Alfa Laval (ALFA) Q2 2025 earnings summary

Executive summary

• Achieved all-time high adjusted earnings above SEK 3 billion and a 19% increase in EPS to SEK 4.87, despite a 14% decline in order intake and a 4% drop in net sales; service business reached record levels and recent acquisitions strengthened the portfolio.

• Order book remains robust at SEK 50.3 billion, up 2% year-over-year, providing visibility into 2025 and 2026, with Marine Division accounting for about half.

• Service business achieved record order intake above SEK 20 billion, now over 30% of group sales, with strong performance in Food & Water and stable demand in Marine.

• Acquisition of Fives Cryogenics completed, adding 700 employees and strengthening the Energy Division.

• Recent acquisitions and investments, including NRG Marine and an American service provider, position the business for continued growth.

Financial highlights

• Adjusted EBITA margin improved to 17.8% from 16.7% year-over-year, with adjusted EBITA at SEK 3 billion and EPS at SEK 4.87, up 19%.

• Revenue declined by 4.1% year-over-year, but organic growth was positive at 2.3%.

• Cash flow from operations was SEK 2.2 billion; free cash flow SEK 1.5 billion; net debt at SEK 4.6 billion (0.34x LTM EBITDA).

• Return on capital employed improved to 24.4% from 22.1% year-over-year.

• Dividend of SEK 8.50 per share paid in Q2.

Outlook and guidance

• Market conditions expected to remain stable sequentially, with Q3 demand somewhat higher than Q2, supported by recent acquisitions.

• Marine Division expected to remain stable; Energy Division to see higher demand, especially post-acquisition; Food & Water to be seasonally lower in Q3.

• CapEx guidance for Q3 is SEK 0.7 billion, with annual CapEx expected between SEK 2.5–3 billion.

• Tax rate guidance remains at 24–26%.

• Cost and hiring caution to continue due to slow conversion of large capex projects.