 
The Financial assets at fair value through 
profit or loss are split on: 
–  Designated upon initial recognition; 
–  Held for trading; and 
–  Derivatives used for hedging. 
Financial liabilities are classified into two 
portfolios: 
–  Financial liabilities at fair value through 
profit or loss; and 
–  Loans. 
The Financial liabilities at fair value through 
profit or loss are split on: 
–  Designated upon initial recognition; 
–  Held for trading; and 
–  Derivatives used for hedging. 
The classification into different portfolios 
has a direct impact on the valuation of the 
instruments, i.e. if the instrument is valued 
at fair value or amortised cost. “Loans and 
receivables”, “Held to maturity investments” 
and “Loans” are valued at amortised cost, 
whereas “Financial assets and Financial 
liabilities at fair value through profit or loss” and 
“Available for sale financial assets” are valued 
at fair value. Derivatives are always classified 
in the portfolios “Financial assets and Financial 
liabilities at fair value through profit or loss”.
The amortised cost is normally equal to the 
amount recognised upon initial recognition, 
less any principal repayments and plus or 
minus any effective interest adjustments.
Prepaid costs, prepaid income and ad-
vances from customers are not deﬁned as 
ﬁnancial instruments since they will not result 
in future cash ﬂows.
Disclosures must be made on the methods 
and, when a valuation technique is used, 
the assumptions applied in determining the 
fair value of each class of ﬁnancial assets and 
liabilities. The methods are to be classiﬁed 
in a hierarchy of three levels:
1.  Quoted prices in active markets;
2.  Other inputs than quoted prices that are 
directly observable (prices) or indirectly 
observable (derived from prices); and
3.  Unobservable market data.
The fair values of holdings of bonds are 
arrived at using market prices according to 
level 1. The effect of the measurement at 
fair value is reported in net income. The fair 
value adjustment of these instruments is 
reflected directly on the item bonds in the 
statement of financial position. 
The fair values of shares in external com-
panies are arrived at using market prices 
according to level 1 or other inputs accord-
ing to level 2. The effect of the measurement 
at fair value is reported in other compre-
hensive income. The fair value adjustment 
of these instruments is reﬂected directly on 
the item other long-term securities in the 
statement of ﬁnancial position. 
The fair values of the Group’s currency 
forward contracts, currency options, interest-
rate swaps, metal forward contracts and 
electricity futures are arrived at using market 
prices according to level 1. The fair value 
changes are arrived at by comparing the 
conditions of the derivative entered into with 
the market price for the same instrument at 
the closing date and with the same maturity 
date. The effect of the measurement at fair 
value is reported in other comprehensive 
income if the derivative constitutes an effec-
tive cash ﬂow hedge and otherwise on the 
concerned line above net income. The fair 
value adjustment of these instruments is 
reported as derivative assets or derivative 
liabilities in the statement of ﬁnancial position. 
For each class of ﬁnancial instruments 
disclosures shall be made on credit risk and 
an analysis of ﬁnancial assets that are past 
due or impaired. Within Alfa Laval credit risk 
is in reality only related to accounts receivable. 
The disclosures just mentioned are therefore 
to be found in Note 21. The factors to be taken 
into account when providing for bad debts are:
–  If the customer despite reminders does 
not pay, in spite of the fact that the 
customer has not raised any objections 
against the invoice or part of the invoice;
–  For how long the invoice has been past due;
–  If the customer has cancelled their 
payments;
–  If the customer has asked for composition; 
and
–  If the customer has filed for bankruptcy.
Based on this the best estimate based on 
past experience is made on which amount 
that is probable to be received and the 
difference is provided for as unsecure.
Only at a ﬁnal loss the receivable is 
written off.
Group contributions to and from  
the parent company
The parent company is accounting for group 
contributions according to the alternative rule 
in RFR 2 issued by the Council for Financial 
Reporting in Sweden. This means that both 
received and given group contributions are 
reported as appropriations in the income 
statement.
Hedge accounting
Alfa Laval only applies two types of hedge 
accounting: cash flow hedges and hedges 
of net investments in foreign operations.
Cash ﬂow hedges
Alfa Laval has implemented documentation 
requirements to qualify for hedge accounting 
on derivative financial instruments.
The effect of the fair value adjustment of 
derivatives is reported as a part of other 
comprehensive income for the derivatives 
where hedge accounting is made (according 
to the cash ﬂow hedging method) and above 
net income only when the underlying trans-
action has been realised. Hedge accounting 
requires the derivative to be effective within 
an 80 – 125 percent range. For the part of an 
effective derivative that exceeds 100 percent 
effectiveness the fair value adjustment is 
reported above net income. For the deriva-
tives where hedge accounting is not made 
the fair value valuation is reported above 
net income. The fair value adjustment of 
derivatives is reported separately from the 
underlying instrument as a separate item 
called derivative assets/derivative liabilities 
in the statement of ﬁnancial position.

91
Financial statements
Financial statements
Hedges of net investments in foreign 
operations
In order to finance acquisitions of foreign 
operations loans are raised, if possible, in 
the same currency as the net investment. 
The loans thereby constitute a hedge of the 
net investment in each currency. Exchange 
rate differences relating to these loans are 
therefore booked to other comprehensive 
income. 
Income Taxes
Income taxes are reported in accordance 
with IAS 12 ”Income Taxes”. 
Current tax is the amount of income taxes 
payable (recoverable) in respect of the tax-
able proﬁt (tax loss) for a period. Current 
tax liabilities (receivables) for the current and 
prior periods are measured at the amount 
expected to be paid to (recovered from) the 
tax authorities, using the tax rates (and tax 
laws) that have been enacted or substantively 
enacted by the closing date. In essence, this 
means that current tax is calculated according 
to the rules that apply in the countries where 
the proﬁt was generated.
Deferred tax liabilities are the amounts of 
income taxes payable in future periods in 
respect of taxable temporary differences. 
Deferred tax liabilities are recognised for all 
taxable temporary differences, except for 
goodwill.
Deferred tax assets are the amounts of 
income taxes recoverable in future periods in 
respect of: (a) deductible temporary differ-
ences; (b) the carry-forward of unused tax 
losses; and (c) the carry-forward of unused 
tax credits. Deferred tax assets are recog-
nised for all deductible temporary differences 
to the extent that it is probable (>50 percent) 
that taxable proﬁt will be available against 
which the deductible temporary difference 
can be utilised. Deferred tax assets are 
recognised for the carry-forward of unused 
tax losses and unused tax credits to the 
extent that it is probable (>50 percent) that 
future taxable proﬁt will be available against 
which the unused tax losses and unused 
tax credits can be utilised.
Deferred tax assets and liabilities are 
measured at the tax rates that are expected 
to apply to the period when the asset is re-
alised or the liability is settled, based on tax 
rates (and tax laws) that have been enacted 
or substantively enacted by the closing date.
If it is not any longer probable that sufﬁcient 
taxable proﬁts will be available against which 
a deferred tax asset can be utilised, then the 
deferred tax asset is reduced accordingly.
Inventories
The Group’s inventory has been accounted 
for after elimination of inter-company gains. 
The inventory has been valued according 
to the “First-In-First-Out” (FIFO) method at 
the lowest of cost or net realisable value, 
taking into account obsolescence.
This means that raw material and pur-
chased components normally are valued at 
the acquisition cost, unless the market price 
has fallen. Work in progress is valued at the 
sum of direct material and direct labour costs 
with a mark-up for the product’s share in 
capital costs in the manufacturing and 
other indirect manufacturing costs based 
on a forecasted assumption on the capacity 
utilisation in the factory. Finished goods are 
normally valued at the delivery value (i.e. at 
cost) from the factory if the delivery is forth-
coming. Spare parts that can be in the in-
ventory during longer periods of time are 
normally valued at net realisable value. 
Joint ventures
Joint ventures are consolidated according 
to IFRS 11 “Joint arrangements”. Joint 
arrangements are defined as a contractual 
arrangement where two or more parties 
have a joint decisive influence.
It is crucial to be able to judge whether a 
party has control over another party, that is 
decisive inﬂuence or if it rather is a substantial 
or common inﬂuence. If it is the latter, then 
it is a so called joint arrangement, which 
could be either:
–  a joint operation; or 
–  a joint venture.
Jointly owned assets and joint activities are 
called joint operations. Each owner or party 
accounts for his share of assets, liabilities, 
revenues and costs.
Joint ventures are consolidated according 
to the equity method. This means that the 
interest is accounted for on one line in the 
consolidated statement of ﬁnancial position 
and that the share of the result is accounted 
for on one line in the consolidated statement 
of comprehensive income. It is the net in-
come in the joint ventures that is booked 
into one line in the operating income. The 
counter entry is an increase or decrease of 
the value of shares in joint ventures. Received 
dividends reduce the value of the shares in 
joint ventures. The sales volume and other 
result items and the balance items in the 
joint ventures will no longer be reported in 
the statements over consolidated compre-
hensive income and consolidated ﬁnancial 
position in any of the two owner companies.
Leasing
Leasing is accounted for in accordance 
with IAS 17 ”Leases”.
When Alfa Laval is the lessor, leased assets 
that are classiﬁed as ﬁnancial leases are 
accounted for as a ﬁnancial receivable from 
the lessee in the statement on ﬁnancial po-
sition. The leasing fee received from the lessee 
is accounted for as ﬁnancial income calcu-
lated as interest on the outstanding receiv-
able and as amortisation of the receivable.
When Alfa Laval is the lessee, leased assets 
that are classiﬁed as ﬁnancial leases are 
accounted for as capitalised assets and a 
corresponding ﬁnancial payable to the lessor 
in the statement on ﬁnancial position. The 
leasing fee to the lessor is accounted for as 
ﬁnancial cost calculated as interest on the 
outstanding payable and as amortisation of 
the payable. Depreciation according to plan 
is done in the same manner as purchased 
assets.
Leased assets classiﬁed as operational 
leases are not capitalised. The leasing fees 
are expensed as incurred.
Levies
Levies relate to levies/taxes that governmental 
or corresponding bodies are charging compa-
nies in accordance with laws or regulations 
with exception of income taxes, penalties and 
fines. IFRIC 21 “Levies” is an interpretation 
that clarifies when a liability for levies is to 
be accounted for. The obligating event that 
gives rise to the reporting of a liability is the 
activity that triggers the payment of the levy. 
IFRIC 21 only treats the accounting for the 
liability side and not whether the debit side 
is a cost or an asset. One example of a levy 
is the Swedish real estate tax, which is levied 
on the owner of a property at January 1. At 
inception of the year the liability is booked 
and a corresponding prepaid cost, which 
is then phased as a cost over the year. 
Long-term construction projects
Revenue for projects is recognised using 
the percentage of completion method in 
IAS 11 “Construction Contracts”. This means 
that when the outcome of a construction 
project can be calculated reliably, the revenue 
and the costs related to the project are 
recognised in relation of the percentage of 
completion at the closing date. An estimated 
loss is recognised immediately. The percentage 
of completion for a construction project is

92   Financial statements
normally established through the relationship 
between incurred project costs for work 
performed at the closing date and the 
estimated total project costs.
Disclosures shall be made for:
–  the amount of recognised project sales 
revenue;
–  the aggregated amount of costs incurred and 
recognised profits less recognised losses;
–  retentions;
–  the gross amount due from customers 
for work in progress;
–  advances; and
–  the gross amount due to customers for 
work in progress.
The amount of recognised project sales 
revenue is the amount recognised in 
consolidated comprehensive income as a 
reflection of the percentage of completion 
of the projects. It has nothing to do with 
the volume of progress billing in the period. 
This figure shows how much of the net 
invoicing of the Group that originates from 
project sales.
The aggregated amount of costs incurred 
and recognised proﬁts less recognised losses 
shows the total volume of work performed 
on ongoing projects at the closing date. It 
has nothing to do with the recognised costs 
in the consolidated comprehensive income 
statement. 
Retentions are amounts of progress billing 
that are not paid according to the contract 
until conditions speciﬁed in the contract have 
been satisﬁed or until defects have been 
rectiﬁed. This has a negative effect on the 
proﬁtability of the project. Progress billing is 
amounts billed for work performed on a 
project whether or not they have been paid 
by the customer. 
The gross amount due from customers 
for work in progress on plant projects is 
the net amount of:
1. +    costs incurred                           
2. +    recognised profits     
3. -     recognised losses                
4. -     progress billing 
for each project in progress where the net 
of the first three items is higher than item 4. 
The figure shows how much progress billing 
is lacking behind the work performed.
Advances are amounts received from 
the customer before the related work is 
performed and are usually very important 
for the overall proﬁtability of the project.
The gross amount due to customers for 
work in progress on plant projects is the 
net amount of:
1.    +    costs incurred                                            
2.    +    recognised profits
3.    -     recognised losses
4.    -     progress billing
for each project in progress where the net 
of the first three items is smaller than item 
4. The figure shows how much progress 
billing is ahead of the work performed.
Non-current assets  
(tangible and intangible)
Assets have been accounted for at cost, net 
after deduction of accumulated depreciation 
according to plan. Depreciation according 
to plan is based on the assets’ acquisition 
values and is calculated according to the 
estimated useful life of the assets.  
The following useful lives have been used:
Tangible:
Computer programs, computers
3.3 years
Office equipment
4 years
Vehicles
5 years
Machinery and equipment
7–14 years
Land improvements
20 years
Buildings
25–33 years
Intangible:
Patents and unpatented know-how
10–20 years
Trademarks
10–20 years
Licenses, renting rights  
and similar rights
10–20 years
The depreciation is made according to the 
straight-line method.
Any additions to the purchase price in 
connection with investments in non-current 
assets or acquisitions of businesses are 
amortised over the same period as the original 
purchase price. This means that the time when 
the asset is fully depreciated is identical regard-
less of when payments are made. This is a 
reﬂection of the fact that the estimated 
useful life of the asset is the same.
Upon sale or scrapping of assets, the 
results are calculated in relation to the net 
book value after depreciation according to 
plan. The result on sales is included in op-
erating income.
Impairment of assets
When there are indications that the value of 
a tangible asset or an intangible asset with 
a definite useful life has decreased, there is 
a valuation made if it must be written down 
according to IAS 36 “Impairment of Assets”. 
If the reported value is higher than the 
recoverable amount, a write down is made 
that burdens net income. When assets are 
up for sale, for instance items of real estate, 
a clear indication of the recoverable amount 
is received that can trigger a write down. 
Goodwill and intangible assets with in-
deﬁnite useful life are not amortised. These 
assets are instead tested for impairment both 
annually and when there is an indication. 
The impairment test is made according to 
IAS 36 “Impairment on assets”.
The recoverable amount for goodwill and 
intangible assets with indeﬁnite useful life is 
determined from the value in use based on 
discounted future cash ﬂows. For other assets 
the recoverable amount is normally deter-
mined from the fair value less costs to sell 
based on an observable market price.
For the impairment testing of goodwill, three 
of Alfa Laval’s operating segments, the divi-
sions “Equipment”, “Process Technology” 
and “Marine & Diesel” have been identiﬁed as 
the cash-generating units within Alfa Laval. 
Technically a recently acquired business 
activity could be followed independently during 
an initial period, but acquired businesses 
tend to be integrated into the divisions at a 
fast rate. This means that the independent 
traceability is lost fairly soon and then any 
independent measurement and testing be-
comes impracticable. The net present value 
is based on the projected EBITDA ﬁgures 
for the next twenty years, less projected in-
vestments and changes in operating capital 
during the same period. The used discount 
rate is the pre-tax weighted average cost 
of capital (WACC). The growth rate for the 
divisions during the period is the perceived 
expected average industry growth rate. No 
terminal value has been calculated since this 
would render a very large and uncertain value, 
which could give an erroneous impression 
that no impairment exists.
Non-current Assets Held for Sale  
and Discontinued Operations
The Group is applying IFRS 5 “Non-current 
Assets Held for Sale and Discontinued 
Operations”. IFRS 5 specifies the accounting 
for assets held for sale and the disclosures 
to be made for discontinued operations.
Assets held for sale are to be measured 
at the lower of the carrying amount and fair 
value, less sales costs. No depreciation of 
such assets is made. An asset held for sale 
is an asset whose carrying amount will be 
recovered basically through a sale rather 
than through continuing use. It must be 
available for immediate sale in its current 
condition. The sale must be highly probable,

93
Financial statements
Financial statements
that is a decision must have been made 
and an active sales effort must have been 
initiated. The sale must be expected to be 
ﬁnalised within one year. Non-current as-
sets are reclassiﬁed to current assets and 
presented separately in the statement on 
ﬁnancial position.   
Objectives, policies and processes  
for managing capital
IAS 1 “Presentation of Financial Statements” 
paragraphs 134 and 135 contain disclosure 
requirements on the company’s objectives, 
policies and processes for managing capital. 
This information is disclosed in a separate 
section after the description of the accounting 
principles.
Other operating income and  
other operating costs
Other operating income relates to for instance 
commission, royalty and license income. 
Other operating costs refer mainly to 
restructuring costs and to royalty costs.
Comparison distortion items that affect 
the operating income are reported in other 
operating income and other operating costs.
Provisions
The Group is applying IAS 37 “Provisions, 
Contingent Liabilities and Contingent Assets” 
for the reporting of provisions, contingent 
liabilities and contingent assets.
A provision is recognised when and only 
when:
–  there is a present legal or constructive 
obligation as a result of past events;
–  it is probable that a cost will be incurred 
in settling the obligation; and
–  a reliable estimate can be made of the 
amount of the obligation. 
The amount recognised as a provision is the 
best estimate of the cost required to settle 
the present obligation at the closing date.
In measuring the provision:
–  risks and uncertainties are taken into 
account;
–  the provisions are discounted, where the 
effect of the time value of money is material. 
When discounting is used, the increase 
of the provision over time is recognised 
as an interest cost;
–  future events, such as changes in law and 
technology, are taken into account where 
there is sufficient objective evidence that 
they will occur; and 
–  gains from the expected disposal of assets 
are not taken into account, even if the 
expected disposal is closely linked to the 
event giving rise to the provision.
If a reimbursement of some or all of the 
costs to settle a provision is expected (e.g. 
through insurance contracts, indemnity 
clauses or supplier’s warranties), the 
reimbursement is recognised:
–  when and only when, it is virtually certain 
that the reimbursement will be received if 
the obligation is settled. The amount 
recognised for the reimbursement must not 
exceed the amount of the provision; and
–  as a separate asset (gross). In the 
consolidated comprehensive income 
statement, however, the income related 
to the reimbursement is netted against 
the cost for the provision. 
Provisions are reviewed at each closing date 
and adjusted to reflect the current best 
estimate. If it is no longer probable that a 
payment to settle the obligation will be 
incurred, the provision is reversed.
A provision must only be used for the 
purpose it was originally recognised for. 
Provisions are not recognised for future 
operating losses. An expectation of future 
operating losses is though an indication that 
certain assets of the operation may be im-
paired. If a contract is onerous, the present 
obligation under the contract is recognised 
and measured as a provision, once the assets 
used in order to ﬁnalize the contract have 
been tested for impairment.
A provision for restructuring costs is rec-
ognised only when the general recognition 
criteria are met. A constructive obligation 
to restructure arises only when there is:
–  a detailed formal plan for the restructuring, 
identifying at least:
a)  the business or part of a business 
concerned;
b)  the principal locations affected;
c)  the location, function and approximate 
number of employees who will be com-
pensated for terminating their services;
d)  the costs that will be undertaken; and
e)  when the plan will be implemented; and
–  a valid expectation in those affected that 
the restructuring will be carried out.
A management or board decision to restructure 
does not give rise to a constructive obligation 
at the closing date unless the company 
has, before the closing date:
–  started to implement the restructuring 
plan; or
–  communicated the restructuring plan to 
those affected by it in a sufficiently specific 
manner to raise a valid expectation in 
them that the restructuring will happen.
When a restructuring involves the sale of 
an operation, no obligation arises for the 
sale until the company is committed to the 
sale, i.e. through a binding sales agreement.
A restructuring provision only includes the 
direct costs arising from the restructuring, 
which are those that are both:
–  necessarily entailed by the restructuring; 
and
–  not associated with the ongoing activities 
of the company.
Research and development
Research costs are charged to the result in 
the year in which they are incurred. Develop- 
ment costs are charged to the result in the 
year in which they are incurred provided that 
they do not fulfil the conditions for instead 
being capitalised according to IAS 38 
“Intangible Assets”.
Revenue recognition
Revenue recognition is made according to 
IAS 18 “Revenue” and IAS 11 
“Construction Contracts”. 
Revenues from sale of goods, services 
and projects are reported as “Net sales” in 
the statement of consolidated comprehen-
sive income.
Sale of goods
Revenue from sale of goods is recognised 
when all of the following conditions have 
been fulfilled:
–  the seller has transferred the significant 
risks and rewards of ownership of the 
goods to the buyer;
–  the seller retains neither continuing 
managerial involvement to the degree 
usually associated with ownership nor 
effective control over the goods sold;
–  the amount of revenue can be measured 
reliably;
–  it is probable that the seller will get paid; and
–  the costs incurred or to be incurred related 
to the transaction can be measured reliably.

94   Financial statements
The revenue recognition is usually governed 
by the delivery terms used in the sale. Net 
sales are referring to sales value less sales 
taxes, cancellations and discounts. 
Sale of services
To the extent that Alfa Laval also delivers 
services the three last conditions above 
apply together with:
–  the stage of completion at the closing 
date can be measured reliably.
Project sales
Revenue for projects is recognised using 
the percentage of completion method in 
IAS 11 “Construction Contracts”, see above 
under “Long-term construction projects”.
Operating segments
IFRS 8 means that the reporting of operating 
segments must be made according to how 
the chief operating decision maker monitors 
the operations, which may deviate from IFRS. 
Furthermore information according to IFRS 
for the company as a whole must be given 
about products and services as well as 
geographical areas and information about 
major customers. 
The difference between the operating in-
come for the operating segments and the 
operating income according to IFRS for the 
company as a whole is explained by two 
reconciliation items.
Alfa Laval’s operating segments are the 
divisions. The chief operating decision maker 
within Alfa Laval is its Board of Directors.
Transactions in foreign currencies
Receivables and liabilities denominated in 
foreign currencies have been valued at 
year-end rates of exchange. 
Within the Group, exchange gains and 
losses on loans denominated in foreign 
currencies that ﬁnance acquisitions of foreign 
subsidiaries are transferred to other compre-
hensive income as foreign currency translation 
adjustments if the loans act as a hedge to 
the acquired net assets. There they offset 
the translation adjustments resulting from 
the consolidation of the foreign subsidiaries. 
In the parent company, these exchange 
differences are reported above net income.
IAS 21 “The Effects of Changes in Foreign 
Exchange Rates” covers among other things 
the existence of functional currencies. Almost 
all of Alfa Laval’s subsidiaries are affected 
by changes in foreign exchange rates for 
their procurement within the Group. They do 
however usually sell in their local currency 
and they have more or less all of their non-
product related costs and their personnel 
related costs in their local currency. This 
means that none of Alfa Laval’s subsidiaries 
qualify for the use of another functional 
currency than the local currency, with the 
following exception. Subsidiaries in highly 
inﬂationary countries report their closings in 
the functional hard currency that is valid in 
each country, which in all cases is USD. 
During 2016 Venezuela is regarded as a 
highly inﬂationary country.
In the consolidation, the foreign subsidi-
aries have been translated using the current 
method. This means that assets and liabilities 
are translated at closing exchange rates 
and income and expenses are translated 
at the year’s average exchange rate. The 
translation difference that arises is a result of 
the fact that net assets in foreign companies 
are translated at one rate at the beginning 
of the year and another at year-end and 
that the result is translated at average rate. 
The translation differences are part of other 
comprehensive income.
Recently issued accounting  
pronouncements
International Accounting Standards Board 
(IASB) has issued the following new or 
revised accounting pronouncements, which 
may be applicable on Alfa Laval and are 
effective for fiscal years beginning on or 
after January 1, 2017. Alfa Laval has chosen 
not to make any early adoption of any of 
these pronouncements. 
IFRS 9
IFRS 9 ”Financial Instruments” replaces the 
current standard IAS 39 “Financial Instruments: 
Recognition and Measurement”. The changes 
mainly relate to three areas: classification 
and measurement, impairments and hedge 
accounting. 
The standard means that the company’s 
business model and the characteristics of 
the asset inﬂuence the classiﬁcation and 
measurement of ﬁnancial assets. The standard 
means a reduction of the number of valuation 
categories for ﬁnancial assets and contains 
the main categories reported at cost (amor-
tised cost) and fair value through proﬁt or loss. 
IAS 39 only considered incurred losses, 
while IFRS 9 instead has a model for expected 
credit losses.
The requirement that the efﬁciency should 
be between 80-125 percent has been re-
moved in the standard. The possibilities to 
hedge different types of risk for raw materials 
have also increased.
IFRS 9 has been adopted by the European 
Union and becomes effective for ﬁnancial 
years beginning on or after January 1, 2018. 
Early application is allowed.
Alfa Laval’s assessment is that IFRS 9 
will mean:
–  a reallocation of the financial assets on 
fewer categories than today, 
–  that the possibilities for hedge accounting 
and to achieve efficiency will increase and
–  that the efficiency test in itself will become 
easier, but 
–  that the standard otherwise will have 
limited impact on the financial statements 
of Alfa Laval and the disclosures in them.
IFRS 15
IFRS 15 “Revenue from Contracts with 
Customers” covers how revenue recognition 
on contracts with customers shall be made. 
IFRS 15 supersedes mainly IAS 11 
“Construction Contracts” and IAS 18 
“Revenue”. Revenue recognition is based 
on five steps:
1.  Identify the contract with a customer.
2.  Identify the performance obligations in 
the contract.
3.  Determine the transaction price.
4.  Allocate the transaction price to the 
performance obligations in the contract.
5.  Recognise revenue when the entity 
satisfies a performance obligation.
Two or more contracts entered into at or near 
the same time with the same customer are 
accounted for as a single contract if:
–  the contracts are negotiated as a 
package; and/or
–  the amount of consideration to be paid 
in the contracts are linked to each other; 
and/or 
–  the goods or services in the contracts 
are a single performance obligation.
A contract modification is treated as a separate 
contract if added products or services:
–  are distinct; and 
–  have a stand-alone selling price.
An entity shall recognise the revenue when 
it has satisfied the performance obligation 
by transferring control over a promised 
good or service to the customer.
Performance obligations can be satisﬁed 
either over time or at a point in time.
An entity transfers control of a good or 
service over time and therefore satisﬁes a 
performance obligation over time and rec-
ognises revenue over time if:

95
Financial statements
Financial statements
–  the customer simultaneously receives 
and consumes the benefits at the same 
time as the entity performs; or
–  the customer controls the asset while the 
entity creates or enhances the asset; or
–  the entity’s performance does not create 
an asset with an alternative use for the 
entity and there is an enforceable right to 
payment for the performance completed.
 
In order to establish the performance over 
time the entity can use a method based on 
output (survey/investigation, achieved 
milestones or delivered units) or a method 
based on input (incurred costs, worked 
hours or machine hours).
If a performance obligation is not satisﬁed 
over time it is satisﬁed at a point in time. To 
establish the point in time when the customer 
obtains control of a promised asset and the 
entity satisﬁes a performance obligation the 
following control criteria must be considered:
–  The entity has a present right to payment 
for the asset.
–  The customer has legal title to the asset.
–  The customer has physical possession of 
the asset.
–  The customer has the significant risks 
and rewards of ownership of the asset. 
–  The customer has accepted the asset.
IFRS 15 has been adopted by the European 
Union and becomes effective for financial 
years beginning on or after January 1, 2018. 
There are three alternatives for the transition 
with varying degrees of retroactivity. Early 
application is allowed.
Alfa Laval’s assessment is that IFRS 15 
will have limited impact on the ﬁnancial 
statements of Alfa Laval, since it does not 
mean any real change in the revenue rec-
ognition but only in how it is arrived at. The 
amount of disclosures will however increase.
IAS 12
IAS 12 “Income Taxes” has been amended. 
The amendments mean a clarification of 
the requirements on recognition of deferred 
tax assets for unrealised losses on debt 
instruments measured at fair value.
The amendments to IAS 12 have not yet 
been adopted by the European Union.
Alfa Laval’s assessment is that the 
amendments to IAS 12 will have limited im-
pact on the ﬁnancial statements of Alfa Laval 
and the disclosures in them, since Alfa Laval 
currently does not have any debt instruments 
measured at fair value.
IFRS 16
IFRS 16 “Leases” covers the recognition, 
measurement, presentation and disclosure 
of leases by both lessors and lessees. 
IFRS 16 replaces IAS 17 “Leases”.
For lessees the current classiﬁcation in 
operational and ﬁnancial leases disappears 
and is replaced by a model where assets 
and liabilities for all leasing contracts must 
be recognised in the balance sheet. For 
leasing contracts where the contract period 
is maximum 12 months or the leased asset 
is of low value (USD 5 thousand), there is 
an option to apply a practical expedient.
For lessors the rules in IAS 17 are basically 
kept why a classiﬁcation into operational 
and ﬁnancial leases like the current should 
be done also going forward.
Current operational lease contracts can 
include both a leasing part and a service part. 
According to IFRS 16, the company in these 
cases can choose to separate them from each 
other and thus only recognise the leasing part 
in the balance sheet or capitalise the entire 
contract. The choice impacts by which amount 
the balance sheet will increase in the end.
IFRS 16 has not yet been adopted by the 
European Union. For lessees the transition to 
IFRS 16 can be reported either retrospectively 
according to IAS 8 or the effect of the tran-
sition is reported in equity at the date of the 
transition to IFRS 16. In connection with the 
transition a practical expedient can be applied 
that means that the new leasing deﬁnition is 
only applied on new lease contracts instead 
of on all leasing contracts.  Early application 
is allowed if also IFRS 15 is applied.
Alfa Laval’s assessment is that IFRS 16 
will mean that mainly the operational leases 
concerning properties that Alfa Laval has as 
lessee will end up in the balance sheet, why 
the balance sheet total will increase and that 
the disclosure requirements concerning 
leases will become more burdening.
International Accounting Standards Board 
(IASB) has not issued any financial reporting 
interpretations developed by the International 
Financial Reporting Interpretations Committee 
(IFRIC), which may be applicable on Alfa 
Laval and are effective for fiscal years 
beginning on or after January 1, 2017.
Otherwise Alfa Laval will further evaluate 
the effects of the application of the new or 
revised accounting standards or interpreta-
tions before each time of application.

96   Financial statements
Objectives, policies and processes  
for managing capital
Alfa Laval defines its managed capital as the sum of consolidated net debt and equity including the part that is attributable to non-control-
ling interests. At the end of 2016 the managed capital was SEK 23,028 (30,111) million.
The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern and provide an ade-
quate return for shareholders and beneﬁts for other stakeholders.
When managing the capital the Group monitors several measures including:
Measure
Goal
Target 
standard
Target  
not set
Outcome
Average over last
2016
2015
3 years
5 years
8 years
Invoicing growth per year
≥5% *
-10.3%
13.3%
6.5%
4.9%
3.5%
Adjusted EBITA margin **
15% *
15.6%
17.1%
16.5%
16.5%
17.2%
Return on capital employed **
≥20%
15.3%
21.6%
19.1%
22.2%
26.7%
Net debt to EBITDA **
≤2.0
1.81
1.56
1.94
1.42
0.96
Cash flow from operating activities 
including investments in fixed assets ***
10%
12.2%
13.0%
12.7%
12.2%
13.1%
Investments ***
2.0%
1.7%
1.7%
1.7%
1.7%
1.7%
Return on equity
X
11.8%
21.7%
17.0%
18.4%
20.5%
Solidity
X
38.0%
35.5%
34.8%
38.4%
41.6%
Debt ratio **
X
0.47
0.63
0.66
0.49
0.33
Interest coverage ratio **
X
24.5
22.3
21.7
22.1
23.8
Credit rating
 
 
X
BBB+
BBB+
 
 
 
* Average over a business cycle. ** Alternative performance measures, defined on page 142. *** in % of sales.
During 2016 the goal for the average 
invoicing growth per year over a business 
cycle has been reduced from at least 8 
percent to at least 5 percent. The President 
and Chief Executive Officer Tom Erixon 
commented upon the change: “In today’s 
business climate it is more reasonable to 
aim towards a 5 percent growth target, 
especially given what Alfa Laval has 
managed to achieve over the past years”. 
These measures are connected to each 
other as communicating vessels. This 
means that if actions are taken that primar-
ily aim at a certain measure they will also 
have an impact on other measures to a 
varying degree. It is therefore important to 
consider the whole picture.
In order to maintain a good capital 
structure the Group may for instance raise 
new loans or amortise on existing loans, 
adjust the amount of dividends paid to 
shareholders, return capital to shareholders, 
repurchase own shares, issue new shares 
or sell assets.
As examples on the Group’s active work 
with managing its capital the following can 
be mentioned:
–  Two tranches of corporate bonds totalling 
EUR 800 million were issued in September 
2014.
–  A commercial paper programme of 
nominally SEK 2,000 million with a 
duration of 3–5 months was started in 
the spring 2014.
–  The bilateral term loans with Swedish Export 
Credit from June 2011 and June 2014.
–  The senior credit facility with a new banking 
syndicate from June 2014.
–  The finance contracts with the European 
Investment Bank from September 2009 
and December 2013, where bilateral 
term loans were called for in March 2011 
and in June 2014 respectively.
–  The repurchases of shares made during 
2007, 2008 and 2010.
The repurchases of shares should be viewed 
in light of that the consolidated cash flows 
from operations are large enough to finance 
the build-up of working capital and the 
mid-size acquisitions of businesses that 
have been made as well as the dividend to 
the shareholders.

97
Financial statements
Financial statements
Financial risks
Financial risks are referring to financial 
instruments.
Financial instruments
Alfa Laval has the following instruments: 
cash and cash equivalents, deposits, trade 
receivables, bank loans, trade payables and 
a limited number of derivative instruments to 
hedge primarily currency rates or interests, 
but also the price of metals and electricity. 
These include currency forward contracts, 
currency options, interest-rate swaps, metal 
forward contracts and electricity futures. 
See Notes 13 and 14 for more information 
on these financial instruments.
Financial policy
In order to control and limit the financial risks, 
the Board of the Group has established a 
financial policy. The Group has an aversive 
attitude toward financial risks. This is 
expressed in the policy. It establishes the 
distribution of responsibility between the 
local companies and the central finance 
function in Alfa Laval Treasury International, 
what financial risks the Group can accept 
and how the risks should be limited.
Price risk
There are three different types of price risks: 
currency risk, interest risk and market risk. 
See below.
Currency risk
Due to the Alfa Laval Group’s international 
business activities and geographical spread 
the Group is exposed to currency risks. The 
exchange rate movements in the major 
currencies for the Group during the last years 
are presented below (SEK/foreign currency):
4
6
8
10
12
14
Exchange rate ﬂuctuations 
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1.30
1.35
0.05
0.06
0.07
0.08
0.09
0.10
0.0052
0.0056
0.0060
0.0064
0.0068
0.0072
0.0076
0.0080
JAN 14
JUN 14
DEC 14
JUN 15
DEC 15
JUN 16
DEC 16
JAN 14
JUN 14
DEC 14
JUN 15
DEC 15
JUN 16
DEC 16
JAN 14
JUN 14
DEC 14
JUN 15
DEC 15
JUN 16
DEC 16
GBP
EUR
USD
DKK
NOK
KRW
KRW
JPY
JPY
Currency risk is divided into transaction 
exposure that relates to exchange rate 
fluctuations that affects the currency flows 
that arise due to the business activities and 
translation exposure that relates to the 
translation of the subsidiaries’ statements on 
financial position from local currency to SEK.
Transaction exposure
During 2016 Alfa Laval’s sales to countries 
outside Sweden amounted to 97.8 (97.8) 
percent of total sales. 
Alfa Laval’s local sales companies normally 
sell in domestic currency to local end cus-
tomers and have their local cost base in local 
currency. Exports from production and logis-
tical centres to other Group companies are 
invoiced in the exporting companies’ domestic 
currencies, except for Sweden, Denmark and 
UK where the exports are denominated in EUR.
The Group is principally exposed to cur-
rency risk from potential changes in con-
tracted and projected ﬂows of payments and 
receipts. The objective of foreign exchange 
risk management is to reduce the impact of 
foreign exchange movements on the Group’s 
income and ﬁnancial position.
The Group normally has natural risk cover-
age through sales as well as costs in local 
currencies. The ﬁnancial policy states that the 
local companies are responsible for identifying 
and hedging exchange rate exposures on 
all commercial ﬂows via Alfa Laval Treasury 
International. Contract based exposures must 
be fully hedged. In addition, the balance of 
projected ﬂows the next 12 months must be 
hedged to at least 50 percent. The remaining 
part of the projected ﬂows can be partially 
hedged after conferring with the Group’s 
central ﬁnance function. Alfa Laval Treasury 
International can add to or reduce the total 
hedging initiated by the local companies in 
the currencies that Alfa Laval has commercial 
exposure up to but not exceeding 100 percent 
of one year’s commercial exposure for each 
currency.
The Group’s net transaction exposure at 
December 31, 2016 in different currencies 
before and after derivatives for the coming 
12 months amounts to:
-4,000
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
SEK
DKK
JPY
NOK
CAD
EUR
USD
Net transaction exposure per currency 
at December 31, 2016 for the coming 
12 months
Before derivatives
After derivatives
SEK millions
 
The bars for SEK, DKK and NOK are a 
reflection of the fact that a substantial part 
of the production within the Group is located 
in Sweden, Denmark and Norway with costs 
denominated in local currencies.
Currency contracts for projected ﬂows are 
entered into continuously during the year with 
12 months maximum duration. For contract 
based exposures the derivatives follow the 
duration of the underlying contract. This 
means that the company experiences the 
effects from the market currency rate 
movements with a varying degree of delay.

98   Financial statements
If the currency rates between SEK and the most important foreign currencies are changed 
by +/- 10 % it has the following effect on operating income, if no hedging measures are taken:
Effect on operating income by exchange rate fluctuations excluding hedging measures
Consolidated
SEK millions
2016
2015
Exchange rate change against SEK
+ 10%
- 10%
+ 10%
- 10%
USD
336
-336
439
-439
EUR
238
-238
147
-147
CAD
45
-45
58
-58
NOK
-235
235
-303
303
DKK
-126
126
-134
134
JPY
72
-72
69
-69
Other
59
-59
61
-61
Total
389
-389
337
-337
Outstanding currency forward contracts and currency options for the Group amounted to 
the following at the end of the year:
Outstanding currency forward contracts and currency options
Consolidated
Millions
2016
2015
 
Original 
 currency
SEK
Original 
 currency
SEK
Outflows:
 
 
USD
-258
-2,343
-451
-3,775
EUR
-250
-2,391
-152
-1,395
SEK
-81
-81
-904
-904
CAD
-13
-90
-7
-40
CZK
-6
-2
–
–
JPY
-11,990
-935
-15,783
-1,098
SGD
-1
-8
-16
-98
RUB
-26
-4
-29
-3
GBP
–
–
-1
-12
NZD
-2
-10
-3
-17
Other
 
-4
-2
Total
 
-5,868
 
-7,344
Inflows:
 
 
DKK
18
24
831
1,020
NOK
5,120
5,400
5,911
5,676
CNY
386
505
160
206
GBP
2
20
–
–
KRW
1,049
8
–
–
AUD
15
99
22
134
Other
 
0
0
Total
 
6,056
 
7,036
Translation exposure
When the subsidiaries’ statements of financial 
position in local currency are translated into 
SEK a translation difference arises that is 
due to the current year being translated at 
a different closing rate than last year and 
that the comprehensive income statement 
is translated at the average rate during the 
year whereas the statement of financial 
position is translated at the closing rate at 
December 31. The translation differences 
are reported against other comprehensive 
income. The translation exposure consists 
of the risk that the translation difference 
represents in terms of impact on compre-
hensive income. The risk is largest for the 
currencies where the Group has the largest 
net assets and where the exchange rate 
movements against SEK are largest. The 
Group’s net assets or liabilities for the major 
currencies are distributed as follows:
-6,000
-4,000
-2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Net assets
Net liabilities
SEK millions
 
NOK
SEK
INR
CNY
BRL
HKD
JPY
CAD
PLN
RUB
AUD
Other
USD
EUR/DKK
Net assets and liabilities by currency

99
Financial statements
Financial statements
The assets and liabilities in EUR and DKK 
are seen together since the rate for DKK is 
fixed against the EUR.
The translation differences are a central 
responsibility and are managed by distrib-
uting the loans on different currencies based 
on the net assets in each currency and 
through cross currency swaps. Loans taken 
in the same currency as there are net assets 
in the Group, decrease these net assets and 
thereby decrease the translation exposure.
These hedges of net investments in foreign 
operations work in the following way. Ex-
change gains and losses on loans denomi-
nated in foreign currencies that ﬁnance ac-
quisitions of foreign subsidiaries are reported 
as a part of other comprehensive income if 
the loans act as a hedge to the acquired net 
assets. In other comprehensive income they 
offset the translation adjustments resulting 
from the consolidation of the foreign sub-
sidiaries. In the Group, net exchange differ-
ences of SEK -643 (301) million relating to 
debts in foreign currencies have been 
charged to other comprehensive income as 
hedges of net investments in foreign oper-
ations. The loans that hedge net investments 
in foreign operations are denominated in EUR 
and USD since these foreign currencies have 
the largest impact on the statement of ﬁnan-
cial position. Since the Group uses part of 
its cash ﬂows to amortise the loans in order to 
improve the ﬁnancial net, the extent of this 
hedge tends to decrease over time. A change 
in the net assets of the foreign subsidiary 
over time can have the same effect.
Interest risk
By interest risk is meant how changes in the 
interest level affect the financial net of the 
Group and how the value of financial 
instruments vary due to changes in market 
interest rates. The Group attempts to manage 
interest rate risk by matching fixed interest 
periods of financial assets and liabilities 
and through the use of derivative financial 
instruments such as interest rate swaps.
The ﬁnancial policy states that the inter-
est rate risk and duration are measured by 
each main currency. The minimum interest 
duration for the loans should be 10 months 
and the maximum interest duration should 
be 24-48 months depending on the currency 
the loan is raised in according to the policy.
The senior credit facility, the bilateral 
term loans, the commercial papers and the 
EUR 300 million tranche of the corporate 
bonds accrue interest at ﬂoating rate. The 
Group has chosen to hedge 12 (18) percent 
of the loans to ﬁxed interest rate, with a 
duration of 13.8 (10.0) months.
Interest sensitivity analysis versus 
hedging % of ﬂoating rates
SEK millions
%
 
-100
-75
-50
-25
0
2016
2015
Effect on interest costs/income at 
1% increase in market rates
Hedging % of floating rates
-51
-57
0
25
50
75
100
The average interest and currency duration 
for all loans including derivatives is 27.8 (28.4) 
months at the end of 2016.
Calculated on an overall increase of market 
rates by 100 basis points (1 percentage 
unit), the interest net of the Group would 
change according to the bar chart below.   
Market risk
Market risk is defined as the risk for changes 
in the value of a financial instrument due to 
changed market prices. This applies only to 
financial instruments that are listed or otherwise 
traded, which for Alfa Laval concern bonds 
and other securities and other long-term 
securities totalling SEK 960 (778) million. 
The market risk for these is perceived as low. 
For other financial instruments, the price risk 
only consists of currency risk and interest risk.
Liquidity risk and reﬁnancing risk
Liquidity risk is defined as the risk that the 
Group would incur increased costs due to 
lack of liquid funds. 
Refinancing risk is defined as the risk that 
the refinancing of maturing loans becomes 
difficult or costly. The loans of the Group 
are mainly long term and only mature when 
the agreed loan period expires. Since the 
maturity of the loans is distributed over time 
the refinancing risk is reduced.
The private placement from 2006 of USD 
110 million matured in April 2016 and was 
re-paid.
Alfa Laval has a senior credit facility of 
EUR 400 million and USD 544 million, corre-
sponding to SEK 8,779 million with a banking 
syndicate. At December 31, 2016 the facility 
was not utilised. The facility matures in June 
2019, with two one year extension options.
During 2014 Alfa Laval issued EUR 800 
million of corporate bonds, corresponding 
to SEK 7,612 million. The bonds are listed 
on the Irish stock exchange and consist 
of one tranche of EUR 300 million that 
matures in September 2019 and one 
tranche of EUR 500 million that matures 
in September 2022.
Alfa Laval has a bilateral term loan with 
Swedish Export Credit that is split on one 
loan of EUR 100 million that matures in June 
2017 and one loan of EUR 100 million that 
matures in June 2021 as well as a loan of 
USD 136 million that matures in June 2020, 
corresponding to SEK 3,153 million in total.
Alfa Laval also has a bilateral term loan 
from the European Investment Bank split 
on one loan of EUR 130 million that matures 
in March 2018 and an additional loan of 
EUR 115 million that matures in June 2021, 
corresponding to SEK 2,345 million in total.
The commercial paper programme of 
SEK 2,000 million was not utilised at Decem-
ber 31, 2016.
Swedish Export Credit
European Investment Bank
Local Facilities
Swedish Export Credit
Swedish Export Credit
Senior Facility
Corporate bonds
Corporate bonds
European 
Investment Bank
Local Facilities
2022
2021
2020
2019
2018
2017
Maturity structure of Group funding
Non committed – Utilised
Committed
Committed & Utilised
SEK 
millions
Maturity year
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
In summary the maturity structure of the loans and the loan facilities is as follows:

100   Financial statements
Maturity structure of currency derivatives
SEK millions
0
2,000
4,000
6,000
8,000
10,000
-10,000
-8,000
-6,000
-4,000
-2,000
0
3
6
9
12
15
18
24
36
>36
Months
3,266
-3,222
1,999
-1,958
8,277
-8,272
1,353
-1,286
686
-639
323
-335
252
-259
114
-110
9
-9
Positive cash flows
Negative cash flows
Maturity structure of electricity futures
SEK millions
-0,5
-0,4
-0,3
-0,2
-0,1
0,0
3
6
9
12
15
18
36
24
Months
Negative cash flows
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
>36
36
24
18
15
12
9
6
3
Maturity structure of interest derivatives
Positive cash flows
SEK millions
Months
 
-4
-2
0
2
4
6
8
10
12
>36
36
24
18
15
12
9
6
3
Maturity structure of metal derivatives
Negative cash flows
SEK millions
Months
 
Positive cash flows
Cash ﬂow risk
Cash flow risk is defined as the risk that the 
size of future cash flows linked to financial 
instruments is fluctuating. This risk is mostly 
linked to changed interest and currency rates. 
To the extent that this is perceived as a 
problem, different derivative instruments 
are used to fix rates. See description of 
exposure and hedging measures under 
interest risk. See the maturity structure of 
currency derivatives, interest derivatives, 
metal futures and electricity futures below.
Counterpart risks
Financial instruments that potentially subject 
the Group to significant concentrations of 
credit risk consist principally of cash and 
cash equivalents, deposits and derivatives.
The Group maintains cash and cash 
equivalents and current and non-current 
investments with various ﬁnancial institutions 
approved by the Group. These ﬁnancial 
institutions are located in major countries 
throughout the world and the Group’s policy 
is designed to limit exposures to any one 
institution. The risk for a counterpart not 
fulﬁlling its commitments is limited through 
the selection of ﬁnancially solid counterparts 
and by limiting the engagement per counter-
part. The Group performs periodic evalua-
tions of the relative credit standing of those 
ﬁnancial institutions that are considered in 
its investment strategy. The Group does not 
require collateral on these ﬁnancial instruments.
The Group is exposed to credit risk in 
the event of non-performance by counter-
parts to derivative instruments. The Group 
limits this exposure by diversifying among 
counterparts with high credit ratings and 
by limiting the volume of transactions with 
each counter party. Furthermore the Group 
has entered into ISDA agreements (Interna-
tional Swaps and Derivatives Association) 
with the counter parts in order to be able to 
offset assets and liabilities in case of a counter 
party default. Alfa Laval has never encoun-
tered a counter party default, which means 
that such an offset never have been made. 
In total it is the Group’s opinion that the 
counterpart risks are limited and that there 
is no concentration of risk in these ﬁnancial 
instruments.

101
Financial statements
Financial statements
Operational risks
Costs for bad debts / overdues in % 
of accounts receivable
SEK millions
%
 
0
10
20
30
40
50
60
2016
2015
0
2
4
6
8
10
12
Costs for bad debts in SEK millions
< 30 days
 
> 30 days but < 90 dagar
> 90 days
92
42
54
Claim costs in SEK millions and 
in % of net sales
SEK millions
%
 
0
100
200
300
400
500
2016
2015
Costs for claims & warranty in SEK millions
Claims & warranty in % of net sales
378
376
476
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
Risk for bad debts
The risk for bad debts is referring to the risk 
that the customer cannot pay for delivered 
goods due to financial difficulties. The Group 
sells to a large number of customers in 
countries all over the world. That some of 
these customers from time to time face 
payment problems or go bankrupt is 
unfortunately part of reality in an operation 
of Alfa Laval’s magnitude. All customers 
except Tetra Laval represent less than 1 
percent of net sales and thereby represent 
a limited risk. Alfa Laval regularly collects 
credit information on new customers and, 
if needed, on old customers. Earlier payment 
habits have an impact on the acceptance 
of new orders. On markets with political or 
financial risks, the Group strives to attain credit 
insurance solutions. Accounts receivable 
constitutes the single largest financial asset 
according to Note 13. With reference to the 
above description it is management’s opinion 
that there is no material concentration of 
risk in this financial asset.
The amount of accounts receivable being 
overdue is an indication of the risk the com-
pany runs for ending up in a bad debt situation. 
The Group’s costs for bad debts and the 
overdues in percent of accounts receivable 
are presented in the following graph:
Risk for claims
The risk for claims refers to the costs Alfa 
Laval would incur to rectify faults in products 
or systems and possible costs for penalties. 
Alfa Laval strives to minimize these costs 
through an ISO certified quality assurance. 
The major risks for claim costs appear in 
connection with new technical solutions and 
new applications. The risks are limited 
through extensive tests at the manufactur-
ing site and at the customer site. The Group’s 
net claim costs and their relation to net 
sales are found in the following graph:
Risk connected to technical development
This risk refers to the risk that some competitor 
develops a new technical solution that makes 
Alfa Laval’s products technically obsolete and 
therefore difficult to sell. Alfa Laval addresses 
this risk by a deliberate investment in research 
and development aiming at being in the 
absolute frontline of technical development.
Economic risk
Competition
The Group operates in competitive markets. 
In order to address this competition the 
Group has for instance:
–  organized the operations into divisions 
based on customer segments in order to 
get a customer focused market 
penetration;
–  a strategy for acquisition of businesses in 
order to for instance reinforce the presence 
on certain markets or widen the Group’s 
product offering;
–  worked with creating a competitive cost 
level based on its international presence; 
and
–  worked with securing the availability of 
strategic metals and components in 
order to maintain the ability to deliver.
Business climate
In an overall economic downturn the Group 
tends to be affected with a delay of six to 
twelve months depending on customer 
segment. The same applies with an economic 
upturn. The fact that the Group is operating 
on a large number of geographical markets 
and within a wide range of customer segments 
means a diversification that limits the effects 
of fluctuations in the business climate. 
Historically, fluctuations in the business 
climate have not generated decreases in 
orders received by more than approximately 
10–15 percent. The downturn in the business 
climate in 2009 and 2010 however meant 
a considerably larger decline in order intake. 
This was partly due to the fact that the 
decline happened abruptly from a very high 
level of demand that was the culmination 
of a long-lasting boom and that the price 
level in connection with this peak was 
inflated by substantial increases in raw 
material prices.
Prices of raw material
The Group depends on deliveries of stainless 
steel, carbon steel, copper and titanium etc. 
for the manufacture of products. The prices 
in some of these markets are volatile and the 
supply of titanium has occasionally been 
limited. There are a limited number of possible 
suppliers of titanium. The risk for severely 
increased prices or limited supply constitutes 
serious risks for the operations. The possibilities 
to pass on higher input prices to an end 
customer vary from time to time and between 
different markets depending on the competi-
tion. The Group is addressing this risk by 
securing long-term supply commitments 
and through fixed prices from the suppliers 
during six to twelve months. During periods 
of large price increases the customer price 
on titanium products has been linked to 
Alfa Laval’s procurement costs for titanium. 
Primarily in the period 2007 to 2011 the Group 
experienced large price fluctuations for many 
raw materials, but in particular for stainless 
steel, carbon steel, copper and titanium.

102   Financial statements
Nickel
USD/ton
Year
Year
Year
0
5,000
10,000
15,000
20,000
25,000
30,000
10
11
12
13
14
15
16
09
10
11
12
13
14
15
16
09
10
11
12
13
14
15
16
09
Copper
USD/ton
0
2,000
4,000
6,000
8,000
10,000
12,000
Aluminium
USD/ton
0
500
1,000
1,500
2,000
2,500
3,000
Sensitivity analysis and metal 
price hedging
SEK millions
%
 
0
50
100
150
200
250
300
Copper
Nickel
0
10
20
30
40
50
70
60
Cost increase if current metal prices 
increase by 100%, without hedging
Cost increase if current metal prices 
increase by 100%, with hedging
Hedging 2016
 
Hedging 2017
The price volatility for the most important metals is presented below:
The Group uses metal futures to secure 
the price on strategic metals. The graph 
below shows how much of the purchases 
of nickel and copper that have been 
hedged during 2016 and how much of the 
expected purchases during 2017 that were 
hedged at the end of 2016. The graph also 
presents to what extent the Group’s costs 
for these purchases during 2017 would be 
affected if the prices would double from 
the level at December 31, 2016.  
Environmental risks
This risk relates to the costs that the Group 
may incur to reduce emissions according to 
new or stricter environmental legislation, to 
restore land at previously or currently owned 
industrial sites, to arrange more effective 
waste disposal, to obtain prolonged or new 
concessions etc. The Group has an ambition 
to be well within the boundaries that local 
legislation sets, which should reduce the 
risks. The operations of the Group are not 
considered to have a significant environ-
mental impact. For more information on 
Alfa Laval’s environmental impact, see the 
section on “Sustainability” on page 40.
Political risk
Political risk is the risk that the authorities, in 
the countries where the Group is operating, 
by political decisions or administration make 
continued operations difficult, expensive or 
impossible for the Group. The Group is mainly 
operating in countries where the political 
risk is considered to be negligible or minor. 
The operations that are performed in countries 
where the political risk is deemed to be 
higher are not material.
Risk for and in connection with litigations
This risk pertains to the costs the Group 
may incur in managing litigations, costs in 
connection with settlements and costs for 
imposed penalties. The Group is involved 
in a few litigations, mainly with customers. 
Any estimated loss risks are provided for.
 
Asbestos-related lawsuits
The Alfa Laval Group was as of December 
31, 2016, named as a co-defendant in a 
total of 824 asbestos-related lawsuits with 
a total of approximately 824 plaintiffs. Alfa 
Laval strongly believes the claims against 
the Group are without merit and intends to 
vigorously contest each lawsuit. 
Based on current information and Alfa 
Laval’s understanding of these lawsuits, 
Alfa Laval continues to believe that these 
lawsuits will not have a material adverse effect 
on the Group’s ﬁnancial condition or results 
of operation.
Risk for technically related damages
This risk refers to the costs Alfa Laval may 
incur in connection with a product delivered 
by the Group breaking down and causing 
damages to life and property. The main risk 
in this context concerns high-speed 
separators, due to the large forces that are 
involved when the bowl in the separator 
spins with a very high number of revolutions. 
In a breakdown the damages can be extensive. 
Alfa Laval addresses these risks through 
extensive testing and an ISO certified quality 
assurance. The Group has product liability 
insurance. The number of damages is low and 
few damages have occurred historically.

103
Financial statements
Financial statements
Business interruption risks
These risks refer to the risk that single units 
or functions within the Group can be hit by 
business interruption due to:
–  strikes and other labour market conflicts;
–  fires, natural catastrophes etc.;
–  computer access violations, lack of 
backups etc.; and
–  corresponding problems at major 
sub-suppliers.
Alfa Laval has a well-developed dialog with 
the local unions, which reduces the risk for 
conflicts and strikes where Alfa Laval is 
directly involved. It is however more difficult 
to protect the company against conflicts in 
other parts of the labour market, for 
instance within transportation.
Alfa Laval is minimizing the following two 
risks through an active preventive work at 
each site in line with the developed global 
policies in each area under supervision of 
manufacturing management, the Group’s 
Risk Management function, Real Estate 
Management, IT and HR.
Problems at major sub-suppliers are 
minimized by Alfa Laval trying to use several 
suppliers of input goods that when needed 
can cover up for a drop in production 
somewhere else. The wish for long term and 
competitive delivery agreements however 
puts restrictions on the level of ﬂexibility that 
can be achieved. When there is a shortage 
the total supply may be too limited to allow 
exchangeability.
HPR stands for “Highly Protected Risk” 
and is the insurance industry’s highest rat-
ing for risk quality. This rating is reserved 
for those commercial properties where the 
exposure for physical damages is reduced to 
a minimum considering building construction, 
operations and local conditions. HPR means 
that all physical risks in and around the facility 
are documented and that these are kept 
within certain limits. Alfa Laval’s production 
facility in Lund in Sweden, which is the Group’s 
largest and most important facility is HPR 
classiﬁed, as well as the production facilities 
in Lykens, Chesapeake, Sarasota and 
Newburyport in the U.S. A number of other 
key production facilities are being evaluated 
and may eventually become HPR classiﬁed.
A HPR classification means that the facility 
has state of the art fire and machinery 
protection systems and that the responsible 
personnel has adequate security routines 
to make sure that these protection systems 
are maintained and in function. In addition, 
known possible sources of ignition are under 
strict control to prevent a fire from starting. 
For an HPR facility the risk for a physical 
damage is brought to a minimum, which 
minimises the risk for business interruption 
that could have extensive consequences 
for Alfa Laval and its customers. For other 
production facilities, not HPR-classified, the 
aim is also to reduce the risk for damage 
and business interruption to a minimum by 
keeping, among other things, ignition 
sources under strict control. Loss prevention 
visits are conducted according to a schedule 
based on size and importance for Alfa Laval.
Insurance risks
These risks refer to the costs that Alfa Laval 
may incur due to an inadequate insurance 
coverage for property, business interruption, 
liability, transport, life and pensions. The Group 
strives to maintain an insurance coverage 
that keeps the risk level at an acceptable 
level for a Group of Alfa Laval’s size and is 
still cost efficient. As a part in this Alfa Laval 
has an own captive. At the same time a 
continuous work is going on to minimise 
the risks in the operations through 
proactive measures.
Risks connected to credit terms
This risk is referring to the limited freedom 
of action that can be imposed on the Group 
through restrictions connected to credit 
terms in loan agreements.

104   Financial statements
Notes
Note 1.   Operating segments
Alfa Laval’s business is divided into three business divisions “Equipment”, 
“Process Technology” and “Marine & Diesel” that sell to external customers and 
one division “Operations & Other” covering procurement, production and 
logistics as well as corporate overhead and non-core businesses. These four 
divisions constitute Alfa Laval’s four operating segments.
The three business divisions (operating segments) are in turn split into a 
number of customer segments. The customers to the Equipment division 
purchase products whereas the customers to the Process Technology division 
purchase solutions for processing applications. The customers to the Marine & 
Diesel division purchase products and solutions for marine and offshore appli-
cations and for diesel power plants. The Equipment division consists of four 
customer segments: Industrial Equipment, OEM (Original Equipment Manu-
facturers), Sanitary Equipment and the aftermarket segment Service. The 
Process Technology division consists of four customer segments: Energy & 
Process, Food & Life Science, Water & Waste Treatment and the aftermarket 
segment Service. The Marine & Diesel division consists of four customer 
segments: Marine & Diesel Equipment, Marine & Offshore Systems, Marine & 
Offshore Pumping Systems and the aftermarket segment Service.
The operating segments are only responsible for the result down to and 
including operating income excluding comparison distortion items and for the 
operating capital they are managing. This means that ﬁnancial assets and lia-
bilities, pension assets, provisions for pensions and similar commitments and 
current and deferred tax assets and liabilities are a Corporate responsibility 
and not an operating segment responsibility. This also means that the ﬁnancial 
net and income taxes are a Corporate responsibility and not an operating 
segment responsibility. 
The operating segments are only measured based on their transactions 
with external parties.
Orders received
Consolidated
SEK millions
2016
2015
Equipment
10,639
10,472
Process Technology
12,383
12,795
Marine & Diesel
9,038
13,831
Operations & Other
0
0
Total
32,060
37,098
Order backlog
Consolidated
SEK millions
2016
2015
Equipment
1,695
1,637
Process Technology
6,758
7,226
Marine & Diesel
8,417
11,715
Operations & Other
0
0
Total
16,870
20,578
Net sales
Consolidated
 
SEK millions
2016
2015
Equipment
10,532
10,500
Process Technology
12,784
14,511
Marine & Diesel
12,318
14,735
Operations & Other
0
0
Total
35,634
39,746
Operating income in management accounts
Consolidated
SEK millions
2016
2015
Equipment
1,527
1,321
Process Technology
1,289
1,899
Marine & Diesel
2,111
2,999
Operations & Other
-471
-438
Total
4,456
5,781
Reconciliation with Group total:
 
Comparison distortion items
-1,500
 –
Consolidation adjustments *
33
-64
Total operating income
2,989
5,717
Financial net
336
-273
Result after financial items
3,325
5,444
* Difference between management accounts and IFRS.
Assets / Liabilities
Consolidated
Assets
Liabilities
SEK millions
2016
2015
2016
2015
Equipment
5,957
6,339
1,249
973
Process Technology
10,966
10,832
4,227
3,812
Marine & Diesel
23,166
22,905
5,179
4,966
Operations & Other
6,601
5,797
2,432
2,359
Subtotal
46,690
45,873
13,087
12,110
Corporate
6,688
6,024
20,015
21,364
Total
53,378
51,897
33,102
33,474
Corporate refers to items in the statement on financial position that are interest bearing or are related to taxes.
Investments
Consolidated
 
SEK millions
2016
2015
Equipment
61
61
Process Technology
108
156
Marine & Diesel
77
131
Operations & Other
371
326
Total
617
674
Depreciation
Consolidated
 
SEK millions
2016
2015
Equipment
179
218
Process Technology
360
366
Marine & Diesel
745
806
Operations & Other
423
371
Total
1,707
1,761
Operating income in management accounts is very close to operating 
income under IFRS. There are only two differences. Operating income in 
management accounts does not include comparison distortion items nor all 
the consolidation adjustments that are made in the official accounts.

105
Financial statements
Financial statements
Note 2.   Information about geographical areas
Countries with more than 10 percent of either of net sales, non-current assets 
or investments are reported separately.
Net sales
Consolidated
 
 
2016
2015
 
SEK 
millions
%
SEK 
millions
%
To customers in:
 
 
  Sweden
784
2.2
864
2.2
  Other EU
8,959
25.1
9,490
23.9
  Other Europe 
2,597
7.3
2,950
7.4
  USA
6,013
16.9
6,725
16.9
  Other North America
716
2.0
1,031
2.6
  Latin America
1,788
5.0
1,826
4.6
  Africa
307
0.9
337
0.8
  China
4,705
13.2
4,879
12.3
  South Korea
3,594
10.1
5,172
13.0
  Other Asia
5,731
16.1
5,991
15.1
  Oceania
440
1.2
481
1.2
Total
35,634
100.0
39,746
100.0
Net sales are reported by country on the basis of invoicing address, which is 
normally the same as the delivery address.
Non-current assets
Consolidated
2016
2015
 
SEK 
millions
%
SEK 
millions
%
  Sweden
1,321
4.0
1,337
4.1
  Denmark
4,572
13.7
4,374
13.4
  Other EU
3,639
10.9
3,992
12.2
  Norway
13,717
41.0
12,986
39.8
  Other Europe
169
0.5
166
0.5
  USA
4,359
13.0
4,510
13.8
  Other North America
136
0.4
123
0.4
  Latin America
329
1.0
271
0.8
  Africa
9
0.0
2
0.0
  Asia
2,993
9.0
2,986
9.2
  Oceania
94
0.3
87
0.3
Subtotal
31,338
93.8
30,834
94.5
Other long-term  
securities
25
0.1
28
0.1
Pension assets
3
0.0
4
0.0
Deferred tax asset
2,056
6.1
1,765
5.4
Total
33,422
100.0
32,631
100.0
Investments
Consolidated
 
 
2016
2015
 
SEK 
millions
%
SEK 
millions
%
  Sweden
65
10.4
63
9.4
  Denmark
161
26.0
48
7.1
  France
38
6.1
99
14.6
  Other EU
91
14.8
115
17.1
  Norway
28
4.5
81
12.0
  Other Europe
5
0.8
5
0.8
  USA
82
13.3
101
15.0
  Other North America
4
0.7
20
2.9
  Latin America
10
1.7
10
1.5
  Africa
0
0.1
1
0.1
  China
90
14.7
67
10.0
  Other Asia
39
6.3
58
8.7
  Oceania
4
0.6
6
0.8
Total
617
100.0
674
100.0
Note 3.    Information about products  
and services
Net sales by product/service
Consolidated
SEK millions
2016
2015
Own products within:
 
   Separation
6,670
7,886
   Heat transfer
15,765
17,372
   Fluid handling
8,544
9,866
   Other
1,160
1,194
Associated products
1,732
1,786
Services
1,763
1,642
Total
35,634
39,746
The split of own products within separation, heat transfer and fluid handling is a 
reflection of the current three main technologies. Other is own products outside 
these main technologies. Associated products are mainly purchased products 
that compliment Alfa Laval’s product offering. Services cover all sorts of service, 
service agreements etc. 
Note 4.   Information about major customers
Alfa Laval does not have any customer that accounts for 10 percent or more of 
net sales. Tetra Pak within the Tetra Laval Group is Alfa Laval’s single largest 
customer with a volume representing 5.0 (4.2) percent of net sales. See Note 
32 for more information.
Note 5.   Employees
Average number of employees – total
Consolidated
Number of female 
employees
Total number of 
employees
 
2016
2015
2016
2015
Parent company
 –
–
–
–
Subsidiaries in  
Sweden (8)
503
496
2,138
2,125
Total in Sweden (8)
503
496
2,138
2,125
Total abroad (134)
2,949
2,921
15,167
15,361
Total (142)
3,452
3,417
17,305
17,486
The figures in brackets in the text column state how many companies had 
employees as well as salaries and remunerations in 2016.
Average number of employees – in Sweden by municipality 
Consolidated
 
2016
2015
Botkyrka
470
457
Eskilstuna
204
209
Lund
1,049
1,043
Ronneby
246
253
Vänersborg
110
100
Other *
59
63
Total
2,138
2,125
*  “Other” refers to municipalities with less than 10 employees and also includes employees at 
branch offices abroad.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

106   Financial statements
Average number of employees – by country
Consolidated
Number of female employees
Total number of employees
 
2016
2015
2016
2015
Argentina
10
11
35
38
Australia
20
19
103
109
Belgium
2
1
24
24
Brazil
56
57
411
496
Bulgaria
7
7
22
20
Chile
6
6
29
28
Colombia
9
10
25
24
Denmark
435
419
1,758
1,792
Philippines
4
4
14
14
Finland
39
43
224
241
France
156
155
848
865
United Arab Emirates
25
23
147
191
Greece
8
8
23
23
Hong Kong
5
5
19
21
India
69
74
1,416
1,384
Indonesia
22
21
93
93
Iran
2
0
8
5
Italy
174
171
917
902
Japan
57
55
263
279
Canada
22
21
96
103
China
636
632
2,892
2,779
Korea
57
58
318
320
Latvia
5
6
11
12
Malaysia
41
40
124
121
Mexico
8
8
48
41
Netherlands
76
77
349
370
Norway
211
202
1,092
1,147
New Zeeland
3
4
18
16
Panama
5
3
16
12
Peru
8
8
24
24
Poland
45
45
270
254
Portugal
6
4
28
15
Qatar
 -
 -
8
9
Romania
2
4
10
14
Russia
138
141
325
337
Saudi Arabia
 -
 -
36
 -
Switzerland
5
5
14
16
Singapore
59
58
237
234
Slovakia
2
1
10
10
Spain
24
25
92
82
UK
53
55
330
340
Sweden
503
496
2,138
2,125
South Africa
12
12
45
44
Taiwan
9
13
40
42
Thailand
15
14
55
55
Czech Republic
8
8
40
40
Turkey
8
9
48
46
Germany
73
77
328
364
Ukraine
4
5
13
14
Hungary
4
3
14
13
USA
301
290
1,835
1,915
Venezuela
0
1
1
2
Vietnam
 -
 -
2
2
Austria
3
3
19
19
Total
3,452
3,417
17,305
17,486
Gender distribution among managers
Consolidated
2016
 
2015
Total 
number
Male 
%
Female 
%
Total 
number
Male 
%
Female 
%
Board members (excluding deputies)
12
66.7
33.3
12
66.7
33.3
President and other executive officers
10
90.0
10.0
11
90.9
9.1
Managers in Sweden
291
79.0
21.0
288
77.1
22.9
Managers outside Sweden
1,996
83.2
16.8
1,969
85.0
15.0
Managers total
2,287
82.7
17.3
2,257
84.0
16.0
Employees in Sweden
2,138
76.5
23.5
2,125
76.7
23.3
Employees outside Sweden
15,167
80.6
19.4
15,361
81.0
19.0
Employees total
17,305
80.1
19.9
17,486
80.5
19.5

107
Financial statements
Financial statements
Note 6.   Salaries and remunerations
Salaries and remunerations – total
Consolidated 
SEK millions
2016
2015
Board of Directors, Presidents and Vice 
Presidents
260
272
 - out of which, variable
39
42
Other
7,337
7,315
Total salaries and remunerations
7,597
7,587
Social security costs
1,237
1,208
Pension costs, defined benefit plans
142
139
Pension costs, defined contribution plans
586
547
Total personnel costs
9,562
9,481
The Group’s pension costs and pension liabilities relating to the Board of 
Directors, presidents and vice presidents amounts to SEK 62 (45) million 
and SEK 315 (310) million respectively. SEK 114 (113) million of the pension 
liabilities is covered by the Alfa Laval Pension Fund.
Equity compensation beneﬁts                                                                  
During the period 2015 to 2016 no equity related benefits existed within Alfa Laval.
Variable remunerations
All employees have either a fixed salary or a fixed base salary. For certain 
personnel categories the remuneration package also includes a variable 
element. This relates to personnel categorises where it is customary or part 
of a market offer to pay a variable part. Variable remunerations are most 
common in sales related jobs and on higher managerial positions. Normally 
the variable part constitutes a minor part of the total remuneration package. 
 
Cash-based long term incentive programme
The Annual General Meetings 2013 to 2016 decided to implement step three 
to six of a cash-based long term incentive programme. The long term incentive 
programme is targeting maximum 85 senior managers in the Group including 
the Chief Executive Officer and the persons defined as executive officers. 
Each of the steps runs over three years and with an individual award for 
each year. The award for each year is set independently from the other two 
years. Since each step runs over three years, three steps of the programme 
will always run in parallel. In 2016 step four, ﬁve and six of the programme 
were running in parallel.
The ﬁnal award for each step is calculated on the employee’s yearly base 
salary at the end of the three year period. The maximum award is linked to 
the employee’s annual maximum variable remuneration and is set to a per-
centage of the base salary according to the following:
Maximum long term incentive 
Maximum long term incentive  
in percent of base salary
Maximum variable 
remuneration per 
year in percent of 
base salary
Per annum  
per step
In total per step over  
the three year period
60%
15%
45%
40%
10%
30%
30%
8.3%
25%
25%
6.7%
20%
15%
4%
12%
The column “Per annum per step” shows the maximum award per step and 
year. Since three steps are running in parallel during each year the maximum 
award in percent during a certain year can be as large as the maximum 
award in percent for a certain step during the whole three year period. 
The outcome of the programme is linked to the development of earnings 
per share (EPS) for Alfa Laval. The EPS targets for the individual years within 
each step are set by the Board of Directors at the inception of the three year 
period and are presented in the below table for the steps that were paid out 
during 2016 (three) or are running (four-six). In the table the EPS outcome 
for each year is also presented.
Earnings per share
Consolidated 
Target and outcome
SEK
2016
2015
2014
2013
Target EPS for step:
 
Three
N/A
7.80
7.15
6.50
Four
8.66
7.94
7.22
N/A
Five
9.30
8.45
N/A
N/A
Six
7.85
N/A
N/A
N/A
EPS outcome
8.43*
9.15
7.39**
7.22
* A djusted for comparison distortion items of SEK -1,500 million. ** Adjusted for Frank Mohn 
acquisition.
The award is calculated in the following way. When the EPS outcome is 
within the range of 90 percent to 110 percent of the target EPS, the 
employee gets the share of the maximum award that is shown in the below 
graph. An EPS outcome of 90 percent or less of the EPS target gives no 
award and an EPS outcome of 110 or more gives the maximum award. 
To be eligible for payout the employees must be in service on the award 
date and the vesting date (except in case of termination of employment due 
to retirement, death or disability). If the employee resigns or is dismissed 
before the end of the three year period, the awards will lapse and the 
employee will not be entitled to any payout. If the employee moves to a 
position that is not eligible for this programme the tranches that already have 
been earned are paid out upon the change of position. Paid remunerations 
from the long term incentive programme do not affect the pensionable 
income or the holiday pay. 
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
% of maximum award
 
0
25
50
75
100
130
120
110
100
90
80
70
EPS outcome in % of target EPS
 
Award

108   Financial statements
Salaries and remunerations to Group Management
Consolidated
Group Management
Chief Executive Officer/President
Other  executive officers
Current:  
Tom Erixon
Former: 
Lars Renström
SEK thousands
2016
2016
2015
2016
2015
Salary and remunerations
 
 
 
 Base salary
8,250
4,506
10,815
31,175
31,485
  Variable salary 1)
–
6,911
4,020
8,866
7,180
  Cash-based long term incentive programme 1)
–
8,436
1,895
8,033
3,445
 Other benefits 2)
84
4,560
719
4,448
2,365
Total salary and remuneration
8,334
24,413
17,449
52,522
44,475
Pension costs
 
 
 
  Retirement and survivors’ pension 
4,147
3,129
6,689
22,694
20,878
  Life, disability and health care insurance 
64
6
50
308
239
Total pension costs
4,211
3,135
6,739
23,002
21,117
Sum including pensions
12,545
27,548
24,188
75,524
65,592
Number of other executive officers at year end
 
9
10
Variable salary
 
 
  Included
Yes 3)
Yes
Yes
Yes
Yes
  Un-guaranteed target of base salary
30%
30%
30%
Not set
Not set
  Maximum of base salary
60%
60%
60%
40%
40%
Cash-based long term incentive programme
 
 
 
  Included
Yes 4)
Yes
Yes
Yes
Yes
  Current year award (SEK thousands) 5)
1,785
270
4,866
3,799
9,066
  Vested unpaid awards at December 31 (SEK thousands)
5,241
270
8,605
11,903
16,031
Commitment for early retirement 6)
No
No
No
Yes
8 of 10
Commitment for severance pay
Yes 7)
Yes 8)
Yes
Yes 9)
Yes
Commitment for retirement and survivors' pension 
10)
11)
12)
1)  Refers to what was paid during the year.
2)  Value of company car, taxable daily allowances, holiday pay, payment for vacation taken 
in cash and house/flat during 6 (12) months supplied to 1 (1) other executive officer.
3)  For 2016 he has a transitional provision that means that he is guaranteed at least 30 percent 
variable salary.
4)  He also participates retroactively in the plans that started in 2014 and 2015, where he is 
guaranteed an outcome of at least 7.5 percent per annum. 
5)  Based on estimated base salaries at the future time of payment.
6)  From the age of 62. A defined contribution solution for early retirement with a premium of 
15 percent of the pensionable salary.
7)  If Alfa Laval terminates his employment before the age of 61 he will receive 24 months’ 
remuneration, between 61 and 62 he will receive 12 months’ remuneration and from 62 
he will receive 6 months’ remuneration.
8)  24 months’ remuneration reduced with the number of months that has passed since his 
63rd birthday.
Cash-based long term incentive plan
Consolidated
SEK millions,  
unless otherwise stated
Per year
Accumulated 
Step
Decided by 
Annual General 
Meeting 
Covering period
Payable 
in April
Actual outcome in %  of maximum outcome 
Payable in percent 
of base salary  based 
on  15% in variable  
remuneration 
Awards
January 1 – December 31
2016
2015
2014
2013
To date
Paid
Estimated
Three
2013
2013
2015
2016
N/A
100.00%
66.78%
100.00%
88.93%
10.67%
28
N/A
Four
2014
2014
2016
2017
36.72%
100.00%
61.77%
N/A
66.16%
7.94%
N/A
22
Five
2015
2015
2017
2018
3.23%
91.42%
N/A
N/A
47.33%
3.79%
N/A
12
Six
2016
2016
 
2018
2019
86.94%
N/A
N/A
N/A
86.94%
3.48%
N/A
11
Awards per year
15
33
14
11
Total
28
45
The costs for the awards per step and per year are based on estimated base salaries at the future time of payment.
Guidelines for remunerations to executive ofﬁcers
The remunerations to the Chief Executive Officer/Managing Director are decided 
by the Board of Directors based on proposals from the Remuneration Committee 
according to the guidelines established by the Annual General Meeting. The 
remunerations to the other members of Group Management are decided by 
the Remuneration Committee according to the same guidelines. The principle 
used when deciding the remunerations to executive officers is to offer a 
competitive remuneration where the remuneration package is mainly based 
on a fixed monthly salary, with an option for a company car and in addition 
to that a variable remuneration of up to 40 percent of the salary (managing 
director up to 60 percent of the salary). The size of the variable remuneration 
depends on the outcome of a number of financial measurements and the 
result of special projects, all compared with the objectives that have been 
established for the year. The guidelines for pension, termination and severance 
pay differ between the Chief Executive Officer/Managing Director and the 
other executive officers, see the below table.
The Annual General Meetings 2013 to 2016 decided to implement step 
three to six of a cash-based long term incentive programme for maximum 
85 senior managers in the Group including the Chief Executive Officer and 
the persons defined as executive officers. The Board of Directors will propose 
the Annual General Meeting 2017 to implement step seven of the cash-based 
long term incentive programme for the period January 1, 2017 – December 
31, 2019 for maximum 70 senior managers in the Group including the Chief 
Executive Officer and the persons defined as executive officers. No other 
changes of these guidelines are proposed by the Board of Directors.
Based on the reported EPS during the period 2013 to 2016, the different steps have resulted in the following awards:
9)  Maximum 2 years’ salary. The commitments define the conditions that must be fulfilled in 
order for them to become valid. 
10)  Is not included in the ITP plan. He has a defined contribution benefit comprising 50 percent 
of the base salary. In addition, he may exchange salary and variable remunerations for a 
temporary old age and family pension.
11)  The ordinary ITP up to a salary of 30 base amounts was funded in order to achieve full 
ITP benefits at the age of 65. On top of the ordinary ITP he had a defined contribution 
benefit comprising 50 percent of the base salary. In addition, he could exchange salary 
and variable remunerations for a temporary old age and family pension.
12)  For salaries above 30 base amounts there is a defined contribution pension solution with 
a premium of 30 percent of the pensionable salary above 30 base amounts. Until May 1, 2012 
the executive officers also had a special family pension that represented a supplement between 
the old age pension and the family pension according to ITP. For the persons that were 
executive officers on May 1, 2012 the special family pension has been converted to a premium 
based supplementary retirement pension based on the premium level in December 2011. 
In addition, they may exchange salary and variable remunerations for a temporary old 
age and family pension.

109
Financial statements
Financial statements
Remunerations to Board members *
Consolidated 
 
SEK thousands
 
2016
2015
Fees by function:
 
  Chairman of the Board
1,500
1,350
  Other members of the Board
515
500
Supplement to:
 
  Chairman of the Audit Committee
150
150
  Other members of the Audit Committee
100
100
  Chairman of the remuneration committee
50
50
   Other members of the remuneration  
committee
50
50
Fees by name:
 
  Anders Narvinger
Chairman
1,550
1,400
  Gunilla Berg
Member
615
600
  Arne Frank
Member
565
550
  Ulla Litzén 
Member
615
600
  Finn Rausing
Member
665
650
  Jörn Rausing
Member
565
550
  Ulf Wiinberg
Member
515
500
  Margareth Øvrum
Member
515
500
Total
 
5,605
5,350
* Elected at the Annual General Meeting and not employed by the company
The reported remunerations refer to the period between two Annual General 
Meetings.
The Chairman of the Board does not have any agreement on future 
retirement or severance pay with Alfa Laval. 
The audit committee and the remuneration committee have had the following 
members during the last two years:
2016
2015
Audit Committee:
   Chairman
Finn Rausing
Finn Rausing
   Other member
Gunilla Berg
Gunilla Berg
   Other member
Ulla Litzén
Ulla Litzén
Remuneration committee:
   Chairman
Anders Narvinger
Anders Narvinger
   Other member
Arne Frank
Arne Frank
   Other member
Jörn Rausing
Jörn Rausing
The members of the committees are appointed at the constituent meeting of 
the Board of Directors directly after the Annual General Meeting.
Tom Erixon replaced Lars Renström as President and Chief Executive Officer 
of Alfa Laval AB (publ) as per March 1, 2016. The remunerations during 2016 
is relating to eleven months for Tom Erixon and five months for Lars Renström.
In connection with Lars Renström leaving his employment, the tranches 
of the cash-based long term incentive programme that already were vested 
per December 31, 2015 were paid out, which constitute SEK 4,277 thousand 
of the reported amount under salaries and remunerations for 2016. The current 
year award of SEK 270 thousand will be paid in May 2017. The variable salary 
for the ﬁrst ﬁve months 2016 amounted to SEK 1,352 thousand and was paid 
already in 2016. The amount under other beneﬁts 2016 is to SEK 4,506 thousand 
relating to paid available vacation days.
One of the other executive ofﬁcers in Group Management Ray Field retired 
as per July 1, 2016. His cost for the ﬁrst six months 2016 are included in the 
above table. The vested unpaid awards at December 31, 2016 for him in the 
cash-based long term incentive programme constitute SEK 950 thousand of 
the reported amount for 2016 and will be paid in May 2017.
Board of Directors
For 2016, the Board of Directors receive a total fixed remuneration of SEK 5,605 
(5,350) thousand, which is distributed among the members elected at the 
Annual General Meeting that are not employed by the company. These 
Directors do not receive any variable remuneration. 
Note 7.    Information on auditors  
and auditors’ fee
The line “Group auditors” in the below table is referring to the auditors 
elected at Annual General Meeting of Alfa Laval AB (publ). The Annual 
General Meeting 2016 and 2015 decided to elect KPMG as the Group’s 
auditors for the coming year.   
Fees and expense compensation
Consolidated
SEK millions
2016
2015
Audit engagements
 
Group auditors
34
34
Other audit firms
1
1
Total
35
35
Audit related services
 
Group auditors
3
1
Other audit firms
1
1
Total
4
2
Tax services
 
Group auditors
7
5
Other audit firms
7
3
Total
14
8
Other services
 
Group auditors
1
1
Other audit firms
3
4
Total
4
5
Expenses
 
Group auditors
0
1
Other audit firms
0
0
Total
0
1
Total
 
Group auditors
45
42
Other audit firms
12
9
Total
57
51
An audit engagement includes examining the financial statements, assessing 
the accounting principles used and significant estimates made by management, 
as well as evaluating the overall financial statement presentation. It also includes 
an examination in order to give an opinion on the Board’s discharge from 
liability. Audit related services are audit services that are outside the audit 
engagement. Tax services refer to advices given in connection with various 
tax matters. All other assignments are defined as other services. Expenses 
refer to reimbursements of travel costs, secretarial services etc.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

110   Financial statements
Note 8.   Comparison distortion items
The operating income has been affected by comparison distortion items of 
SEK -1,500 (-) million, which are specified below. In the consolidated 
comprehensive income statement these are reported gross as a part of 
each concerned line. 
Group Management has started three initiatives for restructuring and 
implementation of a new organisation. The three initiatives concern:
1 – Cost adaptations and a new organisation
The initiative includes the consequences of establishing a new more efficient 
organisational structure at the same time as it contains adaptations to the 
current demand situation.
2 – Restructuring of the manufacturing structure
This initiative includes a stepwise implementation of measures to achieve an 
even more competitive manufacturing structure. The initiative comprises 
re-locations and closures of entities during a period of about three years.
3 – “Greenhouse” 
The initiative means that three product groups that have had an unsatisfactory 
development will be operated separately from the new organisation in order 
to in an even more focused manner give the best preconditions for a better 
development.
The costs for the initiatives are of a non-recurring nature and have amounted 
to SEK -1,500 million for 2016. The cost contains among others a write down 
of above all allocated step-up values and goodwill with about SEK -700 million, 
which has burdened cost of goods sold. The remaining part of the cost of 
SEK -800 million concerns mainly lay off of about 1,000 employees and in 
addition certain costs for write down of assets and provisions for lease 
agreements, which has burdened other operating costs. 
The measures during 2016 are estimated to give savings related to cost 
of goods sold of approximately SEK 200 million and to operating costs, 
excluding cost of goods sold, of about SEK 300 million and are expected to 
be implemented to approximately 75 percent by the end of 2017 and to be 
implemented in full by the end of 2018.
Note 9.   Depreciation and amortisation
Split by function
Consolidated
SEK millions
2016
2015
Cost of goods sold
-1,466
-1,553
Sales
-41
-54
Administration
-81
-78
Research and development
-6
-7
Other income and costs
-113
-69
Total
-1,707
-1,761
Split by type of asset
Consolidated
SEK millions
2016
2015
Patents and unpatented know-how,  
trademarks, etc.
-1,045
-1,079
Machinery and equipment
-471
-482
Financial leasing machinery and equipment
-4
-3
Buildings and ground installations
-180
-190
Financial leasing buildings
-7
-7
Total
-1,707
-1,761
Note 10.    Dividends and changes in fair 
value of financial instruments
Split by type
Consolidated
SEK millions
2016
2015
Dividends from other
0
0
Fair value changes in securities
47
33
Total
47
33

111
Financial statements
Financial statements
Note 11.   Interest income/expense and financial exchange rate gains/losses
Split on type of income/expense or gain/loss
Consolidated
SEK millions
2016
2015
Interest income
 
  Financial leasing
0
 –
  Other interest
118
129
Exchange rate gains
 
  Unrealised
211
118
  Realised
316
157
Total
645
404
Interest expenses
 
  Financial leasing
-1
-1
  Other interest
-240
-338
Exchange rate losses
 
  Unrealised
-27
-84
  Realised
-88
-287
Total
-356
-710
Split on type of income/expense or gain/loss
Parent company
SEK millions
2016
2015
Interest income
 
    External companies
1
0
    Subsidiaries
0
1
Exchange rate gains
 
  Unrealised
9
6
Total
10
7
Interest costs
 
    External companies
 –
-1
Exchange rate losses
 
  Unrealised
-2
-14
Total
-2
-15
Note 12.   Non-controlling interests
Alfa Laval has the following subsidiaries with non-controlling interests. None of these non-controlling interests are material.
Specification of subsidiaries with non-controlling interests
SEK millions, unless otherwise stated
Non-controlling interest %
Attributable to non-controlling interest
Net income
Equity
Company name
Country of domicile
2016
2015
2016
2015
2016
2015
Frank Mohn Mexico Sa de CV
Mexico
0.01
0.01
0
0
0
0
Alfa Laval Aalborg Indústria e Comércio Ltda
Brazil
0.5
0.5
0
0
1
1
Frank Mohn do Brasil Ltda. *
Brazil
–
4.67
0
0
–
0
Liyang Sifang Stainless Steel Products Co., Ltd. 
China
35
35
12
11
97
87
Alfa Laval (India) Ltd **
India
–
1.8047
4
4
–
24
Kenus LLP ***
Kazakhstan
–
10
–
0
–
0
Chang San Engineering Co. Ltd. *
Korea
16.7
25.0
8
7
14
7
Aalborg Industries Water Treatment Pte. Ltd.,
Singapore
40
40
0
0
0
0
Ziepack SA
France
49
49
-1
0
5
2
Fusatun AS ****
Norway
–
0.65
–
0
–
–
AO Alfa Laval Potok
Russia
0.0007
0.0007
0
0
0
0
Total
 
 
23
22
117
121
*    The whole or part of the non-controlling interest has been acquired.
**   The non-controlling interest has been eliminated through a selective share capital reduction.
***  The company has been liquidated in August 2016.
**** Sold to an external buyer on September 1, 2015.
In the Group, reported net exchange differences of SEK -643 (301) million 
relating to debts in foreign currencies have been charged to other comprehensive 
income. These debts finance the acquisition of shares in foreign subsidiaries 
and act as a hedge to the acquired net assets. The amount is charged with 
tax resulting in a net after tax impact on other comprehensive income of 
SEK -502 (235) million. 
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

112   Financial statements
Financial liabilities
Consolidated
 
 
Financial liabilities at fair value through profit or loss:
Loans 
Valuation   
hierarchy level 
Held for trading
Derivatives used for hedging
SEK millions
2016
2015
2016
2015
2016
2015
Non-current liabilities
 
 
 
Liabilities to credit 
institutions etc
*
 –
 –
 –
 –
12,169
12,484
Derivative liabilities
2
1
4
36
99
 –
 –
 
 
 
Current liabilities
 
 
 
Liabilities to credit  
institutions etc
*
 –
 –
 –
 –
1,078
2,019
Accounts payable
*
 –
 –
 –
 –
2,490
2,492
Notes payable
*
 –
 –
 –
 –
178
172
Other liabilities
*
 –
 –
 –
 –
2,286
1,891
Accrued costs
*
 –
 –
 –
 –
2,407
2,229
Derivative liabilities
2
50
105
227
467
 –
 –
Total financial liabilities
51
109
263
566
20,608
21,287
* Valued at amortised cost. The book value is the same as the fair value.
Valuation hierarchy level 1 is according to quoted prices in active markets for identical assets and liabilities.
Valuation hierarchy level 2 is out of directly or indirectly observable market data outside level 1.
Note 13.   Classification of financial assets and liabilities
Financial assets
Consolidated
 
 
 
 
Financial assets at fair value through profit or loss:
Loans and  
receivables
Available for sale  
financial assets
Valuation   
hierarchy level 
Designated upon  
initial recognition
Held for trading
Derivatives used for 
hedging
SEK millions
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
Non-current assets
 
 
 
 
 
Other non-current assets
 
 
 
 
 
Other long-term securities
1 and 2
 –
 –
 –
 –
 –
 –
 –
 –
25
28
Derivative assets
2
 –
 –
1
 –
15
7
 –
 –
 –
 –
 
 
 
 
 
Current assets
 
 
 
 
 
Current receivables
*
 
 
 
 
 
Accounts receivable
*
 –
 –
 –
 –
 –
 –
5,830
5,796
 –
 –
Notes receivable
*
 –
 –
 –
 –
 –
 –
347
461
 –
 –
Other receivables
*
 –
 –
 –
 –
 –
 –
984
1,060
 –
 –
Accrued income
*
 –
 –
 –
 –
 –
 –
102
107
 –
 –
Derivative assets
2
 –
 –
79
51
74
107
 –
 –
 –
 –
 
 
 
 
 
Current deposits
 
 
 
 
 
Deposits with banks
*
 –
 –
 –
 –
 –
 –
109
244
 –
 –
Bonds and other securities
1
956
768
 –
 –
 –
 –
 –
 –
 –
 –
Other deposits
*
 –
 –
 –
 –
 –
 –
10
9
 –
 –
 
 
 
 
 
Cash and cash equivalents
*
 –
 –
 –
 –
 –
 –
2,619
1,876
 –
 –
Total financial assets
956
768
80
51
89
114
10,001
9,553
25
28
* Valued at amortised cost. The book value is the same as the fair value.
Valuation hierarchy level 1 is according to quoted prices in active markets for identical assets and liabilities.
Valuation hierarchy level 2 is out of directly or indirectly observable market data outside level 1.
The Group does not have any financial assets that represent held-to-maturity investments. 
The Group does not have any financial liabilities at fair value through profit 
and loss designated upon initial recognition.
Derivatives used for hedging in all cases only relate to cash ﬂow hedges.
All of the ﬁnancial instruments above sum up either to the corresponding 
item in the statement on ﬁnancial position or to the item speciﬁed in the 
notes referred to in the statement on ﬁnancial position. The risks linked to 
these ﬁnancial instruments including any concentrations of risk are presented 
in the sections on risks on pages 97–103. 
Result of ﬁnancial instruments
The result of the financial assets designated upon recognition is found in 
Note 10 as fair value changes in securities.
The result of the ﬁnancial assets held for trading of SEK 31 (32) million 
has affected exchange gains in Note 11 with SEK 31 (32) million.
The result of the assets under loans and receivables is presented in Note 11 
as other interest income for deposits with banks, other deposits and cash 
and cash equivalents. The other assets under loans and receivables do not 
generate a result but only a cash-in of the principal amount.
The result of the available for sale ﬁnancial assets is reported as part of other 
comprehensive income in the consolidated comprehensive income statement.
The result of the ﬁnancial liabilities held for trading of SEK -2 (-95) million 
has affected cost of goods sold with SEK -2 (-12) million and exchange 
losses in Note 11 with SEK - (-83) million.
The result of the liabilities under loans is presented in Note 11 as other in-
terest costs for the liabilities to credit institutions etc. The other liabilities under 
loans do not generate a result but only a cash-out of the principal amount.
The result of the derivative assets and liabilities used for hedging is reported 
as part of other comprehensive income in the consolidated comprehensive 
income statement.

113
Financial statements
Financial statements
Note 15.   Current and deferred taxes
Note 14.   Fair value of financial instruments
The fair value changes in shares in external companies are made under other 
comprehensive income and amounts to SEK 0 (2) million, see the consolidated 
comprehensive income statement. 
The fair value changes in marketable securities are made on the line dividends 
and changes in fair value in the consolidated comprehensive income statement 
and amounts to SEK 47 (33) million, see Note 10.
Fair value of derivatives
Consolidated
Difference between 
contracted rate and 
current rate
SEK millions
Currency pairs
2016
2015
Derivative assets/liabilities
 
    Foreign exchange  
forward contracts:
EUR
USD
-45
-28
EUR
SEK
-17
65
EUR
AUD
-1
0
EUR
CAD
0
2
EUR
CNY
14
 –
EUR
DKK
0
-1
EUR
JPY
1
-2
USD
CAD
2
1
USD
DKK
-32
-54
USD
GBP
0
 –
USD
SEK
5
9
USD
JPY
-3
0
USD
SGD
-1
-1
DKK
SEK
-1
1
NOK
EUR
-5
7
NOK
SEK
22
-72
NOK
USD
-54
-309
CNY
SEK
10
 –
CNY
USD
-3
5
AUD
USD
-5
-7
JPY
NOK
-48
-95
JPY
SEK
-3
0
RUB
EUR
-1
1
Other
Other
-7
1
Subtotal
-172
-477
   Currency options
0
6
   Interest Rate Swaps
5
2
   Metal forward contacts
23
-33
   Electricity futures
-1
-8
Total, corresponding to a net  
derivative asset (+) or liability (-)
-145
-510
For currency options and electricity futures hedge accounting has not been 
applied. For foreign exchange forward contracts, interest rate swaps and 
metal forward contracts hedge accounting has been applied when the 
conditions for hedge accounting have been fulfilled.
The fair value adjustment of derivatives is made through other compre-
hensive income if hedge accounting can be applied and the derivatives are 
effective. In all other cases the fair value adjustment is made above net in-
come. The corresponding entries are made on derivative assets and liabili-
ties and not on the underlying ﬁnancial instruments in the statement on ﬁ-
nancial position.
Tax on this year’s net income and other taxes
Consolidated
SEK millions
2016
2015
Major components of the Group's tax 
costs
 
Current tax cost
-1,317
-1,727
Adjustment for current taxes on prior periods
-4
74
Deferred tax costs/income on changes in 
temporary differences
235
175
Deferred tax costs/income on changes in tax 
rates or new taxes
128
-4
Previously unrecognised tax assets related to 
tax losses and tax credits
0
0
Previously unrecognised deferred tax 
assets related to tax losses, tax credits and 
temporary differences
0
0
Deferred tax cost from the write down or 
reversal of a previous write down of a  
deferred tax asset
-2
-59
Other taxes
-53
-42
Total tax cost
-1,013
-1,583
Tax on this year’s other comprehensive income
Consolidated
SEK millions
2016
2015
Major components
 
Deferred tax on:
 
  Cash flow hedges
-54
43
  Market valuation of external shares
0
-1
  Translation difference
-89
-22
  Revaluations of defined benefit obligations
67
-47
Total tax cost
-76
-27
The difference between the tax costs of the group and the tax cost based 
upon applicable tax rates can be explained as follows:
Tax cost reconciliation
Consolidated
SEK millions
2016
2015
Result after financial items
3,325
5,444
Tax according to applicable tax rates
-860
-1,539
Tax effect of:
 
Non-deductible costs
-178
-112
Non-taxable income
87
101
Differences between reported official depre-
ciation and depreciation according to tax rules
0
-6
Differences between reported other official 
appropriations and other appropriations 
according to tax rules
-14
-18
Tax losses and tax credits
9
-41
Adjustment for current tax on prior periods
-4
74
Other
-53
-42
Total tax costs
-1,013
-1,583
Other taxes are mainly referring to wealth tax.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

114   Financial statements
Temporary differences exist when there is a difference between the book 
value and the tax base of assets and liabilities. The Group’s temporary 
differences have resulted in a deferred tax asset or a deferred tax liability 
relating to the following assets and liabilities: 
Deferred tax assets and liabilities
Consolidated
2016
2015
SEK millions
assets
liabilities
assets
liabilities
Relating to:
 
 
Intangible non-current 
assets 
3
1,469
7
1,666
Tangible non-current 
assets
52
212
41
208
Inventory
193
45
176
35
Other current assets
11
4
4
4
Financial assets
27
0
114
0
Short term liabilities
1,824
81
1,491
165
Tax losses and tax credits *
56
–
39
–
Other
0
1,021
9
963
Subtotal
2,166
2,832
1,881
3,041
Possible to net
-110
-110
-116
-116
Total deferred taxes
2,056
2,722
1,765
2,925
*  The Group has reported a deferred tax asset on unused tax losses and tax grants of 
SEK 130 (168) million. These unused tax losses and tax grants are essentially not 
restricted in time.
The nominal tax rate has changed in the following countries between 2015 
and 2016.
Tax rates by country
Consolidated
Percent
2016
2015
Chile
24
23
Denmark
22
24
Japan
31
36
Canada
27
26
Norway
25
27
Peru
29
28
Singapore
18
17
Spain
25
28
Germany
30
28
Hungary
10
19
The Group’s normal effective tax rate is approximately 28 (28) percent based 
on taxable result, and it is calculated as a weighted average based on each 
subsidiary’s part of the result before tax.   
In the Group there are temporary differences and unused tax losses and tax 
credits of SEK 1,115 (934) million that have not resulted in corresponding 
deferred tax assets, since these are not likely to be used. The temporary 
differences are mainly relating to pensions, where the date of payment is so 
far into the future that considering discounting and uncertainty concerning 
future profit levels no asset is deemed to exist. The unused tax losses and tax 
grants are essentially not restricted in time, but the tax losses that can be utilised 
per year can be restricted to a certain proportion of the taxable result.
Tax cost per country
Consolidated
2016
2015
SEK millions (unless otherwise stated)
Earnings  
before tax  
and received 
dividends
Tax cost
Tax percentage (%)
Earnings  
before tax  
and received 
dividends
Tax cost
Tax percentage (%)
Top ten countries
 
 
 
Norway
1,498
-388
25.9%
1,075
-203
18.9%
Sweden
1,756
-383
21.8%
634
-156
24.6%
China
893
-185
20.7%
687
-173
25.2%
India
347
-126
36.3%
333
-113
33.9%
Denmark
136
-100
73.7%
343
-74
21.6%
USA
297
-93
31.1%
661
-267
40.4%
France
242
-64
26.6%
344
-113
32.9%
Japan
161
-60
37.0%
126
-52
40.9%
Netherlands
100
-30
30.5%
169
-56
33.1%
Brazil
142
-29
20.5%
126
-43
34.1%
Total top ten countries
5,572
-1,458
26.2%
4,498
-1,250
27.8%
 
 
 
Other countries
 
 
 
With a positive result
466
-129
27.7%
907
-316
34.9%
With losses
-423
-43
10.1%
-134
5
-3.7%
 
 
 
 
 
 
Total all countries
5,615
-1,630
29.0%
5,271
-1,561
29.6%
 
 
 
Consolidation entries
 
 
 
Elimination of appropriations
271
-58
21.4%
1,081
-237
21.9%
Amortisation of step-up values
-1,064
281
26.4%
-1,094
312
28.5%
Write down of step-up values
-94
9
9.6%
–
–
–
Adjustment of deferred taxes relating to step-
up values due to reduced company taxes
–
132
N/A
–
–
–
Write down of goodwill
-533
–
N/A
–
–
–
Exchange differences relating to debts in 
foreign currencies charged to other  
comprehensive income
-643
141
21.9%
301
-66
21.9%
Central provisions and consolidation 
adjustments
-227
112
49.3%
-115
-31
-27.0%
Total tax cost
3,325
-1,013
30.5%
5,444
-1,583
29.1%

115
Financial statements
Financial statements
Note 16.   Goodwill and step-up values – acquisition of businesses
The allocation of step-up values to tangible and intangible assets and the residual goodwill in effect means that all acquisitions are valued at market. In order 
to separate out this valuation effect Alfa Laval focuses on EBITA, where any amortisation of step-up values is excluded. The development of these step-up 
values and any goodwill is shown in the table below. 
Movement schedule
Consolidated
 
 
SEK millions
Opening 
balance  
2016
Adjustment of 
last year’s 
purchase  price 
allocation
Sold
Write down
Planned  
depreciation/
amortisation
Translation 
difference
Closing 
balance 
2016
Buildings
369
 –
-18
–
-31
20
340
Land and land improvements
-59
–
–
–
–
-4
-63
Patents and unpatented know-how
2,425
–
–
-89
-414
179
2,101
Trademarks
4,048
13
–
-5
-619
329
3,766
Subtotal step-up values
6,783
13
-18
-94
-1,064
524
6,144
 
 
 
 
 
 
 
Goodwill
19,498
5
–
-533
–
1,466
20,436
 
 
 
 
 
 
 
Total
26,281
18
-18
-627
-1,064
1,990
26,580
During 2016 the Group has recorded impairment losses relating to patents and unpatented know-how with SEK -89 (-) million, trademarks with SEK -5 (-) 
million and goodwill with SEK -533 (-) million. Otherwise the Group has not recorded any impairment losses related to other step-up values. 
There is no deferred tax liability calculated on the goodwill. The deferred tax liability on the other step-up values is SEK 1,294 (1,528) million.
For assets sold, net gains or losses are recognised on the costs basis including any related step-up value.
The next table shows each acquisition separately. Any later adjustments to the allocations are referred to the original year of the acquisition. The ﬁgures 
for the allocations are based on the prevailing rates at the time the transactions took place and any change in exchange rates until December 31, 2016 is 
shown as a translation difference. The corresponding presentation by asset type is found in Notes 17 and 18.
The above table presents the earnings before tax and received dividends, 
the tax cost and the tax percentage per country for the top ten countries 
separately and the others grouped under profit generating and loss-making 
respectively and the consolidation entries in order to arrive at the total. The 
local results include appropriations. The reason why the result is before 
received dividends is that these mostly are non-taxable. The top ten countries 
are defined as the ten countries with the highest tax cost in 2016. The 
comparison figures 2015 are for these ten countries, although they might 
not have been among the ten countries with highest tax cost also in 2015.
Observe that individual companies in the top ten countries and in the 
group with a positive result can report losses. The group with losses can 
contain individual companies with proﬁts. Also observe that the presented 
result is without correction for any non-deductible costs and non-taxable 
revenues outside received tax free dividends. The tax percentage for Denmark 
in 2016 has been affected by one-time items in connection with tax disputes 
with another country. 
Companies with losses in countries without tax pooling might have unused 
tax losses that have not resulted in a corresponding deferred tax asset, since 
these are not likely to be used. The lack of such a deferred tax income in 
these cases has an impact on the tax percentage in the concerned countries.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

116   Financial statements
Acquisition of businesses since 2000
Consolidated
SEK millions 
Year/Businesses
Buildings
Land and land 
improve-
ments
Inventory
Patents and 
unpatented 
know-how
Trademarks
Other
Total step-up 
values
Goodwill
Total
2000
 
 
 
Alfa Laval Holding
1,058
-228
340
1,280
461
1,112
4,023
3,683
7,706
2002
 
 
 
Danish Separation Systems
 –
 –
 –
 –
 –
 –
 –
118
118
2003
 
 
 
Toftejorg
1
 –
 –
 –
 –
 –
1
35
36
2005
 
 
 
Packinox
 –
 –
6
99
183
 –
288
253
541
2006
 
 
 
Tranter
17
 –
6
180
265
 –
468
530
998
2007
 
 
 
AGC Engineering
 –
 –
 –
 –
12
 –
12
20
32
Helpman
9
8
 –
36
 –
 –
53
4
57
Public offer Alfa Laval (India)
 –
 –
 –
 –
 –
 –
 –
441
441
DSO Fluid Handling
 –
 –
 –
 –
39
 –
39
42
81
Fincoil
 –
 –
 –
233
 –
 –
233
241
474
2008
 
 
 
Høyer Promix A/S
 –
 –
 –
 –
 –
 –
 –
16
16
Nitrile India Pvt Ltd
 –
 –
 –
 –
 –
 –
 –
6
6
Standard Refrigeration
 –
 –
5
166
 –
 –
171
152
323
Pressko AG
 –
 –
1
 –
 –
 –
1
69
70
Hutchison Hayes Separation
 –
 –
1
95
49
 –
145
46
191
P&D's Plattvärmeväxlarservice
 –
 –
 –
 –
 –
 –
 –
10
10
Ageratec
 –
 –
 –
 –
 –
 –
 –
44
44
2009
 
 
 
Two providers of parts & service
 –
 –
 –
 –
291
 –
291
210
501
Onnuri Industrial Machinery
 –
 –
 –
40
39
 –
79
48
127
HES Heat Exchanger Systems
 –
 –
 –
83
 –
 –
83
59
142
Public offer Alfa Laval (India)
 –
 –
 –
 –
 –
 –
 –
311
311
Termatrans
 –
 –
 –
 –
7
 –
7
6
13
Tranter acquisitions in Latin America
 –
 –
 –
 –
20
 –
20
16
36
ISO Mix
 –
 –
 –
22
 –
 –
22
 –
22
LHE
 –
 –
 –
298
297
 –
595
344
939
2010
 
 
 
Champ Products
 –
 –
 –
15
14
 –
29
2
31
A leading U.S. service provider 
 –
 –
 –
 –
134
 –
134
82
216
G.S Anderson
 –
 –
 –
35
 –
 –
35
23
58
Astepo
 –
 –
 –
24
15
 –
39
8
47
Si Fang Stainless Steel Products
 –
 –
 –
27
16
 –
43
42
85
Definox
 –
 –
 –
4
5
 –
9
2
11
Olmi
 –
 –
37
58
32
 –
127
 –
127
2011
 
 
 
Service company in the U.S.
 –
 –
 –
 –
150
 –
150
126
276
Aalborg Industries
248
 –
 –
430
860
 –
1,538
3,630
5,168
2012
 
 
 
Vortex Systems
 –
 –
 –
148
 –
 –
148
225
373
Ashbrook Simon-Hartley
 –
 –
 –
86
 –
 –
86
55
141
Gamajet Cleaning Systems
 –
 –
 –
47
 –
 –
47
37
84
Air Cooled Exchangers (ACE)
 –
 –
 –
585
 –
 –
585
346
931
2013
 
 
 
Niagara Blower Company
 –
 –
 –
202
 –
 –
202
203
405
2014
 
 
 
 
 
 
 
 
Frank Mohn AS
 –
 –
38
1,160
3,793
 –
4,991
9,831
14,822
CorHex Corp
 –
 –
 –
15
 –
 –
15
 –
15
2015
Aftermarket company (separation)
 –
 –
 –
 –
32
 –
32
24
56
K-Bar Parts LLC 
 –
 –
 –
 –
16
 –
16
 –
16
Accumulated during the period
 
 
 
 
 
 
 
 
 
Realised
-542
122
-435
 –
–
-123
-978
–
-978
Write down
-6
-9
–
-89
-5
–
-109
-581
-690
Planned depreciation/amortisation
-439
 –
–
-3,516
-2,887
-993
-7,835
-612
-8,447
Translation difference
-6
44
1
338
-72
4
309
289
598
Closing balance
340
-63
 –
2,101
3,766
–
6,144
20,436
26,580
The acquisition of the Alfa Laval Holding AB group in connection with the acquisition by Industri Kapital of the Alfa Laval Group from Tetra Laval on August 24, 
2000 is shown on the first row.
“Other” relates to step-up values from 2000 for “Machinery” of SEK 548 million and “Equipment” of SEK 452 million that have been fully depreciated or realised, 
for “Research and development” of SEK 54 million and “Capital gain (Industrial Flow)” of SEK 42 million that have been fully realised and for “Construction in 
process” of SEK 16 million that has been transferred to “Machinery”.

117
Financial statements
Financial statements
Acquisition of businesses
During 2016
On May 21, 2016 Alfa Laval has acquired an additional 8.33 percent of the 
shares in the subsidiary Chang San Engineering Co Ltd in South Korea for 
SEK 33 million, which has increased the holding from 75 percent to 83.33 
percent. On July 15, 2016 Alfa Laval has acquired the remaining 4.67 percent 
of the shares in Frank Mohn do Brasil Ltda for SEK 4 million, which makes it 
a 100 percent owned subsidiary. The shareholding in these two companies 
was part of the acquisition of Frank Mohn AS in 2014. 
On October 5, 2016 a selective reduction of the share capital in the Indian 
subsidiary Alfa Laval (India) Ltd was ﬁnalised, upon which the non-controlling 
interests corresponding to 1.8 percent of the shareholding were bought out 
for SEK 174 million. Thereafter the company is a fully owned subsidiary.
The remaining SEK 19 million relates to adjustment of preliminary purchase 
price for the acquisition of an aftermarket company specialized in separation 
technology during 2015 and payment of withheld additional purchase price 
concerning the acquisition of Olmi SpA in Italy.
During 2015
An aftermarket company specialized in separation technology
As from July 3, 2015 Alfa Laval acquired 100 percent of an aftermarket company 
specialized in separation technology. The company will remain a separate 
organisation and offer its own parts and services under its own brand name. 
The acquisition was in line with the strategy of the Alfa Laval Group of acquiring 
companies that complement the existing business in terms of products, 
geography or in the form of new sales channels. In this case the Alfa Laval 
Group added a complementary aftermarket channel. “With the acquisition 
we are adding presence in an important niche of the aftermarket,” said Lars 
Renström, former President and CEO of the Alfa Laval Group. The purchase 
price was SEK 94 million, out of which SEK 56 million was paid in cash and 
SEK 38 million is retained for a period of 2-5 years. The retained part of the 
purchase price was contingent on certain warranties in the contract not being 
triggered. The outcome can be anything between SEK 0 million and SEK 38 
million, but the probable outcome is SEK 38 million, which is also the fair value 
since the contingent consideration is to be paid in cash. The costs directly 
linked to the acquisition (fees to lawyers, due diligence and assisting counsel) 
come in addition to this and amounted to SEK 1 million, which was reported 
as other operating costs. The impact on the cash flow was thus SEK -57 million. 
Out of the difference between the purchase price paid and the net assets 
Acquisitions 2015
Consolidated
Total
SEK millions
Book value
Adjustment to fair value
Fair value
Trademarks  1)
–
35
35
Inventory
50
–
50
Accounts receivable
2
–
2
Other receivables
12
–
12
Accounts payable
-1
–
-1
Other liabilities
-40
–
-40
Deferred tax
–
-6
-6
Acquired net assets
23
29
52
Goodwill 2)
 
 
19
Purchase price
 
 
-71
Costs directly linked to the acquisitions  3)
 
 
-2
Payment of amounts retained in prior years
 
 
0
Effect on the Group's liquid assets
 
 
-73
1) The step-up value for trademarks is amortised over 10 years.
2)  The goodwill is relating to estimated synergies in procurement, logistics and corporate overheads and the companies’ ability to over time recreate its intangible assets. The value of 
the goodwill is still preliminary.
3) Refers to fees to lawyers, due diligence and assisting counsel. Has been expensed as other operating costs.
All acquired assets and liabilities were reported according to IFRS at the time of the acquisitions.
The two small acquisitions during 2015 are not reported per acquisition since such a reporting would have been too fragmented and rather would have 
burdened the presentation than increased clarity. Instead they are reported together. 
The acquisitions during 2015 can be summarized as follows. Please observe that the purchase price allocations for the two acquisitions were still preliminary at 
the end of 2015.
acquired SEK 19 million was allocated to the trademark, while the residual 
SEK 19 million was allocated to goodwill. The goodwill is relating to estimated 
synergies in procurement, logistics and corporate overheads and the company’s 
ability to over time recreate its intangible assets. In connection with the 
finalisation of the purchase price allocation in 2016 the value of the trademark 
has been increased with SEK 13 million to SEK 32 million and the value of 
the goodwill has been increased with SEK 5 million to SEK 24 million. The 
step-up value for trademark is amortised over 10 years. From the date of 
the acquisition the company has added SEK 30 million in orders received, 
SEK 31 million in invoicing and SEK 6 million in adjusted EBITA to Alfa Laval. 
If the company had been acquired at January 1, 2015 the corresponding 
figures would have been SEK 64 million, SEK 65 million and SEK 4 million 
respectively. At the end of December 2015 the number of employees was 15.
K-Bar Parts LLC
On July 31, 2015 Alfa Laval acquired 100 percent of K-Bar Parts LLC, which 
is a small aftermarket company in the U.S. The company has since then been 
renamed to Alfa Laval Kathabar Inc. The purchase price was SEK 17 million, 
out of which SEK 15 million was paid in cash and SEK 2 million is retained for 
a period of 1–2 years. The retained part of the purchase price was contingent 
on certain warranties in the contract not being triggered. The outcome can be 
anything between SEK 0 million and SEK 2 million, but the probable outcome 
is SEK 2 million, which is also the fair value since the contingent consideration 
is to be paid in cash. The costs directly linked to the acquisition (fees to lawyers, 
due diligence and assisting counsel) come in addition to this and amounted 
to SEK 1 million, which was reported as other operating costs. The impact 
on the cash flow was thus SEK -16 million. Out of the difference between the 
purchase price paid and the net assets acquired SEK 16 million was allocated 
to the trademark, while nothing was allocated to goodwill. In connection with 
the finalisation of the purchase price allocation in 2016 the value of the goodwill 
has been finalised to SEK - million. The step-up value for trademark is amortised 
over 10 years. From the date of the acquisition the company has added SEK 4 
million in orders received, SEK 4 million in invoicing and SEK 1 million in adjusted 
EBITA to Alfa Laval. If the company had been acquired at January 1, 2015 the 
corresponding figures would have been SEK 10 million, SEK 10 million and SEK 2 
million respectively. At the end of December 2015 the number of employees was 13.
Payment of retained parts of the purchase price from previous acquisitions 
constitutes the remaining part of the cash ﬂow related to acquisition of businesses.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

118   Financial statements
Impairment testing
An impairment test has been performed at the end of 2016 indicating that 
there is not any need to write down the goodwill. 
Three of Alfa Laval’s operating segments, the three divisions “Equipment”, 
“Process Technology” and “Marine & Diesel” have been identiﬁed as the 
cash-generating units within Alfa Laval. Technically a recently acquired business 
activity could be followed independently during an initial period, but acquired 
businesses are normally integrated into the divisions at a fast rate. This means 
that the independent traceability is lost fairly soon and then any independent 
measurement and testing becomes impracticable. 
The recoverable amount of the cash-generating units is based on their 
value in use, which is established by calculating the net present value of future 
cash ﬂows. The net present value is based on the projected EBITDA ﬁgures 
for the next twenty years, less projected investments and changes in operating 
capital during the same period. This projection for the coming 20 years is 
based on the following components:
–  The projection for 2017 is based on the Groups normal 12 month revolving 
“Forecast” reporting. This is based on a very large number of rather detailed 
assumptions throughout the organisation concerning the business cycle, 
volume growth, market initiatives, product mix, currency rates, cost 
development, cost structure, R&D etc. 
–  The projection for the years 2018 and 2019 is based on Management’s 
general assumptions concerning the business cycle, volume growth, 
market initiatives, product mix, currency rates, cost development, cost 
structure, R&D etc. 
–  The projection for the years 2020 to 2036 is based on the perceived 
expected average industry growth rate. 
The reason why a longer period than 5 years has been used for the calculation 
of the net present value is that Management considers 5 years to be a too 
short period for an operation where applying the going concern concept can 
be justified.
The assumptions used for the projections reﬂect past experiences or in-
formation from external sources. 
The used discount rate is the pre-tax weighted average cost of capital 
(WACC) of 8.32 (8.95) percent. 
There exists no reasonably possible change in a key assumption in the 
impairment test that would cause the carrying amount to exceed the recov-
erable amount. The reason is that the recoverable amounts with a very good 
margin exceed the carrying amounts. Due to this a sensitivity analysis is not 
presented.
Alfa Laval does not have any intangible assets with indeﬁnite useful lives 
other than goodwill. 
The three cash-generating units have been allocated the following 
amounts of goodwill:
Goodwill
Consolidated
SEK millions
2016
2015
Equipment
2,337
2,703
Process Technology
4,049
3,819
Marine & Diesel
14,050
12,976
Total
20,436
19,498
Note 17.   Intangible non-current assets  
Patents and unpatented know-how
Consolidated
SEK millions
2016
2015
Accumulated acquisition values
 
Opening balance
5,738
5,769
Purchases
2
–
Sales/disposals
-11
–
Reclassifications
1
2
Translation difference
369
-33
Closing balance
6,099
5,738
 
Accumulated amortisation
 
Opening balance
-3,271
-2,837
Reclassifications
0
0
Amortisation of step-up value
-414
-441
Amortisation for the year
-6
-9
Write down
-89
–
Translation difference
-177
16
Closing balance
-3,957
-3,271
 
Closing balance, net book value
2,142
2,467
Trademarks
Consolidated
SEK millions
2016
2015
Accumulated acquisition values
 
Opening balance
6,392
6,702
Step-up values
13
35
Translation difference
510
-345
Closing balance
6,915
6,392
 
Accumulated amortisation
 
Opening balance
-2,344
-1,782
Amortisation of step-up values
-619
-621
Write down
-5
–
Translation difference
-181
59
Closing balance
-3,149
-2,344
 
Closing balance, net book value
3,766
4,048
Licenses, renting rights and similar rights
Consolidated
SEK millions
2016
2015
Accumulated acquisition values
 
Opening balance
217
220
Purchases
3
6
Sales/disposals
-13
-4
Reclassifications
-10
0
Translation difference
20
-5
Closing balance
217
217
 
Accumulated amortisation
 
Opening balance
-176
-174
Sales/disposals
12
-1
Reclassifications
10
0
Amortisation for the year
-6
-8
Translation difference
-19
7
Closing balance
-179
-176
 
Closing balance, net book value
38
41
Alfa Laval does not have any internally generated intangible assets.

119
Financial statements
Financial statements
Goodwill
Consolidated
SEK millions
2016
2015
Accumulated acquisition values
 
Opening balance
20,067
20,980
Goodwill in connection with acquisition of 
businesses
5
20
Translation difference
1,514
-933
Closing balance
21,586
20,067
 
Accumulated amortisation
 
Opening balance
-569
-572
Write down of goodwill
-533
–
Translation difference
-48
3
Closing balance
-1,150
-569
 
Closing balance, net book value
20,436
19,498
Note 18.   Property, plant and equipment  
Real estate
Consolidated
SEK millions
2016
2015
Accumulated acquisition values
 
Opening balance
4,518
4,679
Purchases
44
86
Sold businesses
–
-11
Sales/disposal
-85
-23
Reclassifications
30
26
Reclassification to assets for sale
17
-56
Translation difference
240
-183
Closing balance
4,764
4,518
 
Accumulated amortisation
 
Opening balance
-2,201
-2,196
Sales/disposals
53
7
Sold businesses
–
6
Reclassifications
-13
19
Reclassification to assets for sale
-10
53
Depreciation of step-up value
-31
-32
Depreciation for the year
-149
-158
Translation difference
-93
100
Closing balance
-2,444
-2,201
 
Closing balance, net book value
2,320
2,317
Non-current assets held for sale
Within Alfa Laval these assets are normally relating to real estate. 
The empty property in Spijkenisse in the Netherlands is to be sold and a 
small property in France is empty and has been for sale for several years. 
They are not expected to be sold within the next year. 
A property in Lima in Peru and the empty property in Groningen in the 
Netherlands are for sale and are expected to be sold within the next year and 
are therefore still classified as current assets held for sale with SEK 2 (9) million. 
Machinery and other technical installations
Consolidated
SEK millions
2016
2015
Accumulated acquisition values
 
Opening balance
6,609
6,689
Purchases
214
281
Acquisition of businesses
–
2
Sales/disposal
-152
-243
Reclassifications
122
46
Translation difference
320
-166
Closing balance
7,113
6,609
 
Accumulated amortisation
 
Opening balance
-5,039
-5,103
Sales/disposals
135
207
Acquisition of businesses
–
-2
Reclassifications
-6
64
Depreciation for the year
-319
-339
Translation difference
-261
134
Closing balance
-5,490
-5,039
 
Closing balance, net book value
1,623
1,570
Equipment, tools and installations
Consolidated
SEK millions
2016
2015
Accumulated acquisition values
 
Opening balance
2,602
2,630
Purchases
103
158
Sales/disposal
-103
-140
Reclassifications
3
16
Translation difference
117
-62
Closing balance
2,722
2,602
 
Accumulated amortisation
 
Opening balance
-2,000
-2,031
Sales/disposals
98
126
Reclassifications
2
-9
Depreciation for the year
-152
-143
Translation difference
-91
57
Closing balance
-2,143
-2,000
 
Closing balance, net book value
579
602
Construction in progress and advances to suppliers  
concerning property, plant and equipment
Consolidated
SEK millions
2016
2015
Accumulated acquisition values
 
Opening balance
144
204
Purchases
251
143
Reclassifications
-128
-202
Translation difference
14
-1
Closing balance
281
144
 
Closing balance, net book value
281
144
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

120   Financial statements
Leased real estate
Consolidated
SEK millions
2016
2015
Accumulated acquisition values
 
Opening balance
172
157
Purchases 
0
–
Sales/disposal
0
-7
Reclassifications
–
28
Translation difference
8
-6
Closing balance
180
172
 
Accumulated depreciation
 
Opening balance
-42
-38
Sales/disposals
–
2
Depreciation for the year
-7
-7
Translation difference
-1
1
Closing balance
-50
-42
 
Closing balance, net book value
130
130
Leased machinery
Consolidated
SEK millions
2016
2015
Accumulated acquisition values
 
Opening balance
35
37
Translation difference
2
-2
Closing balance
37
35
 
Accumulated depreciation
 
Opening balance
-27
-26
Depreciation for the year
-3
-3
Translation difference
-1
2
Closing balance
-31
-27
 
Closing balance, net book value
6
8
Leased equipment, tools and installations
Consolidated
SEK millions
2016
2015
Accumulated acquisition values
 
Opening balance
4
3
Purchases
0
1
Sales/disposal
0
–
Reclassifications
0
0
Translation difference
0
0
Closing balance
4
4
 
Accumulated depreciation
 
Opening balance
-2
-1
Sales/disposals
0
0
Reclassifications
0
0
Depreciation for the year
-1
0
Translation difference
0
-1
Closing balance
-3
-2
 
Closing balance, net book value
1
2
Leased real estate, machinery and equipment relate to fixed assets which 
are leased and where the leasing agreement has been considered to be a 
financial lease. These financial leases are capitalised in the statement on 
financial position.
Note 19.   Other non-current assets
Shares in subsidiaries, joint ventures and other companies
Consolidated
Parent company
SEK millions
2016
2015
2016
2015
Shares in subsidiaries
 –
–
4,669
4,669
Shares in joint ventures
21
18
–
–
Shares in other companies
4
10
–
–
Total
25
28
4,669
4,669
Alfa Laval does not hold any shares in unconsolidated structured entities.
The consolidated ﬁnancial statements include the parent company Alfa 
Laval AB (publ) and the subsidiaries in which it has a decisive inﬂuence, 
which in all cases refer to companies where the parent company directly or 
indirectly had an ownership of more than 50 percent during the period. These 
are consolidated according to the purchase method and are referred to as 
subsidiaries. Most of the subsidiaries are owned to 100 percent and only 7 
(10) companies have non-controlling interests, see note 12. The subsidiaries 
are displayed in the ﬁrst table below. Since all consolidated companies are 
owned to more than 50 percent there is no risk that judgements if a decisive 
inﬂuence exists or not at ownerships below 50 percent means that companies 
from time to time are included or not included in the consolidation. 
Alfa Laval also has interests in 3 (4) small joint ventures that are consolidated 
according to the equity method since no decisive inﬂuence exists. These are 
displayed in a separate table below. The risks associated with joint ventures 
are basically business oriented and are not materially different than the risks 
linked to subsidiaries, with one exception. The exception relates to the risk 
of disagreeing with the other joint venture partner concerning for instance 
larger investments, ﬁnancing and future direction for market penetration and 
product development, which could result in a sub-optimal development of 
the operations. Since Alfa Laval’s joint ventures are of marginal signiﬁcance 
for the Group as a total this risk is judged to be small.

121
Financial statements
Financial statements
Specification of shares in subsidiaries
Company name
Registration 
number
Domicile
Number of 
shares
Share of 
capital %
Book value 
SEK millions
Alfa Laval Holding AB
556587-8062
Lund, Sweden
8,191,000
100
4,461
Alfa Laval NV
Maarssen, Netherlands
887,753
100
 –
Alfa Laval Inc.
Newmarket, Canada
1,000,000
67
 –
Alfa Laval S.A. DE C.V.
Tlalnepantla, Mexico
45,057,057
100
 –
Alfa Laval S.A.
San Isidro, Argentina
1,223,967
95
 –
Alfa Laval Ltda
Sao Paulo, Brazil
21,129,066
100
 –
Frank Mohn do Brasil Ltda.
Rio de Janeiro, Brazil
14,850
4.67
–
Alfa Laval SpA
Santiago, Chile
2,735
100
 –
Ashbrook Chile S.A.
Santiago, Chile
579,999
100
 –
Alfa Laval S.A.
Bogota, Colombia
12,195
100
 –
Alfa Laval S.A.
Lima, Peru
4,346,832
100
 –
Inmobililaria Tanguis S.A.C.
Lima, Peru
1,499
100
 –
Alfa Laval Venezolana S.A.
Caracas, Venezuela
10,000
100
 –
Alfa Laval Oilfield C.A.
Caracas, Venezuela
203
81
 –
Alfa Laval Taiwan Ltd
Taipei, Taiwan
1,499,994
100
 –
Alfa Laval (China) Ltd
Hong Kong, China
79,999
100
 –
Alfa Laval (Jiangyin) Manufacturing Co Ltd
Jiang Yin, China
 
100
 –
Alfa Laval Flow Equipment (Kunshan) Co Ltd
Jiangsu, China
 
75
 –
Alfa Laval Flow Equipment (Kunshan) Co Ltd
Jiangsu, China
 
25
 –
Alfa Laval (Shanghai) Technologies Co Ltd
Shanghai, China
 
100
 –
Wuxi MCD Gasket Co Ltd
Jiang Yin, China
 
100
 –
Tranter Heat Exchangers (Beijing) Co Ltd
Beijing, China
 
100
 –
Liyang Sifang Stainless Steel Products Co., Ltd 
Liyang City, China
 
65
 –
Alfa Laval Iran Ltd
Teheran, Iran
32,983
100
 –
Alfa Laval Industry (PVT) Ltd
Lahore, Pakistan
119,110
100
 –
Alfa Laval Philippines Inc.
Makati, Philippines
72,000
100
 –
Alfa Laval Singapore Pte Ltd
Singapore
5,000,000
100
 –
Alfa Laval India Services LLP
Poona, India
 
100
–
Alfa Laval (Thailand) Ltd
Bangkok, Thailand
1,199,999
100
 –
Alfa Laval Middle East Ltd
Nicosia, Cyprus
40,000
100
 –
Alfa Laval Service Operations Qatar LLC
Doha, Qatar
9,800
49
 –
Alfa Laval Benelux NV/SA
Brussels, Belgium
98,284
100
 –
Alfa Laval EOOD
Sofia, Bulgaria
100
100
 –
Alfa Laval Slovakia S.R.O.
Bratislava, Slovakia
 
1
 –
Alfa Laval Spol S.R.O.
Prague, Czech Republic
 
20
 –
Alfa Laval Nordic OY
Espoo, Finland
20,000
100
 –
Alfa Laval Vantaa OY
Vantaa, Finland
7,000
100
 –
Alfa Laval Nederland BV
Maarssen, Netherlands
10,000
100
 –
Alfa Laval Benelux BV
Maarssen, Netherlands
20,000
100
 –
Helpman Capital BV
Breda, Netherlands
35,578
100
 –
Helpman Holding BV
Naarden, Netherlands
80
100
 –
Alfa Laval Groningen BV
Groningen, Netherlands
15,885
100
 –
PHE Holding AB
556306-2404
Lund, Sweden
2,500
100
 –
Tranter Heat Exchangers Canada Inc.
Edmonton, Canada
100
100
 –
Tranter Latin America S.A. de C.V.
Queretaro, Mexico
49,999
100
 –
Tranter Indùstria e Comércio de Equipamentos Ltda
Sao Paulo, Brazil
2,018,370
100
 –
MCD Nitrile India Pvt Ltd
Falta, India
2,432
9
 –
Tranter India Pvt Ltd
Poona, India
3,009,999
100
 –
Alfa Laval (India) Ltd
Poona, India
1
0
 –
Alfa Laval Korea Ltd
Seoul, South Korea
36,400
10
 –
Alfa Laval Korea Holding Company Ltd
Chungnam, South Korea
13,318,600
100
–
Alfa Laval Korea Ltd
Seoul, South Korea
327,600
90
 –
Alfa Laval Corhex Ltd
Daejeon, South Korea
50,000
100
 –
LHE Co. Ltd
Gim Hae, South Korea
4,560,000
100
 –
Tranter Heat Exchangers Middle East (Cyprus) Ltd
Nicosia, Cyprus
20,000
100
 –
Tranter International AB
556559-1764
Vänersborg, Sweden
100,000
100
 –
Multbran AB
556662-3988
Lund, Sweden
2,723
100
 –
Alfa Laval (India) Ltd
Poona, India
1
0
–
Breezewind AB
556773-6532
Lund, Sweden
1,000
100
 –
Alfa Laval (India) Ltd
Poona, India
1
0
 –
OOO Tranter CIS
Moscow, Russia
 
100
 –
Alfa Laval Nordic AB
556243-2061
Tumba, Sweden
1,000
100
 –
Alfa Laval Corporate AB
556007-7785
Lund, Sweden
13,920,000
100
 –
Alfa Laval S.A.
San Isidro, Argentina
64,419
5
 –
Tranter Latin America S.A. de C.V.
Queretaro, Mexico
1
0
 –
Definox (Beijing) Stainless Steel Equipment Ltd
Beijing, China
 
100
 –
Alfa Laval (Kunshan) Manufacturing Co Ltd
Kunshan, China
 
100
 –
Alfa Laval (India) Ltd
Poona, India
17,832,712
100
 –
The share of capital in the below tables is in all cases the same as the share of voting rights.
The below speciﬁcation of shares contains some simpliﬁcations, for instance in connection with ownership in multiple layers or when the ownership is split on 
several owners or at cross-holdings. This is in order not to unnecessarily burden the presentation. A complete speciﬁcation of shares can be ordered by con-
tacting Alfa Laval’s head ofﬁce in Lund or via the Swedish Companies Registration Ofﬁce (Bolagsverket).
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

122   Financial statements
Specification of shares in subsidiaries
Company name
Registration 
number
Domicile
Number of 
shares
Share of 
capital %
Book value 
SEK millions
Alfa Laval Support Services Pvt Ltd
Poona, India
10
0
 –
Tranter India Pvt Ltd
Poona, India
1
0
 –
PT Alfa Laval Indonesia
Jakarta, Indonesia
1,249
100
 –
Alfa Laval Malaysia Sdn Bhd
Shah Alam, Malaysia
10,000
100
 –
Alfa Laval Kolding A/S
Kolding, Denmark
40
100
 –
Alfa Laval Nordic A/S
Rödovre, Denmark
1
100
 –
Alfa Laval Copenhagen A/S
Söborg, Denmark
1
100
 –
Alfa Laval Nakskov A/S
Nakskov, Denmark
242,713
100
 –
Alfa Laval Aalborg A/S
Aalborg, Denmark
2,560,972
100
 –
Alfa Laval Aalborg Indústria e Comércio Ltda
Petrópolis, Brazil
5,969,400
99.5
 –
Aalborg Industries Ltda
Itu, Brazil
4,644,373
100
 –
Alfa Laval Aalborg Ltd
Shanghai, China
100
 –
Alfa Laval Qingdao Ltd
Jiaozhou City, China
100
 –
Alfa Laval Aalborg Ltd
Hong Kong, China
99
100
 –
Aalborg Industries Engineering Bhd
Kuala Lumpur, Malaysia
100
 –
Aalborg Industries Water Treatment Pte Ltd
Singapore
4,800,000
60
 –
Alfa Laval HaiPhong Co. Ltd
HaiPhong, Vietnam
100
 –
Alfa Laval Aalborg Oy
Rauma, Finland
3,000
100
 –
Alfa Laval Nijmegen BV 
Nijmegen, Netherlands
182
100
 –
Alfa Laval Aalborg Holding Pty Ltd
North Wyong, Australia
11,500,000
100
 –
Alfa Laval Aalborg Pty Ltd
North Wyong, Australia
225,000
100
 –
Alfa Laval Olmi SpA
Suisio, Italy
500,000
100
 –
Alfa Laval Italy Srl
Milan, Italy
 
33.3
 –
Alfa Laval Nordic A/S
Oslo, Norway
100
100
 –
Framo AS 
Nesttun, Norway
95,347,695
100
 –
Framo Bombas Mexico SA de CV 
Mexico City, Mexico
49,999
99.99
 –
Frank Mohn do Brasil Ltda. 
Rio de Janeiro, Brazil
303,002
95.33
 –
Framo Shanghai Ltd. 
Shanghai, China
0
100
 –
Framo Nippon KK 
Tokyo, Japan
600
100
 –
Chang San Engineering Co. Ltd. 
Busan, South Korea
15,000
83.3
 –
Framo Singapore PTE Ltd. 
Singapore
1,000,000
100
 –
Framo Nederland BV
Spijkenisse, Netherlands
500
100
 –
Framo Fusa AS 
Fusa, Norway
86,236
100
 –
Framo Holsnøy AS 
Frekhaug, Norway
25,000
100
 –
Framo Flatøy AS 
Frekhaug, Norway
45,330
100
 –
Framo Services AS 
Nesttun, Norway
10,000
100
 –
PHE Holding AS 
Nesttun, Norway
45,000
100
 –
Alfa Laval Oilfield C.A.
Caracas, Venezuela
47
19
 –
Alfa Laval Treasury International AB (publ)
556432-2484
Lund, Sweden
50,000
100
 –
Alfa Laval (India) Ltd
Poona, India
1
0
–
Alfa Laval Europe AB
556128-7847
Lund, Sweden
500
100
 –
Alfa Laval Lund AB
556016-8642
Lund, Sweden
100
100
 –
Alfa Laval (India) Ltd
Poona, India
1
0
–
Alfa Laval International Engineering AB
556039-8934
Lund, Sweden
4,500
100
 –
Alfa Laval Tumba AB
556021-3893
Tumba, Sweden
1,000
100
 –
Alfa Laval Makine Sanayii ve Ticaret Ltd Sti
Istanbul, Turkey
27,001,755
99
 –
Alfa Laval SIA
Riga, Latvia
125
100
 –
Alfa Laval Australia Pty Ltd
Homebush, Australia
2,088,076
100
 –
Tranter Heat Exchanger Pty Ltd
Sydney, Australia
600,000
100
 –
Alfa Laval New Zeeland Pty Ltd
Hamilton, New Zeeland
1,000
100
 –
Alfa Laval Holding BV
Maarssen, Netherlands
60,035,631
100
 –
Alfa Laval (Pty) Ltd
Isando, South Africa
2,000
100
 –
Alfa Laval SA (Pty) Ltd
Isando, South Africa
100
100
–
Alfa Laval Slovakia S.R.O.
Bratislava, Slovakia
 
99
 –
Alfa Laval Spol S.R.O.
Prague, Czech Republic
 
80
 –
Alfa Laval France SAS
Saint-Priest, France
2,000,000
100
 –
Alfa Laval SAS
Saint-Priest, France
606,700
100
 –
Alfa Laval Moatti SAS
Elancourt, France
24,000
100
 –
Alfa Laval Spiral SAS
Nevers, France
79,999
100
 –
MCD SAS
Guny, France
71,300
100
 –
Alfa Laval Vicarb SAS
Grenoble, France
200,000
100
 –
Canada Inc.
Newmarket, Canada
480,000
100
 –
Alfa Laval Inc.
Newmarket, Canada
481,600
33
 –
SCI du Companil
Grenoble, France
32,165
100
 –
Alfa Laval HES SAS
Pontcharra sur Turdine, 
France
150,000
100
 –
Alfa Laval Packinox SAS 
Paris, France
348,115
100
 –
Ziepack SA
Paris, France
37,701
51
 –
Tranter SAS
Nanterre, France
 
100
 –
Definox SAS
Clisson, France
10,000
100
 –
Alfa Laval Holding GmbH
Glinde, Germany
1
100
 –
Alfa Laval Mid Europe GmbH
Wiener Neudorf, Austria
1
100
 –
, continued

123
Financial statements
Financial statements
Specification of shares in subsidiaries
Company name
Registration 
number
Domicile
Number of 
shares
Share of 
capital %
Book value 
SEK millions
Tranter Warmetauscher GmbH
Guntramsdorf, Austria
 
100
 –
Alfa Laval Mid Europe GmbH
Glinde, Germany
1
100
 –
Alfa Laval Stormarn GmbH
Glinde, Germany
1
100
 –
Tranter GmbH
Artern, Germany
1
100
 –
Tranter Solarice GmbH
Artern, Germany
 
100
 –
Alfa Laval Mid Europe AG
Dietlikon, Switzerland
647
100
 –
Alfa Laval AEBE
Holargos, Greece
807,000
100
 –
Alfa Laval Kft
Budapest, Hungary
1
100
 –
Alfa Laval SpA
Monza, Italy
1,992,276
99
 –
Alfa Laval Italy Srl
Milan, Italy
66.7
 –
Alfa Laval Polska Sp.z.o.o.
Warsaw, Poland
7,600
100
 –
Alfa Laval Kraków Sp.z.o.o.
Krakow, Poland
80,080
100
 –
Alfa Laval (Portugal) Ltd
Linda-A-Velha, Portugal
 
1
 –
Alfa Laval SRL
Bucharest, Romania
38,566
100
 –
Alfa Laval Iberia SA
Madrid, Spain
99,999
99.999
 –
Alfa Laval (Portugal) Ltd
Linda-A-Velha, Portugal
1
99
 –
Alfa Laval Holdings Ltd
Camberley, UK
14,053,262
100
 –
Alfa Laval Ltd
Camberley, UK
11,700,000
100
 –
Tranter Ltd
Doncaster, UK
10,000
100
 –
Alfa Laval Eastbourne Ltd
Eastbourne, UK
10,000
100
 –
Ashbrook Simon-Hartley Ltd
Newcastle-under-Lyme, UK
2
100
 –
Alfa Laval Makine Sanayii ve Ticaret Ltd Sti
Istanbul, Turkey
1
1
 –
Alfa Laval USA Inc.
Richmond, Virginia, USA
1,000
100
 –
Alfa Laval US Holding Inc.
Richmond, Virginia, USA
180
100
 –
Alfa Laval Inc.
Richmond, Virginia, USA
44,000
100
 –
Champ Products LLC
Richmond, Virginia, USA
 
100
–
Standard Refrigeration LLC
Richmond, Virginia, USA
 
100
–
Niagara Blower Company Inc
Buffalo, New York, USA
4,000,200
100
 –
Framo Houston Inc. 
La Porte, Texas, USA
5,000
100
 –
Alfa Laval US Treasury Inc.
Richmond, Virginia, USA
1,000
100
 –
DSO Fluid Handling Inc.
Irvington, New Jersey, USA
100
100
 –
AGC Heat Transfer Inc.
Bristow, Virginia, USA
1,000
100
 –
Tranter Inc.
Wichita Falls, Texas, USA
1,000
100
 –
MCD Gaskets Inc.
Richmond, Virginia, USA
1,000
100
 –
Hutchison Hayes Separation Inc.
Houston, Texas, USA
1,000
100
 –
Definox Inc.
New Berlin, Wisconsin, USA
1,000
100
 –
Alfa Laval Aalborg Inc.
Miramar, Florida, USA
200
100
 –
Alfa Laval Kathabar Inc. 
Elizabethtown, North 
Carolina, USA
1,000
100
 –
AO Alfa Laval Potok
Koroljov, Russia
31,077,504
100
 –
Alfa Laval Försäkrings AB
516406-0682
Lund, Sweden
50,000
100
 –
Alfa Laval Ltda
Sao Paulo, Brazil
2
0
 –
Tranter Indùstria e Comércio de Equipamentos Ltda
Sao Paulo, Brazil
1
0
 –
Alfa Laval Support Services Pvt Ltd
Poona, India
99,990
100
 –
MCD Nitrile India Pvt Ltd
Falta, India
24,593
91
 –
Alfa Laval Benelux NV/SA
Brussels, Belgium
2
0
 –
Alfa Laval SpA
Monza, Italy
20,124
1
 –
Alfa Laval Iberia SA
Madrid, Spain
1
0.001
 –
Alfa Laval Ukraine
Kiev, Ukraine
100
–
Alfa Laval (India) Ltd
Poona, India
1
0
 –
Alfa Laval KK
Tokyo, Japan
1,200,000
100
208
Total
 
 
 
4,669
, continued
Specification of shares in joint ventures
Company name
Registration  
number
Domicile
Number of 
shares
Share of 
capital %
Book value 
SEK millions
Alfa Laval Holding AB
Alfdex AB
556647-7278
Botkyrka, Sweden
1,000
50
20
Alfa Laval Corporate AB
 
 
 
 
AlfaWall AB
556723-6715
Botkyrka, Sweden
500
50
1
Alfa Laval Ltd
 
 
 
 
Rolls Laval Heat Exchangers Ltd
Wolverhampton, UK
5,000
50
0
Total
 
 
 
21
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

124   Financial statements
Specification of shares in other companies
Company name
Domicile 
Number of shares
Share of capital %
Book value SEK thousands
Alfa Laval Aalborg Ltda
Tractebel
Brazil
1,268
120
Elektrobras
Brazil
7,107
162
Alfa Laval Philippines Inc.
 
 
Philippine Long Distance Telephone
Philippines
820
15
Alfa Laval Nordic OY
 
 
As Oy Koivulantie 7A
Finland
1
297
Helsinki Halli
Finland
4
134
Alfa Laval Vantaa OY
 
 
Länsi-Vantaan Tenniskeskus
Finland
4
0
Mikkelin Puhelin Oyj
Finland
5
19
Alfa Laval HES SA
 
 
Thermothec
France
9,130
0
Alfa Laval Benelux BV
 
 
CV Scheepvaartonderneming Finterbaltica
Netherlands
1
163
Helpman Holding BV
 
 
Helpman Sofia OOD
Bulgaria
500
49
0
Alfa Laval NV
 
 
Dalian Haven Automation Co Ltd
China
102
43
853
Frank Mohn Nederland BV
 
 
Triangle (Air) Freight Forwarders BV
Netherlands
12
33
1,916
Frank Mohn Flatøy AS 
 
 
Nordhordaland handverk og industrilag AS
Norway
50
4
26
Meland arbeids- og kompetansesenter
Norway
3
3
3
Alfa Laval Tumba AB
 
 
Smedhälsan Ekonomisk Förening
Sweden
 
0
Alfa Laval Corporate AB
 
 
European Development Capital
 
 
Corporation (EDCC) NV
Curacao
36,129
0
Multiprogress
Hungary
100
3
0
Kurose Chemical Equipment Ltd
Japan
180,000
11
0
Poljopriveda
former Yugoslavia
 
0
Tecnica Argo-Industrial S.A.
Mexico
490
49
0
Adela Investment Co S.A. (preference)
Luxembourg
1,911
0
0
Adela Investment Co S.A. 
Luxembourg
1,911
0
0
Mas Dairies Ltd
Pakistan
125,000
5
0
Total
 
 
 
3,708
None of these other companies with a share of capital of 20 percent or more are accounted for as associates since they are dormant and Alfa Laval does not 
have a significant influence according to IAS 28 item 6. 
Note 20.   Inventories
Type of  inventory
Consolidated
SEK millions
2016
2015
Raw materials and consumables
2,849
2,565
Work in progress
2,087
2,180
Finished goods & goods for resale, new sales
1,720
1,616
Finished goods & goods for resale, spare parts
1,039
925
Advance payments to suppliers
136
119
Total
7,831
7,405
A considerable part of the inventory for spare parts is carried at net realisable value.
Obsolescence related to inventories amounts to and has changed as follows:
Obsolescence
Consolidated
 
 
SEK millions
January 1
Translation  
difference 
Acquired
Write-down
Reversal of  
previous 
write-down 
December 31
Year:
2015
1,119
-14
0
259
-188
1,176
2016
1,176
61
 -
318
-292
1,263
The Group’s inventories have been accounted for after deduction for inter-company gains in inventory due to internal sales within the Group. The inter-company 
profit reserve at the end of 2016 amounts to SEK 499 (488) million.

125
Financial statements
Financial statements
Note 22.   Other short-term receivables
Split on type and maturity
Consolidated
SEK millions
2016
2015
Notes receivable
347
461
Financial leasing receivables
8
37
Other receivables
984
1,060
Total
1,339
1,558
Of which, not due within one year:
 
   Notes receivable
10
12
   Other receivables
26
26
Total
36
38
Note 23.   Prepaid expenses and accrued income
Split on type
Consolidated
SEK millions
2016
2015
Prepaid expenses
266
172
Accrued income
102
107
Total
368
279
Note 21.   Accounts receivable
Accounts receivable with a maturity exceeding one year of SEK 152 (174) million have not been accounted for as non-current assets as they are not intended 
for permanent use.
Accounts receivable are reported net of provisions for bad debts. The provision for bad debts amounts to and has changed as follows:
Bad Debts
Consolidated
 
 
SEK millions
January 1
Translation 
difference
New  provisions and 
increase of existing 
provisions
Amounts used 
Unused 
amounts  
reversed
Change due to 
discounting
December 31
Year:
2015
505
-17
121
-57
-79
0
473
2016
473
26
111
-88
-57
0
465
The amount of accounts receivable being overdue is an indication of the risk the company runs for ending up in bad debts. The percentage is in relation to 
the total amount of accounts receivable.
Accounts receivable – overdue
Consolidated
SEK millions
2016
%
2015
%
Overdue:
 
 
Maximum 30 days
672
11.5
647
11.2
More than 30 days but maximum 90 days
373
6.4
357
6.1
More than 90 days
557
9.6
475
8.2
Total
1,602
27.5
1,479
25.5
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

126   Financial statements
Note 24.   Other current deposits
Split on type and maturity
Consolidated
SEK millions
2016
2015
Deposits with banks
109
244
Bonds and other securities
956
768
Other deposits
10
9
Total
1,075
1,021
Of which, not due within one year:
 
   Deposits with banks
1
8
   Other deposits
0
0
Total
1
8
Note 25.   Cash and cash equivalents
The item cash and cash equivalents in the statement on financial position and in the cash-flow statement is mainly relating to bank deposits and liquid deposits.
Note 26.   Defined benefit obligations
The Group has defined benefit commitments to employees and former employees and their survivors. The benefits are referring to old age pension, survivor’s 
pension, disability pension, health care and severance pay.
The deﬁned beneﬁt plans are in place in Austria, Belgium, Canada, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Netherlands, Norway, Philippines, 
South Africa, Sweden, Switzerland, Taiwan, the United Kingdom and the United States. Most plans have been closed for new participants and replaced by deﬁned 
contribution plans for new employees.
Risks
The cost for defined benefit obligations are impacted by several factors that are outside the control of the company, such as the discount rate, the return on plan assets, 
future salary increases, the development of the average length of life and the claim rates under medical plans. The size of and the development of these costs 
are therefore difficult to predict. According to the new IAS 19 all of these remeasurements are reported in other comprehensive income and not in net income.
 The following table presents how the net deﬁned beneﬁt liability is arrived at out of the present values of the different deﬁned beneﬁt plans, less the fair value 
of the plan assets.
Net defined benefit liability
Consolidated
SEK millions
2016
2015
Present value of defined benefit obligation, unfunded
-1,264
-1,167
Present value of defined benefit obligation, funded
-5,664
-5,225
Present value of defined benefit obligation at year end
-6,928
-6,392
Fair value of plan assets
4,506
4,465
Defined benefit liability
-2,422
-1,927
Less disallowed assets due to asset ceiling
–
–
(-) liability/(+) asset at December 31
-2,422
-1,927
Total plan cost
Consolidated
SEK millions
2016
2015
Net plan cost
 
Current service cost
-102
-118
Net interest cost/income
-66
-61
Past service cost/income from plan amendments and curtailments and gains and losses on settlements
-6
-1
Net plan (-) cost/(+) income
-174
-180
Remeasurements
 
Actuarial losses/gains arising from changes in demographic assumptions
-41
-2
Actuarial losses/gains arising from changes in financial assumptions
-692
252
Actuarial losses/gains arising from changes in experience
108
219
Return on plan assets less interest on plan assets
120
-153
Change in disallowed assets due to asset ceiling
–
16
Other comprehensive income (OCI)
-505
332
Total plan cost
-679
152
The net plan cost for the defined benefit plans describes the different cost elements of the plans. The net plan cost is reported in the consolidated comprehensive 
income statement on the lines where personnel costs are reported. The interest cost/income is not part of the financial net, but instead just a way to categorize 
the components of the net plan cost. All remeasurements are reported in other comprehensive income and will never be reclassified to net income.

127
Financial statements
Financial statements
The following table presents how the present value of the defined benefit liability has changed during the year and lists the different components of the change.
Present value of defined benefit liability
Consolidated
SEK millions
2016
2015
Present value of defined benefit liability at January 1
-6,392
-6,796
Translation difference
-22
-54
Current service cost
-102
-118
Interest cost
-199
-205
Employee contributions
-5
-5
Actuarial losses/gains arising from changes in demographic assumptions
-41
-2
Actuarial losses/gains arising from changes in financial assumptions
-692
252
Actuarial losses/gains arising from changes in experience
108
219
Past service cost/income from plan amendments and curtailments and gains and losses on settlements
-6
-1
Benefit payments
268
280
Settlement payments
155
38
(-) liability at December 31
-6,928
-6,392
The liability has the following duration and maturity:
Duration and maturity
Consolidated
 
2016
2015
Weighted average duration of the defined benefit obligation (years)
12
12
Maturity analysis of benefit payments (non discounted amounts) SEK millions
 
maturity ≤ 1 year
276
293
maturity > 1 ≤ 5 years
1,138
1,107
maturity > 5 ≤ 10 years
1,559
1,494
maturity > 10 ≤ 20 years
3,016
3,026
maturity > 20 years
4,510
4,572
The following table presents how the fair value of the plan assets has developed during the year and lists the components of the change.
Fair value of plan assets
Consolidated
SEK millions
2016
2015
Fair value of plan assets at January 1
4,465
4,598
Translation difference
-13
-2
Employer contributions
175
143
Employee contributions
5
5
Interest on plan assets
133
144
Return on plan assets less interest on plan assets
120
-153
Benefit payments
-224
-232
Settlement payments
-155
-38
(+) asset at December 31
4,506
4,465
The plan assets are split on the following types of assets:
Split of plan assets
Consolidated
SEK millions
2016
2015
Cash and cash equivalents
786
794
Equity instruments
1,148
1,308
Debt instruments
1,551
1,440
Real estate
254
254
Investment funds
767
669
Fair value at December 31
4,506
4,465
The plan assets are in all essentials valued at quoted market prices in active markets.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

128   Financial statements
The table below presents how the net defined benefit liability has changed and the factors affecting the change.
Net defined benefit liability/asset 
Consolidated
SEK millions
2016
2015
Defined benefit liability/asset at January 1
-1,927
-2,215
Translation difference
-35
-55
Net plan cost
-174
-180
Employer contributions
175
143
Remeasurements (other comprehensive income)
-505
332
Benefit payments, unfunded plans
44
48
Settlement payments, unfunded plans
0
0
(-) liability/(+) asset at December 31
-2,422
-1,927
The gross plan assets and gross defined benefit liabilities of each plan are to be reported as a net amount. The following table shows how the net asset and 
the net liability are calculated.
Gross defined benefit liability/asset 
Consolidated
SEK millions
2016
2015
Assets 
 
Fair value of plan assets
4,506
4,465
Less disallowed assets due to asset ceiling
–
–
4,506
4,465
Netting
-4,503
-4,461
Assets in statement on financial position
3
4
Liabilities
 
Present value of defined benefit obligation at year end
-6,928
-6,392
Netting 
4,503
4,461
Provision in statement on financial position
-2,425
-1,931
The weighted averages for the more significant actuarial assumptions that have been used at the year-end are:
Actuarial assumptions
Consolidated
 
2016
2015
Discount rate (%)
2.8
3.4
Expected average retirement age (years)
63
63
Life expectancy for a 45 year old male (years)
82
82
Life expectancy for a 45 year old female (years)
85
86
Claim rates under medical plans (%)
5
5
Expected rate of salary/wage increase (%)
3
3
Change in health care costs (%)
5
5
Index for future compensation increases (%)
2
3
Future contributions
Consolidated
SEK millions
2017
Expected employer contributions to the plan for the next calendar year
-175
Expected employer contributions for the next calendar year to multi-employer plans reported as defined contribution plans
-59

129
Financial statements
Financial statements
The following table presents how the defined benefit pension schemes are distributed on different countries.
Regional split
Consolidated
SEK millions, unless otherwise stated
United 
States
United 
Kingdom
Nether-
lands
Germany
Norway
Italy
Belgium
Other
Total
Net defined benefit liability
 
 
 
 
 
 
 
 
 
Present value of the defined benefit  
obligation, unfunded
-745
–
–
-187
-9
-33
–
-290
-1,264
Present value of the defined benefit  
obligation, funded
-913
-2,705
-596
–
-978
–
-100
-372
-5,664
Present value of the defined benefit  
obligation at year end
-1,658
-2,705
-596
-187
-987
-33
-100
-662
-6,928
Fair value of plan assets
785
1,904
550
–
860
–
69
338
4,506
Defined benefit liability
-873
-801
-46
-187
-127
-33
-31
-324
-2,422
Less disallowed assets due to asset ceiling
–
–
–
–
–
–
–
–
–
(-) liability/(+) asset
-873
-801
-46
-187
-127
-33
-31
-324
-2,422
Net plan cost
-55
-28
-20
-4
-30
0
-3
-34
-174
Remeasurements (OCI)
1
-445
-9
-6
-40
–
-5
-1
-505
Sensitivity analysis*
 
 
 
 
 
 
 
 
 
Discount rate decreased by 1% point
-176
-530
-124
-24
-127
–
-5
-40
-1,026
Life expectancy increased by 1 year
-56
-112
-19
-10
-16
–
0
-7
-220
Expected average retirement age 
decreased by 1 year
-17
–
–
0
0
–
1
-4
-20
Claim rates under medical plans 
increased by 1 % point
-4
–
–
–
–
–
–
–
-4
Expected rate of salary increases 
increased by 1% point
0
-53
-23
–
-46
–
-13
-23
-158
Medical costs increased by 1% point
-39
–
–
–
–
–
–
0
-39
Index for future compensation increases 
increased by 1% point
0
-103
-49
–
-78
–
–
-18
-248
Cost for actuarial services
-4
-1
-1
0
0
0
0
0
-6
Number of participants in the plans 
at December 31
 
 
 
 
 
 
 
 
 
Current employees (active members)
1,121
106
156
5
284
–
24
2,670
4,366
Current employees (only vested value  
for closed plans)
27
–
–
9
–
275
–
10
321
Former employees that are not yet  
pensioners
109
450
213
–
–
–
47
4
823
Pensioners
1,438
648
84
224
304
–
–
113
2,811
Total
2,695
1,204
453
238
588
275
71
2,797
8,321
Remaining service period
 
 
 
 
 
 
 
 
 
Average remaining service period for  
active members (years)
10
9
12
7
6
–
11
8
9
* How much would the present value of the defined benefit obligation at December 31 increase if the (all other things being equal):
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

130   Financial statements
Note 27.   Other provisions
Movement schedule
Consolidated
 
 
 
 
SEK millions
January 1
Translation  
difference 
New  provisions and increase 
of existing provisions
Amounts used 
Unused  amounts 
reversed
December 31
2015
Claims & warranty
1,169
-24
495
-396
-119
1,125
Deferred costs
201
-7
118
-72
-22
218
Restructuring
235
0
71
-151
-15
140
Onerous contracts
146
-3
40
-59
-4
120
Litigations
284
-5
87
-108
-4
254
Other
370
26
213
-235
-15
359
Total
2,405
-13
1,024
-1,021
-179
2,216
Of which:
   current
1,862
1,798
   non-current
543
 
 
 
 
418
2016
Claims & warranty
1,125
32
596
-416
-120
1,217
Deferred costs
218
9
75
-104
-46
152
Restructuring
140
-1
679
-43
-5
770
Onerous contracts
120
5
80
-67
-9
129
Litigations
254
4
91
-27
-2
320
Other
359
19
189
-163
-28
376
Total
2,216
68
1,710
-820
-210
2,964
Of which:
 
 
   current
1,798
2,365
   non-current
418
 
 
 
 
599
Unused amounts reversed refer to, among other items, changed classifications and reversals of provisions made in prior years that have not been used.
Each type of provision entails everything from a few up to a large number of different items. It is therefore not practicable or particularly meaningful to specify 
the provisions item by item. As indicated above a clear majority of the provisions will result in disbursements within the next year. 
Claims & warranty refers to claims from customers according to the conditions in issued warranties. The claims concern technical problems with the 
delivered goods or that promised performance has not been achieved. 
Deferred costs are partly costs that are known but not yet debited at the time of invoicing, partly costs that are unknown but expected at the time of 
invoicing. The provision for deferred costs is charged to costs of goods sold in order to get a correct phasing of the gross margin.   
Provisions for restructuring are usually relating to closure of plants or closure or move of production lines, businesses, functions etc. or reduction of the number 
of employees in connection with a downturn in the business climate. The provisions for restructuring are affecting approximately 1,040 (190) employees.
The provision for onerous contracts is relating to orders where a negative gross margin is expected. Provisions are made as soon as a ﬁnal loss on the 
order can be expected. This can in exceptional cases happen already at the time when the order is taken. Normally this provision is relating to larger and 
complex orders where the ﬁnal margin is more uncertain.
The provision for litigations refers to ongoing or expected legal disputes. The provision covers expected legal costs and expected amounts for damages or settlements.
Other refers to miscellaneous provisions that do not fall within any of the above categories.
Note 28.   Borrowings and net debt
Net debt
Consolidated
SEK millions
2016
2015
Credit institutions
137
107
Swedish Export Credit
3,153
2,970
European Investment Bank
2,345
2,240
Private placement
0
921
Commercial papers
0
1,000
Corporate bonds
7,612
7,265
Capitalised financial leases
66
82
Interest-bearing pension liabilities
0
0
Total debt
13,313
14,585
Cash and cash equivalents  
and current deposits
-3,694
-2,897
Net debt *
9,619
11,688
* Alternative performance measures, defined on page 142.
The loans are distributed among currencies as follows:
Maturity of loans by currency
Consolidated
Current
Non-current
SEK millions
2016
2015
2016
2015
Currency:
 
 
BRL
 –
4
 –
 –
CNY
 –
2
 –
 –
DKK
 –
1
3
3
EUR
1,025
252
10,929
11,341
INR
17
8
 –
 –
KRW
 –
 –
 –
1
SEK
 –
1,000
 –
 –
USD
36
752
1,237
1,139
Other
0
0
 –
 –
Total
1,078
2,019
12,169
12,484
Of which, not due within five years:
4,746
6,505
The maturity structure of the loans is presented in the bar chart in the 
section “Liquidity risk and refinancing risk” under Financial risks.

131
Financial statements
Financial statements
Loans with ﬂoating interest rate
Loan from credit institutions
Alfa Laval has a senior credit facility of EUR 400 million and USD 544 million, 
corresponding to SEK 8,779 million with a banking syndicate. At December 
31, 2016 the facility was not utilised. The facility matures in June 2019, with 
two one year extension options.
The interest is based on applicable IBOR plus a mark-up based on the relation 
between net debt and EBITDA and how much of the facility that is utilised. 
At year end the mark up is 40 (40) basis points.
Bilateral term loans with other lenders
Alfa Laval has a bilateral term loan with Swedish Export Credit that is split on 
one loan of EUR 100 million that matures in June 2017 and one loan of 
EUR 100 million that matures in June 2021 as well as a loan of USD 136 
million that matures in June 2020, corresponding to SEK 3,153 million in 
total. The loans accrue interest at floating rate based on applicable IBOR plus 
a mark-up of 45, 95 and 80 basis points respectively.
Alfa Laval also has a bilateral term loan from the European Investment Bank 
split on one loan of EUR 130 million that matures in March 2018 and an ad-
ditional loan of EUR 115 million that matures in June 2021, corresponding to 
SEK 2,345 million in total. The loans accrue interest at ﬂoating rate based on 
EURIBOR plus a mark-up of 70 and 45 basis points respectively.
Corporate bonds
Alfa Laval has issued EUR 300 million of corporate bonds corresponding to 
SEK 2,871 million, with floating interest rate and that matures in September 
2019. The floating interest rate is based on EURIBOR plus a mark-up of 55 
basis points.
Interest level of loans with ﬂoating interest rate
The senior credit facility, the bilateral term loans and the EUR 300 million tranche 
of the corporate bonds accrue interest at floating rate. At the end of 2016 the 
loans were accruing interest in the range of 0.23 % - 1.80 % (0.41 % - 1.39 %). 
The average interest rate at the end of 2016 was 0.59 (0.93) percent. The 
Group has chosen to hedge 12 (18) percent of the loans to fixed interest 
rate, with a duration of 13.8 (10.0) months.
Loans with ﬁxed rate
Private placement
The private placement from 2006 of USD 110 million matured in April 2016 
and was re-paid.
Corporate bonds and commercial papers
Alfa Laval has issued EUR 500 million of corporate bonds corresponding to 
SEK 4,741 million, with a fixed interest rate of 1.495 percent and that 
matures in September 2022.
The commercial paper programme of SEK 2,000 million was not utilised 
at December 31, 2016. When utilised, the interest is ﬁxed at inception and is 
based on STIBOR ﬂat.
Transaction costs
The transaction costs in connection with raising the loans or issuing the 
bonds have been capitalised and are being amortised over the maturity of 
the loans. At the end of the year the capitalised amount was SEK 35 (49) 
million. The current year’s cost for the fee amortisation is SEK -14 (-14) million. 
Average interest and currency duration
The average interest and currency duration for all loans including derivatives 
is 27.8 (28.4) months at the end of 2016.
Financial covenants
The syndicated loan and the bilateral term loans with Swedish Export Credit 
and the European Investment Bank are linked to one financial covenant that 
must be fulfilled throughout the life of the loans. The covenant refers to the 
relationship between net debt and EBITDA in combination with the current 
official Alfa Laval rating.
If the covenants are not fulﬁlled, the lenders are entitled to demand immediate 
repayment of the loans, provided that the breach is not temporary. Alfa Laval 
has fulﬁlled the covenants with a good margin ever since the loans were raised.
Note 29.   Other current liabilities  
Split by type
Consolidated
SEK millions
2016
2015
Financial lessee payable
66
82
VAT liabilities, employee withholding taxes
173
177
Other non-interest bearing liabilities
2,113
1,714
Total
2,352
1,973
Note 30.   Accrued costs and prepaid income  
Split by type and maturity
Consolidated
SEK millions
2016
2015
Accruals for social security
296
314
Reserve for severance pay
188
168
Accrued interest expenses
23
32
Other accrued expenses
1,900
1,715
Prepaid income
26
8
Total
2,433
2,237
Of which, not due within one year:
 
   Accruals for social security
32
31
   Reserve for severance pay
101
96
   Other accrued expenses
116
102
Total
249
229
Note 31.    Pledged assets and contingent 
liabilities 
Split by type
Consolidated
SEK millions
2016
2015
Pledged assets
 
   Other pledges and similar commitments
14
11
Total
14
11
Contingent liabilities
 
   Discounted bills
31
44
   Performance guarantees
1,530
1,724
   Other contingent liabilities
673
722
Total
2,234
2,490
As of December 31, 2016 the Group had sold receivables with recourse 
totalling SEK 31 (44) million. These are disclosed as discounted bills above. 
Other contingent liabilities are among other items referring to bid guaran-
tees, payment guarantees to suppliers and retention money guarantees. 
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

132   Financial statements
Note 32.   Transactions with related party
Tetra Pak within the Tetra Laval Group is Alfa Laval’s single largest customer 
with 5.0 (4.2) percent of net sales. In June 1999, Tetra Pak entered into a 
purchasing agreement with Alfa Laval that governs the distribution, research 
and development, market and sales information, use of trademarks and 
intellectual property. The following areas shall be agreed upon from time to 
time between representatives of the parties: products that are subject to the 
agreement, prices and discounts of such products, geographical markets 
and product areas where Tetra Pak is Alfa Laval’s preferred distributor, the 
right of Tetra Pak to affix its trademarks to Alfa Laval products, sales goals 
for Tetra Pak in defined geographical markets, products and technologies 
that are the focus of joint research and development and the ownership 
rights of the research and development result and use of market and sales 
information. The agreement aims at the applications within liquid food where 
Tetra Pak has a natural market presence through the deliveries of packaging 
equipment and packaging material.
The agreement was prolonged by two years from December 31, 2016. It 
has a 12 month period of notice. The prices Tetra Pak receives are not lower 
than the prices Alfa Laval would obtain when selling to a comparable third 
party. The prices are ﬁxed on a calendar year basis.
Alfa Laval rents premises to DeLaval in Russia. The total rent income for 
this amounts to SEK 1 (2) million. 
The Board of Directors for Alfa Laval AB (publ) has two representatives 
from Tetra Laval – Jörn Rausing and Finn Rausing.
At year-end, Alfa Laval has the following balance items against companies 
within the Tetra Laval group (Tetra Pak and DeLaval).
Receivables on/payables to related parties
Consolidated
SEK millions
2016
2015
Receivables:
 
Accounts receivable
144
177
Other receivables
0
0
 
Liabilities:
 
Accounts payable
0
0
Alfa Laval has had the following transactions with companies within the Tetra 
Laval group (Tetra Pak and DeLaval). 
Revenues/expenses from related parties
Consolidated
SEK millions
2016
2015
Net sales
1,769
1,664
Other operating income
1
2
Note 33.   Interests in joint ventures
Alfa Laval owns 50 percent in three different joint ventures: Rolls Laval Heat 
Exchangers Ltd with Rolls Royce as partner, Alfdex AB with Haldex as partner 
and AlfaWall AB with Wallenius as partner. None of these joint ventures are 
of material importance and for that reason no disclosures are made of each 
individual joint venture. Instead disclosures in aggregate are made on the 
carrying amount of Alfa Laval’s interests in these individually immaterial joint 
ventures. See the below tables.
Since joint ventures as from 2014 are consolidated according to the eq-
uity method in IFRS 11 ”Joint arrangements”, all amounts in the following 
two tables have disappeared out of Alfa Laval’s statements over consoli-
dated comprehensive income and consolidated ﬁnancial position.
  
Assets/liabilities
Joint ventures
SEK millions
2016
2015
Current assets
58
55
Non-current assets
6
10
Current liabilities
32
37
Non-current liabilities
12
11
Contingent liabilities
35
39
Revenues/expenses
Joint ventures
SEK millions
2016
2015
Net sales
183
193
Cost of goods sold
-110
-122
Other operating income
38
27
Other operating costs
-93
-87
Financial net
0
0
Result before tax
18
11
Taxes
-3
-3
Net income
15
8
Other comprehensive income
0
0
Comprehensive income
15
8
Instead the application of the equity method means that the net income in 
the joint ventures is booked into one line in the operating income. The counter 
entry is an increase or decrease of the value of shares in joint ventures. 
Received dividends reduce the value of the shares in joint ventures.
Interests in joint ventures
Consolidated
SEK millions
2016
2015
Operating income
18
11
Taxes
-3
-3
Net income
15
8
Received dividends
12
12
Shares in joint ventures
21
18
The effect on comprehensive income is the same as the net income.

133
Financial statements
Financial statements
Note 34.   Work in progress on plant projects
Impact of percentage of completion method
Consolidated
SEK millions
2016
2015
Result items
 
Amount of recognised project sales revenue 
2,404
2,402
Work performed on ongoing projects 
 
Aggregate amount of costs incurred and recognised profits (less recognised losses)
3,137
2,753
Assets
 
Retentions
58
61
Gross amount due from customers for work in progress
618
249
Liabilities
 
Advances received
903
948
Gross amount due to customers for work in progress
263
285
Note 35.   Leasing
Alfa Laval has entered into non-cancellable operating leases mainly relating to premises and finance lease agreements regarding machinery and equipment 
with leasing periods of 1-20 years. The leasing fees for non-cancellable operating leases for premises were SEK 462 (429) million. During the year, the Group 
has entered into finance leases with a capitalised value of SEK 0 (1) million. See Note 18 for information on the capitalised value of finance leases.
The future minimum leasing fees concerning non-cancellable operating leases, distributed on maturity dates, amount to:
Future minimum leasing fees for operating leases
Consolidated
SEK millions
2016
2015
Maturity in year:
 
2016
N/A
390
2017
427
353
2018
379
299
2019
315
221
2020
235
176
2021
183
N/A
Later
764
799
Total
2,303
2,238
The future minimum leasing fees concerning financial leasing agreements and their net present value, distributed on maturity dates, amount to:
Financial leases
Consolidated
Future minimum leasing  
fees for financial leases
Present value of  
financial leases
SEK millions
2016
2015
2016
2015
Maturity in year:
 
 
2016
N/A
20
N/A
20
2017
18
17
18
16
2018
17
16
17
16
2019
17
16
16
15
2020
14
13
13
12
2021
0
N/A
0
N/A
Later
0
0
0
0
Total
66
82
64
79
Note 36.   Events after the closing date
The statements on financial position and the comprehensive income statements will be adopted at the Annual General Meeting of shareholders on April 26, 2017.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

134   Financial statements
The unrestricted equity in Alfa Laval AB (publ) is SEK: 
Profit brought forward
7,774,379,055
Net income 2016
1,422,735,554
9,197,114,609
The Board of Directors propose a dividend of SEK 4.25 (4.25) per share corresponding to SEK 1,782,689,339 (1,782,689,339) and that 
the remaining income of SEK 7,414,425,270 (7,774,379,055) be carried forward. 
The Board of Directors are of the opinion that the proposed dividend is in line with the requirements that the type and size of operations, 
the associated risks, the capital needs, liquidity and ﬁnancial position put on the company.
True and fair view
The undersigned certify that the annual report for the Group and the Parent company has been prepared in accordance with International 
Financial Reporting Standards (IFRS), as adopted for use in the European Union, and generally accepted accounting principles respectively, 
and gives a true and fair view of the financial positions and results of the Group and the Parent company, and that the Board of Directors’ 
report gives a fair review of the development of the operations, financial positions and results of the Group and the Parent company and 
describes substantial risks and uncertainties that the Group companies face. 
 
 
Lund, March 1, 2017 
 
 
 
 
Anders Narvinger 
Gunilla Berg 
Arne Frank
 
Chairman 
Director 
Director 
 
 
Bror García Lantz 
Ulla Litzén 
Henrik Nielsen
 
Employee representative 
Director 
Employee representative 
 
 
Susanna Holmqvist Norrby 
Finn Rausing 
Jörn Rausing
 
Employee representative 
Director 
Director
 
 
 
 
 
Ulf Wiinberg 
Margareth Øvrum 
 Tom Erixon
 
Director 
Director 
President and CEO 
 
 
 
 
 
Our Auditors’ Report concerning this Annual Report has been issued on March 3, 2017.
 
 
 
 
 
Håkan Olsson Reising 
 
Joakim Thilstedt
 
Authorized Public Accountant 
 
Authorized Public Accountant
Note 37.   Proposed disposition of earnings

135
Financial statements
Financial statements
Opinions
We have audited the annual accounts and 
consolidated accounts of Alfa Laval AB (publ.) 
for the year 2016. The annual accounts and 
consolidated accounts of the company are 
included on pages 61–142 in this document. 
In our opinion, the annual accounts have 
been prepared in accordance with the Annual 
Accounts Act, and present fairly, in all material 
respects, the ﬁnancial position of the parent 
company as of 31 December 2016 and its 
ﬁnancial performance and cash ﬂow for the 
year then ended in accordance with the 
Annual Accounts Act. The consolidated 
accounts have been prepared in accordance 
with the Annual Accounts Act and present 
fairly, in all material respects, the ﬁnancial 
position of the group as of 31 December 2016 
and their ﬁnancial performance and cash ﬂow 
for the year then ended in accordance with 
International Financial Reporting Standards 
Auditor’s report
To the general meeting of the shareholders of Alfa Laval AB (publ.), corp. id 556587-8054
(IFRS), as adopted by the EU, and the Annual 
Accounts Act. The statutory administration 
report is consistent with the other parts of the 
annual accounts and consolidated accounts.
We therefore recommend that the general 
meeting of shareholders adopts the income 
statement and balance sheet for the parent 
company and the statement of comprehensive 
income and statement of ﬁnancial position 
for the group.
Basis for Opinions
We conducted our audit in accordance with 
International Standards on Auditing (ISA) 
and generally accepted auditing standards 
in Sweden. Our responsibilities under those 
standards are further described in the Auditor’s 
Responsibilities section. We are independent 
of the parent company and the group in 
accordance with professional ethics for 
accountants in Sweden and have otherwise 
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
fulfilled our ethical responsibilities in accordance 
with these requirements. 
We believe that the audit evidence we 
have obtained is sufﬁcient and appropriate 
to provide a basis for our opinions.
Key Audit Matters 
Key audit matters of the audit are those 
matters that, in our professional judgment, 
were of most significance in our audit of the 
annual accounts and consolidated accounts 
of the current period. These matters were 
addressed in the context of our audit of, and 
in forming our opinion thereon, the annual 
accounts and consolidated accounts as a 
whole, but we do not provide a separate 
opinion on these matters. These matters 
refer to consolidated accounts unless 
otherwise stated.
Description of key audit matter
The carrying value of intangible assets, mainly goodwill, patents 
and unpatented know-how amounts to SEK 26,382 million as at 
31 December 2016, which represents approximately 49% of total
assets. Annually, or if certain indicators of impairment exist, 
goodwill is subject to an impairment test which is complex and 
contains significant elements of judgment.
The impairment test as required by IFRS is to be performed 
taking into account both forecasted internal and external assump-
tions and plans. Examples of such judgments are future cash flows
and the discount rate to be used considering that estimated future 
payments are subject to risk.
In connection with the Group’s strategy review during the 
year impairment tests have resulted in recognized impairments 
in total amounting to SEK 627 million related to goodwill and 
other intangible assets.
The parent company holds shares in group companies of 
SEK 4,669 million as at 31 December 2016. If the book value of the
shares exceeds the equity in a given group company, a similar 
type of impairment test is performed using the same methodology
and assumptions as is done in respect of goodwill in the Group.
How the matter was addressed during the audit
We have obtained and assessed the Group’s impairment tests
to ascertain whether they are carried out in accordance with the 
techniques prescribed by IFRS.
In addition, we have assessed the reasonableness of future cash
flows and discount rate by obtaining and evaluating the Group’s
written documentation and plans. We have also had discussions
with group management and performed retrospective review over
prior period estimates.
We have involved our internal valuation specialists in the audit
team to ensure that appropriate experience and expertise have been
applied in the assessment of methodology and discount rates used.
An important part of our work has been to obtain and assess the
Group’s sensitivity analysis to evaluate how changes in assumptions
may affect the valuation.
We have reviewed the Annual Report disclosures for completeness, 
assessed whether the disclosures are in line with the assumptions 
used by management in their valuation and that they are, in all 
material respects, in accordance with disclosures required by IFRS.
Valuation of intangible assets and the parent company’s shares in group companies
See Notes 16, 17 och 19 and accounting principles on page 92 in the annual accounts and consolidated accounts 
for detailed information and description of the matter.
Report on the annual accounts and consolidated accounts

136   Financial statements
Description of key audit matter
The Group has pension obligations that mainly relate to the United 
Kingdom, the United States, Norway and the Netherlands. Before 
reduction by the fair value of plan assets, the pension obligations
are valued at SEK 6,928 million as at 31 December 2016.
Estimation of the value of the pension obigations relies upon 
a number of assumptions, including life expectancy, inflation, 
and discount rates that are applied to estimate the present value
of future pension payments. The Group engages external actuaries 
to perform these complex calculations.
Changes to the assumptions which the calculations are based 
upon could have a significant impact on total comprehensive in-
come as well as on the recorded value of the pension obligations.
Description of key audit matter
The carrying value of the Group’s provisions amounts to SEK 2,964 
million per 31 December 2016. These relate among others to claims
& warranty, litigations, restructuring and onerous contracts.
Included in the provisions is SEK 770 million for restructuring, 
mainly related to the restructuring programme that was launched 
during the autumn 2016 as a result of the strategy review.
Provisions involve significant judgment regarding uncertain future 
outcomes, in particular relating to the amount and timing of the
final assessments. Changes to the underlying assumptions used to 
make these provisions could significantly affect the reported result.
How the matter was addressed during the audit
We have examined the external actuarial report that is used by 
the Group for valuation of its pension obligations. We have, with 
input from our internal specialists’, critically assessed the key 
assumptions used for inflation and discount rates.
We have also reviewed the Annual Report disclosures for 
completeness and assessed whether they are in line with the 
assumptions and sensitivity analysis used.
How the matter was addressed during the audit
We have examined the Group’s documentation of its provisions. 
We have assessed the estimates made and have held discussions 
with Group management regarding their assumptions in each 
area to ensure that the provisions are in line with the Group’s 
accounting principles.
Provisions for pensions
See Note 26 and accounting principles on page 89 in the annual accounts and consolidated accounts for detailed information and 
description of the matter.
Other provisions
See Note 27 and accounting principles on page 93 in the annual accounts and consolidated accounts for detailed information and 
description of the matter.

137
Financial statements
Financial statements
Other information than the annual  
accounts and consolidated accounts 
This document also contains other 
information than the annual accounts and 
consolidated accounts and is found on 
pages 1–44. The Board of Directors and 
the Managing Director are responsible for 
this other information.
Our opinion on the annual accounts and 
consolidated accounts does not cover this 
other information and we do not express 
any form of assurance conclusion regarding 
this other information.
In connection with our audit of the annual 
accounts and consolidated accounts, our 
responsibility is to read the information 
identiﬁed above and consider whether the 
information is materially inconsistent with the 
annual accounts and consolidated accounts. 
In this procedure we also take into account 
our knowledge otherwise obtained in the 
audit and assess whether the information 
otherwise appears to be materially misstated.
If we, based on the work performed 
concerning this information, conclude that 
there is a material misstatement of this other 
information, we are required to report that 
fact. We have nothing to report in this regard.
Responsibilities of the Board of  
Directors and the Managing Director
The Board of Directors and the Managing 
Director are responsible for the preparation 
of the annual accounts and consolidated 
accounts and that they give a fair presentation 
in accordance with the Annual Accounts Act 
and, concerning the consolidated accounts, 
in accordance with IFRS as adopted by the 
EU. The Board of Directors and the Managing 
Director are also responsible for such internal 
control as they determine is necessary to 
enable the preparation of annual accounts 
and consolidated accounts that are free 
from material misstatement, whether due 
to fraud or error. 
In preparing the annual accounts and 
consolidated accounts The Board of Directors 
and the Managing Director are responsible 
for the assessment of the company’s and 
the group’s ability to continue as a going 
concern. They disclose, as applicable, matters 
related to going concern and using the going 
concern basis of accounting. The going 
concern basis of accounting is however 
not applied if the Board of Directors and 
the Managing Director intend to liquidate 
the company, to cease operations, or has 
no realistic alternative but to do so.
The Audit Committee shall, without prejudice 
to the Board of Director’s responsibilities and 
tasks in general, among other things over-
see the company’s ﬁnancial reporting process.
Auditor’s responsibility
Our objectives are to obtain reasonable 
assurance about whether the annual accounts 
and consolidated accounts as a whole are 
free from material misstatement, whether due 
to fraud or error, and to issue an auditor’s 
report that includes our opinions. Reasonable 
assurance is a high level of assurance, but 
is not a guarantee that an audit conducted 
in accordance with ISAs and generally 
accepted auditing standards in Sweden 
will always detect a material misstatement 
when it exists. Misstatements can arise 
from fraud or error and are considered 
material if, individually or in the aggregate, 
they could reasonably be expected to 
influence the economic decisions of users 
taken on the basis of these annual accounts 
and consolidated accounts.
As part of an audit in accordance with 
ISAs, we exercise professional judgment 
and maintain professional skepticism 
throughout the audit. We also:
–  Identify and assess the risks of material mis-
statement of the annual accounts and consoli-
dated accounts, whether due to fraud or error, 
design and perform audit procedures respon-
sive to those risks, and obtain audit evidence 
that is sufﬁcient and appropriate to provide a 
basis for our opinions. The risk of not detecting 
a material misstatement resulting from fraud is 
higher than for one resulting from error, as fraud 
may involve collusion, forgery, intentional omis-
sions, misrepresentations, or the override of 
internal control.
–  Obtain an understanding of the company’s 
internal control relevant to our audit in order to 
design audit procedures that are appropriate in 
the circumstances, but not for the purpose of 
expressing an opinion on the effectiveness of 
the company’s internal control.
–  Evaluate the appropriateness of accounting 
policies used and the reasonableness of  
accounting estimates and related disclosures made 
by the Board of Directors and the Managing 
Director. Conclude on the appropriateness of the 
Board of Directors’ and the Managing Director’s, 
use of the going concern basis of accounting in 
preparing the annual accounts and consolidated 
accounts. We also draw a conclusion, based 
on the audit evidence obtained, as to whether 
any material uncertainty exists related to events 
or conditions that may cast signiﬁcant doubt on 
the company’s and the group’s ability to continue 
as a going concern.
–  If we conclude that a material uncertainty exists, 
we are required to draw attention in our auditor’s 
report to the related disclosures in the annual 
accounts and consolidated accounts or, if such 
disclosures are inadequate, to modify our opinion 
about the annual accounts and consolidated 
accounts. Our conclusions are based on the 
audit evidence obtained up to the date of our 
auditor’s report. However, future events or con-
ditions may cause a company and a group to 
cease to continue as a going concern.
–  Evaluate the overall presentation, structure and 
content of the annual accounts and consolidated 
accounts, including the disclosures, and whether 
the annual accounts and consolidated accounts 
represent the underlying transactions and events 
in a manner that achieves fair presentation.
–  Obtain sufﬁcient and appropriate audit evidence 
regarding the ﬁnancial information of the entities 
or business activities within the group to express 
an opinion on the consolidated accounts. We 
are responsible for the direction, supervision 
and performance of the group audit. We remain 
solely responsible for our opinions.
We must inform the Board of Directors of, 
among other matters, the planned scope 
and timing of the audit. We must also inform 
of significant audit findings during our audit, 
including any significant deficiencies in 
internal control that we identified. 
We must also provide the Board of Directors 
with a statement that we have complied with 
relevant ethical requirements regarding in-
dependence, and to communicate with them 
all relationships and other matters that may 
reasonably be thought to bear on our inde-
pendence, and where applicable, related 
safeguards.
From the matters communicated with the 
Board of Directors, we determine those 
matters that were of most signiﬁcance in the 
audit of the annual accounts and consoli-
dated accounts, including the most important 
assessed risks for material misstatement, 
and are therefore the key audit matters. 
We describe these matters in the auditor’s 
report unless law or regulation precludes 
disclosure about the matter or when, in ex-
tremely rare circumstances, we determine 
that a matter should not be communicated 
in the auditor’s report because the adverse 
consequences of doing so would reasonably 
be expected to outweigh the public interest 
beneﬁts of such communication.

138   Financial statements
Stockholm, March 3, 2017
 
Håkan Olsson Reising
Authorized Public Accountant
Joakim Thilstedt
Authorized Public Accountant
Opinions
In addition to our audit of the annual accounts 
and consolidated accounts, we have also 
audited the administration of the Board of 
Directors and the Managing Director of Alfa 
Laval AB (publ.) for the year 2016 and the 
proposed appropriations of the company’s 
profit or loss.
We recommend to the general meeting of 
shareholders that the proﬁt be appropriated 
in accordance with the proposal in the 
statutory administration report and that the 
members of the Board of Directors and the 
Managing Director be discharged from  
liability for the ﬁnancial year.
Basis for Opinions
We conducted the audit in accordance with 
generally accepted auditing standards in 
Sweden. Our responsibilities under those 
standards are further described in the 
Auditor’s Responsibilities section. We are 
independent of the parent company and 
the group in accordance with professional 
ethics for accountants in Sweden and have 
otherwise fulfilled our ethical responsibilities 
in accordance with these requirements. 
We believe that the audit evidence we 
have obtained is sufﬁcient and appropriate 
to provide a basis for our opinions.
Responsibilities of the Board of  
Directors and the Managing Director 
The Board of Directors is responsible for the 
proposal for appropriations of the company’s 
profit or loss. At the proposal of a dividend, 
this includes an assessment of whether the 
dividend is justifiable considering the 
requirements which the company’s and the 
group’s type of operations, size and risks 
place on the size of the parent company’s 
and the group’s equity, consolidation 
requirements, liquidity and position in general.
The Board of Directors is responsible for 
the company’s organization and the admin-
istration of the company’s affairs. This includes 
among other things continuous assessment 
of the company’s and the group’s ﬁnancial 
situation and ensuring that the company’s 
organization is designed so that the  
accounting, management of assets and 
the company’s ﬁnancial affairs otherwise 
are controlled in a reassuring manner. 
The Managing Director shall manage the 
ongoing administration according to the Board 
of Directors’ guidelines and instructions and 
among other matters take measures that are 
necessary to fulﬁll the company’s accounting 
in accordance with law and handle the 
management of assets in a reassuring manner.
 
Auditor’s responsibility
Our objective concerning the audit of the 
administration, and thereby our opinion 
about discharge from liability, is to obtain 
audit evidence to assess with a reasonable 
degree of assurance whether any member 
of the Board of Directors or the Managing 
Director in any material respect:
–  has undertaken any action or been guilty 
of any omission which can give rise to  
liability to the company, or
–  in any other way has acted in contraven-
tion of the Companies Act, the Annual 
Accounts Act or the Articles of Association.
Our objective concerning the audit of the 
proposed appropriations of the company’s 
profit or loss, and thereby our opinion about 
this, is to assess with reasonable degree of 
assurance whether the proposal is in 
accordance with the Companies Act.
Reasonable assurance is a high level of 
assurance, but is not a guarantee that an 
audit conducted in accordance with generally 
accepted auditing standards in Sweden 
will always detect actions or omissions that 
can give rise to liability to the company, or 
that the proposed appropriations of the 
company’s proﬁt or loss are not in accord-
ance with the Companies Act.
As part of an audit in accordance with 
generally accepted auditing standards in 
Sweden, we exercise professional judgment 
and maintain professional skepticism through-
out the audit. The examination of the admin-
istration and the proposed appropriations 
of the company’s proﬁt or loss is based 
primarily on the audit of the accounts. 
Additional audit procedures performed are 
based on our professional judgment with 
starting point in risk and materiality. This 
means that we focus the examination on 
such actions, areas and relationships that 
are material for the operations and where 
deviations and violations would have particu-
lar importance for the company’s situation. 
We examine and test decisions undertaken, 
support for decisions, actions taken and 
other circumstances that are relevant to our 
opinion concerning discharge from liability. 
As a basis for our opinion on the Board of 
Directors’ proposed appropriations of the 
company’s proﬁt or loss we examined the 
Board of Directors’ reasoned statement and 
a selection of supporting evidence in order 
to be able to assess whether the proposal 
is in accordance with the Companies Act. 
Report on other legal and regulatory requirements

139
Financial statements
Financial statements

140   Financial statements
Ten-year overview
Ten-year overview
Consolidated
 
 
 
 
SEK millions,  
unless otherwise stated
2016
2015
2014
2013 *
2012 **
2011
2010
2009
2008
2007
Profit and loss
 
 
Net sales
35,634
39,746
35,067
29,801
29,813
28,652
24,720
26,039
27,850
24,849
Comparison distortion items
-1,500
–
-320
–
-51
-170
90
-225
-168
54
Operating income
2,989
5,717
4,667
4,353
4,396
4,691
4,401
4,030
5,736
4,691
Financial net
336
-273
-550
-181
133
-15
-37
-270
-395
-134
Result after financial items
3,325
5,444
4,117
4,172
4,529
4,676
4,364
3,760
5,341
4,557
Taxes
-1,013
-1,583
-1,149
-1,132
-1,306
-1,425
-1,248
-1,023
-1,534
-1,377
Net income for the year
2,312
3,861
2,968
3,040
3,223
3,251
3,116
2,737
3,807
3,180
Financial position
 
 
Goodwill
20,436
19,498
20,408
10,061
9,792
9,543
5,952
6,143
5,383
4,459
Other intangible assets
5,946
6,556
7,898
3,582
3,807
3,502
2,581
2,490
1,890
1,275
Property, plant and equipment
4,940
4,773
5,004
3,785
3,823
3,936
3,512
3,548
3,546
2,824
Other non-current assets
2,100
1,804
2,092
1,447
1,509
1,664
1,568
1,542
1,376
1,128
Inventories
7,831
7,405
7,883
6,312
6,176
6,148
4,769
4,485
5,972
5,086
Current receivables
8,431
8,964
9,791
7,671
8,050
7,663
6,884
6,584
9,238
7,420
Current deposits
1,075
1,021
697
605
427
483
575
302
544
190
Cash and cash equivalents
2,619
1,876
2,013
1,446
1,404
1,564
1,328
1,112
1,083
856
TOTAL ASSETS
53,378
51,897
55,786
34,909
34,988
34,503
27,169
26,206
29,032
23,238
 
Equity
20,276
18,423
17,202
16,162
14,453
15,144
13,582
12,229
10,493
7,937
Provisions for pensions etc.
2,425
1,931
2,221
1,494
1,727
852
847
920
990
877
Provisions for taxes
2,722
2,925
3,074
1,758
1,932
1,930
1,617
1,390
1,161
1,090
Other non-current liabilities
636
521
660
423
473
520
632
439
403
409
Non-current loans
12,169
12,484
16,454
3,529
5,393
5,060
1,041
1,626
3,394
3,068
Current liabilities
15,150
15,613
16,175
11,543
11,010
10,997
9,450
9,602
12,591
9,857
TOTAL EQUITY & LIABILITIES
53,378
51,897
55,786
34,909
34,988
34,503
27,169
26,206
29,032
23,238
* Restated to IFRS 11.   ** Restated to the new IAS 19.   *** The ﬁgures for 2008 until 2007 have been recalculated due to the 4:1 split.
Changes in accounting standards
A reader of the ten-year overview should observe that accounting standards have 
changed repeatedly over this period of time. The major changes are the following.
In 2014 IFRS 11 “Joint arrangements” has been implemented as per January 1, 
2013, which has meant a restatement of the comparison ﬁgures for 2013.
In 2013 the revised IAS 19 “Employee Beneﬁts” has been implemented as per 
January 1, 2012, which has meant a restatement of the comparison ﬁgures for 2012.

Ten-year overview
Consolidated
 
 
 
 
SEK millions, 
unless otherwise stated
2016
2015
2014
2013 *
2012 **
2011
2010
2009
2008
2007
Key ratios
 
 
Orders received
32,060
37,098
36,660
30,202
30,339
28,671
23,869
21,539
27,464
27,553
Order backlog at year end
16,870
20,578
22,293
14,568
14,468
13,736
11,552
11,906
14,310
14,730
EBITA
4,680
6,811
5,571
4,914
4,883
5,117
4,772
4,360
5,992
5,034
EBITDA
5,323
7,478
6,136
5,360
5,330
5,566
5,197
4,751
6,296
5,299
EBITA-margin %
13.1%
17.1%
15.9%
16.5%
16.4%
17.9%
19.3%
16.7%
21.5%
20.3%
EBITDA-margin %
14.9%
18.8%
17.5%
18.0%
17.9%
19.4%
21.0%
18.2%
22.6%
21.3%
Adjusted EBITA
5,553
6,811
5,891
4,914
4,934
5,287
4,682
4,585
6,160
4,980
Adjusted EBITDA
6,196
7,478
6,456
5,360
5,381
5,736
5,107
4,976
6,464
5,245
Adjusted EBITA-margin %
15.6%
17.1%
16.8%
16.5%
16.5%
18.5%
18.9%
17.6%
22.1%
20.0%
Adjusted EBITDA-margin %
17.4%
18.8%
18.4%
18.0%
18.0%
20.0%
20.7%
19.1%
23.2%
21.1%
Profit margin %
9.3%
13.7%
11.7%
14.0%
15.2%
16.3%
17.7%
14.4%
19.2%
18.3%
Excl. goodwill and step-up values:
 
 
Capital turnover rate, times
8.6
10.6
7.9
6.4
6.7
6.3
5.6
5.2
5.6
6.4
Capital employed
4,146
3,734
4,447
4,657
4,430
4,560
4,399
5,052
4,973
3,863
Return on capital employed % 
112.9%
182.4%
125.3%
105.5%
110.2%
112.2%
108.5%
86.3%
120.5%
130.3%
Incl. goodwill and step-up values:
 
 
Capital turnover rate, times
1.2
1.3
1.3
1.6
1.7
1.8
1.9
2.0
2.5
2.7
Capital employed
30,663
31,512
27,259
18,598
17,833
16,324
12,752
12,976
11,144
9,289
Return on capital employed % 
15.3%
21.6%
20.4%
26.4%
27.4%
31.3%
37.4%
33.6%
53.8%
54.2%
Return on equity %
11.8%
21.7%
17.6%
17.9%
22.9%
22.9%
24.4%
24.5%
42.8%
44.1%
Solidity %
38.0%
35.5%
30.8%
46.3%
41.3%
43.9%
50.0%
46.7%
36.1%
34.2%
Net debt
9,619
11,688
15,068
2,611
4,270
3,264
-551
533
2,074
2,397
Net debt to EBITDA, times
1.81
1.56
2.46
0.49
0.80
0.59
-0.11
0.11
0.33
0.45
Debt ratio, times
0.47
0.63
0.88
0.16
0.30
0.22
-0.04
0.04
0.20
0.30
Interest coverage ratio, times
24.5
22.3
18.2
22.1
23.2
28.6
35.9
15.2
26.2
23.7
Cash flow from: 
 
 
   operating activities
4,979
5,850
5,123
4,233
3,586
3,429
4,098
5,347
4,062
3,264
   investing activities
-795
-710
-14,970
-951
-3,260
-5,497
-1,417
-2,620
-1,333
-1,676
   financing activities
-3,566
-5,229
10,250
-3,191
-407
2,317
-2,431
-2,667
-2,599
-1,291
Investments
617
674
603
492
531
555
429
451
747
556
Average number of employees
17,305
17,486
17,109
16,238
16,060
14,667
12,078
11,773
11,821
10,804
Earnings per share, SEK ***
5.46
9.15
7.02
7.22
7.64
7.68
7.34
6.42
8.83
7.12
Free cash flow per share, SEK ***
9.97
12.25
-23.48
7.82
0.78
-4.93
6.38
6.46
6.38
3.60
* Restated to IFRS 11.   ** Restated to the new IAS 19.   *** The ﬁgures for 2008 until 2007 have been recalculated due to the 4:1 split. 
  Observe that certain ﬁnancial measures above constitute alternative performance measures according to the deﬁnition on page 142.
341 063
Trycksak
Alfa Laval AB (publ)
Box 73
SE-221 00 Lund
Corporate Registration Number:
556587-8054
Visiting address:
Rudeboksvägen 1
Tel: + 46 46 36 65 00
Website: www.alfalaval.com
Production: Alfa Laval AB / Bysted AB   
Prepress and printing: Gigantprint
Translation: The Bugli Company

Alternative performance measures
An alternative performance measure is a financial 
measure of historical financial performance, financial 
position or cash flows, other than a financial measure 
defined or specified in the financial reporting framework. 
In the annual report, the following alternative perfor-
mance measures have been used (all of these alternative 
performance measures relate to actual historical figures 
and never to expected performance in future periods):
Measures to achieve full comparability 
over time. 
All of these concern the comparison distorting impact 
from above all amortisation of step-up values both over 
time and compared to external companies. For the same 
reasons adjustments are also made for comparison 
distortion items. How they are calculated is exhibited 
in the Income analysis table on page 77, except for 
the last one.
–  EBITA or Earnings Before Interests, Taxes and 
Amortisation is defined as operating income before 
amortisation of step-up values. This measure of result 
is fully comparable over time independent of the financing 
costs and the amortisation of step-up values that 
from time to time burden the Group.
–  EBITA margin (%) is defined as EBITA in relation to 
net sales and expressed in percent.  
–  EBITDA or Earnings Before Interest, Taxes, Depreciation 
and Amortisation is defined as operating income before 
depreciation and amortisation of step-up values. 
This measure of result is fully comparable over time 
independent of the financing costs, the depreciation 
and the amortisation of step-up values that from 
time to time burden the Group. 
–  EBITDA margin (%) is defined as EBITDA in relation 
to net sales and expressed in percent.
–  Adjusted EBITA or Adjusted Earnings Before Interests, 
Taxes and Amortisation is defined as operating income 
before amortisation of step-up values, adjusted for 
comparison distortion items. This measure of result 
is fully comparable over time independent of the 
comparison distortion items, the financing costs and 
the amortisation of step-up values that from time to 
time burden the Group.
–  Adjusted EBITA margin (%) is defined as Adjusted 
EBITA in relation to net sales and expressed in percent.  
–  Adjusted EBITDA or Adjusted Earnings Before Interest, 
Taxes, Depreciation and Amortisation is defined as 
operating income before depreciation and amortisation 
of step-up values, adjusted for comparison distortion 
items. This measure of result is fully comparable over 
time independent of the comparison distortion items, 
the financing costs, the depreciation and the amorti-
sation of step-up values that from time to time burden 
the Group. 
–  Adjusted EBITDA margin (%) is defined as Adjusted 
EBITDA in relation to net sales and expressed in percent.
–  Adjusted gross profit is defined as gross profit excluding 
amortisation of step-up values. This measure of result 
is fully comparable over time independent of the amor-
tisation of step-up values that from time to time burden 
the Group.
–  Adjusted gross margin (%) is defined as Adjusted gross 
profit in relation to net sales and expressed in percent.
–  Earnings per share, excluding amortisation of 
step-up values and the corresponding tax is defined 
as net income attributable to the owners of the parent, 
excluding amortisation of step-up values and the 
corresponding tax divided by the average number of 
shares. The net income attributable to the owners of 
the parent is presented in the consolidated compre-
hensive income statement and the amortisation of 
step-up values is exhibited in the Income analysis table 
on page 77, while the corresponding tax is SEK 311 
(235) million. This key figure is fully comparable over 
time independent of the amortisation of step-up values 
that from time to time burden the Group.
  
Measures to show how the Group is 
funded and manages its capital:
–  Return on capital employed (%) is defined as EBITA 
in relation to average capital employed, calculated on 
12 months’ revolving basis and expressed in percent. 
Capital employed is defined as total assets less liquid 
funds, other long-term securities, accrued interest in-
come, operating liabilities and other non-interest bearing 
liabilities, including tax and deferred tax, but excluding 
accrued interest costs. The measure shows how well 
the capital that is used in the operations is managed.
–  Net debt is defined as interest-bearing liabilities in-
cluding interest-bearing pension liabilities and capitalised 
financial leases less liquid funds. The calculation of net 
debt is exhibited in the Net debt table in Note 28. 
The measure shows the net financial indebtedness.
–  Net debt to EBITDA, times is defined as Net debt 
in relation to EBITDA, calculated on 12 months’ re-
volving basis and expressed as a multiple of EBITDA. 
This is one of the covenants of Alfa Laval’s loans and 
an important key figure when reviewing the proposed 
dividend. EBITDA or Earnings Before Interest, Taxes, 
Depreciation and Amortisation is defined as operating 
income before depreciation and amortisation of 
step-up values.
–  Debt ratio, times is defined as Net debt in relation 
to equity at the end of the period and expressed as 
a multiple of the equity. This is another measure of 
how the Group is funded.
–  Interest coverage ratio, times is defined as EBITDA 
plus financial net increased by interest costs in relation 
to interest costs. Expressed as a multiple of interest 
costs. Gives an expression for the Group’s ability to 
pay interest. The reason EBITDA is used as the 
starting point is that this forms the starting point for 
a cash flow perspective on the ability to pay interest. 
Financial items classified as comparison distorting 
are excluded from the calculation.
Deﬁnitions of other performance measures
Net sales
Revenues from goods sold and services performed 
that are part of the ordinary operations of the Group, 
after deduction for given discounts, value added tax 
and other tax directly linked to the sales.
Comparison distortion items
Items that do not have any link to the normal operations 
of the Group or that are of a non-recurring nature, where 
a reporting together with other items in the consolidated 
comprehensive income statement would have given a 
comparison distortion effect that would have made it 
difficult to judge the development of the ordinary oper-
ations for an outside viewer.
Orders received
Incoming orders during the year, calculated in the same 
way as net sales. The orders received give an indication 
of the current demand for the Group’s products and 
services, that with a varying delay appear in net sales.
Order backlog at year-end
Incoming orders that not yet have been invoiced. The 
order backlog at the end of the year is equal to the 
sum of the order backlog at the beginning of the year 
plus the orders received during the year less the net 
sales for the year. It gives an indication of how the net 
sales can be expected to develop in the future.
Proﬁt margin %
Result after financial items in relation to net sales, 
expressed in percent.
Capital turnover rate, times
Net sales in relation to average capital employed, expressed 
as a multiple of capital employed. Shown excluding and 
including goodwill, step-up values and the corresponding 
deferred tax liability.
Capital employed
Average total assets less liquid funds, other long-term 
securities, accrued interest income, operating liabilities 
and other non-interest bearing liabilities, including tax 
and deferred tax, but excluding accrued interest costs. 
Shown excluding and including goodwill and step-up 
values and the corresponding deferred tax liability. 
Shows the capital that is used in the operations. The 
capital employed for the Group differs from the net 
capital for the segments concerning taxes, deferred 
taxes and pensions.
Return on equity %
Net income for the year in relation to average equity, 
expressed in percent. 
Solidity %
Equity in relation to total assets, expressed in percent.
Cash ﬂow from operating activities
Shows the Group’s cash flow from operating activities, 
that is the cash flow generated in the daily operational 
activities.
Cash ﬂow from investing activities
Shows the Group’s cash flow from investing activities, 
i.e. the cash flow generated by mainly the Group’s 
divestments and acquisitions of businesses and divest-
ments of real estate.
Cash ﬂow from ﬁnancing activities
Shows the Group’s cash flow from financing activities, 
that is mainly the cash flow impact of the Group’s 
loans in terms of interest payments and amortisation.
Investments
Investments represent an important component in the 
cash flow for the Group. The level of investments during 
a couple of years gives a picture of the capacity build 
up in the Group. 
Average number of employees
The costs that are related to the number of employees 
represent a large part of the total costs for the Group. 
The development of the average number of employees 
over time in relation to the development of the net sales 
therefore gives an indication of the cost rationalisation 
that is taking place.
Earnings per share
Net income for the year attributable to the equity holders 
of the parent divided by the average number of shares.
Free cash ﬂow per share
The sum of cash flows from operating and investing 
activities for the year divided by the average number of 
shares. This represents the cash flow available for interest 
payments, amortisation and dividends to investors. 
Alternative performance measures and definitions
:

Analysts tracking Alfa Laval
ABG Sundal Collier
Anders Idborg
anders.idborg@abgsc.se
Tel: +46 8 5662 8674
ALPHAVALUE
Marzio Foa
m.foa@alphavalue.eu
Tel: +33 1 70 61 10 71
Bank of America Merrill Lynch
Michael Kaloghiros
michael.kaloghiros@baml.com
Tel: +44 207 9961 226
Barclays Capital
Lars Brorson
lars.brorson@barclays.com
Tel: +44 20 3134 1156
Carnegie
Johan Wettergren
johan.wettergren@carnegie.se
Tel: +46 8 5886 87 43
Citi Investment Research
Klas Bergelind
klas.bergelind@citi.com
Tel: +44 207 986 4018
Commerzbank
Sebastian Growe
sebastian.growe@commerzbank.com
Tel: +49 69 136 89800
Credit Suisse
Max Yates
max.yates@credit-suisse.com
Tel: +44 20 7883 8501
Danske Bank
Oscar Stjerngren
oscar.stjerngren@danskebank.se
Tel: +46 8 568 806 06
Deutsche Bank
Andreas Koski
andreas.koski@db.com
Tel: +44 20 754 565 80
DNB Markets
Christer Magnergård
christer.magnergard@dnb.no
Tel: +46 8 473 48 44
Goldman Sachs International
Jonathan Hanks
jonathan.hanks@gs.com
Tel: +44 20 7051 0928
Handelsbanken Capital Markets
Peder Frölén
pefr15@handelsbanken.se
Tel: +46 8 701 12 51
HSBC
Jörg-André Finke
joerg.andre.finke@hsbc.de
Tel: +49 211 910 3722
JP Morgan
Glen Liddy
glen.liddy@jpmorgan.com
Tel: +44 20 7155 6113
Kepler Cheuvreux
Johan Eliason
jeliason@keplercheuvreux.com
Tel: +46 8 723 51 77
Morgan Stanley Research
Ben Maslen
ben.maslen@morganstanley.com
Tel: +44 20 7425 3837
Morningstar
Denise Molina
Denise.molina@morningstar.com
Tel: +31 20 797 0010
Nordea Bank
Fredrik Agardh
fredrik.agardh@nordea.com
Tel: +46 8 534 919 20
Pareto Securities
Henrik Falk
henrik.falk@paretosec.com
Tel: +46 8 402 52 78
RBC Capital Markets
Wazi Rizvi
wazi.rizvi@rbccm.com
Tel: +44 20 7653 4591
SEB
Daniel Schmidt
daniel.schmidt@enskilda.se
Tel: +46 8 522 296 75
Swedbank
Anders Roslund
anders.roslund@swedbank.se
Tel: +46 8 585 900 93
UBS
Sven Weier
sven.weier@ubs.com
Tel: +49 69 1369 8278
Alfa Laval uses a number of channels to provide information about the company’s 
operations and ﬁnancial development. The website – www.alfalaval.com/
investors – is updated continuously with annual reports, quarterly reports, 
press releases and presentations. Annual reports are also sent to those 
shareholders who have notiﬁed the company that they wish to receive a copy. 
Conference calls with analysts, investors and the media are arranged by 
Alfa Laval in conjunction with the publication of the company’s quarterly reports. 
A capital markets day is organized each year, during which representatives 
from the ﬁnancial market are offered more in-depth information regarding 
the company’s operations. In addition, representatives of Group management 
meet with analysts, investors and journalists on an ongoing basis to ensure 
that they have correct and current information. Pursuant to the company’s 
agreement with Nasdaq Stockholm, information that could have an effect 
on the share price and that is not yet publicly known is never disclosed in 
conjunction with these types of meetings or contacts. Alfa Laval employs a 
so-called silent period of three weeks prior to the publication of a quarterly 
report. The President and Chief Financial Ofﬁcer do not meet or speak to 
representatives from the ﬁnancial market during this period. 
Annual General Meeting 2017 
The Annual General Meeting of Alfa Laval AB (publ) will be held on Wednesday, 
April 26, 2017, at 4:00 p.m. at Sparbanken Skåne Arena, Klostergården’s 
sports area, Stattenavägen, in Lund. Light refreshments will be served after 
the Meeting. In accordance with the company’s Articles of Association, notice 
of the Annual General Meeting will be inserted as an announcement in the 
Swedish Ofﬁcial Gazette and on the company’s website not more than six 
and not less than four weeks prior to the Meeting. An announcement that 
notiﬁcation has been issued will be placed in Dagens Nyheter. As a service 
to existing shareholders, information about the Annual General Meeting will 
be sent to them by mail. The following information concerning the Meeting 
does not constitute legal notice. 
Notiﬁcation of participation 
Shareholders who wish to participate in the Meeting and be entitled to vote 
must be entered in the share register maintained by Euroclear AB not later 
than Thursday, April 20, 2017, and register their intention to participate, along 
with any assistants, not later than Thursday, April 20, preferably before 12:00 noon. 
Shareholders whose shares are held in trust must temporarily re-register their 
shares in their own names not later than April 20. Shareholders must request 
such registration from the trustee a few working days prior to the deadline. 
Notiﬁcation of participation shall be made to: 
– Alfa Laval AB, Group Staff Legal, Box 73, SE-221 00 Lund, Sweden 
– E-mail: arsstamma.lund@alfalaval.com 
– Website: www.alfalaval.com 
– Tel: +46 46 36 74 00 or +46 46 36 65 00. 
Shareholders must state their name, personal identity number and telephone 
number on the notice of participation. If participation is by proxy, a power of 
attorney or authorization must be submitted to the company prior to the Meeting. 
Meeting program 
1:30 p.m.   Bus departs from Sparbanken Skåne Arena for Alfa Laval’s 
production unit for heat exchangers in Lund 
3:30 p.m.  Registration starts 
4:00 p.m.  Start of Meeting 
Tour of production facility in Lund 
Prior to the Annual General Meeting, participants will have an opportunity to 
view the production of plate heat exchangers at the plant in Lund. The tour 
will begin with assembly at Sparbanken Skåne Arena, Klostergården’s sports 
area, Stattenavägen in Lund not later than 1:30 p.m. Buses will be provided 
for transportation to the plant and back to the Meeting venue. Registration for 
the tour must be made in conjunction with registration for participation in the 
Annual General Meeting. Please note that the number of participants is limited. 
Dividend 
The Board of Directors and the President propose to the Annual General 
Meeting that a dividend of SEK 4.25 per share be paid. The proposed record 
date for this dividend is Friday, April 28, 2017. If the Meeting approves the 
motion, the dividend is expected to be distributed on Thursday, May 4, 2017. 
However, the record date and dividend payment date may be postponed 
due to the technical procedures required for executing the payment. 
Financial information 
Financial information during 2017
Alfa Laval will publish quarterly reports on the following dates in 2017:
Year-end report 2016  
January 31
First-quarter report  
April 26
Second-quarter report  
July 17
Third-quarter report  
October 25
Shareholder information
Gabriella Grotte
Investor Relations Manager
Tel: +46 46 36 74 82
E-mail: investor.relations@alfalaval.com

CC00338EN 1703
Alfa Laval in brief
Alfa Laval is a leading global provider of spe-
cialized products and engineered solutions.
 
The company’s equipment, systems and 
services are dedicated to helping customers 
optimize the performance of their processes. 
Time and time again.
 
Alfa Laval helps customers to heat, cool, 
separate and transport products such as oil, 
water, chemicals, beverages, foodstuffs, 
starch and pharmaceuticals.
 
Alfa Laval’s worldwide organization works 
closely with customers in 100 countries to 
help optimize their processes.
More information on the Internet
Alfa Laval’s website is continuously updated 
with new information, including contact 
details for all countries.
Read more at www.alfalaval.com and
www.alfalaval.com/investors