Alfa Laval (ALFA) investor relations material

Strategic direction and market outlook

• Targeting SEK 100 billion in sales by 2030, up from a current run rate of SEK 70 billion, with growth driven by GDP, M&A, and expansion in energy, food & pharma, and ocean sectors.

• Focus remains on leading the energy transition, with a net zero (scope 1 & 2) target advanced to 2027 and a robust approach to volatility in global markets, especially the U.S. and China.

• China is a key growth market, contributing over 20% of turnover and hosting the largest employee base, driving engagement in pioneering projects like batteries, solar, and hydrogen.

• The company expects a slower, more realistic energy transition, with strategy and 2030 targets based on achievable trends rather than political ambitions.

• Removing barriers to scale through streamlined reporting, IT, sustainability, and operating models.

Financial guidance and performance

• New financial targets: 7% sales CAGR, adjusted EBITDA/EBITA margin increased to 17%, and return on capital employed target retained at 20%.

• EBITA doubled from 6.8 BSEK in 2015 to 12.0 BSEK in 2025 LTM; net income rose from 3.9 BSEK to 8.4 BSEK.

• Dividend for 2024 increased by 13% to 3.5 BSEK.

• Average cash flow conversion at 84% over 10 years, with cash flow from operations reaching 10.0 BSEK in 2024, supporting both organic and inorganic growth without new debt.

• CapEx and R&D investments are at record highs, with a CAPEX program of ~5.1 BSEK for 2023-2028 and R&D spend now three times higher than 10–15 years ago.

Business developments and divisional strategies

• Divisions restructured: Marine becomes Ocean Division, Food & Water renamed Food & Pharma, with Energy Division unchanged; new business unit structures optimize sales, innovation, and market access.

• Food & Pharma targets 7% organic growth to 2030, focusing on pharma, protein, and industrial flow, with 16 growth initiatives and increased R&D to 3% of sales.

• Energy Division addresses 50% demand growth by 2050, focusing on clean fuels, electrification, and energy efficiency, with 80% of business tied to energy efficiency.

• Ocean Division expects 30–40% growth, driven by multi-fuel transition, offshore, and aquaculture, with major investments in automation and service.

• Operating model streamlined to nine business units, balancing global sales/service with business unit P&L responsibility, and portfolio units for emerging businesses.