Note 1. Operating segments

Alfa Laval’s business is divided into three Business Divisions ”Energy”, ”Food & Water” and ”Marine” that sell to external customers and are responsible for the manufacturing of the products and one division “Operations & Other” covering procurement and logistics as well as corporate overhead and non-core businesses. These four divisions constitute Alfa Laval’s four operating segments.

The customers to the Energy Division purchase products and systems for energy applications, whereas the customers to the Food & Water Division purchase products and systems for food and water applications. The customers to the Marine Division purchase products, systems and digital solutions for marine and offshore applications.

The three first Business Divisions are in turn split into a number of Business Units. The Energy Division consists of five Business Units: Brazed & Fusion Bonded Heat Exchangers, Electrolyzer and Fuel Cell Technologies, Energy Separation, Gasketed Plate Heat Exchangers and Welded Heat Exchangers. The Food & Water Division consists of six Business Units: Decanters, Food Heat Transfer, Food Systems, Hygienic Fluid Handling, High Speed Separators and Desmet. The Marine Division consists of four Business Units: Pumping Systems, Water, Wind & Fuel Solutions, Heat & Gas Systems and Digital Solutions.

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 liabilities, 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.

* Difference between management accounts and IFRS.

Corporate refers to items in the statement on financial position that are interest bearing or are related to taxes.