Alfa Laval (ALFA) Q3 2024 earnings summary

Executive summary

• Q3 2024 order intake reached SEK 18.9 billion, up 15% organically year-over-year, with net sales at SEK 16.2 billion, up 6% organically; Marine division was the main growth driver with a 41% increase in order intake.

• Adjusted EBITA rose 7% to SEK 2.8 billion, with a margin of 17.3% (up from 16.7%).

• EPS improved to SEK 4.77, and free cash flow was robust at SEK 3.75 billion.

• Book-to-bill ratio stood at 1.17, with an order backlog of SEK 52 billion supporting future invoicing.

• Service business expanded across all divisions, contributing to margin strength and stable growth.

Financial highlights

• Gross profit reached SEK 5.8 billion (36% margin), up 2.8 percentage points year-over-year.

• Operating income was SEK 2.7 billion, and net income for Q3 was SEK 1,983 million.

• Free cash flow increased to SEK 3.04 billion, with CapEx at 4.3% of net sales.

• Return on capital employed improved to 22.8%, and return on equity to 18%.

• Net debt/EBITDA (LTM) reduced to 0.61 from 1.19 year-over-year; net debt including leases at SEK 7.7 billion.

Outlook and guidance

• Q4 demand is expected to be lower than Q3, with marine demand moderating after record tanker orders.

• FY 2024 CAPEX estimated at SEK 2.5–2.8 billion; FY 2025 at SEK 2.5–3.0 billion.

• Tax rate guidance for 2024 and 2025 is 24–26%; currency impact anticipated to be low.

• Most end markets and geographies remain stable to positive, with Food and Water demand expected to rise and Energy to remain flat.