Alfa Laval (ALFA) Q1 2025 earnings summary

Executive summary

• Net sales rose 10.5% year-over-year to SEK 16.5 billion, with organic growth of 10.4% and strong service and transactional business supporting solid invoicing and margin development.

• Adjusted EBITA increased 20% to SEK 2.9 billion, with margin improving to 17.7% from 16.3%.

• Order intake declined 8% year-over-year to SEK 16.8 billion, mainly due to currency effects, but the order book remains high at SEK 52.1 billion, covering over 9 months of sales.

• The company is essentially debt-free, with a 24% ROCE and a strong balance sheet.

• Service business accounted for a record 32% of invoicing, growing 13% year-over-year.

Financial highlights

• Gross profit increased to SEK 6,057 million from SEK 5,210 million year-over-year, with gross margin improving to 37.5%.

• Operating income rose to SEK 2.8 billion from SEK 2.2 billion.

• EPS reached SEK 4.82 per share, up from SEK 4.07.

• Free cash flow before acquisitions was SEK 771 million; final cash flow for the quarter was SEK 457 million.

• Net debt/EBITDA reduced to 0.13.

Outlook and guidance

• Q2 demand expected to remain at similar levels as Q1, except for Marine Division where order intake is expected to slow.

• FY 2025 CAPEX estimated at 2.5–3.0 BSEK; Q2 CAPEX at ~0.8 BSEK.

• Positive currency impact expected in Q2 and for the full year; currency impact on EBITA for FY 2025 estimated at 200 MSEK.

• Proposed dividend of SEK 8.50 per share, up from SEK 7.50.

• Internal cost control initiative launched, focusing on discretionary costs.