• Order Book: SEK52 billion, with Marine at SEK27 billion, Energy at SEK10.6 billion, and Food & Water at SEK14.9 billion.
• Revenue: SEK67 billion for 2024, with SEK18.3 billion in Q4.
• Organic Growth: 7% for the year, 2% in Q4.
• Gross Profit Margin: 34.6% for the year, 34.4% in Q4.
• Operating Income: Increased by 12.7% for the year.
• Adjusted EBITA Margin: 16.6% for the year.
• EPS: SEK17.88 for the year, SEK4.96 in Q4.
• Cash Flow from Operating Activities: SEK12 billion for the year, SEK4 billion in Q4.
• Free Cash Flow: SEK8.8 billion for the year, SEK3 billion in Q4.
• Net Debt: SEK2.4 billion, with a debt to EBITDA ratio of 0.8.
• Return on Capital Employed: 23.2% for the year.
• Dividend Recommendation: SEK8.50 per share, totaling SEK3.5 billion.

• Warning! GuruFocus has detected 6 Warning Signs with KIGRY.

Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Alfa Laval AB (ALFVF) reported strong growth in the fourth quarter and full year 2024, with favorable market conditions across most applications.
• The company enters 2025 with a solid SEK52 billion order book and good momentum in the short cycle business.
• Operational cash flow was robust, reaching a record SEK12 billion for the full year 2024.
• The Marine division achieved a record year with a 40% order intake growth in Q4, indicating strong market conditions.
• Service division saw a 13% organic growth in Q4, contributing to an 8% growth for the full year, supported by momentum across all divisions.

Negative Points

• Q4 margins were affected by one-off restructuring costs and project risk exposures, leading to a somewhat weaker seasonal performance.
• The Energy division faced challenges with a weak HVAC and heat pump market, although this was offset by growth in other areas.
• Currency fluctuations had a negative impact on the full year, mainly due to the movement of the US dollar to euro.
• The heat pump market is expected to recover only in the second half of 2025, indicating ongoing challenges in this segment.
• There is uncertainty regarding the order intake for the Marine division from Q2 2025 onwards, particularly in the cargo pumping business.

Q & A Highlights

Q: Can you provide insights into the growth of your data center business and the split between liquid and air cooling? A: The data center business showed good momentum in the second half of 2024, with expectations for continued growth into 2025. The business is approximately SEK2 billion, and while the exact split between liquid and air cooling isn't specified, water cooling is becoming increasingly important. Tom Erixon, President, CEO

Q: How do you foresee the evolution of the Pumping Systems business, and what are the major offsets for potential order losses? A: The Pumping Systems business, particularly in Marine, is not expected to maintain the SEK15 billion order level due to capacity and market constraints. However, growth in offshore and service sectors, along with biofuel projects, are expected to offset potential declines. Tom Erixon, President, CEO

Q: What are your expectations for Marine pricing in 2025, and can you elaborate on the restructuring in Food & Water and Marine? A: Marine pricing for 2025 is largely set, with a positive outlook on margins. The restructuring in Food & Water and Marine involved operational improvements and resource adjustments, with no major restructuring planned for 2025. Tom Erixon, President, CEO

Q: Could you explain the impact of shipyard bottlenecks on Marine revenue recognition and the outlook for shipyard capacity in 2025? A: The deviation in Marine revenue recognition is more about forecasting precision rather than shipyard bottlenecks. The shipyard capacity is under pressure, but Alfa Laval is taking measures to support commissioning and maintain delivery schedules. Tom Erixon, President, CEO

Q: How do you view the recovery in the heat pump market and the outlook for light industry tech? A: The heat pump market recovery is expected in the second half of 2025, with some signs of improvement. The light industry tech segment, including data centers, is stable with no major concerns. Tom Erixon, President, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.