Q3 2024 Alfa Laval AB Earnings Call Transcript
Key Points
- Alfa Laval AB (ALFVF) reported a strong quarter with elevated demand in the marine sector and a book-to-bill ratio of 1.17.
- Service growth continued at a high level of 11%, supported by strategic investments in infrastructure and personnel.
- The company achieved strong cash flow of SEK3.75 billion, indicating operational stability in the supply chain.
- Margins strengthened year-on-year and sequentially, driven by a positive mix and strong performance in several business units.
- The Energy division returned to order intake growth, with promising developments in clean energy applications like carbon capture.
- Project invoicing in the Energy division was lower than expected, contributing to some volatility between quarters.
- The European heat pump market remains weak, with no speedy recovery expected, impacting the brazed heat exchangers segment.
- The Food & Water division saw a decline in order intake compared to the previous year due to fewer large project orders.
- The US market showed unexpected weakness in order intake, particularly affecting the Food & Water division.
- The Marine division anticipates a moderation in order intake in Q4, following record levels in the tanker segment.
Welcome everyone, to Alfa Laval's Q3 2024 Report. I will now hand over to Tom Erixon. Please go ahead.
Good morning, and welcome to our earnings call for the third quarter. Let me start with a couple of introductory comments as always. We had another strong quarter with elevated demand in the marine sector and the book-to-bill of 1.17 for the group. The service growth continued on a high level of 11% in the quarter, the strategic focus on the service business since many years, continues with investments in both infrastructure and people.
And finally, the cash flow was strong in the quarter at SEK3.75 billion, the operational stability in the supply chain is on a good level. After several years of work in restoring a normal level of operating working capital has given positive results with maintained customer service levels.
And so with that, let me go to the key figures. Orders were a bit stronger than expected with good demand in all 3 divisions and sequentially stable compared
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