Alfa Laval (ALFA) Q2 2024 earnings summary

Executive summary

• Record order intake for Q2 and H1 2024, with the order book at an all-time high of SEK 50 billion, supporting strong project execution and future revenue visibility.

• All financial KPIs improved, including strong cash flow, double-digit sales growth, and a return on capital employed of 22%.

• Marine division saw record order intake and led growth, while Energy and Food & Water faced order declines but improved margins.

• Sustainability initiatives advanced, with reduced carbon intensity and improved safety metrics.

• Stable operating environment with solid performance across most divisions, though HVAC/Heat Pump demand remained weak.

Financial highlights

• Q2 order intake reached SEK 18.9 billion, up 3.5% organically; H1 order intake at SEK 37.2 billion, up 1.1%.

• Revenues grew 10.4% in Q2 to SEK 17.5 billion, with organic growth of 11.2%.

• Adjusted EBITA margin at 16.7% (SEK 2.9 billion), up from 15.0% last year; operating income margin rose to 15.6%.

• Free cash flow in Q2 at SEK 1.9 billion, nearly doubling year-over-year; net debt/EBITDA LTM improved to 0.83.

• EPS up 12% to SEK 4.08 in Q2; return on capital employed at 22.1%.

Outlook and guidance

• Q3 demand expected to be somewhat lower sequentially, but still higher than Q3 last year.

• Energy division expected to bottom next quarter; Marine order book supports stable development into 2025.

• CapEx for 2024 guided at SEK 2–2.5 billion; currency expected to have a positive impact; average tax rate expected at 24–26%.

• Currency impact on EBITA for FY 2024 estimated at 250 MSEK.

• Short-term focus on energy efficiency continues amid slower global energy transition.